Council of the City of Sydney v Waldorf Apartments Hotel Sydney Pty Limited and Anor

Land and Environment Court (NSW)|2008-07-01|Before: Pain J, Mr P

CITATION : Council of the City of Sydney v Waldorf Apartments Hotel Sydney Pty Limited and Anor [2008] NSWLEC 97

APPLICANT Council of the City of Sydney

PARTIES : FIRST RESPONDENT Waldorf Apartments Hotel Sydney Pty Limited

Development Consent :- whether 'residential flat building' includes use as serviced apartments

KEY ISSUES: Estoppel:- whether Council estopped by its conduct from exercising statutory duty

Discretion:- whether Court should exercise its discretion to make declaration of breach of Environmental Planning and Assessment Act 1979 given long delay in enforcement action

Central Sydney Local Environmental Plan 1996 City of Sydney Local Environmental Plan 2005 LEGISLATION CITED: City of Sydney Planning Scheme Ordinance 1971 County of Cumberland Planning Scheme Ordinance Environmental Planning and Assessment Act 1979 Local Government Act 1919

ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681 Attorney-General (NSW) v Quin (1990) 170 CLR 1 Barilla v James (1964) 81 WN (Pt 1) 457 Baulkham Hills Shire Council v Cosmopolitan Homes No 2 Pty Ltd (1986) 61 LGRA 200 Brickworks Ltd v Warringah Shire Council (1963) 108 CLR 568 Coffs Harbour City Council v Arrawarra Beach Ltd (2006) 148 LGERA 11 Coffs Harbour Shire Council v Ben Haul Industries Pty Ltd (1983) 48 LGRA 391 Commissioner of Taxation v Miller (1946) 73 CLR 93 Derisi v Vaughan [1983] 3 NSWLR 17 Derring Lane Pty Ltd v Port Phillip City Council (1999) 104 LGERA 92 Edwards v Sutherland Shire Council (2006) 146 LGERA 199 F Hannan Pty Ltd v Electricity Commission (NSW) (No 3) (1985) 66 LGRA 306 F N Eckold Pty Ltd and Ors v Auburn Municipal Council (1975) 34 LGRA 114 Hafza v Director-General of Social Security (1985) ASSC 92-052 CASES CITED: Hawkesbury City Council v Sammut (2002) 119 LGERA 171 Holidays-A-Float Pty Ltd v Hornsby Shire Council (1992) 75 LGRA 127 Hornsby Shire Council v Vitone Developments Pty Ltd (2003) 132 LGERA 122 KJD York Management Services Pty Ltd v City of Sydney Council (2006) 148 LGERA 117 Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 New South Wales Trotting Club Ltd v Municipality of Glebe (1937) 37 SR (NSW) 288 North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd & Anor (1990) 21 NSWLR 532 Potter v Minahan (1908) 7 CLR 277 Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 Rowley v New South Wales Leather Trading Co Pty Ltd v Woollahra Municipal Council (1980) 46 LGRA 250 Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416 Sydney City Council v Zizza (1989) 67 LGRA 224 The Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 Trimboli v Penrith City Council (1981) 48 LGRA 323 Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335

TEXTS CITED: Aronson, Mark et al, Judicial Review of Administrative Action, 3rd ed (Sydney: Lawbook Co, 2004) Halsbury's Laws of England 4th ed, Vol 44

DATES OF HEARING: 3 December 2007 4 December 2007

APPLICANT Mr M Baird SOLICITORS City Prosecutor's Office, Sydney City Council LEGAL REPRESENTATIVES: RESPONDENTS Mr P McEwen SC with Mr M Staunton SOLICITORS Landerer & Company

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40389 of 2007 Council of the City of Sydney v Waldorf Apartments Hotel Sydney Pty Limited and Anor

JUDGMENT 1 Her Honour: The Council of the City of Sydney (the Council) has commenced these Class 4 proceedings seeking a declaration that the First Respondent is operating premises at 57 - 67 Liverpool Street Sydney (the premises), known as the Waldorf, as serviced apartments without development consent. The Council also seeks declarations that a development consent for use of the premises as "flats" does not permit or authorise the use of the premises for "serviced apartments", "hotel" or the like, and that the First Respondent, its servants or agents cease carrying out the use of the premises for "serviced apartments", "hotel" or the like until such time as it has obtained development consent. Rinbac Pty Limited was joined, on its application, as the Second Respondent during the hearing. Its joinder was not opposed by the Council. The Council seeks relief only against the First Respondent. 2 A large number of matters are contained in the Agreed Statement of Facts (ASOF) filed by the parties. The Respondents admit that the units managed by them are used for serviced apartments. The Respondents currently control 27 units (controlled units) in the 100 unit building under a transitional management agreement with the respective owners of those units. The business arrangements of the First Respondent over the last few months has been the arranging and provision of accommodation in the controlled units, including carparking if necessary. Details are identified in the ASOF at par 32-42 as to the advertising, booking arrangements, provision of staff and services in the manager's lot (Lot 191) in the building. It is not necessary to set all this out in detail in the judgment. 3 Lot 191 has the benefit of a special by-law under the building's strata title by-laws passed in 1992. The by-law permits the owner of Lot 191 to use additional areas within the building for the purpose of maid change rooms, trolley storage areas and linen rooms to facilitate the use of the building for short term accommodation/serviced apartments. 4 The Council relied on the affidavit of Mr Moore, Planning Manager of the Council, sworn on 10 August 2007, which identifies the relevant planning instruments applying to the premises now, being the City of Sydney Local Environmental Plan 2005 (CSLEP 2005). Serviced apartments are a permissible use in the City Centre zone subject to obtaining development consent. He refers to the planning issues related to mixed use buildings which have both residential accommodation and serviced apartment uses. There are different impacts due to the short term use of serviced apartments because of the different living and activity patterns and behaviour of guests, greater maintenance required due to guests in serviced apartments and potential impacts on residential amenity. 5 The Council also relied on an affidavit of Mr Pearson, compliance officer with the Council, sworn on 22 June 2007, which annexed a range of correspondence including inquiries made by Mr Cartwright about the use of the building for short-term letting and expressing concern that such use was illegal from 2004 as well as correspondence of complaints about the premises received by the Council. 6 The Council also relied on an affidavit of Mr Fozzard solicitor, sworn on 27 November 2007, annexing correspondence sent by the Council manager building compliance (dated 1 February 2007) advising that development consent was required for the serviced apartment use of the premises, inter alia. A further letter to similar effect was sent by the Council's solicitors in April 2007. 7 The Respondents relied on the affidavit of Mr Rubinstein, sworn on 27 November 2007, who has managed the premises as serviced apartments since 1992. He attested to an inquiry he made of the duty planner in the Council in 1992 asking whether apartments in the building could be used for short term accommodation as serviced apartments. He was told that the Council was aware of the use and that additional approval was not required. He advised a prospective purchaser of one of the units at that time of that advice. He also stated that other purchasers told him they had received similar advice from the Council. He also stated that Lot 191 is a very narrow lot which it is feasible to use for administration of the serviced apartments business but not other commercial uses, for example, a souvenir shop venture there failed. The exclusive use areas attached to Lot 191 do not have any viable alternative use other than perhaps storage. If not used in conjunction with the serviced apartment use the lot has little value. He also noted that there are signs at the premises which have indicated its use as hotel/serviced apartments since 1987. 8 During his supervision of the serviced apartments he dealt with the Council on many occasions in relation to garbage collection, fire safety certification and public pool usage. No officer raised any issue concerning the need for additional approvals to operate as serviced apartments. The Council has had knowledge of the use of the building in this manner for 20 years. 9 Mr Rubinstein noted in his affidavit at par 22 that, during his involvement with the business, there have been three complaints about the serviced apartments. Chronology 10 The parties filed a bundle of documents which contained the large number of applications made in relation to the premises. The following chronology based on these documents was also filed by the parties. While it refers to several applications made to the Council in relation to the premises those identified by number 1 to 4 in bold were the focus of the parties' arguments. (i) 16 July 1971 - The City of Sydney Planning Scheme Ordinance (CSPSO) made, pursuant to which the Site was zoned "County Centre". (ii) September 1980 - Development consent no 44/80/0266 granted by the Council (consent no 1). (iii) 24 February 1981 - Waldorf Apartments Hotel Sydney Pty Limited (the First Respondent) is registered in New South Wales. (iv) In or about 1981 - 1983 - premises constructed (v) On or about 6 July 1983 the First Respondent lodged a development application for strata subdivision of the premises. (vi) 22 August 1983 - The Strata Application was approved by the Council subject to conditions. (vii) September 1983 - Strata Plan No 20656 was registered in respect of the premises (viii) 1983 - 1987 - First Respondent sells off some apartments in the premises. (ix) 1987 - First Respondent purchases back most of apartments previously sold so that it owned more than 90 per cent of apartments. (x) In or about 1987 - The use of the flats in the premises by the First Respondent as serviced apartments commenced. (xi) On or about 23 September 1987 the First Respondent lodged an application with the Council for alteration of parking restrictions (xii) On or about 3 December 1987 the First Respondent lodged a development application with the Council for erection of identification signs stating "THE WALDORF" on eastern and western walls. (xiii) 8 January 1988 Council responds to letter of 23 September 1987 requesting changes to parking restrictions. (xiv) 5 April 1988 - The sign application was approved by the Council subject to conditions (consent no 2). (xv) On or about 12 September 1988 the First Respondent lodged a development application with the Council for alterations to the premises and use for "new restaurant, new administration area, new souvenir kiosk and new baggage store" (consent no 3). (xvi) 14 October 1988 - The development application for alterations was approved by the Council on 14 October 1988 subject to conditions. (xvii) 25 August 1989 - On-Licence (Restaurant) Premises Licence Number 24002292 was granted to the Licensee to the Waldorf Restaurant. (xviii) On or about 28 February 1991, Waldorf Apartments Pty Ltd lodged a development application with the Council for "Outdoor seating area for use of existing ground floor restaurant". (xix) On or about March 1991 the First Respondent wrote to the Council about garbage collection stating how there were occasions in the preceding months when the garbage had not been collected, and that the apartments should be classified as "commercial", not "residential". (xx) On or about 28 March 1991 the Council replied by clarifying the collection times and agreed that the apartments should be classified as "commercial", and, as a result, a new cleaning contract should be negotiated with the cleaning department on that basis, or a private contract should be taken out. (xxi) 12 April 1991 The outdoor seating application was approved by the Council subject to conditions on 12 April 1991 (consent no 4). (xxii) Early 1992 Mr Rubenstein had a telephone conversation with the duty planner at Sydney City Council about serviced apartments use. According to Mr Rubinstein's affidavit, he asked the duty planner whether use as serviced apartments for short term accommodation was permitted or whether approval was needed. The duty planner answered that Council was aware the premises were being used as service apartments and that Mr Rubinstein did not need any additional approval. (xxiii) In or about early 1992 the First Respondent began selling its interest in individual units in the Waldorf to investors and owner occupiers. (xxiv) In or about early 1992 the First Respondent entered into two forms of standard management agreements with a number of the proprietors of various lots in the Strata Plan to manage their lots as serviced apartments (Management Agreements). (xxv) During 1992 Mr Rubenstein speaks with prospective purchasers and solicitors who confirm Council's advice that no further consent is needed for serviced apartments. (xxvi) 29 February 1992 - Mok & Associates wrote to the Council informing it that a client intended to purchase unit 105 and the carspace (being Lots 35 and 192). Confirmation was sought that the units could be used as serviced apartments, or at least residential apartments. (xxvii) 13 March 1992 - the Council replied to Mr Mok's letter stating that lot 35 was approved as a residential lot and that Council currently had no restriction on the use of residential lots as serviced apartments. (xxviii) 6 April 1992 - Exclusive use by-laws made for Lot 191. (xxix) 27 May 1992 - the proprietors of the Strata Plan (the Scheme) entered into an agreement with the First Respondent. (xxx) 27 May 1992 - the First Respondent enters into one of two forms of standard management agreements (the Management Agreements) with proprietors of various lots in the Strata Plan. (xxxi) 16 March 1993 - the First Respondent entered into an agreement between Waldorf Apartments Pty Ltd (A.C.N 002 078 165) and Rinbac Pty Limited (the Second Respondent), by which the First Respondent agreed, inter alia, to assign its rights and obligations under the Strata Agreement to the Second Respondent and to terminate the Management Agreements. (xxxii) 7 May 1993 - the shareholders in the First Respondent at that time entered into an agreement (Share Sale Agreement) to sell their shares to the Second Respondent . (xxxiii) 17 March 1994 - the Scheme entered into an agreement with the First Respondent (Caretaker Agreement) by which the First Respondent agreed to carry out the management, caretaking, security and supervision of the common property and the supervision of the general repair and maintenance thereof. (xxxiv) 23 March 1994 - A transfer was executed in respect of the sale of the Manager's Lot from the First Respondent to the Second Respondent. (xxxv) 14 September 1995 - the Scheme, the First Respondent and the Second Respondent entered into a Deed of Novation and Amendment (Deed of Novation and Amendment). (xxxvi) 20 December 1996 the Central Sydney Local Environmental Plan 1996 (the CSLEP 1996) was made, which introduced "serviced apartments" as a use of land controlled under the CSLEP. (xxxvii) June 2004 - complaint by dissatisfied guest Puccini who fell over in the sauna and did not like standard of accommodation (xxxviii) December 2005 - the CSLEP 2005 made, serviced apartment use is permissible with consent. (xxxix) November 2006 - email correspondence between the Council and the First Respondent from 2004 concerning use of the premises as serviced apartments, attached to the affidavit of Mr Pearson. (xl) June 2007 - Transitional Tenancy Agreements entered into with owners of 27 apartments. 11 The end result of the course of contracts referred to above at par 10(xxxi-xxxv) is the following contractual relationships between the Respondents: (i) Mr Rubinstein is a director of both Rinbac and the First Respondent (ii) Rinbac is now the owner of lot 191 and therefore has the benefit of the exclusive use by-law related to it. (iii) Rinbac has the caretaker rights pursuant to the Novation Agreement referred to in par 10(xxxv) of the chronology (iv) the First Respondent is now a wholly owned subsidiary of Rinbac (v) although there is no written agreement, the First Respondent carries out the caretaker duties on behalf of Rinbac (vi) the First Respondent continued to have the management rights of the controlled units pursuant to the management agreements referred to in par 10(xxxiii) of the chronology up until the First Respondent entered into the Transitional Management Agreements (TMA) in or about June 2007 and thereafter the First Respondent has had the management rights of the controlled units pursuant to the TMA. 12 While a number of development applications and consents are identified in the chronology the parties' arguments focused on four consents as follows:

Development consent No 1 (1980 ) 13 Development consent no 44/80/0266 was granted for the erection on the site of "a twenty-four storeyed building, comprising ground and first to fourth floors, inclusive, over the whole site and a nineteen storey tower to an overall height of 83.28m above the mean level of Liverpool Street" and for use of those premises for "shops on part of the ground floor, tenant parking for 100 cars on the remainder of the ground floor and on the first to fourth floor, inclusive, and for the purpose of 64 one-bedroom flats and 36 two-bedroom flats on the upper floors with plant rooms and swimming pool on the roof in accordance with plans Nos 115/1 to 115/8, inclusive dated January and February 1980" subject to conditions. This consent was granted by the Council on 1 September 1980.

Development consent No 2 (1988) 14 On or about 3 December 1987 the First Respondent lodged a development application with the Council for erection of identification signs stating "THE WALDORF" on eastern and western walls. This application was approved by the Council on 5 April 1988 subject to conditions. Development consent No 3 (1988) 15 On or about 12 September 1988 the First Respondent lodged a development application with the Council for alterations to the premises and use for "new restaurant, new administration area, new souvenir kiosk and new baggage store". The existing premises were described in the development application as "serviced apartments." Development consent no 4 (1991) 16 On or about 28 February 1991, the First Respondent lodged a development application with the Council for "Outdoor seating area for use of existing ground floor restaurant". The existing premises were described in the development application as "Residential Apartments operating as serviced apartments." The work was described in the development application as "Removable platform with removable handrail for levelling of excessive slope of existing paving." The outdoor seating application was approved by the Council subject to conditions on 12 April 1991.

Legislation 17 At the time the 1980 development consent (consent no 1) was granted, development of the premises was controlled by the CSPSO made on 16 July 1971 and the consent was granted pursuant to the CSPSO. The premises were in the County Centre zone. The zoning table to cl 23 of the CSPSO provided that "Caravan parks; extractive industries; gas holders; generating works; institutions; mines; offensive or hazardous industries; saw mills" were prohibited within the County Centre zone. Any purpose other than those prohibited purposes were permissible with consent (ASOF - tab 4 pages 48 and 50). 18 The CSPSO contained the following definitions (ASOF - tab 4 page 45): "Residential Building" means a building used or intended for use as a residential flat building, a boarding-house, a lodging house or a hostel, but does not include a motel.

"Residential Flat Building" means a building containing two or more flats, but does not include a row of two or more dwellings attached to each other such as are commonly known semi-detached or terrace buildings and "flat" means a room or suite of rooms occupied or used or so constructed, designed or adapted as to be capable of being occupied or used as a separate domicile.

19 The CSPSO did not define "serviced apartments" or "short term accommodation". These could therefore be the subject of a development application as an innominate use. 20 A definition of "serviced apartment" was introduced for the first time in the City of Sydney Local Environmental Plan 1996 (the CSLEP 1996). Development consent was required for such a use under the CSLEP 1996 as a permissible use in the relevant zone. This has continued under CSLEP 2005 in relation to the City Centre zone.

Construction of 1980 consent (consent No 1) Council's submissions 21 The 1980 development consent should be construed on the basis that "residential flat building" excludes use for serviced apartments. North Sydney Municipal Council v Sydney Serviced Apartments Pty Ltd & Anor (1990) 21 NSWLR 532 (the Blues Point Tower case) and KJD York Management Services Pty Ltd v City of Sydney Council (2006) 148 LGERA 117 support this approach. This case has similar parameters to the decision of the Court of Appeal in Blues Point Tower. The case also falls within the use of a "residential flat building" as "serviced apartments" considered by Lloyd J in KJD.

22 In the present case, the premises were built in the early 1980s following development consent granted on 1 September 1980. The development consent was for the erection on the site of "a 24 storey building" with: … shops on part of the ground floor, tenant parking for 100 cars on the remainder of the Ground Floor and on the First to Fourth Floor, inclusive, and for purpose of 64 one-bedroom flats and 36 two-bedroom flats on the upper floors with plant rooms and swimming pool on the roof in accordance with Plans Nos. 115/1 to 115/8, inclusive dated January and February 1980.

23 The planning control applicable to the site at the time of the development consent being granted was the CSPSO.

24 Unlike the facts in Blues Point Tower, the definition of "flat" and "residential flat" in the CSPSO was the same as the definition in Part 11 (Building Regulation) of the Local Government Act 1919 (the LG Act). Under the CSPSO: 'Residential Flat Building' means a building containing two or more flats but does not include a row of two or more dwellings attached to each other such as are commonly known as semi-detached or terrace buildings … 'flat' means a room or suite of rooms occupied or used or so constructed, designed or adapted as to be capable of being occupied or used as a separate domicile. 25 These definitions were included in the CSPSO as at 1980. This fact was recognised by Lloyd J in KJD at 119. 26 The issue in relation to the question of residential flat buildings and the need to provide that the use of land for residential purposes requires a degree of permanency of habitation or occupancy is longstanding.

27 Where the word "domicile" is employed in the definition of an occupancy use, however termed, the popular and legal meaning of domicile "embod[ies] the idea which is expressed in English by the word 'home' ie permanent home" (per Griffith CJ, Potter v Minahan (1908) 7 CLR 277 at 288).

28 The question before the Court now is whether the use of the rooms is for the purposes of "residential" accommodation or for some other purpose, namely short-term accommodation. Respondents' submissions 29 The proper construction of the 1980 consent and the planning instrument then in force (CSPSO) means the premises can be used for serviced apartments. Blues Point Tower and KJD did not consider the words "capable of use as …" but rather considered other aspects of the use of premises as a residential flat building. These cases did not consider the argument relied on by the Respondents.

30 The 1980 consent expressly authorises the use of the premises for "shops on part of the ground floor, tenant parking for 100 cars on the remainder of the ground floor and on the first to fourth floor, inclusive, and for the purpose of 64 one-bedroom flats and 36 two-bedroom flats on the upper floors with plant rooms and swimming pool on the roof, all in accordance with plans Nos. 115/1 to 115/8 inclusive…". 31 The Respondent contends that the 1980 consent authorises the use of the apartments within the premises as "flats". A "flat" as defined in the CSPSO was a room or suite of rooms which are either occupied as a separate domicile; or used as a separate domicile; or constructed, designed or adapted as to be "capable" of being occupied or used as a separate domicile.

32 Each of the apartments within the premises are "capable of being occupied or used as a separate domicile". The definition does not require actual user as "a separate domicile" only that the built form has that capacity. Each apartment within the subject premises is a flat as defined in the CSPSO, and so it follows that the Respondents' use of the apartments is authorised by the 1980 consent. 33 The Respondents also submitted that the circumstances of this case are distinguishable from those in Blues Point Tower and KJD on the facts. Finding on issue 1 34 Did the 1980 development consent authorise use for serviced apartments? In Blues Point Tower the Court of Appeal had to consider whether the use by a company of 37 units in a residential flat building of 144 units as serviced apartments was lawful under the relevant town planning laws in effect at the time development consent was granted in 1961. Mahoney JA (Priestley and Handley JJA concurring) had to determine if this use fell within the use of the premises as a residential flat building. The relevant planning instrument was the County of Cumberland Planning Scheme Ordinance (CPSO) which contained a definition of "residential building" which included use for a residential flat building but there was no definition of "residential flat building". 35 Mahoney JA noted that the LG Act also contained a definition of "flat" as "a room or suite of rooms occupied or used or so constructed, designed, or adapted as to be capable of being occupied or used as a separate domicile" and "residential flat building" as a "building containing two or more flats but does not include a row of two or more dwellings attached to each other such as are commonly known as semi-detached or terrace buildings". These had no direct application to the CPSO however. 36 Mahoney JA held at 535 that the physical structure of the building does not determine whether its use is permissible. The parts of the building controlled by the company did not differ physically from the other occupied parts of the building. The issue of use related to the time for which the flats were occupied as relevant to determining the nature of the use as residential or not. His Honour rejected an argument that as the definition of "residential building" meant a building designed for use for human habitation in flats in the building and "residential flat building" was included in the definition of "residential building" then the latter also had the same definition. That definition did not convey any requirement for permanency of the use of the flats for human habitation. He held rather that the definitions in the CPSO included within its terms descriptions of buildings or usages involving different kinds of human habitation. Within the definition of a flat as a dwelling or domicile there is a degree of permanency expected (at 538). The use of the flats as serviced apartments by the company did not have the necessary degree of permanence and was unauthorised. 37 The Respondents have emphasised that the wording "capable of occupation or use as a separate domicile" was not considered in Blues Point Tower. The wording considered in that case was general in nature referring to "use for human habitation" with no reference to timeframes for occupation. The words "capable of use…" relied on in this case are also general with no reference to length of occupation. The reasoning in Blues Point Tower confirms that a use for residential flat building requires a degree of permanence in the duration of occupation in circumstances where the definition does not suggest a minimum period of habitation. 38 Lloyd J in KJD applied the finding in Blues Point Tower that a flat carries with it a requirement for its use with a degree of permanency of habitation or occupancy. The circumstances in those cases were similar. In KJD his Honour was construing a development consent granted for a multi-storey building for 123 flats in 1979. Some of the flats were let as serviced apartments under contractual arrangements with the apartment owners. Consent was granted under the City of Sydney planning controls which adopted the standard or model provisions provided for by the LG Act. The definitions in that instrument were the same as those relevantly before me. His Honour held at 121 that, firstly, the consent was for the erection and use as a residential flat building. Secondly, the ordinary meaning of "domicile" requires a degree of permanence and none of the dictionary definitions support the concept of a temporary place or residence such as a serviced apartment. Thirdly, Blues Point Tower is a unanimous decision of that Court and has since been applied in this Court. It is binding on this Court. Reference was also made to the Court of Appeal in Derisi v Vaughan [1983] 3 NSWLR 17 at 26 as referred in Edwards v Sutherland Shire Council (2006) 146 LGERA 199 at 211 - 212 per Biscoe J to the effect that longstanding Court of Appeal decisions should be applied until reconsidered by that Court.

39 In KJD the definitions of "flat" and "residential flat building" were identical to those in the CSPSO definitions before me. The argument of the Respondents in this case, that the definition of flat means "a room or suite of rooms occupied or used or so constructed, designed or adapted as to be capable of being occupied or used as a separate use" covers use as a serviced apartment, was raised before Lloyd J contrary to the Respondents' submissions. His Honour dealt with the matter in obiter and in circumstances where the Council did not act as a contradictor but I do not consider that undermines the essential findings that he made in relation to the need for a degree of permanence. 40 I do not consider that the factual difference between this case, where the use for serviced apartments commenced in or about 1987 and Blues Point Tower, where the use commenced about 25 years after the approved residential use, is relevant. That was also the approach taken by Lloyd J in KJD where he did not distinguish Blues Point Tower on the basis of similar factual differences. It is also not material to the legal issue in this part of the case that there was a lot in the premises used for the administration of the business of letting out the serviced apartments and that a by-law permitted use of areas of common property in the premises for guests using the serviced apartments. These arrangements were not part of the development application for the 1980 development consent and could not have been the subject of consideration by the Council. 41 The situation before me in this case is not distinguishable in any material way from the principles in Blues Point Tower as applied in KJD and I consider I should adopt that reasoning to the effect that "capable of use as a separate domicile" when used as a definition for a "flat" in a "residential flat building" requires that the flat also be used for habitation for a duration suggesting permanency rather than short term use suggested by serviced apartment use. I do not therefore consider that the 1980 development consent authorised the use of the premises for serviced apartments. Further support for this approach is found in Derring Lane Pty Ltd v Port Phillip City Council (1999) 104 LGERA 92 relied on by the Council, in which Balmford J in the Victorian Supreme Court upheld a determination of the Victorian Planning Tribunal that a motel did not come with the meaning of a residential building. Referring to Wilcox J in Hafza v Director-General of Social Security (1985) ASSC 92-052 at 90,607 and Latham CJ in Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99, his Honour held at 98: On that basis, the phrase "residential building" must be taken to refer to a building constructed for the purpose of people dwelling there permanently or for a considerable period of time, or having in that building their settled or usual abode.

42 While the arguments before me focused on use for serviced apartments the declarations sought also refer to hotel use. This finding that serviced apartment use was not given consent in 1980 applies also to the use of the premises as a hotel. As I have held in favour of the Council on its primary argument it is now necessary to consider the defence raised by the Respondents.

Estoppel 43 The Respondents raised estoppel by conduct arguing that the application of this principle prevented the Council enforcing the CSLEP 2005. The Respondents' use of the premises has continued uninterrupted since 1987 and the Council has been aware of that use for much of that time. It has both permitted that use to continue and has affirmatively represented to the Respondent and others that the consents authorised use for serviced apartments and that no further consent is required to authorise that use. By its conduct the Council is estopped from enforcing the Environmental Planning and Assessment Act 1979 (the EP&A Act). 44 The evidence relied on by the Respondents in relation to the estoppel argument included the affidavit of Mr Rubinstein referred to above in par 7. He states that in relation to development applications numbers 3 (restaurant, kiosk, administration area) (1988) and 4 (outdoor seating) (1991) the First Respondent advised the Council of its ongoing use of the premises for the purpose of serviced apartments. The Council raised no objection and approved the development applications (ASOF - tab 15 and 17). 45 The development application the subject of consent No 3 stated that the subject premises were being used for the purposes of serviced apartments and sought consent to construct, inter alia, a new administration area and new baggage store to facilitate the serviced apartment use (ASOF - tab 13 pages 245 and 251 (second last paragraph)). The development application form for development consent No 3 refers under "Description of existing building" to "serviced apartments". The application relates to part of the building only and for "Description of development or other activity" states that: "ground floor-deletion of existing coffee ship and replace same with baggage store, foyer waiting area and new souvenir kiosk; ground floor and mezzanine level-change of use of existing tenancy from Wilderness Society to a restaurant at ground floor and administration on mezzanine level." The proposed use of the building when altered is specified as new restaurant, new administration area, new souvenir kiosk and new baggage store. The present use of the subject building or section of building is stated as "coffee shop and tenancy for the Wilderness Society". The description of building work involved is stated as "Tenancy work associated with the alteration of existing coffee shop to baggage store and waiting area to foyer". The Statement of Environmental Effects (SEE) stated that "the existing foyer will be expanded by the removal of the present coffee shop and its conversion to a new souvenir kiosk, waiting area and baggage store associated with the serviced apartments." It also stated "the situation in the existing foyer will be greatly improved by the additional waiting area and baggage store. Thus large groups of patrons will not be forced to spill over to the external pavement area."

The restaurant is described as being largely used by the patrons of the serviced apartments. 46 The development consent No 4 was granted for "Outdoor seating area for use of existing ground floor restaurant on 12 April 1991 (ASOF - tab 17 pg 262). The existing premises were described in the development application the subject of that consent as "Residential Apartments operating as serviced apartments." (ASOF - Tab 16 pg 259). 47 Since 1987 the Respondents have had dealings with the Council in relation to garbage collection, fire safety and public pool usage. All of these issues directly related to the Respondents' ongoing serviced apartment use and at no time did Council raise any objection to that use (Rubenstein affidavit sworn 27.11.07 par 22 and ASOF - tab 32 and 33). There have been signs on the building since the development consent No 2 granted for a sign in 1988, which have referred to its hotel apartment use. 48 In 1992 Mr Rubenstein sought advice from the Council's duty planner and was informed that the Council was aware of the use of the premises for the purpose of serviced apartments and advised that no additional special approval was necessary to authorise that use (see his affidavit sworn 27.11.07, par 11, 14 & 15). 49 The Council gave similar advice in writing to Mr Mok solicitor on behalf of a prospective purchaser of a flat within the subject premises (ASOF - tab 34 and 35). 50 The Respondent, acting in reliance upon Council's advice at a time when it controlled the majority of flats within the subject premises, refrained from applying for consent to use the premises for serviced apartments (a position to which it cannot now be restored having sold out its controlling interest) (Rubenstein affidavit sworn 27.11.07, par 14). 51 The First Respondent and others acting in reliance upon the Council's advice purchased strata lots within the premises (ASOF - tab 34 and 35). 52 In particular Rinbac Pty Limited purchased shares in the First Respondent and purchased a non-residential lot, Lot 191 which comprises the reception and manager's office which is suitable for that use but unlikely to be suitable for any use other than management of serviced apartments (Rubenstein affidavit sworn on 27.11.07 par 15). 53 In the circumstances it is submitted that Council should not be permitted to act contrary to its representations (The Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394) (Brickworks Ltd v Warringah Shire Council (1963) 108 CLR 568). The Respondents relied on Brickworks (1963) to submit that the gross delay of over 25 years in the Council taking enforcement action does not suggest the public interest requirements which have been the basis of the cases which distinguish Brickworks should be applied.

Council's submissions on estoppel 54 It is submitted that no estoppel can operate against a Council when a breach of the EP&A Act has been made out. In the present case the Council has not purported to grant approval to a particular use but rather has, over time, accepted the use of the premises as serviced apartments without any further action. None of the consents, nor the letters, can take the matter further. In this case the Respondents do not contend that the Council has granted approval but rather has accepted the use of the premises over time as serviced apartments without any further action. 55 No estoppel operates against the Council where a breach of the EP&A Act is found. Reliance is placed on Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416, Coffs Harbour City Council v Arrawarra Beach Ltd (2006) 148 LGERA 11, Hornsby Shire Council v Vitone Developments Pty Ltd (2003) 132 LGERA 122 per McClellan J at [13], Coffs Harbour Shire Council v Ben Haul Industries Pty Ltd (1983) 48 LGRA 391 and Hawkesbury City Council v Sammut (2002) 119 LGERA 171.

Finding on estoppel 56 There are a number of cases which have considered estoppel in the context of administrative law. In Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 207 the Full Federal Court was considering an appeal from a judgment in which it was held that estoppel could create substantive rights. That decision, in relation to the issue of estoppel, was overturned by the full Federal Court. Gummow J (as he then was) (Ryan and Neaves JJ concurring on the issue) held that the principle of estoppel had no application in that case. The Minister's department had sent a letter to the respondent warning him of possible consequences following the commission of further offences. The issue arose of whether the Minister was estopped from making another deportation order in relation to the respondent. The Court held the Minister was not estopped. 57 As stated by Gummow J in Kurtovic at 207 there are several categories of estoppel including estoppel as to representation, whether as to present facts (common law estoppel) or as to the future (equitable estoppel). In Kurtovic Gummow J noted at 208 the distinction between a party arguing that a public authority is estopped from asserting that a particular action of which the other party seeks performance would be ultra vires its statutory powers (and the application of the doctrine, if allowed, would enable representations beyond power to be maintained). Rather the respondent sought to prevent the appellant from making a decision within power which would alter a previous decision made within power. Gummow J further noted at 208 that principles of estoppel had developed in the private law context and that difficult issues arise as to the extent these principles should be applied in administrative law contexts. He identified the generally accepted proposition in Halsbury's Laws of England 4th ed, Vol 44, para 949 that "Estoppel cannot operate to prevent or hinder the performance of a positive statutory duty, or the exercise of a statutory discretion which is intended to be performed or exercised for the benefit of the public or a section of the public." Gummow J then considered estoppel and ultra vires decisions and distinguished cases where a decision-maker cannot make a second decision in which he resiles from a first because the power is spent (New South Wales Trotting Club Ltd v Municipality of Glebe (1937) 37 SR (NSW) 288). Such a circumstance does not give rise to estoppel. Separate circumstances arise where a discretionary power is conferred on a decision-maker by statute that is not exercisable from time to time but will be spent by the taking of steps or the making of statements or representations which are an exercise of the substantive power. His Honour stated that an example of such a case was Brickworks. 58 Kurtovic, Attorney-General (NSW) v Quin (1990) 170 CLR 1 and Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1 are all cases where the Federal Court or the High Court has considered estoppel in the context of representations by statutory authorities. In Quin (concerning the NSW Attorney-General's decision to consider the respondent's application for appointment as a magistrate in competition with other applicants) Mason CJ, in his majority judgment, discussed the issue of estoppel in obiter at 17, stating that: [t]he Executive cannot by representation or promise disable itself from, or hinder itself in, performing a statutory duty or exercising a statutory discretion to be performed or exercised in the public interest, by binding itself not to perform the duty or exercise the discretion in a particular way in advance of the actual performance of the duty or exercise of the power. 59 At 18, his Honour continued: [w]hat I have just said does not deny the availability of estoppel against the Executive, arising from conduct amounting to a representation, when holding the Executive to its representation does not significantly hinder the exercise of the relevant discretion in the public interest. 60 Lam concerned an appeal against the cancellation of the applicant's visa by the Minister on the basis that there had been a denial of procedural fairness, and that his legitimate expectation had not been fulfilled where the Department failed to follow up on what it stated it would do in a letter. McHugh and Gummow JJ, in a joint judgment dismissing the appeal (Gleeson CJ, Hayne and Callinan JJ concurring) referred to prior authorities, including Quin, and noted, at 22, that a doctrine of estoppel in an administrative context has not yet emerged in Australia. 61 In discussion of these cases in Aronson, Mark et al, Judicial Review of Administrative Action, 3rd ed (Sydney: Lawbook Co, 2004), 363, the authors conclude that: Apart from Lam , most decisions since Kurtovic and Quin have done little more than note the debate, and perhaps the theoretical possibility of estoppel having some scope when it comes to procedural (as opposed to substantive) representations, or in the other circumstances to which Mason CJ and Gummow J had referred in those two cases. Lam will have an even greater dampening effect. 62 In the much earlier case of Brickworks (1963) Windeyer J stated at 577: The case, as I see it, does not depend upon an estoppel, but on actual admissions of a fact. The Council said that it had consented. Until it spoke by the mouth of its lawyers it never said otherwise. But if, notwithstanding this, it can somehow be said that it did not in fact consent, then an estoppel seems to me to arise. The Council did not at any time before it commenced this suit repudiate what its President had told the Company. In effect it repeated it. And the Company relied upon these purported consents. Does not this found an estoppel? It was argued that it could not do so because estoppel by representation cannot prevent the performance of a statutory duty or the exercise of a statutory discretion. There is no doubt about the principle; but I doubt its application to this case. The decision of the Court of Appeal in Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416 was relied on. The facts of that case do bear a superficial resemblance to those of this case. But there is a distinction. There the Corporation had, by its engineer, said that its permission for the use of land as a builder's yard was not in fact and law required. It was mistaken in this view; and it was held that what the engineer had said could not create an estoppel preventing the Corporation from exercising its statutory discretion to forbid the land being used as a builder's yard. That is to say, the Corporation had in effect said to the respondent company there, 'you do not need our permission; we have no discretion to prevent your act.' In the present case, on the other hand, the Council said in effect, 'you do need our permission; we have a discretion which we have exercised in your favour'. It seems to me that, in the circumstances of this case, the Council was estopped from denying that it had exercised its discretion in the manner it had said it had done.

63 That is the principal case relied on by the Respondents. Windeyer J's statement above was made in obiter but has nevertheless been referred to in numerous cases. The principal reason for upholding the appeal in Brickworks was that the facts suggested a presumption arose that development consent had been granted by the council (Windeyer and Owen JJ concurring, McTiernan J dissenting). 64 A number of cases have decided that estoppel based on representation by conduct cannot arise in relation to development consents not granted in accordance with statutory requirements because of the principle that statutory authorities should not be estopped from carrying out their public duties under the EP&A Act, often in reliance on Southend-on-Sea (1962) a case also referred to in Brickworks (see par 62). In Coffs Harbour Shire Council v Ben Haul Industries, the respondent had sought approval to open a gravel quarry. The council granted consent but later formed the opinion that it had erroneously done so since the proposed use was in fact designated development. The argument that the council was estopped from contending that it did not grant a consent which was effective in law was rejected. Perrignon J said at 397: In the present case I am of the opinion that no estoppel arises to prevent the Council from exercising the statutory duties and discretions which are imposed upon it by the Environmental Planning and Assessment Act and which it has not yet exercised. I think that the general principle which was enunciated in the Southend-on-Sea case, and which is set out above, should be applied.

65 This decision was followed in Holidays-A-Float Pty Ltd v Hornsby Shire Council (1992) 75 LGRA 127. This case involved an appeal against a council decision declaring that a development consent, previously granted conditionally, was null and void. Stein J held that the development consent was invalid under the relevant planning controls and that the council was not estopped from maintaining that the consent was a nullity. 66 In Sammut, the Court of Appeal considered an appeal from this Court where the respondent had sought consent from the council to erect a shed on his land in order to operate a tractor repair business. The council purported to grant consent and the shed was constructed. Both the council and a neighbour had commenced proceedings in this Court seeking declarations as to the invalidity of the consent. Mason P (Powell JA and Young CJ in Eq concurring) referred to Windeyer J in Brickworks and said at [57]: The respondent contended that the council at least was estopped from challenging its own consent on the basis of ultra vires. The judgment of Windeyer J in Brickworks Ltd v Warringah Shire Council (1963) 108 CLR 568 at 577 was invoked. Whatever that passage indicates, it does not represent a decision that an ultra vires act, indubitably established in fact, can never be challenged at the suit of the administrator who did it (see generally Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 211-214 per Gummow J). In my view Stein J (as he then was) was correct to decide that the public interest in the carrying out of statutory duties requires that a Council is not estopped from asserting that a prohibited use to which it had previously granted conditional consent is invalid ( Holidays-A-Float Pty Ltd v Hornsby Shire Council (1992) 75 LGRA 127). 67 In Vitone, McClellan J held at 134 that a council may be estopped by its conduct from denying that its consent had been validly granted but that this would only be in cases where the council had made an assertion in respect of specific facts as opposed to questions of law. McClellan J reviewed the authorities including Ben Haul Industries, Holidays A-Float Pty Ltd and Sammut. His Honour referred to the decision of Windeyer J in Brickworks as support for his statement that if a council has stated that it has carried out the necessary process and has made a decision to grant a consent within its jurisdiction then it may be estopped from denying that development consent has been granted.

68 Estoppel by representation based on a council's conduct is the category of estoppel relied on in this case by the Respondents and the cases referred to in submissions. The cases on estoppel determined in this Court and referred to above have largely considered the circumstance where a Council has exercised a statutory power and granted a development consent which has been relied upon and the Council has then sought to repudiate that consent. The circumstances in this case differ in that the Council did not give development consent for the use of serviced apartments when it approved the 1980 consent, as follows from my finding on the first issue at par 41. It has not therefore exercised its statutory power to grant development consent. Its staff have represented from at least 1992 that it considered that development consent was not needed for the serviced apartments use and did not suggest any contrary view that development consent was required until 2007 when the Council wrote to that effect (see par 6). The misrepresentation was that no exercise of statutory power, meaning the grant of development consent, was required to approve the use for serviced apartments. The Council was informed through the applications for development consent numbers 3 and 4 of the serviced apartment use (par 44-48). There were express representations made in statements by the Council's staff to Mr Rubenstein and other interested parties as identified in the Respondents' submissions at par 48-50. There has been implied representation whereby Council staff have not voiced concern when activities in the premises which related to the serviced apartment use such as garbage collection, public pool usage and fire safety have been drawn to their attention as identified in Mr Rubenstein's affidavit (par 47). 69 In this case there has not been an exercise of statutory power to grant development consent but rather an incorrect representation that consent is not needed, facts similar to Southend-on-Sea. The distinction is referred to in the passage of Windeyer J in Brickworks above and was the reason his Honour distinguished it in holding that on the facts before him estoppel could be raised against the council. 70 The difficulty for both the Council and the Respondents (and the Court) thrown up by the circumstances of this case were identified by Hutley JA (Glass and Samuels JJA concurring) in F N Eckold Pty Ltd and Ors v Auburn Municipal Council (1975) 34 LGRA 114 at 116-117, albeit in the context of whether a council can be estopped from arguing the invalidity of an approval which it has given. His Honour stated: The question as to whether a council can be estopped from setting up the invalidity of an approval which it has given is a question of great difficulty. On the one hand, one has the citizen involved in multifarious controls emanating from public bodies whose operations he cannot understand and on the other hand one has the public bodies enmeshed in a similar complex of rules required to protect public interests. The citizen dealing with a public body on the one hand should be able to rely upon any authorisation emanating from it so that he is unconcerned to see whether or not all proper steps have been complied with prior to the issue of the approval. On the other hand it may be felt that some consequences of approvals are so serious that if proper procedures are not adopted by the statutory body itself, it should be required to exercise its authority even to the extent of repudiating its own consent. These issues are not conclusively solved by application of the maxim that there is no estoppel to prevent a body exercising its statutory powers. The purpose of the powers themselves and the nature of the representation by the statutory body cannot be ignored. A representation as to what the council has itself done, e.g., that it had complied with every formality necessary for the granting of a valid approval, may be in an entirely different position from a representation that an objective fact about which the enquirer can satisfy, and should satisfy, himself, does or does not exist. That there can be estoppels against statutes is established by the judgment of the Privy Council in Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993 and the dissenting judgment of Asprey J in Barilla v James (1964) 81 WN (Pt 1) 457. However, it does not fall to this Court to have to solve the difficult question as to the limits of the principle. 71 I note that this passage was referred to in Sydney City Council v Zizza (1989) 67 LGRA 224 at 227 by Bignold J considering in obiter whether a council can be estopped from setting up the invalidity of an approval it has given. He noted that several prior decisions of the Court had strongly asserted that "estoppel cannot operate to prevent or hinder the performance of a statutory duty …" as found in Southend-on-Sea. His Honour referred to Trimboli v Penrith City Council (1981) 48 LGRA 323, Ben Hall Industries and Baulkham Hills Shire Council v Cosmopolitan Homes No 2 Pty Ltd (1986) 61 LGRA 200. In Zizza Bignold J held that the estoppel argument raised in that case ought not be allowed to defeat the operation of the EP&A Act. He referred to the Kok Hoong decision of the Privy Council referred to by Hutley JA in Eckold (see par 70). As part of his reasoning he considered that decision and asked himself whether the EP&A Act: can be seen to represent a social policy to which the Court must give effect in the interests of the public generally or some section of the public, despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise. (at 231). 72 The principal that statutory authorities should not generally be estopped by their conduct from carrying out their public functions is well recognised in Australian authorities referred to above including Kurtovic, Quin and Lam. Apart from Vitone, the cases decided in this Court referred to above, including Sammut in the Court of Appeal, have generally upheld that principal in holding that a council is not generally estopped by its conduct from exercising its statutory authority under the EP&A Act in circumstances where there has been reliance on the grant of development consent which was later repudiated. Because of the circumstances of this case where the Council has not exercised its statutory powers under the EP&A Act to grant consent but rather its officers represented that an exercise of power was not required suggest even more strongly that the Council should not be estopped from enforcing environmental planning instruments in force, considering Southend-on-Sea and the numerous cases which have relied on it. That difference in circumstance is why Windeyer J in Brickworks distinguished Southend-on-Sea. 73 As identified by the Respondents and as referred to above at par 68, I accept that the Council was directly notified through the development applications for development consent numbers 3 and 4 in 1988 and 1991 and through other correspondence and conversations between Mr Rubinstein and Council officers of the use for serviced apartments and can be taken to have been aware of that use for a lengthy period. The Council does not argue to the contrary. The Respondents argued that they relied on the Council's misrepresentations to their detriment. Up to 1996 when CSLEP 1996 came into force, a development application for the use as serviced apartments could have been made as an innominate use permissible within the zone. The requirements under the planning controls then in force were less onerous for such a use than under the present planning instruments. The detriment suffered is that the opportunity to submit an application for development consent at that time was foregone. After the CSLEP came into force in 1996 serviced apartments were specifically identified as permissible development subject to obtaining development consent within the zone and this situation continues now. The requirements for serviced apartment use are more onerous than before 1995 and to comply now if a development application was lodged and granted subject to conditions would be uneconomic, according to the Respondents. Further, Rinbac purchased Lot 191 which is used for managing serviced apartments and on Mr Rubinstein's evidence is unsuitable for any other use. 74 I accept that the Respondents have acted to their detriment in not lodging a development application for a serviced apartment use in the premises before 1996 when the environmental planning instruments changed. Unlike several of the cases where development consent has been granted for a prohibited use which a council has sought to repudiate, in this case the development is not prohibited but is permissible with development consent. Taking into account all these circumstances I consider the Respondents cannot rely on estoppel based on the Council's conduct as a defence in the proceedings. 75 The circumstances relied on by the Respondents in the estoppel argument are also relevant in relation to the exercise of the Court's discretion as to whether the declarations and orders sought by the Council ought to be made. Additional issue 76 One matter raised in the Respondent's arguments was that the owners of the units which are being used for serviced apartments, which use is managed by the First Respondent, are not joined as parties in the proceedings yet their interests are potentially affected by the Court's orders. It is clear from the evidence that the Respondents are conducting a business which requires the use of parts of the premises for serviced apartments in relation to Lot 191 and the use of numerous individual apartments. That conduct of the business is a use of land and can be the subject of these proceedings. The First Respondent's legal representative told the Court that it has informed the individual unit owners of the proceedings and that is also the reason why the individual owners were asked to enter into a transitional management agreement with the First Respondent in June 2007. I do not consider the absence of the owners of the 27 apartments currently used for serviced apartments as parties is a reason not to make declarations or orders in these proceedings. Exercise of discretion 77 The Respondents argued that if unsuccessful on their other arguments the Court would not in the exercise of its discretion grant the relief sought by the Council's Class 4 application. The Respondents argued there were several reasons why the Court should not exercise its discretion and grant the relief sought as follows: (i) the Council had knowledge of the use from 1988 when the development application was lodged for which development consent no 3 was granted. (ii) the Council has previously informed and represented to the Respondents and others that it is not necessary to obtain any additional approval for the use of the premises as serviced apartments (Rubenstein affidavit sworn on 27/11/07 and ASOF - tabs 34 & 35). (iii) with the introduction of a definition of serviced apartments in the 1996 CSLEP the legal position changed. Up to that point a development application could have been lodged for an innominate use which was permissible with consent and was likely to have less onerous requirements imposed on it than applications made after 1996. (iv) it is now too expensive to retrofit the premises and would cost millions of dollars to do so and therefore refusal of development consent is likely (v) the Second Respondent, Rinbac Pty Limited and purchasers of the flats have acted in reliance upon Council's advice (Rubenstein affidavit sworn on 27/11/07). It was not unreasonable to act on that advice, and the Second Respondent has continued to do so (Sydney City Council v Zizza (1989) 67 LGRA 224). (vi) there is no evidence of environmental harm as a result of the Respondents' ongoing use of the premises. (vii) there are employees of the business who would lose their jobs. 78 The Council essentially submitted that the history of the matter is clear and there is long delay in taking enforcement action. There is public benefit however in enforcing the relevant environmental planning instrument made under the EP&A Act.

Finding on discretion 79 This Court has broad discretion in determining whether the relief sought in particular proceedings ought be granted and in what form relief should be granted. The wide discretion of the Court has been recognised in cases such as F Hannan Pty Ltd v Electricity Commission (NSW) (No 3) (1985) 66 LGRA 306 at 313. In Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 Kirby P (as he then was) identified a number of principles to take into account at 339-341. The principles emphasise, inter alia, the wide nature of the discretion and the importance of upholding public laws as follows: Because s 123 of the Act permits any person (and not just the Attorney-General or a person with a sufficient interest), to bring proceedings in the Court for an order to remedy or restrain a breach of the Act, there is indicated a legislative purpose of upholding, in the normal case, the integrated and co-ordinated nature of planning law. Unless this is done, equal justice may not be secured. … Where the application for the enforcement of the Act is made by the Attorney-General, or a council, a court may be less likely to deny equitable relief than it would in litigation between private citizens: Associated Minerals Consolidated Ltd v Wyong Shire Council (at 692). This is because the Attorney-General or the Council are seen as the proper guardians of public rights. Their interest is deemed to be protective and beneficial, not private or pecuniary: cf Rowley v New South Wales Leather Trading Co Pty Ltd v Woollahra Municipal Council (1980) 46 LGRA 250. Of course, as the development or administrative law demonstrates, administrators who advise the Attorney-General or councils can sometimes act from motives which are less disinterested. Courts will be alert to insensitive, unthinking administration in this as in other fields of law. 80 In ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 Kirby P at 82 at D stated that discretion permits the refusal of relief if granting it would work an injustice disproportionate to securing enforcement of the legislation. 81 In Zizza Bignold J referred to Associated Minerals Consolidated Ltd v Wyong Shire Council [1974] 2 NSWLR 681 which held that: the injury to a public interest by denial of relief, its extent and degree of irremediability, must be weighed against any loss which the defendant may have sustained by the plaintiff standing by while the defendant incurs expense or, if such is the case, misleading the defendant into supposing that its activities were or would be permitted; see Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at 240; Brickworks Ltd v Warringah Corporation (1963) 108 CLR 568. 82 As identified by Bignold J, this decision was referred to in Sedevcic by Kirby P at 340 at F when he was setting out one of several guidelines for the exercise of discretion to the effect that discretion can be more readily exercised where the breach is more easily remedied than for, say, a static structure that requires demolition. Ultimately Kirby P recognised that was relevant to the judicial perception of the need to balance the public interest in compliance with the law with the degree of irremediability arising from a breach (340 at F). 83 Relevant factors that have been considered in the exercise of discretion include whether there is environmental harm caused by the activity the subject of the proceedings. Mr Rubinstein attested that there had been three complaints from owners during the whole period of serviced apartment use. The affidavit of Mr Pearson also attaches a letter of complaint from a person who used one of the serviced apartments and was unhappy with it. That low level of complaint does not suggest there were or are substantial problems with the operation of the serviced apartments. No specific environmental impacts are raised in the evidence. Mr Moore's affidavit at par 4 refers to the different planning considerations raised by the regulation of serviced apartment use when compared to a use for a residential flat building for permanent habitation given potential impacts on maintenance of a building and residential amenity. 84 There is no particular building work required to remedy the breach of the EP&A Act if I make the declarations sought by the Council. What ceases is the business activity related to the serviced apartment use. In that regard there are important discretionary considerations in this case given the long history of use for and investment in the business of serviced apartments at the premises. These have been identified in some detail in relation to the estoppel argument raised by the Respondents at par 44-53 and are also identified in shorter form in par 77. 85 Before finally determining if I should issue any declarations or orders I require further submissions on whether it is possible for orders to be made which enable the current use of some of the apartments in the premises for serviced apartments to continue regardless of whether development consent is applied for from the Council to seek to regularise the potential use of all the apartments in the premises for serviced apartments. Alternatively whether as a practical matter the current number of apartments used for serviced apartments, no matter where these are located in the premises, could be preserved indefinitely through Court orders should also be considered. I will determine the terms of final declarations and orders, if any are to be made, following those submissions.

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(2006) 146 LGERA 199

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