The Evidence of Ms Bennic
69Ms Bennic swore an affidavit on 16 April 2013 stating that:
(a) she obtained the money to purchase the property by taking a mortgage on her home in Kincumber and using her savings and money from the sale of her parents' house in Tamworth;
(b) she is the carer for her 82 year old mother who suffers from dementia;
(c) she purchased the property in order to provide rental income to live on to support herself, her partner and her mother;
(d) when she purchased the property the previous owners, the Keoghs, told her that they were using the property for short term rental accommodation and that she planned to continue this use until she no longer needed to care for her mother, whereupon it was her intention to reside at the property and use it as a bed and breakfast;
(e) before taking a booking for the property she emails prospective tenants a copy of the House Rules and the Stayz Holiday House Code of Conduct. It is only once the prospective tenant emails back confirming they have read, understood and agreed to abide by these Rules and the Code of Conduct, that she confirms their booking. Moreover, prior to the booking commencing she meets with the tenants and ensures that they sign the House Rules. She also verbally advises them of the House Rules to ensure that they completely understand what is required of them with respect to their behaviour while they are occupying the property. In addition, she takes their licence details, confirms their identity, and takes a cash bond;
(f) the local police have confirmed that no fines or convictions have been recorded with respect to the property;
(g) she has attempted to respond to the Dobrohotoffs' complaints when they are received, however, typically this is not until the next day when it is too late for her to remedy the situation;
(h) on 8 March 2013 she listed the property for sale. She decided to sell the property in mid February 2013 because it had ceased to be a viable investment; and
(i) if she is not able to continue renting the property as short term holiday accommodation prior to its sale, she will suffer hardship and have difficulty paying her living expenses and would default on her mortgage.
70The latter evidence was somewhat inconsistent with a letter dated 22 April 2013 tendered by the Dobrohotoffs. The letter was not objected to by counsel for Ms Bennic. The letter was from Ms Bennic's solicitor to the solicitor of the Dobrohotoffs. The letter contained an offer of settlement, the first paragraph of which stated:
That the Respondent by her servants and agents do not use the dwelling-house at 24 Charles Kay Drive Terrigal NSW for the provision of temporary or short-term accommodation. For the purpose of this order "temporary or short-term accommodation" is defined as any period up to 3 months.
71Ms Bennic was cross-examined. The cross-examination was to the effect that:
(a) contrary to assertions that she had made in various print media that she was "shocked" by the litigation, she had in fact been put on notice since October 2012 of the potential unlawful use of the property and of the Dobrohotoffs' intention to commence proceedings in this Court if the use did not cease;
(b) that at the time the property was purchased by her she had potentially been put on notice that the Planning Certificate issued in accordance with s 149 of the EPAA and attached to the contract of sale, listed the possible lawful uses of the property. On its face, the Certificate did not indicate that the use of the property in the manner contemplated by Ms Bennic was permissible with or without consent. It was for this reason that in a letter dated 28 March 2011 from Premier Conveyancing sent to Ms Bennic concerning the purchase of the property, she was advised to:
Please carefully read the zoning certificate (Section 149 Certificate) attached to the contract, and the other information with it. It is only possible to use the property for the purposes shown in this Certificate. All other uses will be prohibited. No matter what you want to do with the property it is almost certain council approval will be needed.
(c) Ms Bennic readily conceded that she did not read the terms of the contract for sale in detail. She stated that she did not comprehend the significance of the warning given to her by Premier Conveyancing. Rather, she relied on the fact that the conveyancer knew the use to which the property was to be put, as did the real estate agent who sold her the property, and likewise the vendors (the Keoghs). Because she did not contemplate that the use could be prohibited given the number of short term holiday rental accommodation venues available in Terrigal, she did not seek legal advice. In short, "I was trusting the people I was paying to do this work for me to advise me knowing - you know, telling them what I was going to do - you know, that it was running as a holiday house and that I was going to be continuing to run it as a holiday house" (T45.11-45.14);
(d) at no time has the council ever told her that the use of the property as short term holiday rental accommodation is unlawful; and
(e) she readily agreed that she could not guarantee compliance with the House Rules or the Code of Conduct. As Ms Bennic stated, "I have no control over any other person do I really, in realism [sic], I can only control my own conduct I can't control other - other people's conduct." (T57.41-57.43)
Declaration
72Ms Bennic opposed the making of the declaration on the basis that, first, she was not aware that her actions were unlawful. Second, because of the large number of persons within Terrigal who also engage in this conduct, to make the declaration would be unjust . Third, because the property was on the market to be sold as "a family home", and not as short term holiday accommodation, there was no utility in making the declaration for a limited period of time. And fourth, because of the delay by the Dobrohotoffs in commencing proceedings against her.
73In my opinion, it is appropriate for the Court to grant the declaration sought by the Dobrohotoffs in light of the fact that the current use of the property constitutes development that is prohibited within the Zone in breach of s 76B of the EPAA (cf Great Lakes Council v Lani [2007] NSWLEC 681; (2007) 158 LGERA 1 where no declaration was made).
74As to the first reason, although, as I have expressed above, I have great sympathy for the position that Ms Bennic now finds herself in, this is not sufficient. First, at all times Ms Bennic has, as is her right, denied any breach of the GPSO and thus of the EPAA (Director-General, Department of Environment, Climate Change and Water v Venn [2011] NSWLEC 118 at [279]). Second, the breach is not merely technical (Simpson v Wakool Shire Council [2012] NSWLEC 163; (2012) 190 LGERA 143 at [84]). Third, the breach is continuing (Marrickville Council v Tanwar Enterprises Pty Ltd [2009] NSWLEC 127 at [37] and Venn at [280]). Fourth, there is a demonstrable purpose in making the declaration insofar as it serves to declare the law and advances the regulatory objects of the GPSO and the EPAA. Furthermore, the making of the declaration will assist in serving the public interest by ensuring compliance with the GPSO and the EPAA (Council of the City of Sydney v Mae [2009] NSWLEC 84 at [29]).
75As I stated in Hill Top Residents Action Group Inc v Minister Administering the Sporting Venues Authorities Act 2008 (No 4) [2011] NSWLEC 6 (at [20], quoted with approval in Venn at [281]):
...the making of the declarations marks the disapproval of the Court of conduct that Parliament has proscribed. It also serves to discourage others from acting in a similar way and may, therefore, be seen to have a deterrent and educative element. The granting of the declaration may accordingly be seen as advancing the regulatory objects of the EPAA (s 5 of the EPAA and Humane Society v Kyodo Senpaku [2006] FCAFC 116; (2006) 154 FCR 425 at [22]-[27]).
A similar sentiment was expressed in Winn v Director-General of National Parks and Wildlife [2001] NSWCA 17; (2001) 130 LGERA 508 (at [308], also quoted in Venn at [282]).
76These comments are equally apposite here.
77As to the second reason, although perhaps a matter of inference given Terrigal's reputation as a premier holiday destination, there was no direct evidence of the widespread nature of the unlawful conduct (the provision of short term rental holiday accommodation contrary to the GPSO) said to be engaged in by others. In any event, even assuming the submission to be factually correct, this is, in my view, all the more reason to make the declaration.
78As to the third reason, while the property is being marketed for sale in a manner that suggests that its present unlawful use may cease ("large family home"), this cannot be guaranteed by Ms Bennic.
79As to the fourth reason, this was premised on the contention that because the unlawful use had been ongoing since 2001 when the Dobrohotoffs first purchased their property, they were at fault by waiting until Ms Bennic had bought her property prior to commencing this action.
80This submission must be rejected in the strongest terms. Any delay in the commencement of the proceedings can only be relevant as between the parties. Put another way, any delay in commencing the present proceedings can only be measured as at the commencement of the ownership by Ms Bennic. In this regard, I find that at all times the Dobrohotoffs have acted in a timely and reasonable manner. Ms Bennic purchased the property on 31 March 2011. The Dobrohotoffs initially attempted to informally resolve the ongoing problems with the use of the property with Ms Bennic. It was only when these attempts failed that litigation was contemplated by them. And it was only after fair warning was given to Ms Bennic commencing in October 2012 that legal proceedings would ensue if the use of the property for the purpose of short term holiday rental accommodation did not cease, that the summons was filed. In short, there was no delay by the Dobrohotoffs whatsoever in commencing proceedings, in my opinion, let alone delay sufficient to disentitle them to the relief they seek, declaratory or injunctive.
Injunction
81The Dobrohotoffs also seek an injunction to restrain the continuing unlawful use of the property. The evidence of Ms Bennic discloses that she intends to continue the use until such time as the property is sold.
82The principles governing the exercise of the Court's discretion to grant injunctive relief were analysed in the seminal decisions of Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339-341 and ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 82. They are well settled (see Botany Bay City Council v Saab Corp Pty Ltd [2011] NSWCA 308; (2011) 183 LGERA 228 at [149]) and have been applied in this Court on many occasions. Applying these principles necessitates an examination of, amongst other things:
(a) the nature of the breach of the EPAA;
(b) whether the breach was more than merely technical in nature;
(c) the hardship and other matters personal to the Dobrohotoffs;
(d) the hardship and other matters personal to Ms Bennic; and
(e) the harm to the environment generally caused by the unlawful conduct.
83Having regard to the evidence of both parties and applying the factors stated above, in my opinion, the injunction sought should be granted, but it should be initially stayed to mitigate any financial detriment flowing to Ms Bennic as a consequence of its imposition. I have reached this conclusion because:
(a) first, the breach by Ms Bennic offends and undermines the planning regime of the Gosford LGA and ultimately of the State. While brought in their private capacity, the enforcement of the relevant planning law by the Dobrohotoffs is nevertheless in the public interest;
(b) second, as found above, the breach is not trivial in nature;
(c) third, also as found above, the breach, if not restrained, will continue until such time as the property is sold;
(d) fourth, the harm caused to the environment is not limited to the undermining of the planning regime. The adverse impact on the amenity and wellbeing of the Dobrohotoffs has been, as the evidence overwhelmingly demonstrates, severe. Although Mrs Dobrohotoff's stress and anxiety caused by the unlawful use of the property commenced while the property was owned by the Keoghs, her condition has been exacerbated by the continued unlawful use of the property by Ms Bennic;
(e) fifth, because of the ongoing impact on the amenity and wellbeing of the Dobrohotoffs, the eventual sale of the property by Ms Bennic affords no remedy to them as she has suggested. There was no evidence that a sale was imminent, there was no evidence that the unlawful use would cease pending the sale, and, as noted above, the sale provides no guarantee that the unlawful use will cease once the new owner takes possession; and
(f) sixth, the relief is sought against a development that is not static and cannot be regularised by, for example, the granting of development consent because it is prohibited within the 2(a) Residential Zone (see item 3). I repeat that it was an agreed fact that the draft Gosford LEP is neither certain nor imminent.
84I do not accept, however, as a matter going to the exercise of my discretion, that, as the Dobrohotoffs submitted, Ms Bennic is entirely the author of her own misfortune because she did not heed the notice purportedly given to her by her conveyancer upon the purchase of the property. True it is that once the potential unlawful use of the property was raised with her by the Dobrohotoffs' legal representatives in October 2012 she should have sought legal advice, but her failure to do so at the time she bought the property was not unreasonable given all of the circumstances.
85Moreover, I accept that, as Ms Bennic deposed in her affidavit, and notwithstanding the term of the settlement offer quoted above, the granting of an injunction will cause her financial hardship. Although individual hardship ought not be permitted to erode the general operation of planning schemes (Sedevcic at 346 per Mahoney JA), given that, as I have found, Ms Bennic was not sufficiently put on notice when she purchased the property in 2011 that her intended use was unlawful, and given that at no point in time has the council ever communicated to her that she was acting contrary to the GPSO, I take the likely adverse financial effect of the restraint on her into account. It is for this reason that I propose to stay the commencement of the injunction for a period of approximately two months.
The Draft Gosford LEP
86An order is sought, in the event that the draft Gosford LEP comes into effect, to restrain Ms Bennic from using the property as short term holiday rental accommodation absent development consent.
87Given that the draft LEP is, as was agreed, neither certain nor imminent, and because neither party addressed the Court as to the proper construction of any relevant provision (it is possible, for example, that Ms Bennic's property is exempt development. The sales marketing material describes the house as four, not six, bedrooms), I decline to grant this relief.
Notification Order
88The Dobrohotoffs also seek an order not only restraining Ms Bennic but, by way of amendment to the summons, an order notifying any prospective purchasers of the property of the orders granting declaratory and injunctive relief. The proposed order is in the following terms:
An order that, in the event that the Property is listed for sale, the respondent must notify any parties interested in purchasing the Property of the orders made by the Court in relation to the Property, in writing.
89This gives rise to a question as to the source, if any, of the Court's power to make such an order. The Dobrohotoffs rely, in this regard, on ss 123 and 124 of the EPAA, ss 16(1A), 20(2) and 22 of the Land and Environment Court Act 1979 ("the LEC Act"), and the Court's general powers of case management under the Civil Procedure Act 2005 ("the CPA") and the Uniform Civil Procedure Rules 2005 ("the UCPR").
90The immediate difficulty with the order proposed is that there is no evidence that any prospective purchaser of the property has breached, is breaching, or will breach the GPSO and hence the EPAA. Moreover, it is not the case that Ms Bennic, in selling her property, is, has, or will be, committing a breach of the GPSO and the EPAA. In other words, the order does not seek to remedy or restrain a breach of the EPAA by either Ms Bennic or any interested buyer. In these circumstances I remain unconvinced that ss 123 and 124 of the EPAA are engaged.
91Likewise, I am of the opinion that the Dobrohotoffs cannot avail themselves of ss 16(1A) and 20(2) of the LEC Act. Section 16(1A) permits the Court to hear and dispose of matters "ancillary" to its conferred statutory jurisdiction. The provision amplifies the range of subject matters that the Court can entertain, but this is not to be conflated with the conferral of additional power to make orders where none otherwise exists.
92Section 20(2) of the LEC Act is in the following terms:
20 Class 4-environmental planning and protection and development contract civil enforcement
(2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of the following proceedings:
(a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract,
(b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract,
(c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function,
(d) whether or not as provided by section 68 of the Supreme Court Act 1970-to award damages for a breach of a development contract.
93But there is nothing in the powers of the Supreme Court that I was referred to that would permit such an order being made under either s 20(2)(a), (b), (c) or (d) of the LEC Act.
94Section 22 of the LEC Act provides:
22 Determination of matter completely and finally
The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided.
95While arguably s 22 confers on the Court the necessary power to make the notification order sought, I am of the opinion that, absent any evidence of a breach of the GPSO and the EPAA by any prospective purchaser of the property, or by Ms Bennic in selling the property, it would not be appropriate to make such an order pursuant to this provision. First, it is not clear to me that this is a remedy to which either of the Dobrohotoffs "appears to be entitled", and second, the order is not necessary as "between the parties" to completely and finally resolve all matters in controversy between them. Once the declaration is made and the injunctive relief granted, the controversy between the Dobrohotoffs and Ms Bennic will be quelled.
96As for the Court's case management powers under the UCPR and the CPA, I do not think they are apposite. For example, an order compelling a non-party to litigation to produce documents pursuant to a subpoena is tangibly different from a notification order of the type sought here insofar as, unlike the present situation where the class of persons to whom the order is ultimately directed is at large, the non-party is identifiable at the time the order is made.
97In addition, in the terms sought, the order is uncertain. It is not clear to me who constitutes "any parties interested in purchasing the property". Does this include anyone who makes a telephone enquiry? Or who attends an inspection? Or is it limited to persons who have taken out a contract for sale? Court orders are required to be formulated in precise terms (Foster v Sutherland Shire Council [2001] NSWLEC 89; (2001) 115 LGERA 130 at [8]).
98Finally, even if all of the above reasoning is wrong, I would not, as an exercise of my discretion, make the notification order sought, first, on the basis that it is not necessary. Given the extensive media (both print and television) coverage these proceedings have had to date, it is highly unlikely that any potential purchaser will not be aware of the orders made today. And second, I am of the opinion that the terms of the injunction are sufficient to protect the Dobrohotoffs in this regard, covering as it does, the advertising, soliciting and permitting of the unlawful use of the property during the sale.
99Accordingly, I refuse leave to amend the summons to include the notification order.
Orders
100In conformity with the reasons given above, the orders of the Court are as follows:
(1) leave to amend the summons is refused;
(2) the Court declares that, in breach of s 76B of the Environmental Planning and Assessment Act 1979, the respondent has carried out development that is prohibited, namely, the use of land for short term holiday rental accommodation at 24 Charles Kay Drive, Terrigal ("the property");
(3) that the respondent, by herself and her servants and agents, be restrained from using the property for short term holiday rental accommodation, including, without limitation, advertising, soliciting or permitting the property to be used for that purpose. "Short term holiday rental accommodation" means accommodation for a period of less than three months;
(4) the Court stays the operation of Order (3) until 29 June 2013; and
(5) that the respondent to pay the applicants' costs of the proceedings, unless, within 14 days either party seeks, by way of notice of motion and supporting affidavit, some other form of costs order.