HIS HONOUR: On 18 December 2014 I made orders to give effect to my reasons for judgment of 4 December 2014 (Construction Technologies Australia Pty Ltd v Doueihi [2014] NSWSC 1717; (2015) 17 BPR 33,457). As part of the orders made on 18 December 2014 I noted an undertaking from the plaintiff (CTA) to the Court promptly to do all things necessary on its part to obtain all necessary regulatory approvals for its occupation and use of the CTA premises and its manufacturing facility at those premises. I ordered the first to fourth defendants to do all that was necessary on their part for the obtaining of such approvals by CTA, including providing their consent to CTA's application for necessary approvals, failing which a registrar of the Court could provide such consent.
In my reasons of 4 December 2014 I explained at paras [97]-[104] the circumstances in which the issue of council approval to CTA's operations arose. The defendants had submitted that CTA was not entitled to any equitable relief because it did not have necessary approvals for its manufacturing activities. I held that that complaint would be appropriately dealt with by its being a condition of a grant of any equitable relief that development consent (if required) and any other approval that might be required for the manufacturing use be obtained (at [97] and [104]). Because the owners' consent was required for the lodgment of an application requiring council's approval, CTA's relief extended to requiring the defendants to provide their consent to its application for necessary approvals (at [104]).
By notice of motion filed on 3 September 2015 the first to fourth defendants sought, amongst other relief, a declaration that CTA had failed promptly to do all things necessary on its part to obtain all necessary regulatory approvals for its occupation and use of the CTA premises and its manufacturing facility at those premises. It sought an order that nothing in the orders made on 18 December 2014 prevented it from taking steps it was otherwise entitled to take under the lease it was required to give CTA for failing to comply with applicable laws, or failing to hold necessary approvals for its manufacturing facility. It sought a discharge of the orders and declarations made on 18 December 2015 for the alleged failure of CTA to comply with its undertaking.
These claims were not pressed. Instead the defendants sought a direction that in order to comply with its undertaking CTA was required by 30 November 2015 (subsequently amended in oral submissions to 31 December 2015) to lodge an appeal with the Land and Environment Court from the deemed refusal of CTA's application to Blacktown City Council of 22 May 2015.
CTA filed a notice of motion in court on 16 November 2015 in which it sought directions with respect to the enforcement of the order made on 18 December 2014 that the first to fourth defendants do all that was necessary on their part for the obtaining of the approvals referred to in the undertaking given by CTA. CTA sought an order that the first to fourth defendants be restrained from doing any act that might have the effect of delaying, frustrating or otherwise hindering approval of CTA's application under s 96 of the Environmental Planning and Assessment Act 1979 (NSW) by the Blacktown City Council. It sought an order that the first to fourth defendants advise the Blacktown City Council forthwith that their objections to CTA's s 96 application were withdrawn.
The matter had earlier come before me on 9 March 2015 following an application by CTA to the Registrar to give consent on behalf of the first to fourth defendants to an application by CTA to the Blacktown City Council for modification of development consent.
On 9 March 2015 I gave a short judgment on CTA's application for an order that the Registrar give on behalf of the owners (the first to fourth defendants) their consent to an application by CTA to the Blacktown City Council for modification of the development consent. (Construction Technologies Australia Pty Ltd v Edward Doueihi & Ors (9 March 2015, no medium neutral citation)). The objections taken by the defendants to the plaintiff's application and my reasons for declining to direct the Registrar to sign the application on behalf of the owners, in the form the application then took, so as to give their consent, were as follows:
"1 HIS HONOUR: Two objections are taken by the defendants to the plaintiff's application that the Registrar be directed to sign the application to the Blacktown City Council for modification of a development consent. One objection is that it is said that the Town Planner's report that accompanies and forms part of the application mis-states the relevant facts in stating that the activity being conducted does not involve the manufacture of adhesives, but merely involves the processing of mixing of dry sand, cement and pigments in a way that does not come within the definition of designated development. That may be a question which council will have to decide. I do not accept that by being required to give its consent to the application to the council, and giving its consent, the defendants would themselves be making a representation as to the truth of the statements in the Town Planner's report.
2 It is accepted that the defendants' giving their consent would not preclude their ability to make representations to the council to the opposite effect of what is contended for in the Town Planner's report. The defendants are not justified in refusing to give their consent on that ground.
3 The second objection, however, is that the application to the council includes an application that an area of land which is well outside the building which, on my findings, the plaintiff is entitled to occupy, should be designated as car parking spaces. I do not understand it to be in contention that if the council acceded to that application the permitted use of that area of land would be limited to its use as car parking spaces. Nothing in the findings which I have made would justify the imposition of limits on the lawful use to which the defendants could put that part of the land. I do not think that the defendants can be required to give their consent to the making of the application which would designate the four areas that are marked yellow on the plan which forms part of tab 3 behind exhibit SD-5.
4 Accordingly, I decline to direct the Registrar to sign the application on behalf of the defendants so as to give their consent to the application in the form in which it presently is."
The four areas marked yellow on the plan referred to in para 3 would have been designated as areas for car parking.
Following the hearing on 9 March 2015 CTA prepared a new application for modification of development consent under s 96 of the Environmental Planning and Assessment Act. CTA contended in its application that the development to which the consent was sought to be modified was substantially the same development as that for which consent had previously been granted. It contended that the development in question involved the mixing of cement and sand and other inert materials which were not hazardous or potentially hazardous, nor an offensive industry. It contended that the process of mixing dry sand, cement and pigments conducted on the site was not designated development under Schedule 3 of the Environmental Planning and Assessment Regulation 2000 (NSW). It stated that information had been provided to the council previously that the operation of the site at commencement and until recently was below 5,000 tonnes per annum. It did not say that this had been a false representation, but attached a statement of production volumes that showed that in the year to 28 February 2014 the production was over 11,500 tonnes of dry mix cement product. It stated that it was proposed to increase that figure in future to 18,000 tonnes per annum. The application stated that the activity was not a chemical process but involved the mixing of dry cement products.
The application recited that condition 4.3.2 of the existing development consent required the provision of 59 car parking spaces. It sought the reduction of the required number of car parking spaces to 55 for so long as the machinery installed by CTA in the basement area took up four spaces so as to render them unavailable for parking. The application included a submission that having regard to the number of staff employed on the site by Marble Plus and by CTA there was ample car parking on the site for staff and visitors and that a reduction of spaces from 59 to 55 would meet the objectives of the Blacktown Development Control Plan 2007.
On 31 March 2015 the solicitors for CTA submitted the application to the solicitors for the first to fourth defendants requesting them to give their consent as owners to the application.
The defendants signed the s 96 application on 12 May 2015. On the same day the solicitors for the defendants, Norton Rose Fulbright, lodged a detailed objection to the application with the council. They submitted that the application could not properly be brought under s 96(1A) of the Environmental Planning and Assessment Act. They submitted that a new development application was required. They submitted that the application contained inaccurate information. They drew attention to my finding as to the falsity of the earlier representation as to the volume of production. They submitted that CTA had not adequately addressed the requirements of SEPP 33 relating to potentially hazardous or offensive material. On the issue of parking Norton Rose Fulbright advised that the defendants, as the landlord to the property, had not granted CTA any parking rights for the property. They stated that a lease was then being negotiated between the owners and CTA as required by the Supreme Court orders, but that the lease related solely to the building on the property and the exclusive and shared occupation of particular areas that were internal to that building. It did not provide for parking. They said that CTA had no legal right to use any car parking on the property except for four spots in the basement which had been displaced by CTA's machinery.
This submission was lodged before the s 96 application was lodged by CTA with the council. On 14 May 2015 CTA's solicitor wrote to the council contending that it would be premature for the council to consider the defendants' objections until the application was lodged. The application was lodged on 22 May 2015.
The application had not been determined by 1 July 2015. Pursuant to cl 122A of the Environmental Planning and Assessment Regulation 2000 the council was then taken to have refused the application. CTA had a right to appeal to the Land and Environment Court against the deemed refusal of the application pursuant to s 97AA of the Environmental Planning and Assessment Act. The fact that the council was taken to have refused the application under s 96A by failing to determine it within 40 days did not preclude the council from later determining the application.
On 6 July 2015 the defendants' solicitors wrote to the council advising, amongst other things, that the defendants were concerned that CTA was operating a manufacturing facility without appropriate approval and appeared to be trying to avoid obtaining licences from the Environmental Protection Authority by characterising their adhesive manufacturing activity as cement manufacturing.
On 8 July 2015 the council advised the defendants' solicitors that the application was currently in its early stages of review and a decision would be made in due course.
A town planner retained by CTA, Mr Chris Young, formed the view that in line with his experience as to procedures the council ordinarily followed in such applications, if the council took the view that any of the issues raised by the defendants' solicitor merited further consideration, it would write to CTA to bring those matters to its attention and invite CTA to submit a response.
On 19 August 2015 the defendants' solicitors wrote to CTA's solicitors asking whether CTA had lodged or intended to lodge an appeal against the council's deemed refusal of the s 96 application, and whether it had lodged applications with any other regulatory authority for approval of its facilities. It foreshadowed seeking further orders from the Court.
On 20 August 2015 Mr Young advised CTA that although there was a right to appeal to the Land and Environment Court on the basis of a deemed refusal, the application was still live until it was decided by the council or by the Court, and the right to appeal continued for six months after the 40th day after lodgement . He advised that unless CTA knew that the application would be refused, it should keep talking to the council. Mr Young based that advice on the fact that the council had not raised any further matters with CTA regarding the application and had not given any indication that the application had been or would be refused. He thought that the council was following its normal procedures.
On 26 August 2015 a council officer dealing with the application, a Ms Portelli, advised Mr Doueihi (the first defendant) that on the basis of the information before her she could see no valid planning or building grounds on which to refuse the application. She commented that bagging of dry sand and cement was permissible with consent and was not designated development, that the quantity being bagged was below designated development volumes and was acceptable, that the proposal was not a hazardous or offensive industry and fell below the SEPP thresholds, that the council's environmental health unit had signed off on issues of dust, noise and odour with appropriate conditions, that the building surveyors were satisfied that fire rating and fire safety requirements could be met, and that the four displaced car parking spaces in the basement could be provided on ground in accordance with the requirements of the council's development control plan as "parallel stacks basis" for staff along the side boundary.
Mr Doueihi responded on 27 August 2015 by attaching a copy of the orders made in the proceedings and saying that, "As you will see CTA has no parking on site at all" and that "the 3 [sic] parking spots they do have in the basement they are using them for manufacturing & production equipment".
On 31 August 2015 an internal council email from a Mr Glenn Apps, Team Leader, Regulatory Planning, to, it seems, a Mr Romic, a town planner with the council, stated:
"If you have concerns regarding parking, then is the Applicant able to come back with a parking assessment that shows that the provision of the 4 lost spaces is unreasonable or unnecessary, noting that the facility has been in operation in this form for some time without apparent problem? Can they provide a plan that shows the parking picked up somewhere else on the land? If they cannot achieve one of the above to your satisfaction then is it the case that the Section 96 must fail?"
There was further correspondence between Mr Tsacalos of Norton Rose Fulbright and the council regarding the issue of car parking. Mr Tsacalos said it was very clear from the judgment of 9 March 2015 that CTA had no legal right to any car parking on the property, except for the four basement car spaces which it was occupying with its plant and equipment. He said that CTA had no legal right to any car spaces on the property at all, whether it be on the land itself or in the basement, except for the four car spaces previously mentioned.
On 3 September 2015 the defendants' solicitor wrote to the council stating that the orders of this Court of 18 December 2014 were highly relevant to the s 96 application as they made clear that CTA had "no legal right to any car spaces on the property at all - whether it be on the land itself or in the basement (except for the 4 car spaces previously mentioned)".
This statement was repeated on 10 September 2015.
On 11 September 2015 a town planner with the council advised Mr Young that a decision could not be made until all facts and any allegations by the owner were reviewed in more detail. He said that the real sticking point was the deficiency of four spaces in car parking.
On 17 September 2015, Mr Romic told Mr Young that so far as he was concerned, CTA's activities were an industrial use on industrial land. Mr Romic said words to the effect:
"The application is fine. I suggest you put the 4 car parking spaces inside the factory area and that will do it."
An internal council email dated 18 September 2015, reporting on a site visit of council officers with Mr Young, stated that, in the view of the council officer, the processing was not designated development and that allegations from the owners that CTA's activities were hazardous or dangerous were unfounded. The internal council email reported that in terms of car parking the lease was a severe restriction on the tenant. The email said:
"Signage has been erected on the premises at every single car bay to read 'parking only with the owner's permission'. From a visitor point of view it is bizarre. The parking should be used as communal parking irrespective what the lease may stipulate as the tenants share the same entry into the office. If the ordinary mum and dad renovator was to drive into the facility the signage is intimidating in my view and bad for business.
What is even more ridiculous … the owner is making a song and dance on 4 car spaces but has truck tailer's (total of 3) permanently parked over a row of 20 or so spaces."
A further submission from the defendants was received by the council on 18 September 2015. In that submission the defendants submitted that none of their concerns relating to the competency of the s 96 application or its accuracy had been addressed and purportedly reserved their right to take further action as might be necessary, including legal action in the Land and Environment Court, if approval were given.
On 28 September 2015 Mr Young asked the council to provide a copy of the defendants' submissions and he subsequently received them. On 1 October 2015 Mr Young advised the council that he was preparing a response to the defendants' submissions. Mr Hogan of CTA was away until 8 October. On Mr Hogan's return he asked Mr Young to prepare a response to the council which would include four spaces within CTA's rented premises.
During October Mr Young spoke to a traffic engineer to ask him to design four car spaces in CTA's rented premises. He asked a company called IDraft to forward plans to the traffic engineer. On 21 October 2015 that company told Mr Young that they could not do the plan drawing as he had requested. Mr Young attempted to arrange for the drawing to be prepared by an architect but was advised on 26 October 2015 that the architect could not prepare the drawing. But on 31 October 2015 a traffic engineer, Mr Fred Gennaoui of Gennaoui Consulting Pty Ltd, provided CTA and Mr Young with a plan to be submitted to the Blacktown City Council for the provision of four spaces within the leased premises to be used by staff. On 4 November Mr Young wrote to the council and said:
"As previously advised the applicant considered the matter of the 4 car parking spaces following Councils [sic] inspection of the site and has drawn up a plan to indicate where these spaces can be located within the lease area. The location and size of the spaces and loading dock have been set out by a qualified traffic engineer and his report including the plan accompanies the response.
Should you require any further information or hard copies of the response or plans please contact me.
We believe all matters are now at a point where Council can determine the application and look forward to a positive outcome."
Also on 4 November 2015 Mr Young responded to the various submissions made by the solicitors for the defendants to the council.
At the date of the hearing of these notices of motion the council had not determined the s 96 application.
As previously noted, on 3 September 2015 the defendants filed in Court their notice of motion. Part of the notice of motion involved settling the terms of the lease to be executed pursuant to the orders of 18 December 2014. Orders made on that day settled the terms of the lease. The balance of the notice of motion, including an application for a declaration that the plaintiff has failed promptly to do all things necessary on its part to obtain all necessary regulatory approvals for its occupation and use of the premises and its manufacturing facility at those premises, was stood over to 16 November 2015, as was the first to fourth defendants' application to discharge the orders made on 18 December 2014 for alleged failure by the plaintiff to comply with its undertaking.
Those claims were not pressed at the hearing on 16 November 2015. As noted earlier, the defendants instead sought a direction that in order to comply with the undertaking noted in para 1 of the orders of 18 December 2014 the plaintiff was required to lodge an appeal in the Land and Environment Court from the deemed refusal of its application to the Blacktown City Council.
The question is whether CTA is required to take that step in order to comply with its undertaking. Its town planner, Mr Young, made an affidavit on 17 September 2015 in which he deposed in substance that because the matter was under active consideration by the council, CTA should not lodge an appeal unless and until it received notice from the council that its application had been refused. He had advised Mr Hogan on 20 August 2015 in substance that unless it was known that the application would be refused, CTA should keep talking to the council. It was his opinion that it was likely that CTA's application would be approved, subject to conditions, and there was no need for CTA to file an appeal at that time.
In an affidavit sworn on 11 November 2015, Mr Young said that he remained of the view that the council was likely to approve CTA's s 96 application. He observed that it appeared from the documents produced by the council on subpoena that it was the submissions made by the owners in opposition to the application, that in his experience was unprecedented, that had slowed the approval of the application.
The defendants have not shown that CTA has not complied with its undertaking to the Court promptly to do all things necessary on its part to obtain all necessary regulatory approvals. I do not accept that to comply with that undertaking it was necessary for CTA to have filed an appeal to the Land and Environment Court on the basis of the deemed refusal of its application. It was appropriate for it to have acted in accordance with Mr Young's opinion that it wait to see whether its application would be approved by the council. Lodging an appeal against the deemed refusal might lead to the council's not making a decision on the application as the matter would then be pending in the Land and Environment Court. It might also involve expenditure that would be unnecessary if the council approves the application. Of course, proceedings may in any event be brought in the Land and Environment Court by the defendants if the application is approved, but CTA is not required to move pre-emptively.
Although the defendants did not seek to move on all of the claims for relief in paras (b) to (e) of their notice of motion, but sought other relief, it is appropriate to dispose of the notice of motion. The relief sought in the notice of motion was premised upon a finding that CTA had not complied with its undertaking. The defendants are not entitled as of right to defer that application and seek the lesser relief propounded in MFI-1 referred to at para [4] above, that is, an order requiring CTA to appeal to the Land and Environment Court against the deemed refusal of CTA's application. The defendants are not entitled to the relief sought in the notice of motion.
Nor is it appropriate to give the direction sought in oral submissions that to comply with its undertaking CTA should lodge an appeal against the deemed refusal of its application by 31 December 2015 if its application has still not been determined at that time. It may be that CTA should take that step. But the time to make that decision has not yet arisen. It might never arise. There may be other courses open to CTA which it could take, consistently with its undertaking promptly to seek all necessary regulatory approvals.
It suffices to say that the defendants have not demonstrated a breach of the undertaking. The appropriate course is to dismiss the balance of the defendants' notice of motion filed on 3 September 2015 as well as to refuse the relief sought in MFI-1.
CTA submitted that by opposing its application to the council, the first to fourth defendants are in breach of order 2 made on 18 December 2014 that they do all that is necessary on their part for the obtaining of all necessary regulatory approvals by CTA. Counsel for CTA submitted that I went too far in saying in my judgment on 9 March 2015 that "It is accepted that the defendants' giving their consent would not preclude their ability to make representations to the council to the opposite effect of what is contended for in the Town Planner's report". Counsel submitted that I did not and could not have varied any of the final relief granted on 18 December 2014. Counsel also submitted that it was not right to say that it was accepted that the defendants could make representations to the council to the opposite effect of what was contended for in the Town Planner's report.
I see no reason to correct para 2 of my judgment of 9 March 2015. On that day counsel for CTA rightly accepted that an order requiring the defendants to sign the s 96 application would not preclude their making submissions to the Blacktown City Council about the application. In the context in which that concession was made it was clear that the defendants' submissions to the council would canvass all grounds that might be available to them to oppose the grant of regulatory approval.
The concession was correct. The orders of 18 December 2014 do no more than require the defendants to do what is necessary on their part to enable CTA to obtain regulatory approvals. The defendants' consent to the application was required for that purpose. The orders did not require the defendants to do more than that which is a necessary precondition to CTA's obtaining necessary approvals. They do not require the defendants to support the application. They contain no implication that the defendants are not entitled to oppose the grant of approval. That is clear from paras [97]-[104] of the principal judgment. The effect of what I there said was that the defendants' objections to the legality of CTA's operations should be determined by the appropriate regulatory authorities. The requirement that the defendants give necessary consents to applications for approval did not imply that the defendants could not oppose the grant of approvals.
CTA complains that the defendants have misrepresented to the council the effect of the Court's orders. It contends that nothing decided in the case establishes that the external car spaces, the hard stand or certain basement car spaces were not common property.
By its amended statement of claim CTA had sought orders, the effect of which, if granted, would have been that there was an agreement for lease of areas that included nine car spaces in the basement opposite four enclosed car spaces, the hard stand outside the warehouse, and seven car spaces opposite the warehouse, or alternatively that the defendants were estopped from denying that CTA was entitled to a lease of those areas (amongst others). At the trial, the defendants did not dispute that CTA used these areas, but denied its continued right to do so. During the hearing I raised a question whether a claim that there was a long-term lease of land that was not within the building might raise the issue of whether there was a subdivision. Counsel for CTA said that consideration would be given to that question. After that question was raised CTA did not pursue further a claim to a right of exclusive possession of those areas. Nor did it contend that those areas should be treated as common property.
On 9 December 2014, that is after the publication of reasons and before the making of final orders, CTA's solicitors wrote to the solicitors for the defendants stating that:
"We note that his Honour did not deal with the apron and parking spaces outside the CTA premises where our client's trucks load and unload and the factory staff park their cars …
To avoid further disputation between the parties, we request that these areas either be included in the definition of 'CTA premises' or that CTA otherwise be given parking rights over those areas."
The defendants did not agree. The defendants' solicitors said:
"If your client seeks to have the 'apron and parking spaces' included in the definition of 'CTA Premises' in the Short Minutes of Order or in any lease executed, it will need to negotiate to do so with our clients via us as their lawyers".
The issue was not ventilated when final orders were made on 18 December 2014. The final orders did not include orders giving CTA exclusive possession or non-exclusive possession of such car parking spaces. Nor was any such right conferred by the lease that was entered into pursuant to the orders of 18 December 2014. After lengthy negotiation the terms of that lease were settled by agreement, save as to a dispute concerning the giving of directors' guarantees. I resolved that matter on 3 September 2015 and directed execution of the lease. No question of whether CTA should have a right to use external or other basement car parking spaces was raised on the settlement of the lease.
Whilst CTA is correct in saying that the Court was not asked to decide and did not decide whether CTA had the right to use such areas for car parking, it does not follow that the defendants cannot assert that CTA has no such right on land that is not subject to CTA's lease. CTA made a claim which included a claim for exclusive possession of additional car parking spaces on land outside the building. It did not pursue that claim. Nor did it pursue a claim for non-exclusive rights to use such areas for car parking. I see no reason that the defendants cannot assert that as legal owners of the land in question CTA does not have the right to park on the defendants' land without their consent, which it refuses to give.
The defendants submitted that it would be contrary to the terms of the lease if CTA used any part of the premises leased to CTA for car parking because the lease requires the leased premises to be used as "Manufacturing facility and ancillary offices and warehouseing". Clause 7.1 of the lease provides that CTA must not use, occupy or permit the premises to be used or occupied for any other purpose. However, that permission extends to a use for purposes incidental to the permitted use (Lizzio v Council of the Municipality of Ryde (1983) 155 CLR 211 at 216-217 per Gibbs CJ). The defendants are wrong in their submission to the council that CTA has no legal right to any car spaces on the property at all, including in the basement (except for four car spaces which it occupies with its plant and equipment). The use of any of the leased premises for car parking that is incidental to the permitted use under the lease is permitted.
CTA is not entitled to the orders sought in paras 2 and 3 of its notice of motion. The orders sought go well beyond restraining the first to fourth defendants from representing to the council that CTA is not entitled to use any part of the basement which is the subject of its lease in addition to the four spaces that are occupied by its plant and equipment, or requiring the first to fourth defendants to correct statements to that effect. I make no finding as to whether the council should be required to decide whether CTA has a right to use any of the leased premises for car parking. But if CTA's right to use the leased basement area for car parking as a use incidental to its conducting a manufacturing facility, occupying offices and warehousing is an issue for the council, CTA can bring these reasons to the council's attention.
For these reasons CTA's notice of motion filed on 16 November 2015 should also be dismissed. The notices of motion were heard together and the same evidence was relevant to both applications. I will hear the parties on costs.
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: 04 December 2015
Parties
Applicant/Plaintiff:
Construction Technologies Australia Pty Ltd
Respondent/Defendant:
Doueihi & 4 Ors
Legislation Cited (2)
Environmental Planning and Assessment Regulation 2000(NSW)