Local Democracy Matters Incorporated; Waverley Council v Infrastructure NSW

Applicants' evidence

1. Mr Maltby treasurer, public officer and nominated spokesperson for LDM swore an affidavit dated 5 February 2019. Mr Maltby stated that the objects of LDM are to protect local democracy in the Woollahra, Waverley and Randwick local government areas and to encourage civic advocacy in support of local democracy amongst all residents in these local government areas. Mr Maltby stated that LDM has been aware since at least 20 December 2018 that senior counsel's legal advice was available which held that the decision to demolish the SFS had been made invalidly. Mr Maltby attested that he is aware that "soft stripping" off the site has begun.
2. Mr Monks director of Waverley Futures swore an affidavit dated 8 February 2019. Annexed to his affidavit are extracts of Waverley Council meetings held on 12 December 2017, 15 May 2018 and 16 October 2018. Mr Monks stated that these indicate that the Council has constantly expressed concerns regarding the impacts of the proposal on open space, local traffic congestion, public transport capacity and long term effect on public land. Annexed to Mr Monks' affidavit are letters to the Minister for Sports and the Department of Planning and Environment reflecting these concerns. Further annexed to his affidavit are the minutes of the sequence of Waverley Council meetings preceding the Council's decision to commence legal proceedings. This includes the minutes of the Waverley Council meeting held on 12 December 2017. These state that the Council agreed to collaborate with neighbouring councils and State and Federal representatives to work together in order to effect an immediate moratorium on the progression of the rebuilding of the SFS and encroachment and expansion into Moore Park at an anticipated cost to taxpayers of $705 million. Mr Monks stated that the Council resolved to commence legal proceedings to challenge the development consent on 5 February 2019.
3. Mr Monks stated that on 6 February 2019 the representative of the Lendlease stated words to the effect, without undertaking, that presently "the hard demolition is slated for late February".
4. The Applicant's further supplementary tender bundle dated 25 February 2019 (Exhibit E) was drawn from Lendlease's response to a notice to produce. A presentation from Lendlease on the SFS mid-range program dated January 2019 states that between 25 February and 3 March 2019 hard demolition with respect to the south roof and preparation for eastern roof lowering will occur. The SFS redevelopment short-range programme dated 23 February 2019 states that separation of entire roof at expansion joints will occur between 2 and 5 March 2019 and separation works around live sub will occur between 4 and 6 March 2019, both of which are classified as "roof demolition". A Lendlease presentation to the Community Consultative Committee dated February 2019 states that between 4 and 31 March 2019 major structural demolition of the north, south and east sections of the SFS and processing and removal of stadium materials will occur. An email from Kiara Neasy communication and engagement manager for INSW dated 7 February 2019 states that removal of the roof structure and external sides of the stadium is expected to commence from late February. Draft minutes from the Community Consultative Committee meeting dated 7 February 2019 state that major roof structure demolition is expected to begin at the end of February.
5. The Applicant referred to the "SFS response to submissions" dated 16 October 2018 specifically its response to additional issues raised by the Heritage Council of NSW in the evidence book tendered in the substantive proceedings. This states that the Heritage Council's previous comments noted that the concept proposal has the potential to adversely impact on significant historic view lines. The visual impact assessment provided in the Environmental Impact Statement (EIS) concluded that the proposal does have an impact on close range views obtained from the Sydney Cricket Ground.

Respondents' evidence

1. An email was sent from Ms Townsend solicitor for INSW to Mr Briggs solicitor for Lendlease dated 25 February 2019 (Exhibit 2). Ms Townsend requested information on the following: 1. whether it is Lendlease's position that it is entitled to claim delay costs under the contract between it and INSW by reason of the injunction made on 22 February 2019; 2. whether Lendlease is able to indicate the likely nature and quantum of those costs and in particular whether its position is that part of its entitlement is the payment of $46,000 per day for every day it is restrained by the injunction; 3. whether Lendlease accepts the position put on behalf of Waverley Council in the proceedings that an extension of time for completion of work under the contract given by INSW will remove any entitlement to delay costs; and 4. whether a delay caused by an extension of the injunction to 1 or 8 March 2019 would impact completion of the Stage 1 works under the contract or would be able to be absorbed into the contract program such that it would not put at risk the intended completion date for those works.
2. Mr Briggs solicitor for Lendlease responded to Ms Townsend in an email dated 25 February 2019 (Exhibit 2) which stated that Lendlease is entitled under the contract to claim costs associated with any delay including under clauses 51 and 8A.9 and unavoidable additional costs under clause 12A (as applicable). The applicable costs would be calculated in accordance with the contract terms and as such it is not possible to provide details of the quantum at this stage. A delay caused by an extension of the injunction to 1 or 8 March 2019 could potentially impact on completion of the Stage 1 works under the contract.
3. By email dated 22 February 2019 Mr Morten contractor representative for Lendlease notified Mr Riches executive program director of INSW of the injunctive orders the Court made on 22 February 2019. Mr Morten stated that Lendlease reserves its rights under the contract between it and INSW including to claim time and cost (including delay costs) associated with any delay, variation and unavoidable additional costs in accordance with clauses 8A.9, 12A.1, 48, 50, 51 and 68 as applicable.

Mr Riches' affidavit

1. Mr Riches affirmed an affidavit dated 15 February 2019. Mr Riches is the head of Projects NSW which is mandated to procure and deliver major capital works projects. He is currently responsible for the SFS redevelopment. Annexed to Mr Riches' affidavit is the contract between INSW and Lendlease for demolition of the SFS dated 7 December 2018. This contract provides for bulk excavation, piling and foundation works for the new stadium for which INSW is responsible for obtaining development consent.
2. Mr Riches stated that on 30 January 2019 a crown certificate for the SFS redevelopment was issued. This was required before any soft strip work could commence on the site. Works comprising bulk excavation, piling and foundations are intended to be completed by 30 June 2020. The construction of the new stadium is to be completed by the date specified in the Stage 2 offer. Under the Master Program Mr Riches prepared for the SFS development, construction is intended to be completed by the end of 2021. Stadium events are targeted to recommence by March 2020.
3. Mr Riches stated that under the contract, if a legal challenge occurs to the approval for the project which relates to a matter which is outside the reasonable control of the contractor, Lendlease is entitled to claim an extension of time to the contract program and delay costs. INSW would be liable to pay $46,000 to Lendlease per day pursuant to Item 48A2 of the contract information for each day of delay to the works until such time as INSW issues a notice to recommence works on the site.
4. Mr Riches was also cross-examined on the operation of cl 50 of the contract which outlines the conditions upon which Lendlease can claim an extension of time for completing the works. Clause 50.8 states that the "Principal may, in its absolute discretion but without any obligation to do so, extend any Contractual Completion Date or Stage 1 Completion Date … as applicable at any time and for any reason, whether or not the Contractor has claimed an extension of time". Mr Riches confirmed that the operation of cl 50 is that a judgment is made as to whether the ultimate completion date is affected by the delay in respect for which the delay claim is made.

Applicants' submissions

1. The Applicants submit that hard demolition will be irreversible and must be restrained until judgment which can hopefully be by 8 March 2019. The subject matter of the proceedings will start to disappear if no restraining order is made. The proceedings are brought in the public interest, by a local community group and a local elected council, who identify important issues concerning public notification, design excellence requirements for a major public project and the assessment of contamination. The applicants are acting in the public interest, raise matters of public importance and have nothing to gain personally from success in the litigation.
2. The Applicants did not delay in commencing proceedings. They were commenced well within the three month time limit specified in r 59.10(1) of the Uniform Civil Procedure Rules 2005 (UCPR).
3. The contract between INSW and Lendlease provides the ability to extend time in the contract. That Lendlease has advised of the possibility of making a claim for costs incurred whether any costs are payable and how much is speculative.
4. Maintenance of the status quo favours the making of an injunction given that the subject matter of the proceedings is the re-development of the SFS pursuant to a valid development consent.

INSW submissions

1. INSW opposes the making of an interlocutory order as it considers Lendlease is able to make a claim under the contract between INSW and Lendlease for delay arising from such an order. This is likely to result in costs being payable under the contract to Lendlease. That Lendlease is of this view is identified in the solicitors' emails in Exhibit 2 where the notice of intention to make a claim is identified. The Applicants are not offering to pay an undertaking as to damages, which damages are likely to arise to INSW.
2. INSW submits that at issue is not whether the SFS should be demolished but the validity of the Minister's decision to approve the stadium demolition and rebuilding. Whether the SFS should be demolished and rebuilt has already been decided and is a political decision. The subject matter of the case is not the SFS. Maintenance of the status quo suggests no injunction ought to be granted as INSW holds a valid development consent which it is entitled to rely on until declared invalid. For example post-consent conditions have been imposed, a Community Consultative Committee has been convened and has had its first meeting and INSW has entered into a $50 million contract with Lendlease. The SFS is not the subject matter of the proceedings.
3. The Applicants have taken the risk of commencing proceedings without making an application for an interlocutory injunction, relying on expedition of the hearing.
4. The evidence relied on by the Applicants does not establish that the work to be done until 8 March 2019 will be irreversible in any event. The Applicants bear the onus of establishing such a matter in order to justify the injunction being made.
5. Relying on Tegra INSW submitted that there is no suggestion of present harm to the environment. Relevantly the SFS has no heritage status.
6. In terms of equitable considerations, INSW submitted that there was delay in LDM applying for an injunction despite knowing full well that demolition had commenced.

Consideration

1. In relation to serious question to be tried, I have just heard the parties' arguments on the three grounds identified in the amended summonses for three days. No respondent submitted there was not a serious question to be tried and I find that there is.
2. The period of the injunction sought is short being 8 March 2019 a period the parties effectively presume is the time in which a judgment can be delivered in the substantive proceedings.
3. According to documents produced by Lendlease in Exhibit E and its advice to the community the timeframe for hard demolition work to commence is late February 2019 suggesting it is imminent. The detailed work schedule produced by Lendlease to the Applicants provides for the loosening of the roof joints and lowering of the roof in the next two weeks. INSW submitted that the Applicants have not established that this work is irreversible and could have done so by calling an engineer. I do not accept that the Applicants can be expected to produce such evidence about matters that are able to be known to INSW, a government entity, which has the contract with Lendlease. The work is described in the Lendlease program documents as part of hard demolition. In the very short time frame available to assess the material it is reasonable to conclude that reversal will require additional time and costs. Whether it is impossible is unknown. These are however steps required in the process of hard demolition of the SFS building.
4. As to the ability of Lendlease to claim any costs caused by delay, the notice of intention to make a claim sent by its solicitor to INSW does not mean that a claim will be made. There is not enough time to explore fully the operation of the contract with INSW the subject of Mr Riches' affidavit and of his cross-examination but I observe that there is the ability to extend the period of the contract for example. I am unable to conclude at this point in time that a claim is inevitable and payable.
5. The Applicants rely on open standing provisions in the Environmental Planning and Assessment Act 1979 in bringing their respective challenges to the Minister's consent. LDM is a community group established to promote democracy in specified local government areas. Waverley Council is an elected local council. I accept their submissions that they gain no benefit directly from the proceedings if successful. That the re-development of the SFS has generated considerable public interest and controversy is clear from the large amount of material placed before me in the course of the substantive hearing. The grounds raised by the Applicants allege important matters concerning the assessment of the SFS. One ground concerns the adequacy of consideration of design excellence in the concept plan the subject of the consent approved by the Minister. That is a matter of considerable public importance given the location of the SFS.
6. Tegra at [53]-[56] identifies a number of aspects of the public interest and I repeat and adopt these paragraphs here: 53 The court may consider the public interest. The public interest is multi-faceted and may be a factor in favour or against the grant of an interlocutory injunction. 54 There is the public interest in the proper enforcement of public welfare statutes, such as planning and environment laws. In Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339 - 340, Kirby P stated that a public interest exists "in the orderly development and use of the environment" and that there is purpose in "upholding, in the normal case, the integrated and co-ordinated nature of planning law. Unless this is done, equal justice may not be secured. Private advantage may be won by a particular individual which others cannot enjoy. Damage may be done to the environment which is the purpose of the orderly enforcement of environmental law to avoid": see also Ellison v Warringah Shire Council (1985) 55 LGRA 1 at 13; Jarasius v Forestry Commission of NSW (1989) 69 LGRA 156 at 161; South Sydney City Council v Rennoc Australia Pty Ltd [2003] NSWLEC 45 (29 November 2002) at [12]; and Reg v Secretary of State for Transport, ex parte Factortame Ltd (No 2) [1991] 1 AC 603 at 673. 55 There is also the public interest in the reliable and predictable public administration of the law: Ellison v Warringah Shire Council (1985) 55 LGRA 1 at 13; Jarasius v Forestry Commission of NSW (1989) 69 LGRA 156 at 161-162; Bridgetown/Greenbushes Friends of the Forest Inc v Department of Conservation and Land Management (1997) 93 LGERA 436 at 438. 56 There is the public interest in protecting the environment and components of it, and cultural heritage: Carriage v Stockland (Constructors) Pty Ltd [2002] NSWLEC 117 (16 July 2002) at [39]; Williams v Homestake Australia Ltd (2002) 119 LGERA 55 at 66 [53]; Carriage v Stockland (Constructors) Pty Ltd [2002] NSWLEC 216 (20 November 2002) at [33]; Williams v Director General of National Parks and Wildlife Service [2002] NSWLEC 235 (6 December 2002) at [68]-[73], [77], [98].
7. INSW relied on cases such as Lester v Ashton Coal Pty Ltd (No 2) 193 LGERA 293, to submit that something more than acting in the public interest is required here. Those cases all concern costs decisions where at the conclusion of a case an applicant claiming to act in the public interest resists a costs order being made against them. I am considering a different earlier point in time and do not find those cases of much relevance.
8. As to the status quo, the challenge is to the Minister's decision to approve the demolition and redevelopment of the SFS. The SFS as the subject of the consent is also the subject matter of these proceedings. I do not see the consent and the SFS as distinguishable for this purpose.
9. I do not consider there is disqualifying delay on the part of the Applicants. The affidavits read by them attest to the steps taken before proceedings were commenced and appear reasonable given that they are an incorporated community group and an elected council which has to conduct its affairs in an orderly fashion. INSW and Lendlease entered into their contract the day after the Minister granted his consent. There is a three month statute of limitations under r 59.10 of the UCPR.
10. Balancing all these various factors I conclude that the injunction should continue until 5pm 8 March 2019 or until further order in the event that judgment is delivered sooner. No undertaking as to damages is required.

Orders

1. The court orders: 1. Lendlease is restrained by itself, its servants or agents, from carrying out demolition pursuant to the ministerial consent SSD9249 (the consent) dated 6 December 2018 other than demolition soft strip as defined in the consent until 5pm Friday 8 March 2019 or until further court order. 2. These orders must be served by 11am today on Lendlease's solicitors by email and on Lendlease's email as contained in the Notices to the contractor at Angus.Morten@lendlease.com.

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: 27 February 2019