Anshun estoppel
68I have earlier recited the fact that by orders made on 13 February 2007, the present applicants were restrained from carrying out the extraction and removal by pumping of groundwater from the Land "without consent". It is by reason of that injunction that the present applicants seek their present declaratory and consequential relief. For its part, the Council relies upon the making of that order and the circumstances of its making by contending that, even if the proposed use can properly be categorised as a "home business", the applicants are estopped from contending that their currently proposed groundwater extraction activity does not require development consent. They rely upon the principles enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (see also Henderson v Henderson [1843] 3 Hare 100 at 115; 67 ER 313 at 319; Rahme v Commonwealth Bank of Australia [1991] NSWCA 230 ). In short, the Council submits that, assuming the applicants' activities are permitted, without consent, the opportunity to so contend ought to have been taken before Jagot J in February 2007.
69The principle of estoppel articulated by the High Court in Anshun involved the acceptance of what was described as "the extended principle" articulated by Sir James Wigram V.C. in Henderson . In the latter case, the Vice-Chancellor had indicated that the extended principle extended to "every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time." Applying this extended principle, in the joint judgment of Gibbs CJ, Mason and Aitken JJ in Anshun , their Honours said (at 602):
"In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it."
Thus, a test of reasonableness is to be applied.
70The determination of disputes between parties in a single set of proceedings where all issues pertaining to that dispute are capable of being raised was emphasised by the High Court in Dow Jones & Company Inc v Gutnick [2002] HCA 56; (2002) 210 CLR 575. In the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ their Honours said (at [36], omitting citations):
"Clearly, the common law favours the resolution of particular disputes between parties by the bringing of a single action rather than successive proceedings. The principles of res judicata, issue estoppel, and what has come to be known as Anshun estoppel, all find their roots in that policy. .... Effect can be given to that policy by the application of well-established principles preventing vexation by separate suits or, after judgment, by application of the equally well-established principles about preclusion, including principles of Anshun estoppel."
71Articulation of the principles of Anshun estoppel are, with respect, helpfully stated and summarised in the judgment of McColl JA (Giles and Campbell JJA agreeing) in Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231. After referring to those parts of the judgment of the plurality in Anshun to which I have already referred, her Honour stated, citing observations made in judgments of the Federal Court of Australia, that this particular form of estoppel introduces an evaluative element based upon what a litigant could reasonably have been expected to do in earlier proceedings (at [82]). Her Honour identified that such an estoppel will also arise where an omission to plead a claim or defence will contribute to the existence of conflicting judgments, even if not raised on the same cause of action, but involving a declaration of "rights which are inconsistent in respect of the same transaction" (at [83]). However, her Honour continued (at [84]):
"A strict approach is necessary in an Anshun estoppel case to the inquiry whether there exists the requisite identity between the proceedings; the mere fact that the proceedings are closely related is insufficient; a technical approach is not helpful, the doctrine being concerned with substance and not form ... . In determining whether an Anshun estoppel has been established, the court inquires into realities and not mere technicalities".
Importantly, her Honour indicated that when such an estoppel is raised, it is open to the Court to look at "any material that shows what issues were raised and decided". The observations of Brennan J in Rogers v R [1994] HCA 42; (1994) 181 CLR 251 at 263 were cited for this last proposition.
72The application of Anshun estoppel to proceedings brought within this Court's jurisdiction have been considered on a number of occasions. In the course of argument, the parties referred to Holidays-a-Float Pty Ltd v Hornsby Council (1992) 75 LGRA 127; Rosemount Estates Pty Ltd v Minister for Urban Affairs and Planning (1996) 90 LGERA 1; Multistar Pty Ltd v Minister for Urban Affairs and Planning (No. 2) ; [2000] NSWLEC 242; Ashfield Municipal Council v Armstrong [2003] NSWCA 353; Warlam Pty Ltd v Marrickville Council [2009] NSWLEC 23; (2009) 165 LGERA 184. The principles continue to be applied to proceedings of this kind notwithstanding the reservations expressed by Stein J (as his Honour then was) in Rosemount Estates Pty Ltd Minister for Urban Affairs and Planning .
73In approaching the application of principle in this case, there are two matters of particular relevance that emerge from the observations by McColl JA in Habib. The first is the necessity to regard a close relationship between proceedings as being insufficient to attract the estoppel coupled with the need to focus upon substance rather than form. The second matter of present relevance is the capacity to consider all material before the Court identifying that which demonstrates the issues raised and decided in the earlier proceedings. There is a third cautionary note that her Honour sounded which, omitting the citation of authority, was expressed as follows (at [85]):
"In considering whether an Anshun estoppel has been established it is necessary to bear in mind that "shut[ting] out a claim ... a party wishes to pursue, without determination of its intrinsic merit, on the ground that it ought to have been raised in earlier litigation ... is a serious step, [and] a power not to be exercised except 'after a scrupulous examination of all the circumstances.' "
74The chronology of litigation and change in planning instruments is important to the determination of the present issue. Relevantly, the critical events are as follows:
(i) the grant of development consent on 7 February 2000 for the extraction of groundwater and bottling onsite, apparently categorised as "home industry" under LEP 4, such consent being limited to a period of five years from the date of commencement;
(ii) shortly prior to the lapsing of the consent, a development application was lodged, effectively seeking to continue that consent indefinitely but proposing the increase in production of both extraction and bottling to the equivalent of 5,000 litres per day;
(iii) as that application was not determined by the Council, an appeal was brought to the Court at or about the time at which the 2005 consent lapsed;
(iv) LEP 2005 commenced on 7 October 2005 but by dint of a savings provision, LEP 4 continued to be the principal instrument to be applied in determining the applicants' development application;
(v) the present applicants continued their water extraction operation onsite, notwithstanding the lapsing of the 2000 development consent;
(vi) on 5 July 2006 the present applicants were restrained by interlocutory injunction granted by Jagot J from continuing their activity onsite;
(vii) on 28 August 2006, Pain J refused an application for amendment of the development application that was the subject of their appeal to the Court commenced in October 2005 because the amendment sought would change the activity from a "home industry" to a "rural industry" within the meaning of LEP 4, the provisions of that instrument remaining applicable to the undetermined development appeal;
(viii) the appeal instituted by the applicants was discontinued on 18 October 2006;
(ix) the Winnacott letter was written to the Council on 9 February 2007; and
(x) the permanent injunction restraining development "without consent" was made on 13 February 2007.
75The Council relies upon the circumstance that at the time at which Jagot J granted the interlocutory injunction on 5 July 2006 and at the time of granting the permanent injunction on 13 February 2007, LEP 2005 was the operative instrument so that "home business" was on each occasion a form of development that did not require development consent. Notwithstanding that fact, so it is submitted, no contention to that effect was placed before her Honour, it being accepted that the activities of the present applicants were unlawful, the only matter raised in opposition to the orders sought by the Council in February 2007 being that all activity had ceased and there was no evidence of any suggestion that the impugned activity would resume.
76Applying the principles that I have earlier identified, I am unable to accept the Council's submission that the present applicants are estopped from asserting that their activity is able to be carried out without development consent (assuming, contrary to my primary finding, that it otherwise fell within the definition of "home business"). It must be remembered that the proceedings commenced by the Council against the present applicants in July 2006 was to restrain the conduct then being undertaken by them and said to be unlawful.
77The conduct of the present applicants found to be unlawful both at the time of commencement of the Class 4 proceedings and at the time at which Jagot J made the orders that she did on 13 February 2007 is not described, either in her Honour's judgment or in the facts before me, with the degree of particularity necessary to be considered for the purpose of determining that an Anshun estoppel arises. At [3] of her Honour's judgment, she describes the 2000 development consent as being one authorising "the extraction of groundwater". She then refered to the fact that although the consent had ceased, "the extraction activity continued without the required consent until 5 July 2006" when the ex parte injunction was made. The development consent granted in February 2000 not only authorised the extraction of groundwater but also authorised its bottling on the site. Her Honour's description of the activity seems therefore to have been a compendious one to include all of those activities associated with the extraction of groundwater that had been the subject of the 2000 consent.
78As I have said, counsel then appearing for the present applicants before her Honour conceded that "the activities" were being carried out on the property "at the material time" and required, but did not have, development consent under "the relevant planning instruments" (at [43]). A concession by the present applicants' counsel that under LEP 2005 those activities were prohibited is implicit from her Honour's reasons.
79In responding to the submission made on behalf of the applicants that no order was necessary by reason of their cessation of activities and no evidence to suggest their resumption, her Honour addressed the facts adduced before her on behalf of the Council. They indicated the difficulties encountered by the Council in having the applicants cease their activity until the grant of an ex parte injunction. Particular emphasis was given to the dirty equipment being used and the fact that the water was intended for human consumption "thereby raising potential public health risks" (at [8]). This aspect of the evidence was identified by her Honour as part of her reasoning for concluding that orders should be made (at [10]).
80Reference to the use of visibly dirty equipment being used for extraction does, at least, leave open the inference that the activity that had been conducted and which the Council sought to enjoin included some form of bottling or processing onsite as distinct from extraction, pumping to a tank and then piping of stored water from that tank to a vehicle for processing and bottling. Such an inference is enhanced by reference to [2] of the judgment. However, there is a more fundamental factual issue which militates against sustaining the Council's submission.
81The injunction that her Honour granted was made in aid of the declaration made in Order 1 of her orders on 13 February 2007. I have earlier set out the terms of that declaration. It determined that the activities then being conducted contravened the EPA Act because a consent had not been obtained for them, contrary to s 76A(1) of the Act. Had it been, as the Council presently contends, that the activity being considered was absolutely prohibited then one would have thought the declaration would have been made by reference to s 76B.
82Importantly, the inference that I draw from the terms of her Honour's orders is that activities that had been carried out by the present applicants were seen as activities in respect of which a development consent was required but not held. This approach may well have had its origins in the 2005 development appeal and the consideration given by Pain J to the application for amendment in August 2006 when focus was upon the provisions of LEP 4 and the categories of permissible development then being considered.
83However, the basis for the decision does not need to be left to speculation. In addressing the principles attending Anshun estoppel, I do not believe that it was encumbent upon the present applicants to posit an hypothesis, consistent with their present proposal, that if their development was to be carried out in that manner, an injunction in the terms made would not be appropriate. As I have said, the judgment of Jagot J makes clear that they had ceased all activities following the grant of the ex parte injunction and that position pertained at the time of the final hearing. At the risk of being later estopped, I do not consider that they were then bound to identify circumstances in which, should they have a change of heart in relation to the extraction of groundwater, they could undertake extraction without development consent. No doubt it was correct to determine that the extraction of groundwater from the site was prohibited. It is only if the activity is conducted within the constraints of the definition of "home business" that the activity falls outside a prohibited category of development. Nothing in the judgment indicates that the manner in which the activities had been carried out was so constrained.
84Against the possibility that a conclusion of the kind just expressed was reached, the Council makes reference to the Winnacott letter which, by its date, could not have been received more than four days prior to the orders made by Jagot J in February 2007. It is accepted by both parties that this letter was not drawn to the attention of the Court in February 2007. Indeed, the evidence indicates that it was not referred for legal consideration by the Council's solicitors until after orders were made and it was sometime thereafter before a response was received.
85Moreover, the Winnacott letter is somewhat tentative in that it seeks advice on a number of assumptions and in the context of a "pre-lodgement advice application". Importantly, it does not suggest that the extraction of groundwater in terms and subject to the constraints expressed in that letter reflected the manner in which the applicants had conducted their water extraction activity prior to being restrained from so doing in July 2006. I have concluded that it does not assist the Council's submission in support of its estoppel argument.
86In summary, on the material adduced before me, together with that identified in the judgment of Jagot J of 13 February 2007, it is not apparent to me that any defence was available to the present applicants to resist an order restraining the conduct of the activity which they had hitherto carried out on the Land. They were not then bound, at the risk of later being estopped from so doing, to posit an hypothesis or hypotheses upon which development by them may lawfully have overcome the prohibition that had founded the commencement of proceedings against them.