Mittagong Central Developments Pty Ltd v Secretary of the Department of Customer Service

Land and Environment Court (NSW)|2024-09-11|Before: Robson J

Introduction and outcome

On 25 March 2024, the Secretary of the Department of Customer Service ('Secretary') issued a building work rectification order ('Order') under s 33 of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) ('Act') to Mittagong Central Developments Pty Ltd ('MCD'), the "developer" (as defined in s 4(a) of the Act) of a residential apartment building comprising 37 units on land at 2-8 Station Street, Mittagong (the 'building'). Before the Court are two notices of motion filed in two separate proceedings in relation to the Order.
The Order identified 44 "serious defects" (as defined in s 3(1) of the Act) and requires MCD to carry out certain "requirements" in two stages. Stage 1 requires the preparation of a written report and drawings detailing the specific building work necessary to meet various codes and standards, and Stage 2 requires the carrying out of certain rectification works within two to six months.
On 23 April 2024, MCD commenced two proceedings. First, by way of summons filed in the Common Law Division of the Supreme Court of New South Wales ('Supreme Court') seeking relief in the nature of judicial review that the Order be quashed on six discrete grounds ('judicial review proceedings'); and second, by way of Class 2 application filed in this Court seeking relief in the nature of merits review that the Order be revoked or alternatively modified under s 49 of the Act ('merits review proceedings').

Background

In both the substantive proceedings, the building concerned is 2-8 Station Street, Mittagong being a residential apartment building containing 37 units, one of which is owned by MCD.
Having commenced the judicial review proceedings in the Supreme Court challenging the validity of the Order raising six grounds of judicial review, and the merits review proceedings in this Court appealing against the Order, on 20 May 2024, MCD filed a notice of motion in the Class 2 merits review proceedings seeking, inter alia, an order that the merits review proceedings be stayed pending final determination of the judicial review proceedings.
As noted at [4] above, on 29 May 2024, the Secretary filed a notice of motion in the judicial review proceedings (then) in the Supreme Court seeking an order dismissing those proceedings under r 13.4(1) of the Uniform Civil Procedure Rules 2005 (NSW) or in the alternative, an order transferring the proceedings to this Court ('Supreme Court motion').
On 6 August 2024, the Supreme Court motion was heard by Button J in the Supreme Court with his Honour delivering an ex-tempore judgment ordering: "The Judicial review proceedings founded on the summons of 23 April 2024 are transferred to the Land and Environment Court to be heard together with [the merits review proceedings - Class 2]."
In his reasons for judgment at [8], his Honour stated: "…I am well satisfied that, although these two modes of resistance to the rectification order [being the judicial review proceedings and the merits review proceedings] are doctrinally different, and may perhaps be thought of (without deciding) as dealing with different 'matters', they are certainly so closely associated as to form part of the same controversy, for the purposes of the definition in s 149A(2) the Civil Procedure Act 2005 (NSW) (the CPA)."
At [11], his Honour stated: "…I respectfully reject any proposition that any form of 'twin track' litigation should proceed, including one basis of impugnation being potentially litigated after the other. After all, I think that speedy resolution of a controversy such as this is essential in the public interest. …"
At [13], his Honour stated: "And I see no harm to the interests of MCD in me exercising that power pursuant to s 149(2), rather than s 149(1) of the CPA. Questions of the way in which various issues are to be litigated and resolved, with both sets of proceedings being heard together, can and undoubtedly should be left to the wisdom of a Judge of the LEC."
And, at [15], his Honour stated: "In short, I will transfer these judicial review proceedings to the LEC, pursuant to s 149B(2) of the CPA."
Consequent upon the orders of Button J on 6 August 2024 transferring the judicial review proceedings to this Court, on 23 August 2024, the Secretary filed an amended summons in the (now Class 4) judicial review proceedings narrowing the six previously pleaded grounds to one ground, based on a denial of procedural fairness, being the failure of the Secretary to consider, as required by s 47 of the Act, written representations made by MCD in response to the Secretary's proposed building work rectification order notified to MCD on 2 August 2023.

MCD's position

MCD submits that as the judicial review proceedings (now) raise the sole question whether the Order is invalid due to a denial of procedural fairness, this issue is logically anterior to the Class 2 merits review proceedings and, proffers that if the Order is found to be invalid, MCD will discontinue the merits review proceedings. In these circumstances, MCD contends that the question before the Court is now one of case management being whether any steps should be taken in the merits review proceedings that could be rendered otiose by the result in the judicial review proceedings.
MCD notes that it is ready to argue the judicial review proceedings without delay and has marshalled in this motion all the evidence that it intends to rely upon in the judicial review proceedings which, it maintains, raises a single and confined question of law that can be determined in less than one day's hearing based solely on documentary material.
MCD contends that the alternative approach advanced by the Secretary involving two sets of proceedings case managed and heard in parallel, would entail significant public and private resources and points to its evidence that the estimated hearing time for the merits review proceedings is 10 to 15 days (and notes that even the Secretary's evidence accepts that this hearing alone would take at least 3 to 5 days) in circumstances where it is clear that the merits review proceedings could not be heard this calendar year. As such, the judicial review proceedings should be argued and determined potentially rendering the whole of the merits review proceedings (including any s 34 conference and further preparation) unnecessary.
MCD further submits that the Secretary's argument that the orders of Button J otherwise bind this Court (such that the matters cannot now be separated and must proceed to hearing and determined as one matter), would not be accepted. MCD considers that the fact that his Honour transferred the judicial review proceedings to this Court pursuant to s 149B(2) of the Civil Procedure Act 2005 (NSW) ('CPA') rather than s 149B(1) of that Act is not determinative. MCD notes that his Honour stated, at [13] of his judgment, that "the way in which various issues are to be litigated and resolved, with both sets of proceedings being heard together, can and undoubtedly should be left to the wisdom of a Judge of the LEC."
MCD submits that s 149B(2) of the CPA (the provision relied upon by Button J) describes the "type" of order and not the legal effect or consequence of that order and that s 149B is an enabling provision. MCD further submits that as there is some inconsistency between ss 149B (and 149D) of the CPA, and s 20 of the Land and Environment Court Act 1979 (NSW) ('Court Act'), this is overcome by following the enactment which has more recently been passed by Parliament and come into force. As such, MCD identifies that s 20(1)(cj) of the Court Act was made consequent upon the Courts and Other Legislation Amendment Bill 2011 (NSW), which came into force on 7 June 2011 (some years after the relevant provisions of the CPA referred to above), and which provided for amendments to s 20 of the Court Act (which identifies matters to be heard in the "Class 4" jurisdiction of the Court) to clarify this Court's jurisdiction in regard to the appropriate class of the Court's jurisdiction to which certain matters transferred to this Court belong. Section 20(1)(cj) provides as follows: 20 Class 4 - environmental planning and protection, development contract and strata renewal plan civil enforcement (1) The Court has jurisdiction (referred to in this Act as "Class 4" of its jurisdiction) to hear and dispose of the following - … (cj) proceedings that have been transferred to the Court under section 149B of the Civil Procedure Act 2005 (transferred civil proceedings),
MCD submits that there is clear legislative intention that Class 2 and Class 4 proceedings are discrete and separate, and that in the current circumstances the merits review proceedings do not "swallow up" the judicial review proceedings as submitted by the Secretary. As such, s 149B(2) does not require that the two separate matters be effectively combined and it is a matter for the case management of each matter. As such, the judicial review proceedings should be heard before the merits review proceedings.

Secretary's position

The Secretary maintains that it filed its notice of motion on 26 August 2024 in the (now) Class 4 proceedings in response to a suggestion or direction of Pepper J in circumstances where the Secretary maintains that the order of Button J was otherwise determinative of the fact that the matters are to proceed together and that its motion filed 26 August 2024 is not strictly necessary.
In summary, the Secretary submits that the two proceedings should be heard together for two primary reasons. First, because this is a question that has already been determined by Button J and his reasons make it clear that the matter was transferred to this Court pursuant to the express power in s 149B(2) of the CPA; and second, upon the order of Button J being made on 6 August 2024, s 149D(1)(b) of the CPA applies which specifically requires that the proceedings "be heard together with, and taken to form part of, the related proceedings in the transferee court". As such, both by reason of the order made in the Supreme Court and by force of the terms of the statute made by Parliament, this Court is required to hear the two proceedings together - noting that the concept of "two proceedings" is no longer correct having regard to s 149D(1)(b).
The Secretary submits that in the hearing of its notice of motion in the Supreme Court before Button J, MCD contended that the transfer order should be made under s 149B(1) which would not provide for the proceedings to be heard together and, as such, MCD is well aware that this argument was lost before Button J. MCD is therefore bound by both Button J's order and the terms of the CPA. This is particularly so where although there is no appeal against an order for transfer (by dint of s 149C(3)), MCD could have approached the Supreme Court to have the order of Button J varied or revoked.
The Secretary submits that its position is made clear by the express terms of s 149D(1)(b) and this Court has no rules which purport to change the effect of this subsection. Although this Court retains case management functions in proceedings that have been transferred to it, it has no power to revoke or vary the order of the Supreme Court and, again, this is also clear from s 149C(3) of the CPA.
As such, there is a risk that if MCD is successful in its motion in this Court, the administration of justice will be brought into disrepute because such success will give rise to contradictory orders and a process which is contrary to the terms of the CPA.
Contrary to the position of MCD, the Secretary submits that the claim in the judicial review proceedings does not raise a "single confined question of law". This is because in addition to the procedural fairness question raised in the amended summons, there are three associated legal questions the Secretary will argue in any hearing in relation to the judicial review proceedings. First, whether the Court has power to hear and determine the merits review claim if the original decision is only a "purported" decision. Second, if so, must the Court dismiss the judicial review application because, as a matter of statutory construction, there can be no error of procedural fairness of the kind now alleged given the statutory right of full merits review in a superior court. Third, in any event, whether this Court should refuse relief in the judicial review proceedings in the exercise of its discretion because of the availability of the merits review proceedings. In expansion of this tripartite position, the Secretary will argue: 1. This Court has power to undertake merits review of "purported" decisions pursuant to its power under s 49 of the Act: Jerrinja Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2007] NSWLEC 577; (2007) 156 LGERA 65 at [87] (Jagot J). 2. As a matter of statutory construction, there can be no jurisdictional error with respect to the alleged failure to accord procedural fairness in this case given that the Act provides full merits review to a superior court: Twist v Randwick Municipal Council (1976) 136 CLR 106 at 116, where Mason J held that the exercise of a right of merits appeal is capable of "curing" any deficiency in the original decision. 3. This Court should, in any event, refuse relief in the judicial review claim on a discretionary basis given MCD's right to merits review: Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501 at 508F (Kirby P); Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 197 ALR 389 at [33] (Gummow and Callinan JJ).
The Secretary rejects MCD's suggestion that the separate hearing will save public and private resources in circumstances where Button J has already addressed any argument in relation to the most efficient use of judicial resources and found against MCD in his judgment of 6 August 2024.
The Secretary submits that it is usually the case that issues decided in a "piecemeal" fashion invariably leads to more appeals such that more time and resources are lost.
The Secretary further submits that there is an important matter of public interest where both proceedings are the first involving the Act and, as such, it is important that the merits review proceedings conclusively determine the rights and obligations including those of a number of owners and tenants who are not parties to these proceedings and who are residing in a building which the Secretary considers has serious defects.
Finally, the Secretary submits that the consideration and determination of the judicial review proceedings will require consideration of much of the evidence that was taken into account in the Secretary's decision to issue the Order which may also involve an evaluation of the merits of those representations which appear to be over 750 pages in length.

Consideration

Although I was initially attracted to the submissions made by MCD in particular with regard to the dictates of ss 56 and 58 of the CPA, on reflection, I find that the better position is that advanced by the Secretary, and for the following reasons, I have concluded that the judicial review proceedings and the merits review proceedings should be heard together.
First, I have formed the view that the essential question, being whether the Court should determine the judicial review proceedings before the merits review proceedings, has effectively been heard and determined by Button J in the Supreme Court when his Honour ordered that: "The Judicial review proceedings founded on the summons of 23 April 2024 are transferred to the Land and Environment Court to be heard together with the appeal."
The reasons of Button J (briefly noted earlier in this judgment) make it clear that this order, which I consider directly affects how this Court is to deal with both proceedings, was made pursuant to the express power in s 149B (and in particular s 149B(2)) of the CPA, which provides: 149B Transfer of proceedings between Supreme Court and Land and Environment Court (1) If either the Supreme Court or the Land and Environment Court is satisfied, in relation to proceedings before it, that it is more appropriate for the proceedings to be heard in the other court, it may, on application by a party to the proceedings or of its own motion, order that the proceedings be transferred to the other court. (2) If either the Supreme Court or the Land and Environment Court is satisfied, in relation to proceedings before it, that - (a) there are related proceedings pending in the other court, and (b) it is more appropriate for the proceedings to be heard, together with the related proceedings, in the other court, it may, on application by a party to the proceedings or of its own motion, order that the proceedings be transferred to the other court and heard together with the related proceedings. (3) No appeal lies against a decision of the transferor court to make, or not to make, an order under this section.
Having also considered parts of the transcript of the hearing before Button J in the Supreme Court to which I have been referred, and his Honour's brief reasons for judgment, it is clear that MCD had sought orders that, if a transfer order to this Court were to be made, it should be made under s 149B(1) of the CPA (that is, in circumstances where there is no order for the proceedings to be heard together). Although not determinative in my consideration of the matters presently before me, MCD would have been aware that a transfer order made pursuant s 149B(2) would result in the transferred proceedings being "heard together with the related proceedings, in the [transferee court]". Further, as there is no appeal from that outcome, I accept the Secretary's submission that to address any concern, MCD could have made an approach to the Supreme Court.
Second, given the order of 6 August 2024 made by Button J, s 149D(1)(b) of the CPA applies and, by force of that section, proceedings transferred pursuant to an order under s 149B(2) "are to be heard together with, and are taken to form part of, the related proceedings in the transferee court".
This Court has no rules which purport to change the effect of s 149D(1)(b) of the CPA and while this Court retains its case management functions in any proceedings transferred, which I will consider later in this judgment, I find that it does not have power to revoke or vary the order of the Supreme Court or the legislative intention of ss 149B and 149D of the CPA that the two proceedings are to be "heard together". This is made plain in s 149C(3) which provides: "Any order made by the transferor court (other than the transfer order) may be varied or revoked by an order of the transferee court."
Further, I find that the inclusion of s 20(1)(cj) in the Court Act, apart from providing that the transferred proceedings are to be heard in Class 4 of the Court's jurisdiction, does not assist MCD's position as it is clear that the judicial review proceedings must be heard and disposed of in that class of jurisdiction with the attendant rules and procedures.
Third, although, the judicial review proceedings raise an issue that, on one view, can be seen to be anterior to those raised in the merits review proceedings (being the validity of the Order), and leaving aside my finding above in relation to the binding nature of the orders of the Supreme Court, I find that it is not clear that there is a strictly defined question of law that will be heard and determined significantly more quickly than a combined hearing in circumstances where the Secretary has solemnly submitted that there are at least three associated questions in MCD's procedural fairness claim that require consideration.
As noted at [29] above, these relate to whether the Court has power to hear and determine the merits review claim if the original decision is only a purported decision and if so, as a matter of statutory construction, whether there can be an error of procedural fairness of the kind alleged given the statutory right of full merits review in a superior court. And further, in any event, whether this Court should refuse the relief sought in the judicial review claim in the exercise of its discretion because of the availability of the merits review claim. As such, in determining the matters presently before the Court, I take account of these arguments, and accept that determination of the judicial review proceedings may not be determinative of all the issues between the parties, and it does not follow that there would be material benefit in terms of time and cost.
Fourth, apart from not accepting that there is necessarily a "single confined question of law", I note, as the Secretary submitted, that it is not uncommon where a party requests that certain legal and factual issues be decided in a piecemeal fashion (rather than cases in their totality), there is a good chance that it leads to more appeals with a consequent wastage of time and resources. Moreover, it follows that there are dangers of dealing only with certain issues which do not resolve the full controversy as it may give rise to greater complexity in terms of appeals and further hearings (Yarrabee Chicken Co Pty Ltd v Steggles Ltd (No 4) [2013] FCA 604 at [6]-[10]), referring to comments of the High Court in Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 at [168]-[170]).
Fifth, and somewhat repetitively, I am not convinced that the discrete conduct of the judicial review proceedings would be as limited as submitted by MCD where the Secretary submits that the gravamen of MCD's procedural fairness claim (that its written representations were not properly taken into account) are made in circumstances where it appears that MCD's written submissions were some 750 pages in length, which would take some time to canvas in the judicial review proceedings. Further, I note that the Court has received evidence of experienced legal practitioners each expressing significantly different opinion as to the time likely to be involved in the conduct of the merits review proceedings.
Despite the above, I am not persuaded by the Secretary's submission that "only the merits review proceedings will conclusively determine the rights and obligations of [MCD] in respect of the residential property in this case". And, while I accept that there may be public interest considerations at play, and noting that there are serious allegations in relation to specified defects in the building (according to the Secretary), the Secretary is still obliged to undertake their obligations under the Act (including the issuance of building work rectification orders) in a proper and lawful manner - which is the gist of the judicial review claim.
I also take into account the submissions of the Secretary, adopting the evidence of its solicitor, that the interests of justice do not favour the preliminary determination of the judicial review proceedings because, first, there is argument that the ground of review raised by MCD can be "raised and cured" in the merits review proceedings; second, the Court in the merits review proceedings can finally determine the parties' rights on the merits; and third, that there is a broader public interest in the prompt resolution of the underlying substantive dispute relating to the serious defects in the building.
For completion, it follows from my findings above that the first order sought in the Secretary's motion filed 26 August 2024 in the Class 4 judicial review proceedings was not strictly necessary however, I accept that the Secretary's motion was filed, possibly for abundant caution, to comply with a suggestion made in the orders of Pepper J of 16 August 2024.

Conclusion

For the above reasons, I decline to make the orders sought in the notice of motion filed 20 May 2024 by MCD seeking that the merits review proceedings be stayed pending the determination of the judicial review proceedings and make the order requested in the notice of motion filed 26 August 2024 by the Secretary that the merits review proceedings be heard together with the judicial review proceedings.
I remain aware of the different approaches and procedures adopted in Class 4 and Class 2 proceedings in this Court and the different practice notes involved. In the circumstances, and while I understand there is some urgency in the timely resolution of these proceedings, I consider that the parties should be given the opportunity to agree on appropriate directions for the preparation and conduct of the combined hearing before the matters are listed for case management.

Orders

The orders of the Court are: 1. The notice of motion filed 20 May 2024 in the merits review proceedings (2024/00151753) by Mittagong Central Developments Pty Ltd is dismissed. 2. The relief sought in the notice of motion filed 26 August 2024 (in the judicial review proceedings (2024/00292953) by the Secretary of the Department of Customer Service is granted. 3. The merits review proceedings (2024/00151753) are to be heard together with the judicial review proceedings (2024/00292953). 4. The parties are directed to confer and attempt to reach agreement in relation to directions for the preparation and conduct of the hearing(s) to involve both the judicial review proceedings and the merits review proceedings prior to a directions hearing before the List Judge on Friday, 25 October 2024. 5. 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: 11 October 2024

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