Liverpool City Council v Prabha Ranjee Kumaragamage

40052 of 2003 Liverpool City Council v Prabha Ranjee Kumaragamage-(also known as Prabha Ranjanee Kumaragamage-Dona)

JUDGMENT 1 Talbot J: On 19 April 2004 the applicant Council's claim for declaratory relief and consequential orders was determined as follows:- The Court orders that:

1. Declaration that the Building Permit No. 492/76 dated 25 May 1976 which on its face has been issued by the Liverpool City Council is void and of no effect.

2. An Order restraining the Respondent, by herself, her servants, agents and assigns from using, suffering or permitting to be used the premises for the purpose of more than one separate dwelling or for the provision of separate lodgings or as business premises or for any other purpose contrary to the provisions of the Environmental Planning and Assessment Act 1979.
3. An Order that the Respondent within 3 months of the date of this order reinstate or cause to be reinstated the rooms within the premises, so that the premises are not constructed or adapted so as to be capable of being occupied or used as more than one separate dwelling or for the provision of separate lodgings contrary to the provisions of the Environmental Planning and Assessment Act 1979. …

2 The class 4 proceedings were commenced in January 2003. After several intermittent hearing days the respondent made no final submissions in opposition to the making of the abovementioned declaration and orders. A cross claim filed on 13 April 2004 is maintained together with a second cross claim filed on 25 May 2004. 3 Further and better particulars were provided in respect of the first cross claim on 25 May 2004 and the Council filed a points of defence to that cross claim on 21 June 2004. 4 By notice of motion dated 16 August 2004 the Council moved the Court for orders that the cross claims be dismissed with an order for costs in favour of the Council. On 25 August 2004 Lloyd J directed Mrs Kumaragamage to file and serve all evidence in support of the two cross claims by 22 August 2004. No evidence was filed until 15 October 2004. 5 Further and better particulars to the second cross claim were filed in Court on 23 October 2004, notwithstanding a direction made by Lloyd J to reply to the Council's request for those particulars by 1 September 2004. In the meantime points of defence to the second cross claim were filed on 16 September 2004, notwithstanding a direction by Lloyd J requiring the Council to file and serve its defence to the second cross claim by 8 September 2004. 6 The notice of motion seeking the dismissal of the cross claims was heard on 23 October 2004. By then, the cross claimant had filed three affidavits in support of the cross claim together with a notice of intention to tender documents. 7 In the first cross claim, the cross claimant claims damages suffered as a result of the class 4 proceedings, exemplary damages and compensation for suffering experienced by the cross claimant due to improper legal proceedings. The points of cross claim are enumerated as follows:-

1. On 25 May 1976 Cross Respondent issued a Building Permit for the property lot 2 of Hume Highway which granted the permission to the property to be used as two separate dwellings. (it is believed that this permit is for the property lot 2 of DP 505004).

2. The cross claimant obtained a Planning Certificate under s 149 of the Environmental Planning and Assessment Act 1979 (the Certificate) in the year 1999 ie before the purchase of the subject land.
3. Pursuant to s 149(2) and (5), the Cross Respondent had a statutory duty to include advice on matters affecting the land of which the Cross Respondent was aware.
4. The cross respondent breached that duty negligently, maliciously and/or unfaithfully. PARTICULARS 4.1If the above point 1 is deemed false, in such a case the Cross Respondent knew at the time of the application for the certificate (149) that the subject property was not permitted to be used as two separate dwellings and the structure within the ground floor was contrary to the approved drawings and/or the structure had been built without proper approval. 4.2The Cross Respondent knew of the illegality of the subject structure from 1976. Alternatively Cross Respondent should have known the illegality of the subject structure from 1976. 4.3Cross Respondent did not disclose the status of the ground floor structure (illegality and/or non existence of the approval for use for human habitation) to the Cross Claimant in the 149 certificate in 1999.

5. In any case, (even if above point 1 and/or 4.1 deemed false) present legal proceedings against the Cross Claimant were unnecessary since before any legal action, the Cross Respondent had a statutory duty to issue and service Notice(s) under s 124 of the Local Government Act if any breach by the Cross Claimant was evident.

6. Cross Claimant says that the present legal action is based on malicious intention of Stafford Maddigan who is an employee of the Cross Respondent. 6.1 Cross Respondent is vicariously liable for any action of Stafford Maddigan.

7. Alternatively, cross claimant claims that, if the above point 1 deemed true, the present legal proceedings is unnecessary.
8. As a result of the current legal proceedings the Cross Claimant lost an opportunity to sell a parcel of land comprising 395, 377 and 399 Hume Highway, Liverpool in NSW for a sum of three million dollars.
9. Cross Claimant claims the difference between the three million dollars and the current market value as the compensation for lost opportunity.
10. Cross Claimant also suffered undue stress and unrest due to uncertainty of the outcome of these proceedings. 8 In the second cross claim, the cross claimant claims that the Council pay to her all general damages (lost opportunity and other) suffered by the cross claimant as a result of the Council's acts. The points of the second cross claim are as follows:
11. On 25 May 1976 Cross Respondent issued a Building Permit for the property lot 2 which granted the permission to the property to be used as two separate dwellings.
12. This certificate was applicable for the property lot 2 of DP 505004 (the premises).
13. Said Building Permit permitted the use of the premises as two separate dwellings.
14. In 1999, Cross Claimant purchased the land and became the registered owner of the subject property.
15. At the time of purchase Cross Claimant was with the understanding that the property had been duly approved by the Liverpool City Council for two separate dwellings.
16. Cross Claimant was entitled to rely on the said building permit.
17. Cross Respondent argued before the court that the said Building Permit was an ultra vires document and Cross Respondent has acted beyond its jurisdiction. The court accepted that argument.
18. Cross Respondent was not entitled to argue against the validity of a document which was issued by Cross Respondent itself. Alternatively, if the Cross Respondent was entitled to so argue, the Cross Respondent is liable to pay all damages suffered by the Cross Claimant due to Cross Respondent's conduct.
19. As a result of the Cross Respondent's conduct, cross claimant suffered loss of rental income $360.00 every week from 25 April 2004.
20. Cross Claimant also suffered reduction of Market Value (from $3 million to $2.3 million) of her parcel of land 395, 397and 399 Hume Highway Liverpool in the State of NSW. CAUSE OF ACTION 2
21. The lands lot B of DP 357759 and Lot 1 and 2 of DP 505004 and Lot 21 of DP 613849 are situated within 3b Zone in the Liverpool Local Government Area.
22. Cross Claimant is the registered owner of the said four properties.
23. Before the purchase of the properties, Cross Claimant sought advice from the Cross Respondent with regards to the planning issues of the lands.
24. Cross Respondent advised in writing to the effect that: 14.1 There were restrictions applicable to 3A zone and 3C zone in LEP, but no restrictions applicable to zone 3B. 14.2 Objective of the 3 b zone was to permit continuation and consolidation of a group of existing commercial uses along the Hume Highway at Liverpool and Casula.

15. Based on those advices the Cross Claimant was entitled to rely on the fact that there were no restrictions applicable to 3 b Zone in Liverpool Local Government Area.
16. Based on such reliance the Cross Claimant purchased the subject properties.
17. In the year 2001 and after that year, Cross Respondent or its employees advised valuation consultants and those who were prepared to purchase the subject parcel of land from the Cross Claimant that: 17.1 The Council has decided to apply height restrictions to the properties owned by the Cross Claimant. 17.2 The council has decided that maximum of two floors are permitted in the properties owned by the Cross Claimant. 17.3 The council has decided that a range of other restrictions are applicable to the properties owned by the Cross Claimant.
18. The Council has never decided that: 18.1 Height restrictions are applicable to the subject properties. 18.2 Maximum of two floors are permitted in the subject properties 18.3 Any restriction other than those listed in the LEP are applicable to the subject properties.

19. As a direct result of wrong advice given by the employees of the Cross Respondent, (as in paragraph 17) Cross Claimant suffered loss of sale of the said parcel of land (a number of opportunities) for a sum of three million dollars. 19.1 Cross Respondent is vicariously liable for damages caused by wrong advice given by its employees.
20. Cross Claimant suffered reduction of Market Value (from $3 million to $2.3 Million) of her parcel of land 395, 397 and 399 Hume Highway Liverpool in the State of NSW. CAUSE OF ACTION 3 (Alternate pleading to the above Cause of Action 2)
21. If the Cross Respondent was entitled to give advice in above paragraph 17, Cross Respondent was negligent in the action pleaded in paragraph 14 above and the advice described in paragraph 14 was wrong.
22. Cross Claimant then pleads as in above paragraphs 19 and 20. 9 The Council's claim for summary dismissal is partly based upon the failure to comply with the directions made by Lloyd J; to file evidence in support of the cross claims and secondly the lack of evidence of:- (a) The issue of, or reliance upon a section 149 certificate; (b) The issue of, or reliance upon a Building Certificate; (c) Unknown planning advice to persons unknown, by persons unknown that is alleged to be negligent and wrong; and (d) The malicious intention of Stafford Madigan, an employee of the Council. 10 It is submitted that in any event there is no duty to include the advice relied upon by the cross claimant in a s 149 certificate. Moreover the provisions of s 149(6) provide statutory protection to the Council. 11 Furthermore, any claim for loss caused to the cross claimant by the institution of class 4 proceedings in which the Council was the successful applicant is, according to Mr Hemmings who appears for the Council, untenable. Finally he says the allegation that the Council had a duty to issue an order pursuant to s 124 of the Environmental Planning and Assessment Act 1979 ("EP&A Act") cannot be sustained. 12 In General Steel Industries Inc v Commissioner for Railways (NSW) and Others (1964) 112 CLR 125 Barwick CJ identified various tests to be applied before a court is entitled to summarily terminate an action at p 129 as follows:- "so obviously untenable that it cannot possibly succeed" ; "manifestly groundless" ; "so manifestly faulty that it does not admit of argument" ; "discloses a case which the Court is satisfied cannot succeed" ; "under no possibility can there be a good cause of action" ; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". 13 Although the tests described by the then Chief Justice were in no way intended to be exhaustive, they nevertheless demonstrate that there must be a very clear case to justify the summary intervention of the court, the consequence of which is to prevent a party submitting a case for determination. 14 In Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 Dixon J (as he then was) put the position as follows:- … once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process. 15 Following the decision of Lloyd J in Grant v Brewarrina Shire Council No.2 [2003] NSWLEC 54, unreported, which was not disturbed by the Court of Appeal (the High Court subsequently refused leave to appeal against that decision), it is clearly arguable that even if the Land and Environment Court does not have the power to award damages as part of the relief available to enforce a right, section 16(1A) of the Land and Environment Court Act 1979 fills the void. The factual circumstances in Grant are different and the principle applied by Lloyd J may be distinguishable, but that does not make the cross claim so manifestly groundless or untenable to the point of that it should be struck out.

16 For a case to be struck out there must be a lack of cause of action, such as in General Industries. However, in cases where there are issues of fact or law to be determined the matter should be allowed to go to trial. 17 The affidavits filed on 15 October 2004 have not been read. Mrs Kumaragamage who is represented by her husband proposes to call Council officers to give evidence in support of her case. Arrangements have not been made for statements to be taken from these officers and on the assumption that they will not cooperate, Mr Kumaragamage has indicated they will be subpoenaed to give evidence at the trial and it may be necessary to make an application for them to be declared hostile witnesses. 18 It is settled law that a Council does not have a duty to exercise a statutory power (see Ryde City Council v Echt and Another (2000) 107 LGERA 317). Accordingly the claim for relief as a consequence of the Council's failure to take proceedings pursuant to section 124 of the EP&A Act appears to be untenable and totally hopeless to the extent that it should be summarily dismissed. 19 Although the evidentiary issues are far from clear it is not without doubt that a person may rely upon advice given in a certificate issued pursuant to s 149. Questions of onus will arise in relation to reliance by the Council on the provisions of s 149(6). 20 In Witten v Lombard Australia Limited (1968) 88 WN (Pt 1) (NSW) 405 at 412 Walsh J said:- … a balance must be struck as between the plaintiff and the defendant and, in the end, 'the court must decide whether or not on balance justice demands that the action should be dismissed.

He went on to say: Everything must depend upon the circumstances disclosed in each particular case. It is, of course, proper to consider whether any explanation or excuse has been offered for the delay, and whether any explanation or excuse that has been offered is credible and satisfactory. It is proper to consider whether or not there is evidence of particular prejudice to the opposing party by reason of the delay. When all relevant factors have been taken into account, a decision is then to be reached as to the manner in which the discretionary power should be exercised. 21 The Council has not, so far, attempted to establish the prejudice it will suffer as a consequence of the cross claimants failure to comply with the directions made by Lloyd J for the filing of evidence. On the other hand there is no evidence of an explanation or excuse offered by the cross claimant for the failure to comply with the directions. It has not been demonstrated to me that the delay by the respondent in filing the evidence is such that the proceedings should be dismissed for want of prosecution at this stage. 22 I am not sure that the claim alleging that the present legal proceedings, on the part of the Council against the cross claimant, were unnecessary can be sustained. However the only order to be made as a consequence of the argument on the 23 October 2004 is that the claim arising out of an alleged failure by the Council to take proceedings against the cross claimant seeking orders pursuant to section 124 of the EP&A Act cannot be maintained and will be dismissed. The formalities in relation to that order can be finalised in due course. Otherwise the notice of motion filed by the Council is stood over to the hearing before the Trial Judge. Costs in relation to the notice of motion to date will be reserved. 23 Nothing I have said in the course of this judgment can be taken as an embrace of any part of the cross claimant's case. The opposite is the case. The cross claimant's claim is clearly weak and serious questions of jurisdiction to entertain the claim will arise. 24 The cross claimant should be aware that it is almost certain that the Council will seek an order for costs if the cross claim fails.

25 It may well be that the future conduct of the cross claim will benefit from directions by the Court fixing a final, inflexible program for the filing and communication of evidence. Further consideration of the capacity of the cross claimant to maintain a case will be possible after further directions are complied with. It must be clearly understood however that this course in many respects can be regarded as the very last opportunity for the cross claimant to prepare and communicate to the Council the evidence upon which she proposes to rely Any future default is unlikely to be tolerated and could result in a refusal of leave for the opportunity to rely on evidence adduced otherwise than in accordance with the directions. This further and final opportunity takes into account that the cross claimant is not legally represented. 26 The formal directions now made are as follows:-

(a) The cross claimant to file and serve any further affidavit evidence or statements in writing upon which she relies in chief, including expert evidence, by 4.00pm 15 November 2004. (b) The cross claimant to file and serve a written summary of evidence which it is expected a witness will give at the trial where that witness has not sworn an affidavit or refuses to make a statement in writing, by 4.00pm 15 November 2004. (c) The cross claimant shall file and serve a copy of all documents upon which she proposes to rely by 4.00pm 15 November 2004. (d) The cross respondent shall file and serve all affidavits and copies of documents upon which it proposes to rely by 4.00pm 29 November 2004.

(e) The cross claimant shall file and serve all affidavit evidence, copies of documents or written summaries of evidence upon which she proposes to rely in reply by 4.00pm 13 December 2004. (f) No evidence of witnesses, other than deponents of affidavits and witnesses for whom a summary has been provided pursuant to (a), (b) and (e) shall be permitted to give evidence on behalf of the cross claimant without leave and no documents other than those where copies have been provided under (c) and (e) may be tendered without leave. (g) The cross claimant shall file and serve written submissions in chief by 4.00pm 20 December 2004. (h) Taking account of the long vacation, the Council shall file and serve written submissions by 4.00pm 4 February 2004. (i) The cross claimant shall file and serve written submissions by 4.00pm 11 February 2004.

27 The cross claim is set down for hearing Monday 7 March 2005.

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