Holroyd City Council v National Auto Dismantlers Pty Ltd

Land and Environment Court (NSW)|2017-04-26|Before: Robson J

EX TEMPORE Judgment

The primary proceedings before the Court concern the conduct of National Auto Dismantlers Pty Ltd - who I will refer to as National - at premises at 24 Sammut Street, Smithfield ('premises'), in particular use of premises for the purpose of "storage and dismantling of motor vehicles".
The originating Summons was filed in the Court's class 4 civil enforcement jurisdiction by Holroyd City Council ('Council') on 10 May 2016 seeking the following relief against National: 1 Declaration that [National] is in breach of the Environmental Planning and Assessment Act 1979 ('the EPA Act') by failing to comply with the order given by the applicant in terms of order 1 & 2 under S121B of the EPA Act dated 3 February 2015 ('the s 121B order') in respect of the premises at …24 Sammut Street, Smithfield …('the Property'). 2 Declaration that [National] is in breach of the Act by using the property for the purpose of storage and dismantling motor vehicles ('the use development') without Development Consent. 3 Order pursuant to s 124 of the Act, that [National] demolish the office building and storage shed from the property within 60 days of the making of this order. 4 Order pursuant to s 124 of the Act, that [National] by itself, its servants and agents be restrained from carrying out the use development on the Property, except with consent or otherwise under the Act, forthwith. 5 Costs.
Presently before the Court is a Notice of Motion filed 7 April 2017 by National seeking the following relief: 1 Upon the defendant by his Counsel giving an undertaking to pay all necessary filing fees, grant leave to the defendant to file this Notice of Motion in Court. 2 Order that this Notice of Motion be returnable instanter. 3 Grant leave to the defendant to serve Notice of Motion in Court upon the plaintiff. 4 Order a stay of these proceedings for a period of 84 days (12 weeks). 5 Costs for 7 April 2017 appearance be reserved. 6 Liberty to restore the proceedings on 72 hours' notice, for the purposes of either party making an application to extend the time period in Order 4. 7 Any other order in the interests of justice.

Background to orders sought

In order to understand the nature of the relief sought today, some understanding of background facts is required. The background facts are relatively uncontentious and may be briefly summarised: 1. The premises are owned by Mr Dhiya Hadadd and Mr Ziyad Kareem Al Janabi as tenants in common. 2. Mr Hadadd and Mr Al Janabi became owners of the premises on 11 November 2013. 3. On 18 December 2013, Council received a complaint that there had been "an illegal business" in operation at 24 Sammut Street, Smithfield. The complaint related to both the use of a building and to certain construction on the premises. 4. On 19 December 2013, a Council officer, Bradley Glenn Ferguson, attended the premises and spoke to Dhiya Hadadd. Mr Hadadd admitted that he was the owner of the premises and a director of National, and allowed Mr Ferguson to inspect the premises. Mr Ferguson thereafter undertook an inspection and observed that the business being undertaken was "a car wrecking and dismantling business". 5. Mr Ferguson then conducted a search of Council's records and found that: 1. the premises were zoned 1N1 General Industrial under the Holroyd Local Environmental Plan ('LEP') and that the use of the premises as a car wrecking and storage yard is permissible with consent in that zone; and 2. there is no development consent applicable to the premises to either permit the conduct that is presently being undertaken on the premises or for certain building works on the premises. 1. Mr Hadadd and Mr Al Janabi are the only two directors of National and each enjoys beneficial ownership of one half of the ordinary shares issued in the company. 2. On 25 February 2014, two months after Mr Ferguson's attendance at the premises, Council received a development application for a change of use of the premises to a car wrecking and vehicle storage facility ('DA-1'). 3. On 20 June 2014, Council refused DA-1. 4. On 8 August 2014, Mr Ferguson again inspected the premises and observed that the unauthorised use of the premises as a car wrecking and storage facility continued and that the buildings had been further "fitted out" compared to what he had observed on 19 December 2013. 5. On 21 October 2014, National sought a review of DA-1 pursuant to s 82(a) of the EPA Act. 6. On 16 December 2014, Council concluded the s 82(a) review and confirmed the refusal of DA-1. 7. On 19 January 2015, Council gave notice of an intention to give orders to National pursuant to s 121B of the EPA Act in regard to the ongoing use of the structures. 8. On 2 February 2015, Mr Ferguson again conducted a search of Council's records and there was no response from National to the notice given by Council in relation to the impending s 121B notice. 9. On 3 February 2015, Council issued orders to National in relation to the conduct on the premises and these were orders pursuant to s 121B to "cease use" and "demolish" ('s 121B orders'). 10. On 17 April 2015, that is two months after the s 121B orders, National lodged a second development application ('DA-2') to change the use from what was said to be a warehouse use to a car wrecking and storage yard. 11. On 19 November 2015, National withdrew DA-2. 12. On 8 December 2015, Council forwarded correspondence to National advising that if the s 121B orders were not complied with by 6 January 2016, Council would commence legal proceedings. 13. On 7 January 2016, Mr Ferguson conducted an inspection of the premises and observed that the unauthorised building works continued to stand and the use of the subject premises as a car wrecking and storage yard continued. 14. On 13 January 2016, Mr Ferguson conducted an internet search and found that National had a website which detailed the subject premises as its usual place of business for "dismantling all makes and models" [of vehicles]. 15. On 3 March 2016, Mr Ferguson received information from Council's Senior Health Officer, Mr Stuart Nunn, concerning environmental safeguard deficiencies in the operations of National at the premises, which, in Mr Nunn's view, could cause adverse effect on both the built and natural environment. 16. On 31 May 2016, Mr Ferguson conducted a further inspection of the premises and observed that the unauthorised building works remained and the use of the premises continued contrary to the s 121B orders.
The facts recited above, which come from the affidavit of Mr Ferguson of 22 June 2016, were not the subject of any contrary comment or any other evidence.
The Summons was filed on 10 May 2016 and directions were given in relation to the preparation of the matter when the Summons was to be returned on 10 June. Those directions required the parties to serve their affidavits, and the matter was listed for further directions on 3 August. On 3 August, Pepper J made orders by consent in accordance with short minutes of order ('August consent orders'). The Court file noted "Consent orders finalising matter" had been made.
The August consent orders and their subsequent amendment are at the heart of the relief sought by National in the present motion.
The August consent orders state: 1 [National] by itself, or its servants and agents, be restrained from using the premises at …24 Sammut Street, Smithfield 2164, in the State of New South Wales ('the Property') for the purposes of storage and dismantling of motor vehicles; 2 [National] shall cease the use and occupation of the storage shed and office building at the Property; 3 Order 1 and Order 2 is [sic] stayed for a period of 150 days; 4 [National] pay the [Council's] costs in the agreed amount of $15,000.00; 5 Liberty to restore the proceedings on 72 hours' notice, for the purpose of either party making an application to extend the time period in Order 3.
The August consent orders noted National's undertakings to submit a further development application for both the use of the premises and for the use of "the office building and storage shed", submit applications for building certificates, and carry out and maintain certain "interim measures" until either a development consent is obtained or the orders made in the August consent orders have effect.
The salient feature of the August consent orders is that National consented to the primary relief sought by Council in the Summons, albeit subject to a stay. I refer to par 4 in the Summons, which seeks an order pursuant to s 124 of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') that National by itself, servants or agents be restrained from carrying out the use development on the property, except with consent or otherwise under the Act. As I have noted earlier, the reference to "use development" is defined in par 2 of the Summons, as "using property for the storage and dismantling of motor vehicles".
On 3 February 2017, the parties again appeared in the Court and by consent further short minutes of order were made ('February consent orders').
The February consent orders state: 1 Order 3 of Orders made on 3 August 2016 be varied to extend the time to comply to 31 March 2017. 2 Liberty to restore the proceeding on 72 hours' notice. 3 Matter listed for further directions on 7 April 2017.
I note that the extension of time provided in the February consent orders was clearly outside the time that had been otherwise provided for in the August consent orders, which was 150 days from 3 August 2016, which would have, and did, expire on 31 December 2016.
The February consent orders provided for the matter to be listed for further directions on 7 April 2017. On the day the matter was listed for further directions, 7 April 2017, National filed the Notice of Motion presently before the Court seeking a stay of "these proceedings" for a period of 84 days.

Evidence

In support of its motion, National relied upon affidavits of Rana Saab and Mr Hadadd, each sworn 19 April 2017.
Mr Hadadd was not required for cross examination. He deposes that he is the owner and managing director of the "business", National Auto Dismantlers Pty Ltd. He deposes that he "needs further extension of time to be able to submit a fresh Development Application".
He states that he has previously submitted a number of development applications for the premises, all of which had been refused, and that these development applications were made by his previous building designer, Mr Ahmed Jadid. He says he has "invested a significant amount of time and money with Mr Jadid hoping to get a development application approved." Mr Hadadd says that he has now "lost all confidence" in the ability of Mr Jadid as a result of the most recent refusal dated 28 February 2017.
Mr Hadadd also states "I have since spoken to and instructed a more experienced building designer, Mr Peter Perras, about the situation". He gives evidence in relation to his understanding of Mr Perras' experience, and notes that he has confidence in Mr Perras' designs and skills coupled with his expertise in relation to traffic management, stormwater, environment impact statements, private certifiers and town planners. Mr Hadadd further states that when he received the (earlier) 150 day extension after the August consent orders, that such time was, to use his word, "expunged" by Mr Jadid and that all the time afforded by the Court to pursue another unsuccessful development application was used by Mr Jadid with no result. In paragraph 21 he states: I believe with the change of building designers, Mr Perras' approach, the professional reports and the right people and a further stay of proceedings of 8 - 10 weeks, a successful building Development Application for the existing usage, would meet Council requirements.
Mr Hadadd gave no evidence of the number of employees, or any other matters in relation to the conduct of the premises by National, although some submissions were made by Mr Calokerinos, who appears for National, that the business has three employees. Further, as a result of my inquiry, Mr Calokerinos confirms that the photographic material in the evidence before the Court indicates that, at the present time, there are over 80 cars or car bodies and associated car parts located on the premises.
The affidavit of Rana Saab, National's solicitor, simply goes to the August consent orders and to correspondence sent by her to Council's solicitors on 27 March 2017, before the expiry of the further agreed stay. That letter, which anticipated that the stay was to run out on 31 March, sought an extension of 120 to 150 days "…due to a new building designer being retained."
Ms Saab's affidavit also annexes the response from Council on 3 April 2012, indicating that Council's solicitors would seek instructions relating to the request. It is clear that Council did not provide those instructions to Council's solicitors.
Council read affidavits of Bradley Glen Ferguson, sworn 22 June 2016 and 25 April 2017, and Melis Erzin, sworn 25 April 2017. Mr Ferguson, whose 22 June 2016 affidavit I referred to earlier, referred to the history of the matter, which I have summarised above. In his affidavit on 25 April 2017, Mr Ferguson annexes a bundle of historical Council documents which became Exhibit A. Exhibit A comprises, variously, copies of the August consent orders and the February consent orders, copies of the two further development applications (and accompanying documentation) made on 31 August 2016 ('DA-3') and 11 November 2016 ('DA-4'), and copies of Council's refusal of each application.
Finally, Mr Ferguson deposes to his inspection of the premises on 3 April 2017. I have already summarised his earlier observations. On 3 April 2017, he again observed that the premises "were being used for the storage and dismantling of motor vehicles".

Submissions

Detailed submissions were made by Mr Calokerinos of counsel and Mr Fozzard of counsel on behalf of each of National and Council, respectively. I will summarise those briefly.
Mr Calokerinos made the following submissions on behalf of National: 1. The Court has power to order a stay of proceedings, pursuant to s 67 of the Civil Procedure Act 2005 (NSW) ('CPA'); and, in the circumstances, the Court would exercise its discretion to do so. National submits that the stay can be granted in two ways: first, either by extending the stay granted in the August consent orders, as amended by the February consent orders; or alternatively, by granting a fresh stay of the proceedings. 2. A stay should be granted in the circumstances, as National has previously lodged a number of development applications with Council which were unsuccessful, primarily due to conduct of the building designer earlier engaged by National. Accordingly, National submits that it should be given an opportunity to submit a fresh development application using a more suitable building designer. 3. The conduct of the building designer, over which Mr Calokerinos says National did not have significant control, used up the time which was otherwise available both under the August consent orders and the extended time in the February consent orders. Relying upon Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 it is submitted that National lacked the necessary degree of control in submitting the development applications and was effectively in the hands of the building designer. 4. National relies upon AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, to submit that the Court should undertake a broad merit-based approach and find that the dictates of justice require a stay in the circumstances, particularly given that National employs three people, each of whom depend upon this employment for their livelihood. 5. Finally, National submits that the words "at any time", in s 67 of the CPA, should be construed according to the natural and ordinary meaning. It cites in aid the case of Cudgegong Australia Pty Ltd v Transport for New South Wales (No 2) [2014] NSWLEC 36, and states that the circumstances of this case trigger the power to grant a stay.
Although there was no evidence, on instructions, Mr Calokerinos submitted that if the further stay sought by National was refused, National would simply be unable to immediately cease the conduct on the premises. The instructions received from Mr Hadadd were that, should the Court refuse the relief sought, National would require up to six weeks to comply so as to allow time for conduct such as moving the cars and the like.
On behalf of Council, Mr Fozzard argued why the Court should not, in the circumstances, grant the stay. In summary, he submitted: 1. The August consent orders as amended by the February consent orders were final orders and National is seeking to "reopen" the orders without having made any application to set aside or vary the orders, while being technically in default of the orders. Even if the Court does have power pursuant to s 67 of the CPA to grant the stay, which Council does not accept, the evidence does not support any further stay. 2. Even if the stay were granted, National would nonetheless be required to submit a new development application, which if successful would require it to demolish the existing structures, and construct new structures, and the Court has not been provided with any evidence that those steps will occur. 3. Council distinguishes the various authorities relied upon by National primarily on the basis that those authorities dealt with an abuse of process, or occurred during the course of the proceedings. The orders sought in these proceedings Council submits, seek to vary final orders, which is not supported by the authorities, and should not be permitted as it goes against the principle of finality. 4. Council submits that the power to stay proceedings under s 67 of the CPA requires something, to use the word of Mr Fozzard, "extant" from the orders. That is, an occurrence that has an impact upon the orders such as an appeal or the introduction of new legislation. Council submits that National is essentially stating that it needs more time because it cannot comply with the orders made, which Council submits is not sufficient to justify the exercise of discretion to stay proceedings. 5. Council also notes that, although National submits that the building designer had control of the development application(s) and that National lost confidence in the building designer, there is no evidence as to exactly what the building designer was contracted to do. Further, Council submits that it is clear that the building designer was not in charge of every aspect of the development application as there were a number of reports forming part of and supplementing the development application that were outsourced to other agencies, such as the statement of environmental effects and the traffic reports. As such, Council submits that the building designer was only one "cog in the wheel". 6. Council submits that the works envisaged in the recent various development applications are significant, and as such, regardless of whether or not a stay is granted, National will be required to cease work for a period of time in order to carry out those works. 7. Council accepts that if a stay is not granted, an immediate cessation of conduct would likely be impractical. However, Council submits that National should not be granted six weeks to cease works, rather submitting that this cessation should take a matter of days rather than weeks.

Consideration

For reasons I shall give, I do not grant the relief sought by National. Instead I intend to make orders to effect the previously agreed position between the parties, with some indulgence to allow National limited time to organise its affairs and cease the unlawful operations.
The Court has power pursuant to s 67 of the CPA, as well as an inherent power, to control its own proceedings. The nature of the power to stay proceedings is general, and unconfined by any express criteria. Circumstances that warrant a grant of an order to stay proceedings include to prevent an abuse of court process, control ordinary procedures, and, importantly, to stay, or ensure compliance with, the Court's substantive orders and judgments. This is simply a matter of statutory construction.
As with any exercise of statutory interpretation, in relation to s 67 of the CPA, the Court is to adopt the ordinary and natural meaning of the language used in the EPA Act, see Amalgamated Society of Engineers v Adelaide Steam Ship (1920) 28 CLR 129; Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355.
Further, it is well-known that s 56 of the CPA provides that the overriding purpose of the CPA and the rules of the Court is to facilitate the just, quick and cheap resolution of the real issues in proceedings.
However, despite the above, as Mr Fozzard submits, the finality of litigation is a matter which should be taken into account in the application of the powers under the various sections and in particular s 67, and for the reasons below, I do not consider that the present circumstances warrant an exercise of a discretion under s 67 of the CPA.
First, National has conducted itself in a manner which is unlawful for a significant period of time. The evidence makes it abundantly clear that the conduct of concern to Council has been undertaken since at least December 2013 when an earlier s 121B notice was first issued and indeed in February 2015 when a further s 121B notice was issued. National has had notice of the need to legitimise its conduct for over three years, and it has not done so.
Second, close consideration of the two most recent development applications show that the development for which consent is sought involves a complete demolition of the structures on the premises, and a rebuilding in manner quite distinct from that which now exists. Thus, on any view, to the extent that the development applications were successful and consent was granted, it would require demolition of that which is there and a cessation of current activities at least for some period of time, for the implementation of the new development.
Third, I do not accept as compelling Mr Hadadd's reliance upon the conduct of the building designer. It is abundantly clear from perusal of the most recent development application, that there have been various experts involved in preparing the development application including a town planner, Vaughan Williams, who prepared a statement of environmental effects as well as other experts who prepared detailed material in relation to arboricultural evidence, traffic evidence and other discrete expertise. So whilst I accept that Mr Hadadd, on behalf of National, has sought to legitimise the conduct on the premises by lodging various (up to four) development applications, I do not accept that Mr Hadadd was not in control of the applications and the delay in complying with Court orders, as has been suggested in submissions.
Fourth, I also note there is no evidence of any significant financial hardship that would otherwise be suffered.
Fifth, given that this case centres on and around development works and conduct undertaken without development consent, a key consideration for this Court is to take into account is the need to uphold the statutory scheme for orderly planning in New South Wales, provided by the EPA Act. As noted by Preston CJ of LEC in Pittwater Council v Scahill (2009) 165 LGERA 289 at [46]: There is a need for the upholding of the integrity of the system of planning and development control. This system depends on persons taking steps to obey the law by ascertaining when development consent is required and then obtaining development consent before carrying out development. Development must be carried out in accordance with the terms of the development consent obtained.
While I do not consider it appropriate to grant the stay sought by National, I accept that National will require some period of time to comply with orders to restrain use and occupation of the premises. Accordingly, the orders I intend to make are in effect, a stay of execution rather than a stay of the proceedings.

Orders

The Court orders that: 1. The Notice of Motion filed 7 April 2017 is dismissed. 2. The respondent (National Auto Dismantlers Pty Ltd) by itself, or its servants and agents, be restrained from using the premises at Lot 95, DP 247972, 24 Sammut Street, Smithfield 2164, in the State of New South Wales ('the Property') for the purposes of storage and dismantling of motor vehicles. 3. The respondent (National Auto Dismantlers Pty Ltd) shall cease the use and occupation of the storage shed and office building at the Property. 4. Orders (2) and (3) are stayed for a period of 14 days. 5. The respondent is to pay the applicant's costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 June 2017

Civil Procedure Act 2005(NSW)ss 56, 67, 135

(2009) 165 LGERA 289

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