McNeil v Narrabri Shire Council

The premises at 61 Rose Street, Wee Waa 10In January 2006, Mr McNeil owned the Property. The Property consists of two separate parcels of land, being Lot 1 in DP 998352 (Lot 1) and Lot 2 in DP 226829 (Lot 2). Lot 1 and Lot 2 together form a rectangle. Lot 2 consists of a rectangular strip at the northwest corner of Lot 1. 11As at January 2006, there was situated on the Property a shop that had been a commercial bakery. The shop faced Rose Street, which is the main street of Wee Waa. Inside the shop was a type of baker's oven known as a "Scotch Oven". Attached to the shop was a residence. Also erected on the Property were an amenities block and a wash house, as well as a separate toilet building. There was also a freestanding shed in the back northwest corner, a small part of which encroached onto Lot 2. 12Mr McNeil's father had conducted a commercial bakery on the Property and Mr McNeil had assisted his father from time to time in that enterprise. The bakery closed in the 1980s but the equipment remained in situ. Mr McNeil's parents continued to reside in the residential part of the building on the Property until the death of Mr McNeil senior in about 2003. Later in that year, Mr McNeil's mother moved into other accommodation in Wee Waa. 13 In October 2003, the Council gave approval for part of the shop building on the Property to be used as a pizza shop and after the approval was given, that part was used for that purpose. However, on 29 January 2006, the part of the building that was being used as a pizza shop suffered damage in a fire. The shop front and the residential part of the building on the Property were largely destroyed by the fire. 14The Council gave to Mr McNeil a clean-up notice under s 91 of the Protection of the Environment Operations Act 1997 (the Protection of the Environment Act). The notice (the clean-up notice), which was dated 7 February 2006, was stated to apply to "the land at Lot 1, DP 998352, 61 Rose Street, Wee Waa". The clean-up notice stated that that land had been contaminated with friable asbestos as a result of fire and required that all current clean-up activities on the site cease and that an appropriately licensed contractor be required to undertake all clean-up works associated with the site. The clean-up notice stated that the clean-up works must commence within 14 days, and that all clean-up activities were to comply with the Protection of the Environment Act, as well as associated regulations and any other relevant statutory requirements. The clean-up notice also stated that failure to comply would result in the Council initiating the appropriate clean-up works and recovery of costs accordingly. 15On 13 February 2006, Mr McNeil's solicitors responded to the clean-up notice, saying that Mr McNeil would require an extension on the time limit for commencement of the clean-up works to arrange the appropriate clean-up facilities. The letter requested that the Council delay any further action until such time as appropriate arrangements had been completed. The letter stated that Mr Neil believed that he "should be aware of the proper facilities to clean up this matter within one month". By letter dated 20 February 2006, the Council responded indicating that remediation of the site must commence prior to 14 March 2006. 16On 14 March 2006, Mr McNeil's solicitors wrote to the Council again, saying that Mr McNeil had made enquiries of contractors authorised to remove friable asbestos and had been informed that a particular contractor currently in the vicinity could not "appropriately remove the asbestos as no suitably licensed vehicle is in this area". On 16 March 2006, the Council replied, saying that an inspection of the site on 15 March 2006 determined that clean-up works had commenced in accordance with the clean-up notice and that no further extension of time was required. However, the letter said that, if remediation of the site did not occur within a reasonable time frame, as determined by the Council, further requirements may be placed on Mr McNeil. By letter of 4 April 2006, the Council indicated that it expected that the required works would be completed by the end of May 2006. 17On 5 May 2006, the Council wrote to Mr McNeil requesting a meeting with Council staff to discuss the remediation and future options for management of the site, which was described in the letter as "Lot 1, DP 998352, being 61 Rose Street, Wee Waa". The letter said that it was hoped that the meeting would provide further direction to the remediation works and an outcome acceptable to all parties involved. 18It is not clear what happened next. However, on 23 June 2006, the Council gave notification under s 132 of the Local Government Act of a proposed order under s 124 (the s 132 notice). The s 132 notice said that the proposed order under s 124 would apply to the site known as "Lot 1, DP 998352, 61 Rose Street, Wee Waa" and would require the following: "Restoration of the land to a safe and healthy condition". The s 132 notice went on to say that that was required because the site was not in a safe and healthy condition as a result of "the presence of a dilapidated structure and the presence of friable asbestos waste". The s 132 notice said that the restoration of the land must be undertaken in accordance with, inter alia, the following three requirements: "An appropriately licensed contractor is required to undertake all clean-up works associated with the site to restore safe and healthy conditions. All clean-up activities ... are to comply with the [Protection of the Environment Act], as well as associated regulations ... and any other relevant statutory requirements. The contractor is to provide the Council with a written report of all clean-up activities being undertaken in relation to the above mentioned land." [emphasis added] The s 132 notice stated that it was proposed that the order under s 124 would specify a period of 28 days in which compliance would be required. The notice ended by saying that Mr McNeil could relieve the need for the Council to consider serving an order under s 124 by completing the required restoration works in accordance with those three requirements prior to 7 July 2006. 19The work specified in the s 132 notice was not completed by 7 July 2006. There is some contention as to what was required and who was qualified to carry out the work. That is the essence of the dispute in the proceeding. 20In any event, on 7 July 2006, the Council gave Mr McNeil a document purporting to be an order under s 124 (the s 124 order). The terms of the s 124 order as attached and hyperlinked to these reasons. It will be apparent from examination of the document that it is described as an order "relating to Lot 1, DP 998352, 61 Rose Street, Wee Waa". No mention is made of Lot 2. The reason for giving the order is stated to be that the site was not in a safe and healthy condition as a result of "the presence of a dilapidated structure and the presence of friable asbestos waste". 21Curiously, the document does not, in terms, require Mr McNeil to do what was foreshadowed in the s 132 notice. The s 132 notice asserted that the proposed s 124 order would require "restoration of the land to a safe and healthy condition" and that restoration must be undertaken in accordance with the three requirements described above. The s 124 order stated the reason for its issue and that "[t]he restoration of the land" had to be completed in accordance with three requirements. Those three requirements were identical to the three requirements in the s 132 notice. However, the s 124 order did not, in terms, require restoration to a safe and healthy condition, as had been foreshadowed in the s 132 notice. 22Mr McNeil took no steps under s 180 of the Local Government Act to appeal against the s 124 order. The three requirements specified in the s 132 notice and in the s 124 order were not completed by Mr McNeil. 23On 11 October 2006, the Council wrote to Mr McNeil saying that it intended to enter the premises of 61 Rose Street, Wee Waa on 16 October 2006 for the purpose of carrying out the order that had been issued to him on 7 July 2006 and with which he had failed to comply. The letter said that the Council had engaged contractors who would be carrying out the work as provided by s 678 of the Local Government Act. The letter also said that it was expected that the remediation work would be completed over a two week period, after which the Council would be seeking to recover all associated costs from Mr McNeil under s 678 of the Local Government Act. 24Between 16 and 19 October 2006, Hunter Tech Services (HTS) cleared the Property under the supervision of HLA Enviro Sciences Pty Limited (HLA). Each of HTS and HLA had been retained by the Council for that purpose. HTS rendered an invoice to the Council in the sum of $34,195 and HLA rendered an invoice to the Council in the sum of $7,865. Those two sums total $42,060. 25The Council subsequently commenced a proceeding in the Local Court in Narrabri against Mr McNeil, seeking recovery of the sum of $40,687.26 plus interest. The statement of liquidated claim sought payment of the sum of $40,687.26 for remediation of the Property being demolition and clean-up of asbestos contaminated material pursuant to s 124 of the Local Government Act. Subsequently, the proceeding was transferred to the District Court at Tamworth. 26In his third amended defence to the Council's claim, Mr McNeil denied that the Council was entitled to recover from him the sum claimed as a debt under s 678. The essence of his defence was that he was not given an order under s 124, in that the purported order was invalid because:

• the facts on which it purported to be based did not exist;
• it did not disclose the reasons for the order;
• it purported to require Mr McNeil to restore the site to a safe and healthy condition, which is a state or condition unknown to the law, without specifying precisely what work was required to restore the site to that state or condition; and
• if and in so far as it purported to require demolition and removal of any building, there is no power under s 124 to make such an order. 27In addition, the defence asserted that Mr McNeil did not fail to comply with the terms of an order under s 124 in that, as at the date that the s 124 order was given, the Property was not unsafe and unhealthy and, hence, the s 124 order did not require him to do anything. Finally, the defence asserted that the Council did not incur expenses under s 678 in doing all things as were necessary to give effect to the terms of any s 124 order given to Mr McNeil. 28Mr McNeil also filed a cross-claim in the District Court in which he claimed damages for trespass and negligence. The negligence claim was not pressed. His claim in trespass may be summarised as follows:
• Mr McNeil was at all material times the owner of the land being Lot 1 and was also the owner of Lot 2, which adjoined Lot 1 and upon which buildings were jointly constructed;
• the Council issued the s 132 notice to Mr McNeil on 23 June 2006, such notice being issued only in respect of Lot 1;
• the Council purported to issue the s 124 order to Mr McNeil on 7 July 2006, that order relating only to Lot 1.
• the s 124 order was invalid for the reasons set out in the third amended defence;
• both the s 132 notice and the s 124 order referred to the presence of a dilapidated structure and of friable asbestos waste as a result of a fire that partly destroyed one building;
• on about 16 October 2006, the Council entered and trespassed on the Property and proceeded to demolish all buildings and structures located on the Property, both Lot 1 and Lot 2, including detached buildings and structures;
• the entry onto the Property and the demolition of all buildings and the removal from the Property of all movable property was based on the premise that the s 124 order was valid;
• at the time that the Council entered upon the Property and demolished the buildings and structures, there was no relevant Council order requiring demolition;
• section 678 did not authorise the Council to take that action and, hence, the Council was a trespasser; and
• the various structures demolished had a total value of $853,136. 29On 3 April 2012, a judge of the District Court, after hearings in Tamworth and Sydney on 12, 13 and 14 September 2011, 31 October 2011, 1 November 2011 and 31 January 2012, directed judgment for the Council against Mr McNeil in the sum of $40,687.26 plus interest. The primary judge made an order in chambers on 8 May 2012 that that interest was calculated to be $59,764.26. On 22 June 2012, his Honour ordered Mr McNeil to pay the Council's costs up to 24 November 2010 on the party/party basis and on the indemnity basis thereafter. His Honour also ordered that the cross-claim be dismissed.

The appeal 30By notice of appeal filed on 26 April 2012, Mr McNeil appeals from the orders made by the District Court on 3 April 2012 and the later orders as to interest on the judgment sum and costs. The grounds in the notice of appeal may be summarised as follows:

• the trial judge erred in finding that the purported s 124 order of 7 July 2006 was valid;
• the trial judge erred in determining that, even if otherwise valid, the purported s 124 order authorised the Council to demolish every structure on the Property;
• the trial judge erred in finding that the Council had proved that it was entitled to recover as damages the sum of $40,687.26;
• the trial judge erred in finding that the Property was not in a safe and healthy condition as at 7 July 2006;
• the trial judge should have determined that the s 124 order was invalid and a nullity;
• the trial judge should have found that the s 124 order did not authorise the Council to demolish every structure on the Property; and
• the trial judge should have determined that, by entering the Property and demolishing every structure thereon, the Council trespassed on the Property. 31In essence, the contentions pressed by Mr McNeil on the hearing of the appeal may be summarised as follows: 1.The s 124 order was invalid and a nullity because it did not order Mr McNeil to do, or to refrain from doing, anything. 2.Section 124 and item 21 of the table in s 124 do not authorise an order requiring demolition or removal of a building. 3.The s 124 order, even if otherwise valid and effective in relation to Lot 1, was ineffective in relation to Lot 2.

4. The s 124 order was invalid and a nullity because it was based on the premise that friable asbestos material was present on the Property, in circumstances where a finding should have been made that there was no friable asbestos on the Property. It is convenient to deal with each of those propositions separately.

The s 124 order does not require anything to be done 32The s 124 order is infelicitous in its expression. Comparison with the s 132 notice indicates that it is likely that the drafter of the s 124 order may have inadvertently omitted several lines. Thus, the s 124 order does not use, in its statement of what is required to be done, the precise words "[r]estoration of the land to a safe and healthy condition", as had been foreshadowed in the s 132 notice. 33Nevertheless, the terms of the s 124 order achieve the same effect of requiring restoration of the land to a safe and healthy condition. The s 124 order requires Mr McNeil to effect "the restoration" of the Property and that restoration must be completed within 28 days. The order in terms requires that restoration to be completed "in accordance with" the three requirements specified in the order. The first requirement specifies the person required to undertake the restoration, namely, "an appropriately licensed contractor", the restoration to be undertaken, being "all clean-up works associated with the site" and the outcome or objective that must be achieved, namely, "to restore safe and healthy conditions". The second requirement specifies that all clean-up activities, which include not only the clean-up works on site but also the transport of waste and the disposal of waste, are to comply with the Protection of the Environment Act, the regulations under that Act and any other relevant statutory requirements. The third requirement is that the appropriately licensed contractor engaged under the first requirement provide the Council with a written report of all clean-up activities undertaken. The s 124 order does, therefore, require Mr McNeil to do something, being clean-up works on the Property to restore safe and healthy conditions. 34While no specific work is stated in the s 124 order as being necessary or adequate to restore safe and healthy conditions, the requirement to do so must be understood in the light of the reason given for the issue of the s 124 order. That is to say, the reason given is that the Property is not in a safe and healthy condition, as a result of the presence of a dilapidated structure and the presence of friable asbestos waste. It is clear enough that the s 124 order was saying that, in order to restore safe and healthy conditions, it was necessary to remove the dilapidated structure and friable asbestos waste. 35Accordingly, the s 124 order is clear enough in identifying what it is that the Council was ordering Mr McNeil to do. The s 124 order does not order him to refrain from doing anything: it orders that he undertake positive action, being to undertake clean-up works consisting of removing the dilapidated structure and friable asbestos, in order to restore the Property to a safe and healthy condition. 36The s 124 order requires what the s 132 notice informed Mr McNeil it would require. The s 132 notice informed him that a proposed order under s 124 would require restoration of the Property to a safe and healthy condition. That is precisely what the s 124 order, on any fair reading of it, required Mr McNeil to do. This ground of alleged invalidity must fail.

No power to require demolition 37Mr McNeil contends that, having regard to the terms of item 1 of the table in s 124 of the Local Government Act, an order based on item 21 is incapable of requiring the demolition of any building. In order to deal with that contention, it is necessary to say something more about the table in s 124. 38The table in s 124 is subdivided into five parts. Each part deals with a different kind of order. The five parts are headed as follows:

• orders requiring or prohibiting the doing of things to or on premises: items 1 - 14;
• orders requiring that premises be used or not used in specified ways: items 15 - 19;
• orders requiring the preservation of healthy conditions: items 20 - 25;
• orders requiring the protection or repair of public places: items 26 - 29; and
• orders requiring compliance with approval: item 30. 39The structure of s 124 also needs to be understood. Section 124 provides that a council may order a person to do, or refrain from doing, a thing specified in column 1 of the table, if the circumstances specified opposite in column 2 of the table exist, and the person comes within the description opposite it in column 3 of the table. Column 1 is headed "To do what?", column 2 is headed "In what circumstances?" and column 3 is headed "To whom?". 40Item 1 specifies the following in column 1: "To demolish or remove a building" Column 2 of item 1 states as follows: "Building is erected in a catchment district and causes or is likely to cause pollution of the water supply" Column 3 of Item 1 says: "Owner of building" 41Mr McNeil contends that the express reference to demolishing or removing a building in item 1 indicates that subsequent items, such as item 21, should be read down so as not to authorise an order requiring a person to do a thing consisting of demolishing or removing a building. Such a contention has no substance. 42The circumstances in which item 1 applies are that a building is erected in a catchment district and causes, or is likely to cause, pollution of the water supply. The circumstances in which item 21 applies are that land or premises are not in a safe or healthy condition. The two sets of circumstances may conceivably overlap, but they would do so only in very narrow circumstances. 43Item 1 is not concerned with the state of the building that is to be removed or demolished. The building might be a perfectly sound and habitable one and may be in a perfectly safe and healthy condition. Nevertheless, if it is erected in a catchment district and causes or is likely to cause pollution of the water supply, item 1 will be activated. Item 21, on the other hand, is concerned with land or premises that are not in a safe or healthy condition. There is no reason for reading down item 21 by reference to item 1. This ground must fail.

Lot 2 44The ground based on the failure to refer to Lot 2 in the s 124 order is not entirely clear. It is true that the s 124 order refers expressly to Lot 1. However, it also describes the site as 61 Rose Street, Wee Waa. It has not been suggested that Lot 2 is not part of 61 Rose Street, Wee Waa. While there are apparently two separate cadastral parcels, there has been no suggestion that they are treated as separate premises. The two parcels together make up the property known as 61 Rose Street, Wee Waa. On a fair reading of the s 132 notice and the s 124 order, it is clear that, notwithstanding that there is express reference to Lot 1 and no reference to Lot 2 in the two instruments, the site that is the subject of both instruments is the rectangular property known as 61 Rose Street, Wee Waa, which includes both Lot 1 and Lot 2. 45Further, it is by no means clear precisely what contention was advanced before the primary judge as to the consequences of the omission of reference to Lot 2 in the s 124 order. Counsel for Mr McNeil, on the hearing of the appeal, eschewed any contention that the s 124 order was invalid simply by reason of the omission of the reference to Lot 2. However, the case below was not conducted on the basis that there was a separate claim for trespass in relation to Lot 2, even if the s 124 order was otherwise held to be valid in relation to Lot 1. No attempt was made before the primary judge to identify any damage or loss occasioned by any trespass limited to Lot 2. 46In so far as the evidence showed anything, it suggested that the rear wall of a building described as "GI shed", which was substantially constructed on Lot 1, may have encroached on Lot 2. There was no suggestion that that part of the building that encroached on Lot 2 could have been left standing after the balance of the building was demolished. While the failure to refer to Lot 2 is indicative of less than ideal administration on the part of the Council, the omission does not invalidate the s 124 order. This ground must fail.

No friable asbestos material 47The Council's claim against Mr McNeil under s 678 was based on failure to comply with the s 124 order, purportedly given under s 124 of the Local Government Act. Section 124 provides that a council may order a person to do or refrain from doing a thing specified in column 1 of the table in s 124 if the circumstances specified in column 2 of the table exist. Mr McNeil says that such circumstances are a jurisdictional fact for the giving of a valid order and that, if the circumstances on which an order is based do not exist, there will not be a valid order. 48The circumstances on which the s 124 order was based were that, as a result of the presence of, inter alia, friable asbestos waste, the Property was not in a safe and healthy condition. Mr McNeil contended that the primary judge should have found, on the evidence before him, that there was no friable asbestos material on the Property at the time when the Council made the s 124 order and, accordingly, should have found that the s 124 order was invalid. That raises a question as to onus in relation to invalidity. Mr McNeil contended that, in order to succeed in its claim under s 678, based on failure to comply with the s 124 order, the Council had the onus of establishing the validity of the s 124 order. 49However, the Council is entitled to rely on the presumption that the s 124 order was valid, in reliance upon the presumption of regularity. That presumption is captured by the maxim, omnia praesumuntur rite et solemniter acta esse donec probetur in contrarium: that is to say, all things are presumed to have been done duly and in the usual manner until the contrary is proved. On the face of the s 124 order, there is no reason to doubt that the circumstances set out in column 2 in item 21 exist, namely, that the Property is not in a safe and healthy condition. The onus was on Mr McNeil to establish the contrary. 50Mr McNeil gave evidence upon which he relied as establishing that there was no friable asbestos material on the Property. Before dealing with Mr McNeil's contentions, it is desirable to say something about Ch 10 of the Occupation Health and Safety Regulation 2001 (the OHS Regulation), which deals with "Licensing of certain businesses". 51Chapter 10 consists of regs 317 to 328. Regulation 318 relevantly provides that a person must not carry on the business of licensed work otherwise than in accordance with a licence granted and enforced under Ch 10. Further, a person must not employ, direct or allow another person to do licensed work unless that person holds a licence relating to that work granted and in force under Ch 10. Licensed work is defined in reg 317 as including:

• friable asbestos removal work, subject to exceptions not presently relevant; and
• bonded asbestos removal work, other than work done in relation to bonded asbestos material having a total surface area of less than 200 square metres. 52Bonded asbestos removal work means work in which bonded asbestos material is removed, repaired or disturbed. Bonded asbestos material is any material, other than friable asbestos material, that contains asbestos. Friable asbestos removal work means work in which friable asbestos material is removed, repaired or disturbed. Friable asbestos material is defined as any material that contains asbestos and is in the form of a powder or can be crumbled, pulverised or reduced to powder by hand pressure when dry. Mr McNeil asserts that there was no friable asbestos material within that meaning present on the Property. 53Mr McNeil wanted to carry out the remediation work on the Property himself, with the assistance of family and friends. That would be prohibited if there was friable asbestos waste on the Property. 54Mr McNeil met with officers of the Council on the Property on 1 February 2006. He told the Council officers that his mother, who was then the owner of the Property, could not afford to get an asbestos licensed contractor to do the clean-up. The Council officers said that there was burnt fibro sheeting on the Property so there was no choice and Mr McNeil would have to get someone "with an asbestos ticket". The Council officers gave Mr McNeil the name of Mr Bill McColl, who was an employee of the NSW WorkCover Authority (WorkCover). 55Mr McNeil immediately telephoned Mr McColl, who told him that, if he could hold a fibro sheet and not crush it with hand pressure, the fibro was not friable and, if it was not friable, he did not need an "asbestos ticket" so long as there were not more than 200 square metres of fibro and it did not weigh more than 250kg per load. Mr McColl told Mr McNeil that the fire on the Property would need to have generated heat of 1000 degrees Celsius for it to break down the fibro and make it friable. He told Mr McNeil that, if he looked at the copper wire on the Property it would be a guide, because copper wire melts at 1084 degrees Celsius. He said that if the copper wire had melted, the fire was hot enough but, if not, the fibro was probably not friable. Mr McNeil said to Mr McColl that he had had a good look on the Property and observed that the mild steel, which oxidises at about 880 degrees Celsius, had not started to oxidise. Mr McColl replied that that was a fair indication that the fire was not hot enough to break down the fibro so as to render it friable. Mr McNeil said in an affidavit that, following his conversation with Mr McColl, he tested the fibro sheeting "as per the instructions from Mr McColl". Mr McNeil said that he particularly observed that the copper electrical wiring had not melted and that the mild steel had not oxidised. He said in his affidavit: "I determined that the fibro asbestos material was not friable and that the total amount to be removed was less than 200 [square metres]" (emphasis removed). 56The Council officers were still on the Property and Mr McNeil told them what Mr McColl had said to him. There was then a discussion as to whether there was more than 200 square metres of fibro on the Property. There was also discussion as to whether some of the material on the Property was masonite, which does not contain asbestos. 57On 7 and 8 March 2006, Mr McNeil attended a course at Lidcombe dealing with bonded asbestos. On 15 to 16 March 2006, Mr McNeil, his son and a friend attended a course conducted by the Hunter Institute Newcastle Campus of TAFE NSW. That course consisted of asbestos removal training and included:

Conclusion 73Mr McNeil has not established any of the grounds of his appeal. The appeal must be dismissed with costs. 74PRESTON J: I agree with Emmett JA.

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: 09 May 2013