Ralph Lauren 57 Pty Ltd v Byron Shire Council

Civil Procedure Act 2005, ss 57, 60 LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Uniform Civil Procedure Rules

APPLICANT M S Henry (Barrister) SOLICITORS Mallesons Stephen Jaques LEGAL REPRESENTATIVES:

RESPONDENT S A Duggan SC SOLICITORS HWL Ebsworth Lawyers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40184 of 2010 RALPH LAUREN 57 PTY LTD v BYRON SHIRE COUNCIL

1 HIS HONOUR: The applicants seek an order that the respondent Council give "formal" discovery of documents. The making of the orders sought is opposed by the Council. In order to consider the submissions of the parties, it is necessary briefly to record the course of proceedings and the background to them. Background 2 In the context of actions commenced in this Court seeking civil enforcement orders, these proceedings are unusual. The applicants seek final orders which, if made, will have the effect of compelling compliance by the Council with the terms of a development consent granted to itself on 8 November 2001 (the Consent). 3 The applicants are the owners of registered interests in land located at Belongil Beach in Byron Bay. Their respective interests relate to land that has frontage to Belongil Beach. 4 At the heart of their proceedings is an endeavour to secure protection of the lands in which they have an interest from erosion caused by coastal processes. Belongil Beach has already been eroded by such processes. 5 The need to provide protection to land bordering Belongil Beach is said by the applicants to be the rationale for the Consent. The development authorised by that Consent is described as "Interim Beach Stabilisation Works at Belongil Beach and Main Beach." The works authorised by that Consent included the construction of a geobag revetment wall to a specified height. The Consent referred to "approved plans" and required that the development authorised by it be carried out in accordance with a document dated June 2001 prepared by GHD, a firm of engineering consultants. 6 In 2002, works, including the construction of a geobag revetment wall along Belongil Beach, were carried out by the Council. Whether those works were carried out in accordance with the Consent is an issue in the present proceedings. 7 Severe storms battered the coastline in the Byron Bay area during May 2009. The sea level and wave action occasioned by those storms caused damage to the revetment wall constructed by the Council along Belongil Beach. Those storms also occasioned dune erosion at the site of the lands in which the applicants hold their respective interests. Whether the terms of the Consent imposed an obligation upon the Council to repair the revetment wall, the extent of that repair and the need to renourish the sand dune are all issues in the proceedings. The course of proceedings 8 Conformably with directions made by the Court, Points of Claim, Points of Defence and affidavit evidence in chief have all been filed by the parties. It is clear that there is a serious contest between them. The present motion aside, there have been some eight attendances before the Court since the summons was filed on 18 March 2010 and, in addition, some three attendances were had before the Senior Commissioner in an endeavour to mediate the dispute. 9 As I have already indicated, the Points of Defence filed on behalf of the Council put in issue the facts which seek to establish that the works undertaken by the Council in 2002 did not accord with the Consent, as understood by documents incorporated by reference in it. The Council also puts in issue facts directed to the assertion that it was required, but failed, to maintain the revetment wall so as to avoid or mitigate erosion caused by coastal processes. In addition, the Council pleads discretion by way of defence. 10 This defence of discretion falls into two broad categories. The first sets out a series of orders to which it would, "without admissions", consent. It is unnecessary for present purposes to consider this category further. 11 The second category of the defence of discretion raises a number of disparate matters. They relate to the financial resources of the Council to comply with orders that the applicants seek; suggest that the cost of implementing the orders sought would exceed the benefit achieved by carrying out works the subject of those orders and further suggest that "further and other approvals" may need to be obtained before the carrying out of works required by the orders sought. 12 On 30 June 2010, the applicants served the Council with a Notice to Produce documents falling into seven identified categories. In response to that Notice, documents in purported compliance with it were provided by the Council to its solicitor at whose offices the documents were inspected on behalf of the applicants. This process was completed on 22 July 2010. The application for discovery 13 The applicants bring their application for "formal" discovery pursuant to Pt 21 r 21.2 of the Uniform Civil Procedure Rules (UCPR). Conformably with subrule (1)(a), the applicants have identified categories of documents which they seek to have discovered. The Notice stipulating those categories, dated 24 September 2010, has been superseded by an amending document tendered without objection at the hearing of the motion. The amended document (Exhibit B) identifies documents falling within twelve categories. One of those categories falls into two parts. 14 UCPR 21.2(4) proscribes the making of an order for discovery in respect of a document unless the document "is relevant to a fact in issue." A document is relevant to a fact in issue - "if it could, or contains material that could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence": UCPR 21.1(2). 15 In support of their motion, the applicants rely upon an affidavit of Mr Glyn Watson, a solicitor in the employ of the firm of solicitors retained by them. It was Mr Watson who inspected documents made available by the Council following service of the Notice to Produce to which I have earlier referred. He states that upon close examination of the documents produced relating to the financial resources of the Council, it became apparent to him that the quantum of financial assistance sought by the Council from the State Government under the Government's natural disaster relief program had been amended. That application was made by the Council following the storm that occurred in May 2009. No document evidencing an amendment to the application had been produced. 16 Mr Watson raised the apparent omission with the Council's solicitors, as a result of which a further document indicating that the Council had increased its claim, was produced. This increased claim apparently related to additional funding sought for works in the area proximate to the lands in which the applicants have their respective interests. 17 In opposing the making of an order for discovery, the Council sought to rely upon an affidavit sworn by its solicitor, Ms Kirsten Gerathy. She related, on instructions, the method by which the Council's records are kept and, as a consequence, the extent to which the resources of the Council would need to be utilised in order to address the preparation of a verified list of documents (UCPR 21.4). Understandably, Ms Gerathy sought to demonstrate the extent to which both legal and Council resources would be required to comply with a discovery order by reference to the categories for discovery which had been served on 24 September. The same specific examples of resource utilisation were not reiterated in the context of the revised categories of documents upon which the applicants ultimately relied. 18 For its part, the Council indicated that it was prepared to provide informal discovery of eight of the twelve categories of documents that were sought. In respect of the category which was in two parts (Category 6), it indicated that informal discovery would be provided in respect of the first part but not the second. 19 Thus, the issues became - (i) whether verified discovery should be required, and (ii) whether the five categories in contention should be the subject of discovery, be it formal or informal.

The requirement for verified discovery: the Council's submissions 20 In support of the Council's position, Ms Duggan SC, who appeared for the Council, submitted that as the making of an order for discovery was discretionary and not as of right, the provisions of ss 57 and 60 of the Civil Procedure Act 2005, applied to the circumstances of this case, spoke against the exercise of discretion to make the orders sought. In similar vein, she prayed in aid the provisions of the Court's Practice Notes pertaining to the conduct of Class 4 proceedings. Paragraph 15 of those Notes provides that an order for formal discovery "will only be made in exceptional cases". 21 Reliance is placed by the Council on the fact that it has already undertaken "extensive" production of documents in response to the applicant's Notice to Produce. As a consequence, so it is submitted, the work involved in collating the documents should not have to be undertaken again. 22 Furthermore, it was submitted that the Council was not delinquent in providing the documents required to be produced in response to the Notice served upon it on behalf of the applicants. Once the oversight identified by the applicants' solicitor in the production of documents had been drawn to attention, that oversight by the Council was promptly rectified by provision of the omitted document. 23 Finally, a statement made by Ms Gerathy in her affidavit was explained. In paragraph 21 of that affidavit, Ms Gerathy said this: "21 In relation to category 1 (which is in identical terms to paragraph 1 of the Notice to Produce) I have asked Council to make further enquiries and searches and produce any additional documents identified by way of informal discovery." 24 The applicants had relied upon that statement as an indication that the production of documents already made may have been incomplete. Ms Duggan explained the statement as indicating only that any documents which had been created or come within the control of the Council since documents were produced in July last would be sought and produced to the applicants. Verified discovery should be ordered 25 I readily accept that the provisions of the Civil Procedure Act to which reference is made, together with paragraph 15 of the Court's Practice Notes, impose an onus on the applicants to establish that this is a case which is "exceptional" in requiring the order for discovery that they seek. I am satisfied that the applicants have discharged that onus. 26 It will be remembered that by s 60 of the Civil Procedure Act, the cost to be considered in implementing any procedure available to the Court is to be "proportionate to the importance … of the subject-matter in dispute." My brief recitation of the circumstances that inform the commencement and prosecution of these proceedings demonstrate the importance of the subject matter of the dispute to each party. 27 On the part of the applicants, the orders that they seek have, as their purpose, the preservation of their respective proprietary interests in land. On the part of the Council, its interest is, unusually as I have already indicated, to demonstrate compliance with the legal obligations imposed upon it by a development consent granted under the Environmental Planning and Assessment Act 1979. That interest not only extends to demonstrate compliance with the law but, in so doing, also seeks to avoid incurring the costs of carrying out works which the applicants claim it is required to undertake. To my mind, these circumstances make the case "exceptional" within the meaning of the Practice Note. Moreover, they are circumstances that do not suggest the making of the order sought would lack the proportionality to which s 60 of the Civil Procedure Act refers. 28 I accept that the terms in which paragraph 21 of Ms Gerathy's affidavit may not have been felicitously drafted. I am also prepared to accept that the failure to produce the document omitted in response to the applicants' Notice to Produce was not deliberate. While these factors may remove any suggestion of deliberate avoidance on the part of the Council, they do point to the need for discipline in the identification and provision of documents "relevant to a fact in issue" in these proceedings involving, as they do, subject-matter in dispute of such importance to each party. That discipline would be imposed by an order for 'formal' discovery. 29 Although it is a matter that is not determinative of the present motion, I do not completely discount from consideration the position which the Council takes. It accepts that documents falling within eight categories of documents sought by the applicants will be the subject of informal discovery. Several of these categories of documents are the subject of the Notice to Produce with which the Council says it has fully complied. Assuming that to be the case, the cost of attending the formalities required by UCPR 21.3 and 21.4 should not be unduly burdensome in the imposition of costs upon the Council that are disproportionate to the importance of the subject-matter in dispute. 30 For these reasons, I propose to order that the Council provide discovery of documents in accordance with Division 1 of UCPR 21. Categories of documents and determination 31 As I have earlier indicated, by its amended application for discovery, the applicants have nominated twelve categories of documents that they seek to have discovered. Categories numbered 1, 2, 3, 5, 6(a), 7, 9 and 10 are categories about which there is no dispute. Having determined that verified discovery is required, each of those categories of documents will be the subject of the order that I make. That leaves for determination those categories which remain in dispute. 32 The Category 4 documents are described as follows: "All expert advice on or relating to the works at the Border Street Site or the Don Street Site and any consideration by the Respondent of the performance of, or the level or nature of the protection provided by, the works constructed at those sites, since 1999." 33 Paragraph 20 of the Points of Claim alleges that the revetment wall constructed by the Council (referred to as the "GHD Wall") did not protect property at the Don Street and Border Street sites from storm weather events. That allegation is denied by the Council. Added to that denial is a denial that the GHD Wall was intended or designed to protect the identified properties from such events coupled, with an assertion, that the wall "performed in the manner intended by, or in excess of, its design." 34 It seems to me that, by reference to paragraph 20, the pleadings raise issues as to the design and performance of the wall, the manner in which it was constructed and the purpose of its design. These are issues to which the Category 4 documents relate. 35 I am therefore of the opinion that the Category 4 documents should be the subject of discovery. While, as the Council contends, the general issue raised in the proceedings involves an interpretation of the Consent, the allegations contained in the Points of Claim and the Council's defence to those allegations give rise to issues of fact and thus attract the entitlement to discovery of documents relevant to those facts. 36 Category 6(b) of the documents sought relate to - "sources of sand potentially available currently for use at either of the Border Street Site or Don Street Site."

The request for documents falling into that category is said to arise from a discretionary defence pleaded by the Council in the following terms:

"1.6 The orders sought by the Applicant have the potential to put the Council in breach of the conditions of development consent in respect to the timing of the placement and sourcing of sand."

37 The Consent, which has been tendered, required by condition 9 that "(all) materials are to be sourced from north of the Belongil Creek" in accordance with a nominated report. The Council submits that the terms of its discretionary defence relate only to a question of timing and that the condition identifies the source of sand able to be utilised. 38 For my part, I am unable to agree that the Council's defence of its position is sufficient. Condition 9 does not, itself, impose a time limitation and to the extent to which a source of sand is identified, assuming it to be comprehended by "materials" referred to in condition 9, is so general that documents potentially relevant to the defence pleaded seem to me to be appropriately required. 39 I would therefore allow Category 6(b) of the category of documents sought by the applicants. 40 The documents sought in Category 8 have, as the basis for the requirement of their production, the terms of the Council's discretionary defence. Paragraph 1.7 of that part of the Points of Defence alleges that the orders sought by the applicants fail to take account of the need to obtain further approvals from government authorities before carrying out the works that are the subject of the orders that are sought. The Council submits that strict compliance with the terms in which this category of documents is identified would require it to do no more than produce the statutes or statutory instruments identifying the legal obligation to obtain consents or approvals for works. It seems to be accepted by the Council that if the applicants sought documents, if any, reflecting the Council's consideration of those further approvals that it considered necessary, then such documents would conceivably be relevant. 41 The intent of the Category 8 documents is clearly that which the Council apprehends is intended. Subject to amending the terms in which that category is expressed to reflect that intent, I am disposed to include the category among those documents that are the subject of the discovery order. 42 Paragraph 22 of the Points of Claim includes an allegation that the Council did not maintain the GHD Wall to the specifications for it identified in the Consent, as a consequence of which, the Council was in breach of that Consent. The response of the Council in its Points of Defence is threefold. It is sufficient to note only one of those defences which is a denial of the allegations made in paragraph 22. 43 Documents within Category 11 of the applicants' notice are documents directed to "ongoing maintenance and repair", including particular aspects of repair, as it relates to the wall at the Border Street site or Don Street site since 2001. The denial by the Council that it had failed to maintain the GHD Wall in the manner alleged by the applicants, seems to me to make the documents identified in Category 11 relevant to an issue of fact between the parties. It is therefore appropriate that this category of documents be included in the order for discovery. 44 A further matter pleaded by the Council as part of its discretionary defence is as follows: "1.4 The further costs would outweigh the benefit of carrying out any further works." 45 Category 12 seeks documents relating to: "types of beach stabilisation works, other than works constructed at the Border Street site or Don Street site, proposed to and/considered by the respondent: a) between 1999 and 8 November 2001; b) since the 2001 Development Consent was granted."

This category of documents is said by the applicants to be required by paragraph 1.4 of the discretionary defence. 46 I am unable to agree. As I understand paragraph 1.4, it is directed to a comparison between the costs which would be incurred by the Council in giving effect to the orders which the applicants seek and the cost or value of the benefit which would be derived from those works. I see no basis in that defence upon which the documents identified in Category 12 could justifiably be included in an order for discovery. This category must be rejected. Conclusion and orders 47 The unusual and exceptional nature of the issues raised by these proceedings justifies the making of an order for discovery. Those unusual or exceptional aspects of the proceedings arise by reason of the orders sought against the Council, seeking to assert that it is in breach of its own development consent. They also arise by reason of the fact that not only do they seek to uphold what are said to be the obligations imposed by a validly granted development consent but also to protect what I assume is valuable real estate from erosion by processes over which the applicants have no direct control. 48 Compliance with the order that I have foreshadowed should be made will, according to the Council's evidence, require time exceeding that normally allowed under UCPR 21.3(3)(a). In the absence of knowing my decision, the Council has not been able to identify the time it will require to comply with such an order. For their part, the applicants have indicated that they will not insist upon the ordinary 28 day period for compliance being required. 49 Further, I have indicated that some amendment is required to the terms in which Category 8 documents are required to be discovered while I have deleted those sought in Category 12 of the applicant's notice. It is therefore appropriate that I require the parties to bring in short minutes of orders not only to reflect my decision but also accommodate such time as may be agreed or, in the absence of agreement, to be determined for service of the Council's list of documents. 50 The orders that I propose therefore are as follows: 1. Stand over the proceedings to 21 October 2010 at 9:30 am before me. 2. Direct that the applicant bring in short minutes of an order for discovery, consistent with my reasons for judgment. 3. Direct that the applicant serve draft short minutes of order upon the respondent by 4.00pm on 19 October 2010, nominating such time for compliance with the order as may be considered appropriate, following consultation as to that time with the respondent. 4. In the event of disagreement with the applicant's draft short minutes of order, the respondent is to prepare its draft of such orders, consistent with my reasons for judgment, and serve such draft upon the applicants by 5.00pm on 20 October 2010. 5. Costs may be argued. 6. Exhibits may be returned.

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