Council of the City of Sydney v Samadi

Land and Environment Court (NSW)|2010-07-16|Before: Pepper J

Introduction 1 HER HONOUR: Before the Court is an application made by Mr Nasser Samadi to adjourn Class 4 proceedings filed in the Court on 5 March 2010 by the Council of the City of Sydney ("the council"), pending resolution of a Class 1 appeal filed by Mr Sanda Svedas, on 18 June 2010. The Class 1 proceedings are the subject of expedition before the Court and have been set down for a two day hearing commencing 26 August 2010. 2 The application is made principally on the basis that to proceed with the Class 4 application, in light of the expedited Class 1 proceedings, would result in wasted costs by Mr Samadi if the Class 1 appeal is successful. The application is opposed by the council. 3 In my opinion, the adjournment ought not be granted because the likelihood of potential wasted costs is not sufficiently high to warrant it. Factual Background and Chronology 4 The affidavits and exhibit, referred to in greater detail below, reveal the following factual background to the application. 5 On 29 May 2009, the council posted to Mr Samadi a Notice of Intention to Give an Order that premises of which he was the owner were being used for residential purposes for which development consent was required but had not been obtained. The order was served at the last address known to the council for Mr Samadi. 6 On 4 June 2009, Gaden Lawyers ("Gadens"), acting on behalf of Mr Samadi, acknowledged Mr Samadi's receipt of the Notice and stated that there was a dispute between Mr Samadi and the council as to whether the premises required development consent to be used for residential purposes. Gadens requested copies of documents relied on by the council in support of its assertion that the residential use required development approval. 7 On 16 June 2009, Gadens again wrote to the council on behalf of Mr Samadi. Gadens stated to the council that Mr Samadi had advised it that the previous owner of the premises had provided him with historic records demonstrating that at all material times the premises were being used as a residence. The letter set out in detail Mr Samadi's position in rejecting the council's contentions concerning the unlawful use of the premises. Further, Mr Samadi disputed one of the reasons for issuing the Notice of Intention, namely, that the premises in their current state were not compliant with the Building Code of Australia, and therefore, were not suitable for residential uses. 8 On 24 July 2009, the council wrote to Gadens in response to its letter of 16 June 2009. On 21 September 2009, the council issued an order to cease the use of the premises for residential purposes ("the order"). The reasons for the order were as follows: 1. The premises have been approved for commercial use only, following development application 44/81/0036 from 1981;

The use of the premises for residential purposes requires development consent under South Sydney Local Environmental Plan 1998;

The premises in their current situation are not compliant with the Building Code of Australia and therefore are not suitable for residential use;

The amenity of the occupants and adjoining properties may be affected which requires assessment under the Environmental Planning and Assessment Act, 1979;

The health and safety of the occupants needs to be assessed in accordance with the Building Code of Australia. 9 The period for compliance was 28 days from the date of the issue of the order. The order was posted to Mr Samadi at the same address as the Notice of Intention to Give an Order. The order stated that it was an offence pursuant to s 125 of the Environmental Planning and Assessment Act 1979 to fail to comply with the order and should the order not be complied with, the council may commence legal proceedings in this Court seeking mandatory orders, costs and a penalty. 10 On 23 September 2009, Gadens wrote back to the council referring to the order and stating that "our firm has no instructions to accept service of the Order on Mr Nasser Samadi's behalf." The letter went on to say that Gadens had been unable to contact Mr Samadi to discuss the order and that they did not know whether he had received a copy of the order. The letter stated further, that Gadens had contacted a member of Mr Samadi's family and that they were instructed that he used to occupy the premises as his primary residence, but that he had moved away several months ago. Gadens further stated in the letter that they were instructed that the premises were not currently leased to anyone for residential purposes and that they were not currently being used for residential purposes. 11 Notwithstanding these instructions, no later than 12 December 2009, and for a period of 12 months, Mr Samadi entered into a residential tenancy agreement with Ms Suzanne Wood in respect of the premises. Procedural History of the Class 4 and Class 1 Proceedings 12 In the Class 4 proceedings the council seeks the following relief: 1. A declaration that, in contravention of section 124 of the Environmental Planning and Assessment ("the EPA Act"), the Respondent failed to comply with the terms of an Order dated 21 September 2009 and served on the Respondent by the Applicant pursuant to Section 121B of the EPA Act ("the Section 121B Order").

A declaration that the Respondent is unlawfully using (or, in the alternative, has been unlawfully using) the premises situated at and known as 533-535 Elizabeth Street ("the Premises") for residential purposes ("Residential Purposes").

A declaration that the respondent is unlawfully using (or, in the alternative, has been unlawfully using) the premises situated at and known as 533-535 Elizabeth Street ("the Premises") for the purposes of a "boarding house" ("Boarding House Purposes").

An Order restraining the Respondent (by himself or through his servants, contractors and or agents) from using or permitting the use of the Premises for Residential Purposes or Boarding House Purposes ("the said Purposes") until development consent for either use is granted pursuant to the EPA Act and such consent is operative.

An Order restraining the Respondent (by himself or through his servants, contractors and or agents):

a) from advertising or holding out the Premises or any part of them as available for the said Purposes; and

b) from leasing or licensing the Premises or any part of them for the said Purposes without first obtaining a development consent specifically authorising either use.

An Order that the Respondent pay the Applicant's costs of these proceedings as agreed or assessed; and

Such further or other Orders as this Honourable court deems fit. 13 The council states that the dwellings currently have consent for use as commercial premises and not residential premises, and moreover, state that the premises are being used as a boarding house. Mr Samadi disputes that any different consent is needed to that which currently applies to the premises. 14 The Class 4 proceedings have been before the Court on a number of occasions. On 26 March 2010, when the matter first came before the Court there was no appearance on behalf of Mr Samadi. The proceedings were stood over to the list judge on 16 April 2010, and on that date the Court made orders for substituted service. 15 When the matter came back before the Court on 30 April 2010, Mr Samadi was represented and his legal representative requested an adjournment to 14 May 2010 in order to get instructions from Mr Samadi who, the Court was informed, had only just returned to the country from overseas. The Court agreed but indicated to Mr Samadi's legal representative that on the next occasion a timetable for the filing of pleadings and evidence was expected to be set. 16 However, when the matter came before the Court on 14 May 2010, Mr Samadi sought an adjournment of the Class 4 proceedings on the basis that a development application ("the DA") had been lodged on 13 April 2010 with the council in respect of the premises the subject of the Class 4 proceedings. 17 The application was opposed by the council who sought to have the proceedings listed for hearing. Council informed the Court that the application would not, even if approval were granted, obviate the need for the Class 4 proceedings. 18 For this reason and because no determination had been made in relation to the development application, in addition to the fact that it was the fourth time the matter had been listed for directions before the Court, the Court ordered the following timetable for the future conduct of the proceedings: (1) the applicant is to file and serve its points of claim and affidavits in chief by 11 June 2010;

(2) the respondent is to file and serve its points of defence and any cross-claim and the affidavits on which it wishes to rely by 25 June 2010;

(3) the applicant is to file and serve any reply and defence to any cross-claim and affidavits in reply by 9 July 2010;

(4) the matter is adjourned for further directions and allocation of hearing date on 16 July 2010;

(5) parties are to notify promptly the Court if there is any material slippage in the timetable; and

(6) the parties have liberty to restore on three working days' notice. 19 The Court noted its anticipation that the matter would be ready to take a hearing date on the next occasion. 20 Shortly before Mr Samadi was due to file his defence and affidavits, Mr Svedas subsequently filed the Class 1 appeal in the Court. The appeal is against the deemed refusal by the council of the development application lodged by him in respect of the premises. 21 The development application is for the demolition of the existing premises and the construction of a nine storey mixed use development with 31 residential units, ground floor retail and basement car parking for nine vehicles. What is proposed to be demolished are two residential terrace houses at 533 and 535 Elizabeth Street. The 533 Elizabeth Street terrace is a two storey terrace (circa 1865) and the 535 Elizabeth Street terrace is a single storey terrace with an attic dorma. The two buildings are internally connected. 22 To date council has filed its affidavits but not its points of claim, which it says are ready to be filed immediately. Mr Samadi has taken no steps in the preparation of his defence. Evidence of Mr Samadi 23 Mr Samadi relied on four affidavits. Two of those affidavits were sworn by Mr Gordon Hartley, a solicitor employed by Gadens, who remain Mr Samadi's solicitors. In his first affidavit sworn 30 June 2010, Mr Hartley states that Mr Samadi did not become aware of the order until April 2010. He also states that he is instructed that Mr Samadi did not become aware that council had commenced Class 4 proceedings until April 2010. 24 Mr Hartley states that he is instructed that Mr Samadi intends to immediately carry out the proposed development if the DA is approved by the council or the Court. 25 In his second affidavit sworn 9 July 2010, Mr Hartley states that Mr Samadi is 77 years old and has been recently diagnosed with bowel cancer. 26 Mr Hartley further states that Mr Samadi purchased the premises in 2007. His intention at the time was to use the premises as his residential dwelling. When he purchased the premises, Mr Samadi understood that the use of the property for residential purposes was permitted. Standard conveyancing searches were carried out before settlement and none of these searches suggested that this use was not permitted. Moreover, there was nothing about the characteristics of the terrace houses which suggested that the premises had been used for any purpose other than residential. At the time of the purchase, the premises were the subject of a residential lease. 27 Mr Hartley states that he is instructed that it was not until 2008 when, pursuant to Mr Samadi querying rate notices received from the council, that Mr Samadi advised the council that the property was his residence and was not being used for commercial purposes. The council inspected the premises and confirmed Mr Samadi's representations. 28 The council requested that Mr Samadi lodge a development application seeking consent to use the property for residential purposes. This was done. The council then requested additional information in support of the development application including a report confirming compliance with the Building Code of Australia. Given that the two terraces were over one hundred years old they did not comply with the Building Code of Australia and no report confirming compliance was provided to the council. The council refused the development application, in part, on this basis. 29 Mr Hartley states that during this time council staff were in regular contact with Mr Samadi and conducted a number of inspections on his premises. Mr Samadi found his dealings with the council stressful and moved out of the premises. He then leased the premises to residential tenants and went overseas for a holiday, not returning until April 2010. 30 Reliance was also placed on an affidavit of Mr Ash Samadi dated 8 July 2010. Mr Ash Samadi is the sole director of Samadi Corporation Pty Ltd ("the corporation") which has entered into a development management contract with Mr Nasser Samadi in respect of the future development of the premises. Mr Ash Samadi states that the contract is to arrange for appropriate approvals and finance to proceed with the development of the premises. The contract expires on 30 August 2010. If the corporation fails to obtain all necessary approvals to develop the premises by this date then Mr Nasser Samadi is to deem the development unfeasible. Mr Ash Samadi states that if this transpires, then Mr Nasser Samadi "wishes to pursue other options with regards to the property which would produce alternative result to the current dilapidated state of the property." 31 Mr Ash Samadi goes on to detail the steps that have been taken to date to obtain the necessary approvals, including the filing of the Class 1 appeal on 18 June 2010. He states that if the appeal is upheld and the development approved, the corporation intends to obtain a construction certificate and commence the development immediately, in which case he anticipates that development would be completed in 18 months. 32 Finally, Mr Ash Samadi states that he has obtained finance for construction of the proposed development which will lapse if the appeal is not upheld by 30 September 2010. 33 Mr Samadi also relied on an affidavit of Mr Albert Chahda sworn 14 July 2010. Mr Chahda is the director of Gram Constructions Pty Ltd, a licensed building and construction consultancy firm. Mr Chahda says that he has knowledge and expertise in dealing with the requirements of the Building Code of Australia. 34 On 12 July 2010, Mr Chahda inspected the premises in order to identify all of the areas he believed were unsafe, unfit to use for residential purposes or that suffer from structural problems that impose a danger to the public or residents. Mr Chahda says that he found no structural defects or conditions that pose any health or safety concerns for residents of the terraces or the public. While he found the terraces to be in poor to fair condition, there was no evidence of dangerous or unsafe building or fixture parts. Further, while there were areas of the premises that did not strictly comply with the Building Code, he was of the opinion that they did not pose a safety or health risk and were typical features of terraces that age. 35 Mr Chahda noted that there were smoke detectors installed in the premises in accordance with the main fire safety requirements for residential homes under the Building Code. In addition, the premises had two fire extinguishers and provided two egress points in compliance with the safety requirements of the Code. 36 While recommending repairs and maintenance to the rear door entry to the back of the premises and the second floor front balcony, it was Mr Chahda's conclusion that the terraces were safe to be used for residential purposes in their current condition. Evidence of the Council 37 The council relied on three affidavits. First, an affidavit of Mr Adrian Mihaila sworn 10 June 2010. Mr Mihaila is a compliance investigator for the council. Mr Mihaila deposed that on 2 February 2009 he attended the premises for the purpose of conducting an inspection and was told by a tenant that the owner's name was Mr Dillon Roy. 38 The next day he received a telephone call from Mr Dillon Roy, and thereafter, communications passed between Mr Mihaila and Mr Roy concerning an inspection of the premises. On 16 November 2009, Mr Mihaila inspected the premises and was told by one of the occupants living there that the premises were being used as a boarding house. From what Mr Mihaila observed on this inspection he concluded that this information was correct. 39 On 30 April 2010, Mr Mihaila made enquiries with the Department of Immigration and Citizenship regarding Mr Samadi's travel. The Department of Immigration indicated to him that a person identified as "Seyed Nasser Samadi Dezfouli" had left Australia on 22 October 2009 and had returned on 11 March 2010. 40 The council also relied on an affidavit of Mr Tim Wise affirmed 8 July 2010. Mr Wise is a senior planner for the council. Mr Wise states that the current development application lodged on 13 April 2010 does not seek approval for use of the existing dwellings for residential purposes. Mr Wise also states that it is the council's opinion that the dwellings are being used as a boarding house. This was based in part from his own observations and an inspection by him on 23 June 2010. Mr Wise states that there is no consent for the use of the premises as a boarding house. 41 Mr Wise states that in his opinion, even if the Court were to uphold the appeal and grant consent for the DA this would not authorise the use of the existing dwellings for the purpose of a boarding house. Further, it is his opinion that even if the Court were to uphold the appeal, there would be no obligation on Mr Samadi to proceed with the development. 42 Finally, the council relied on an affidavit of Mr Vijay Naicker affirmed 11 June 2010. Mr Naicker is a building surveyor for the council. Mr Naicker deposes that pursuant to an examination of a number of photographs and two plans relating to an inspection conducted of the premises by Mr Adrian Mihaila, he has identified several breaches of the Building Code of Australia. He noted that there were possible additional non-compliances with the Code but that he did not have adequate information to make such an assessment as he had not had the opportunity to inspect the premises. Mr Naicker stated, however, that from his examination of the plans the premises appeared to be a boarding house. Submissions of Mr Samadi 43 Mr Samadi submits that the adjournment should be granted primarily on the basis that to do so would avoid unnecessary costs being thrown away if the Class 1 appeal is successful. This is because the Class 1 appeal will result in the premises being demolished given Mr Samadi's desire to commence development immediately, which will render futile the relief sought by the council in the summons. 44 Mr Samadi further submits that: (a) as the affidavit of Mr Chahda demonstrates, there is in fact no environmental harm resulting from the alleged unlawful use of the premises and that the premises are not a risk to human safety;

(b) no prejudice would flow to the council if the Class 4 proceedings were adjourned given that, for example, the council has not yet filed its points of claim as previously directed by the Court;

(c) since returning to the country and filing the DA and Class 1 appeal, there has been no delay in making the adjournment application and in seeking expedition of the Class 1 appeal;

(d) the dispute the subject of the Class 4 proceedings has been ongoing since 2008, when it was brought to the council's attention by Mr Samadi. Since that date the council has been aware of the use to which the premises have been made and the council has not taken any steps to restrain that use; and

(e) both the use and the development are permissible with consent. 45 Mr Samadi submits, if the Class 4 proceedings are not adjourned then the overriding purpose of the just, quick and cheap resolution of the real issues for determination in those proceedings pursuant to s 56 of the Civil Procedure Act 2005 ("the CPA") would not be met. Submissions of the Council 46 The council's primary submission is that even if the Class 1 proceedings are resolved in favour of Mr Samadi, this will not wholly determine the Class 4 proceedings. This is because there is no guarantee, despite what it characterises as second-hand evidence on behalf of Mr Samadi, that development works would commence in a timely fashion, or even at all. 47 Given the evidence that the premises continues to be unlawfully used not only for residential purposes but, moreover, for the purpose of conducting a boarding house, this uncertainty is unsatisfactory. 48 In particular, the council says that little weight can be attributed to the indirect evidence of Mr Samadi that if he is successful in the Class 1 appeal he will commence development immediately given that: (a) Mr Samadi in fact appeared to be in the country at the time that the order was served and when the matter was before the Court on 16 April 2010, contrary to the instructions that he gave to his solicitors concerning his return date from overseas; and

(b) that Mr Samadi entered into a residential tenancy agreement in circumstances where it can be readily inferred that Mr Samadi had notice of the order and of council's position that the use was unlawful. 49 The council also submitted that notwithstanding the evidence of Mr Chahda, there was evidence that the premises did not comply with the Building Code of Australia, and therefore, that they were in some respects unsafe. This evidence was based not only on Mr Naicker's study of the plans of the premises, but also on the inspection evidence of Mr Wise and Mr Mihaila. 50 In short, council submitted that even if the Class 1 appeal succeeds then it will continue with the Class 4 proceedings because the current use to which the premises are put is unlawful and there is no certainty that even if the appeal succeeds this use will cease. Consideration 51 Ordinarily the Court would be loath to insist on the continuation of the preparation of proceedings where costs may be thrown away by reason of an outcome in another matter. This would not facilitate the overriding purpose set out in s 56 of the CPA. 52 However, in the present Class 4 proceedings it is by no means likely that these costs would be wasted. This is because of the uncertainty surrounding the commencement of the development assuming, of course, that the Class 1 appeal succeeds. I cannot ignore the fact that Mr Samadi is elderly and seriously ill. I did not find the evidence proffered on behalf of Mr Samadi that he would commence construction immediately upon success in the Class 1 appeal compelling. 53 I was influenced in this conclusion by the fact that Mr Samadi may not have been truthful in instructing his solicitors as to when he actually returned to the country. I was not impressed that Gadens had no instructions to accept service of the order. 54 I was even less impressed by the fact that he entered into a residential tenancy agreement for a period of 12 months after the order was issued and before any DA was lodged with the council. 55 Indeed it may be inferred that a factor in Mr Samadi's behaviour, including in lodging the DA with the council after the Class 4 proceedings had been filed and a timetable ordered, was to orchestrate the very thing that he now seeks from the Court, namely, an adjournment and/or avoidance of the Class 4 proceedings. The lodgement of the DA and filing of the appeal is not a situation, for example, of someone without development consent seeking to regularise the unlawful behaviour. 56 In these circumstances, and given that there can be no guarantee that the alleged unlawful use will cease in a timely way, or at all, even if the Class 1 appeal is successful, it is not unreasonable for the council to proceed with the Class 4 proceedings. In my opinion, it is unlikely that these proceedings will be rendered futile by it. They are also, given the delays to date which have largely been at the behest of Mr Samadi, entitled to proceed expeditiously. 57 Accordingly, in my view, to grant an adjournment would not satisfy the overriding purpose set out in s 56 of the CPA as it would neither facilitate the just nor, I suspect, quick determination of the real issues in the proceedings. Orders 58 In addition to dismissing the application for an adjournment, it is appropriate to make orders for the future conduct of the proceedings, including the setting down of the matter for hearing. 59 The orders of the Court are therefore: (1) application for adjournment dismissed;

(3) the council is to file and serve points of claim by 19 July 2010; (4) Mr Samadi is to file and serve points of defence and affidavits by 16 August 2010;

(5) the council is to serve any evidence in reply by 23 August 2010;

(6) the parties are granted leave to approach the Registrar to obtain a hearing date (estimate of three days) by 23 July 2010; and

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.

CITATION : Council of the City of Sydney v Samadi [2010] NSWLEC 125

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