Luxcon Developments No 6 Pty Ltd v Woollahra Municipal Council

Background

1. Luxcon seeks development consent for the demolition of existing buildings at 528-536 Old South Head Road, Rose Bay NSW 2029 ('site'), and the construction of a mixed use development. The development proposes the excavation of two levels for car parking, the construction of a 4 storey 'mixed use building' and construction of a 3 storey 'townhouse building', comprising 19 dwellings in total and an 80m² retail tenancy ('development'). The site is governed by the Woollahra Local Environment Plan 2014 ('Woollahra LEP') and is zoned "B4 Mixed Use". Luxcon contends that the 19 residential units are properly characterised as "shop top housing", and are therefore permitted under the Woollahra LEP.
2. Luxcon lodged Development Application No. 9/2017 with Council on 6 January 2017 ('development application'). On 1 March 2017 Luxcon commenced Class 1 proceedings against Council's deemed refusal of the development application.
3. On 14 March 2017 Council issued a Notice of Determination detailing reasons for its refusal of the development application. The reasons provided were as follows: 1. It is considered that the proposal is inconsistent with the definition of shop top housing and is not consistent with any of the other permissible uses within the B4 Mixed Use zone and as such is prohibited under WLEP 2014. 2. The 'lower ground floor' garage level is not properly characterised as ground floor and does not fall within the definition of retail premises. Development above the 'lower ground floor level' can therefore not be defined as shop-top housing.
4. Council accordingly seeks an order that this Court hears and determines the separate question as a preliminary matter, prior to the commencement of the balance of the proceedings.

Relevant legislation

1. Part 28, Division 2 of the Uniform Civil Procedure Rules 2005 (NSW) provides: Division 2 Separation of questions 28.2 Order for decision (cf SCR Part 31, rule 2) The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings. 28.3 Record of decision (cf SCR Part 31, rule 5) If any question is decided under this Part, the court must, subject to rule 28.4, either: (a) cause the decision to be recorded, or (b) give or make such judgment or order as the nature of the case requires. 28.4 Disposal of proceedings (cf SCR Part 31, rule 6) (1) This rule applies if the decision of a question under this Division: (a) substantially disposes of the proceedings or of the whole or any part of any claim for relief in the proceedings, or (b) renders unnecessary any trial or further trial in the proceedings or on the whole or any part of any claim for relief in the proceedings. (2) In the circumstances referred to in subrule (1), the court may, as the nature of the case requires: (a) dismiss the proceedings or the whole or any part of any claim for relief in the proceedings, or (b) give any judgment, or (c) make any other order.

Council's position

1. Council relies on the affidavit of Jane Hewitt, solicitor for the respondent, sworn 31 March 2017 to support the Motion for the separate question. Council submits that the principles relevant to determining whether a court should order a separate question are well known and set out in by Biscoe J in 820 Cawdor Road Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 8; (2013) 195 LGERA 170 at [10]. In essence, Council puts forward three submissions as to why the Court should order the separate question.
2. First, Council submits that the separate question, if answered in the affirmative, will be dispositive of the proceedings, as the development will be found to be prohibited.
3. Second, Council submits that a full hearing on all matters could occupy approximately two to three days, whereas a hearing on the separate question would occupy approximately half a day, resulting in a time and cost saving of one and a half to two and a half days. Accordingly, Council submits, if the separate question is answered in the affirmative, parties will be spared the time and cost expense of: 1. providing and assessing additional information identified in Part B2 of Council's Statement of Facts and Contentions (which relate to the issue of unacceptable bulk involving the proposed building height and setback); 2. conciliating on matters; 3. preparing evidence from experts in various areas of expertise; and/or 4. running a hearing on merits matters.
4. Council submits that the matter is amenable to a separate question given that it does not involve the credibility of witnesses and there are no disputed primary facts.
5. Finally, Council disputes Luxcon's submission that a hearing on all issues would provide some sort of guidance or advice on a future development, submitting that if the development were found to be prohibited, it is likely that a complete re-design would be required, and therefore there is little benefit to be derived from a merit assessment of this particular application.

Luxcon's position

1. Luxcon relies on the affidavit of Ashleigh Cowper, solicitor for the applicant, sworn 5 April 2017. Luxcon opposes the Motion, submitting that an order for the separate question would offend the 'overriding purpose' contained in s 56 of the Civil Procedure Act 2005 (NSW). Luxcon submits, similarly to Council, that the principles governing whether a separate question should be ordered are well established, relying on 820 Cawdor Road Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 8; (2013) 195 LGERA 170 at [10]; Royal Motor Yacht Club (Broken Bay) New South Wales Pty Ltd v Northern Beaches Council [2016] NSWLEC 87 at [10]; Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182 at [87]-[99].
2. Luxcon submits that the default position is that all issues in a proceeding should be tried and determined at the same time; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 ('Idoport') at [7]. The onus on establishing that a separate question is warranted is therefore on the party seeking the separate question. Luxcon submits that Council has not met this burden.
3. Luxcon submits that even if the separate question is ordered and answered in the affirmative, whilst it will be dispositive of the proceedings, it will not result in the "finality of the dispute" as, given these are Class 1 proceedings, it can submit a new development application to Council. Luxcon maintains that the site is "ripe for redevelopment", and that any legal and merit issues relating to the development application should be "fleshed out" now in one set of proceedings so as to inform any further development application, if such an application is required. Luxcon notes that a number of the contentions raised in Council's Statement of Facts and Contentions can be dealt with by way of Luxcon providing additional information, and that determination of those remaining contentions is relevant to any further development application that Luxcon may make.
4. While Luxcon accepts Council's submission that a hearing on all issues will likely occupy two to three days, Ms Cowper estimates that a hearing on the separate question will likely occupy one full day. Further, Ms Cowper states that if the separate question is answered in the affirmative, the balance of the proceedings would still likely occupy two to three days. In written submissions, Luxcon revised its estimate of the likely duration of the hearing on the separate question to approximately one and a half days, and submitted that a likely time saving of only half or one and a half hearing days is not sufficient cause for an order for the separate question.
5. Further, Luxcon submits that the separate question is one of mixed fact and law, and that one of the issues that falls to be determined - that being whether the ground floor of the premises can properly be characterised as having a retail use - requires town planning evidence. Accordingly, Luxcon submits that the facts relevant to the separate question are likely to be contentious.
6. If the separate question is ordered, Luxcon submits that both parties will be required to undertake significant preparation, including preparation of an agreed statement of facts (assuming that certain facts can be agreed), a bundle of documents and written submissions, which will occupy significant time and resources both for the parties and the Court.

Consideration

1. The principles applicable to the exercise of the Court's discretion to order the determination of a separate question are well known, and were distilled by Biscoe J in 820 Cawdor Road Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 8; (2013) 195 LGERA 170 at [10] as follows: (a) Generally speaking, all issues should be tried and decided at the same time. (b) It is for the party seeking the order to show to the Court that separate decision of a question is appropriate. (c) Separate decision of a question is likely to be appropriate where it can clearly be seen that it will facilitate the just, quick and cheap resolution of the proceedings or the central issues in the proceedings. This gives effect to s 56 of the Civil Procedure Act. Thus, the procedure needs to be fair and involve real savings in time and cost. (d) Separate decision of a question may be appropriate where it is critical to the outcome of the proceedings and (at least if decided in one way) will bring the proceedings to an end. (e) In particular circumstances separate decision of a question may be appropriate even if it will not bring the proceedings to an end. This may occur where the decision will substantially narrow the field of controversy by obviating unnecessary and expensive hearing of other questions or where the decision carries with it a strong prospect that the parties will then be able to agree upon resolution of the proceedings. But on such occasions care must be exercised lest fragmentation of the proceedings (particularly where the exercise of appeal rights is borne in mind) brings delay, expense and hardship greater than that which the making of an order was intended to avoid. (f) Separate decision of a question is unlikely to be appropriate where it may involve the credibility of witnesses which is material to remaining issues in the proceedings (and thus require the remaining issues to be dealt with by another judge). (g) Where the question sought to be separated involves a question of law, there should be a clear definition of what the point of law raised is and all the facts upon which that question has to be considered should be agreed or clearly ascertainable. (h) Where the facts upon which decision depends are contentious, confidence in the utility of the separate question process may be less likely.
2. These principles have been followed in a number of subsequent proceedings, including Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182 at [10] (per Macfarlan JA) and [87]-[92] (per Ward JA), Dial a Dump Industries Pty Ltd v Roads and Maritime Services [2015] NSWLEC 172 at [30]-[36] and Challenger Listed Investments Limited v Valuer General [2015] NSWLEC 7 at [14].
3. Applying these principles to the material submitted, I am not satisfied that it is appropriate to make an order for a separate determination of the question in the Motion.
4. The primary reason for my finding is that I note the "ordinarily applicable" position (see Idoport at [10]) that all issues in a proceeding should be heard and determined together, and I am not convinced on the evidence before me that there is sufficient time and cost savings to warrant an order for the separate question. The parties appear to be in agreement that hearing on all issues would occupy approximately two to three days. The length of time required to determine the separate question is estimated to be approximately half a day to one and a half days (though I note that even if the hearing only requires half a day, which I consider unlikely, a full Court day would likely be allocated). In the circumstances, the savings of Court resources are not significant, and not persuasive so as to warrant a departure from the default position. I further note Luxcon's submission that, apart from the Court resources, a hearing on the separate question also requires significant preparation on the part of the parties, the time and cost of which is also a relevant consideration in my decision not to make an order for the separate question.
5. I note Luxcon's submission that a positive answer to the separate question would not result in the "finality of the dispute", as Luxcon will simply submit a new application for a revised development. However, I find persuasive, but not determinative, Council's submission that if the development as currently framed is found to be prohibited, in order to develop the site Luxcon would be required to undertake a re-design of the development, such that it would likely result in a significantly different development. In any case, the fact that a court (when hearing all issues together) may make findings in relation to merits that may inform a new application is not a matter which assists my consideration of the matter before me.
6. While I accept Council's submission that a positive answer to the separate question would likely be determinative of the proceedings, ultimately I find that this should not be given significant weight in determining whether a separate question should be ordered, as there is no significant time or cost saving in hearing the separate question.
7. I note Luxcon's submission that a hearing on the separate question would require expert evidence from town planners. While I consider it unlikely that such evidence will be required, I note that the case management in relation to whether such evidence is required would add to the time and costs required in preparation for the hearing of the separate question, which further strengthens my conviction that the separate question is not warranted.
8. I note that Council also submitted that the separate question should be ordered as it does not involve the credibility of witnesses, nor are there any disputed primary facts. I accept these submissions, but again, do not find them persuasive given the default position that all issues in a proceeding should be tried together. The onus is on Council to demonstrate that the separate question is warranted, and I do not consider that onus to have been met. I am bound by s 56 of the Civil Procedure Act 2005 (NSW) to ensure the "just, quick and cheap" resolution of proceedings, and I am not convinced that ordering the separate question will facilitate this overriding purpose.

Orders

1. The Court orders that: 1. The Notice of Motion is dismissed. 2. Costs are reserved.

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: 19 April 2017