Inner West Council v Balmain Rentals Pty Ltd

Evidence

1. Council relies upon the following evidence: 1. Affidavit of Engela Lironis sworn 5 December 2018; 2. Affidavit of Paula Mihai sworn 5 December 2018; 3. Affidavit of Sarah Wickert sworn 30 November 2018; 4. Affidavit of Maria Martin sworn 30 November 2018; 5. Affidavit of Nicholas Olsen sworn 4 December 2018; 6. Affidavit of Simon Turner sworn 11 December 2018; and 7. Affidavit of Simon Turner sworn 25 February 2019.
2. The affidavits were read and the exhibit attached to the affidavit of Ms Lironis, Council's compliance officer, was received into evidence as Exhibit D without objection from Mr Hanafi. Four of the affidavits were sworn by local residents each detailing their experiences in relation to the conduct and operation of the premises, expressing various concerns in relation to that conduct and annexing extensive photographic material.
3. Exhibit D contains extensive material from Council's records relating to various historical applications in relation to the premises and details of historical complaints, subsequent attendances and investigations by Council officers. It also contains NSW Land Registry and Australian Securities and Investments Commission record extracts. The two affidavits of Mr Turner, Council's in-house lawyer, relate to dealings between Council and the respondents.
4. The salient facts are uncontested and may be summarised as follows.
5. The premises are occupied by the first respondent, which has its registered office and principal place of business registered at the premises. The sole director and sole shareholder of the first respondent is Raymond Charles Guthrie. The second respondent is the registered proprietor of the premises. The second respondent also has its registered office and principal place of business at the premises and Raymond Charles Guthrie is its sole director and sole shareholder.
6. The premises are located in Marrickville in the local government area now known as the Inner West Council. The premises are irregularly shaped. They have an area of approximately 4,590 square metres, and a street frontage of 48 metres. The premises are located in an industrial area and are surrounded to the north by a number of light industrial uses and to the south by a number of businesses including motor repair businesses. Opposite the site frontage is a row of dwellings which runs from the intersection of Smith Street and Fitzroy Street to the intersection of Edinburgh Road.
7. On or about 8 May 2017, the first respondent commenced operating a vehicle hire business from the premises, trading under the name of "Balmain Rentals" (which is a registered business name of the first respondent) and/or "Balmain Rentals and Self Storage" ('the business'). Prior to May 2017, the business was conducted from a location in The Crescent, Annandale. There has been no development consent for this use at the premises.
8. The business offers a broad range of rental vehicles, comprising up to 60 vehicles available for hire from the premises. The vehicles include utes, long and short wheel-base vans, trucks of various sizes including some with 12, 17 and 20 cubic meter load capacities, and variously sized trucks equipped with hydraulic lifters, as well as flatbed trucks, tipper trucks and a variety of ute style vehicles with cages thereon.
9. Council has received numerous complaints regarding the conduct of the business at the premises.
10. On 28 June 2017, the second respondent lodged a development application with Council seeking development consent for a "vehicle hire & vehicle sale plus self-storage facility within existing building and landscape & fencing" at the premises. The application was refused by Council on 28 August 2017 on the basis, inter alia, that the proposed use was prohibited. It appears from Council's material considering the application and the report of its assessment officer that the premises were being used for unauthorised activity being "hire of removal vehicles", and resident objectors had raised concerns regarding "current unauthorised use of the site".
11. On 15 September 2017, Council issued a Notice of Proposed Order ('Notice') to the second respondent pursuant to the former s 121B of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') which stated that the premises were being used for a "purpose that was prohibited". There was no response to the Notice.
12. On 19 October 2017, Council issued an Order to the second respondent pursuant to the former ss 121K and 121U of the EPA Act to "cease using the premises for the purposes of a vehicle sale and hire and a self-storage facility with an associated office" within 28 days. The Order was not complied with.
13. On 1 March 2018, a development application was lodged with Council on behalf of the second respondent seeking approval for "alterations/additions for use as a self-storage facility & vehicle repair station". The application was refused by Council on 14 March 2018 on the basis that it was illegible or unclear as to the development consent sought or it failed to include any or sufficient information. The second respondent was informed that the "use of vehicle sales and hire is a prohibited use under the zoning provisions applying to the land".
14. On 4 April 2018, Council issued a letter of demand ('first letter of demand') to the first respondent at the premises demanding that the unlawful use of the premises for the purpose of "vehicle hire" cease by 13 April 2018. The first letter of demand was not complied with by 13 April 2018.
15. On 12 September 2018, Council issued a letter of demand ('second letter of demand') to the first respondent at the premises demanding that the unlawful use of the premises cease by 21 September 2018. The second letter of demand was not complied with by 21 September 2018.
16. To date, neither the first letter of demand nor the second letter of demand has been complied with.
17. Since 21 September 2018, Council has received numerous complaints in relation to the use of the premises.
18. The evidence, including extensive photographic material, is that vehicles associated with the business, being vehicles which are available for hire from the premises, are parked on the unbuilt area of the premises as well as on surrounding streets including Fitzroy Street, Smith Street and Edinburgh Road, Marrickville. There is also evidence that the vehicles of customers of the business who drive to the premises to hire vehicles, are parked on surrounding streets including Fitzroy Street, Smith Street and Edinburgh Road, Marrickville.
19. From the evidence extracted from Council's records and the evidence of the residents, it is clear that the use of the premises for vehicle hire has caused amenity impacts to surrounding properties by creating noise impacts through the collection and return of vehicles, reducing on-street parking by the apparent parking of many "Balmain Rentals" trucks on the surrounding streets, and littering, as discarded rubbish from trucks being returned to the premises has been left on the street.
20. In relation to the continuing use of the premises, it is clear that "Balmain Rentals" (as the business is signed and advertised), is a vehicle hire business that operates from the premises. Balmain Rentals advertises that it trades from the premises from 6:00am to 5:45pm seven days a week. This material is gleaned from the affidavit of Ms Lironis and sits comfortably with the evidence of Ms Lironis' various attendances upon the premises and surrounding streets on 16 April, 14 September and 14 November 2018 and the evidence of the local residents who have sworn affidavits.

The legislative context

1. As stated at [3] above, the use of the premises for the purposes of "vehicle sales or hire premises" is a prohibited use under LEP 2011. In summary, 1. Development for the purposes of "commercial premises" is prohibited in the IN1 Zone pursuant to the IN1 Land Use Table; 2. The LEP 2011 Dictionary provides that "commercial premises" is defined to include "retail premises"; 3. The Dictionary also provides that "retail premises" is defined to include "vehicle sales or hire premises"; and 4. The Dictionary provides that "vehicle sales or hire premises" means: a building or place used for the display, sale or hire of motor vehicles, caravans, boats, trailers, agricultural machinery and the like, whether or not accessories are sold or displayed there.
2. The use of the site as a "vehicle sales or hire premises" constitutes "development" as defined in s 1.5(a) of the EPA Act as it relates to the "use of land".
3. Section 4.3 of the EPA Act relevantly provides: 4.3 Development that is prohibited (cf previous s 76B) If an environmental planning instrument provides that: (a) specified development is prohibited on land to which the provision applies, or ... a person must not carry out the development on the land. Maximum penalty: Tier 1 monetary penalty.
4. The power to enforce s 4.3 is found in ss 9.45 and 9.46(1) of the EPA Act which provide: 9.45 Restraint etc of breaches of this Act (cf previous s 123) (1) Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach. (2) Proceedings under this section may be brought by a person on his or her own behalf or on behalf of himself or herself and on behalf of other persons (with their consent), or a body corporate or unincorporated (with the consent of its committee or other controlling or governing body), having like or common interests in those proceedings. (3) Any person on whose behalf proceedings are brought is entitled to contribute to or provide for the payment of the legal costs and expenses incurred by the person bringing the proceedings. (4) (Repealed) 9.46 Orders of the Court (cf previous s 124) (1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.
5. This Court is vested with the jurisdiction to hear proceedings brought under s 9.45 of the EPA Act by virtue of s 20(1)(c) of the Land and Environment Court Act 1979 (NSW).

Consideration

1. Having considered all the material and the careful submissions of Ms Hemmings of counsel who appears for the Council, I am satisfied that the premises are being used for the purpose of vehicle sales or hire premises and have been so used since about May 2017. In those circumstances, it remains for me to consider whether I should exercise my discretion to grant relief and if so, what relief should be granted.
2. Having found that the premises are being used for a prohibited purpose in breach of s 4.3(a) of the EPA Act, I consider it is appropriate to exercise my discretion. The Court has broad powers to make declarations and consequential orders.
3. In Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335; (1987) 63 LGRA 361, Kirby P, as his Honour then was, dealt with the exercise of this Court's discretion under what was then s 124 of the EPA Act. At 340, his Honour said: ...There is nothing in the Act by which the discretion is fettered or limited to "special cases", as Mahoney J, as he then was, pointed out in analogous circumstances in Blacktown Municipal Council v Friend (at 197). But the obvious intention of the Act is that, normally, those concerned in development and use of the environment will comply with the terms of the legislation. Otherwise, if unlawful exceptions and exemptions became a frequent occurrence, condoned by the exercise of the discretion under s 124, the equal and orderly enforcement of the Act could be undermined. A sense of inequity could then be felt by those who complied with the requirements of the Act or who failed to secure the favourable exercise of the discretion under s 124.
4. The principles in relation to the granting of declaratory relief are well established by this Court: see Marshall Rural Pty Ltd v Basscave Pty Ltd (No 3) [2018] NSWLEC 62 ('Marshall') at [25]-[30] where Molesworth AJ recently summarised the relevant authorities.
5. In Great Lakes Council v Lani [2007] NSWLEC 681; (2007) 158 LGERA 1 ('Lani'), Preston CJ of LEC considered the Court's position in relation to the making of declarations. He found that, whilst the Court had jurisdiction to make declarations where the respondents had breached planning and environmental statutes, on the facts before him, as a matter of discretion, a declaration would not be appropriate because first, the making of a declaration would not have any practical effect in the circumstances; second, declarations of breach are not necessary in order for the Court to have jurisdiction to make orders including injunctive orders; third, a declaration of breach by itself neither remedies past breaches nor restrains future breaches; fourth, care must be taken not to use a declaration as a substitute for criminal prosecution; and fifth, whilst a legitimate purpose of civil enforcement is for there to be a finding by the Court and through its judgment a public pronouncement that a breach of the law has occurred, this effect can be equally achieved by the Court making findings in its judgment which is a public document. His Honour's remarks have been considered in a number of subsequent cases: see Hill Top Residents Action Group Inc v Minister Administering the Sporting Venues Authorities Act 2008 (No 4) [2011] NSWLEC 6 ('Hill Top').
6. The essential question is whether the Court should accede to Council's request (and the respondents' agreement) to make a declaration that the respondents have breached the law in circumstances where additional (injunctive) orders are concurrently sought.
7. It has been held that a condition precedent to granting declaratory relief is that, inter alia, the plaintiff must be able to secure a proper contradictor, that is, someone presently existing who has a true interest to oppose the declaration sought: Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448, Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421; [1972] HCA 61 at 438.
8. In Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56 ('MSY'), the question that arose was whether, having regard to the consent of the parties to the granting of the declaratory relief proposed, the primary judge was prevented from granting that relief. Put another way, the question was whether consent to the relief sought precluded the respondent from being a "proper contradictor". The Full Federal Court (Greenwood, Logan and Yates JJ) held, at [30], that the correct position could be found in the judgments of Dawson J in Oil Basins Ltd v Commonwealth of Australia (1993) 178 CLR 643; [1993] HCA 60 at 648 and French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (administrator appointed) [2004] FCA 1390; (2004) 211 ALR 231 at [47]. The Court stated that if a party had a true interest in the plaintiff's claim, even if they saw that interest served by not opposing the relief claimed, that would be sufficient to render them a "proper contradictor": MSY at [16]. Similar sentiments were expressed in Zetting v Müller [2017] NSWSC 659 and In the matter of Beechworth Land Estates Pty Ltd (administrators appointed) [2017] NSWSC 1447.
9. In this case, the respondents have an interest to oppose the declaratory relief sought, notwithstanding the absence of active opposition. This is sufficient to make them proper contradictors.
10. Noting the consideration of principles in Lani, Hill Top at [15]-[23], and MSY at [30], I am of the view that in circumstances where there has been no opposition to the making of the orders and where I have discretely determined on the uncontested evidence that there has been conduct at the premises by the respondents in breach of the EPA Act, to achieve the purpose of exposure and denouncement of the conduct, I do not consider that the mere pronouncement of this judgment alone is sufficient.
11. I am conscious that the breach of the EPA Act is continuing despite, as I have noted earlier, the previous conduct of Council in issuing orders under the EPA Act and numerous warnings to the respondents. I also take into account that in this case, unlike the situation in Lani, there is agreement between the parties that the declaration should be made. Further, despite Mr Hanafi's appearance for the respondents, as no objection or contradictory evidence was called by the respondents and noting that they have not proffered any material explaining or excusing their conduct, the gravity of the relief sought is appropriate.
12. Whilst I am conscious that a declaration for breach of statute in civil proceedings should not be used as akin to, or substitution for, criminal proceedings for breach of environmental statues (Lani at [23] and Gedeon v Commissioner of the New South Wales Crime Commission; Dowe v Commissioner of NSW Crime Commission (2008) 236 CLR 120; [2008] HCA 43 at [23]), as I have found, the continuing nature of the breach, the various efforts of Council to bring to the attention of the respondents the need to remedy the breach, and the agreement between the parties, are matters which I consider relevant in determining that there is utility in granting the relief sought.
13. Having looked at the authorities, I am comfortable that the facts in Lani are distinguishable and I find there is utility in making a declaration in the circumstances before me. My reasons may be shortly stated.
14. First, although all breaches of s 4.3 of the EPA Act are serious, in the present matter, the seriousness is augmented by the fact that the respondents have conducted themselves in a way that may have led to a number of breaches. In particular, the failure to comply with an order issued pursuant to s 121B (as that section then was) and the continued use of the premises for a prohibited purpose despite the issuance of two penalty infringement notices and letters of demand by Council to cease the prohibited use. The past and continuing conduct of the respondents leads me to the view that there is utility in publicly exposing and denouncing on behalf of the community and Council, the behaviour which is both blatant and unlawful.
15. Secondly, the making of a declaration at least 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 therefore can be seen to be a deterrent and have an educative element.
16. In addition, it would appear that the first respondent has previously carried out development without consent on other land at 2-10 Crystal Street, Petersham and was restrained by the Court for this conduct. This is referred to in the affidavit of Mr Turner sworn 25 February 2019. Whilst I do not regard this as determinative, it is a matter of history which I take into account.
17. In relation to the injunctive relief sought, it is clear that a number of attempts have been made by Council to cause the respondents to cease using the premises for a prohibited purpose. Despite the appearance of Mr Hanafi on behalf of the respondents today, as I noted above, there has been no explanation and/or excuse for the conduct which has continued. In those circumstances, I am satisfied that unless restrained, the prohibited use of the premises by the respondents will continue.
18. Finally, I note that local residents have lodged numerous complaints with Council in respect of the use of the premises and continue to suffer the consequences of the respondents' conduct. The extensive evidence from the four surrounding residents as to the amenity impacts being caused by the conduct of the respondents makes it clear to me that there is benefit in both the making of a declaration and granting injunctive relief.
19. In relation to costs, the usual order is that Council's costs be paid by the respondents as provided by r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW). However, I note that in filing a submitting appearance, and in Mr Hanafi's attendance at Court for this hearing, the respondents have also agreed to an order that they pay Council's costs in the agreed amount of $15,000 within 28 days of the date of any Court orders. Given that Council through Ms Hemmings has accepted that it is appropriate that an order for costs be made in that amount, I consider it is appropriate that such agreement be reflected in the orders.

Orders

1. In all the circumstances, I make the following orders: 1. Declare that each of the respondents being Balmain Rentals Pty Ltd and Dewkelp Pty Ltd by itself, its servants or agents has breached s 4.3(a) of the Environmental Planning and Assessment Act 1979 (NSW) by carrying out development on the premises being Lot 4 in DP 1162801 and known as 89 Fitzroy Street, Marrickville for the prohibited purpose of a "vehicle sales or hire premises" as defined by the Marrickville Local Environmental Plan 2011. 2. Pursuant to s 9.46(1) of the Environmental Planning and Assessment Act 1979 (NSW) each respondent by itself, its servants or agents is restrained from carrying out the use of the premises being Lot 4 in DP 1162801 and known as 89 Fitzroy Street, Marrickville for the prohibited purpose of "vehicle sales or hire premises" as defined by the Marrickville Local Environmental Plan 2011. 3. The first and second respondents pay the costs of the Inner West Council of the proceedings as agreed in the sum of $15,000, such costs to be payable within 28 days of today.

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 March 2019