Randwick City Council v Belle Living Pty Ltd

Background

1. Council proposes to list the dwelling at the property as a heritage item under the RLEP. The first respondent, Belle Living Pty Ltd (Belle Living), has obtained a complying development certificate for the demolition of the building on the property.
2. The "bungalow" on the property, the first respondent submits, is physically divided into two sections by an internal partition. There is a two-bedroom dwelling at the rear of the property accessed from a separate entrance at the rear. The rear dwelling is presently tenanted and occupied. The front of the bungalow is a separate section formerly used as a dental surgery. It is accessed via stairs in the front yard. It is presently vacant, unused and in need of repair, says the first respondent.
3. On 14 October 2022, Council issued an interim heritage order (IHO) after having received a preliminary heritage assessment from its heritage consultant Kerime Danis on 13 October 2022. Ms Danis concluded that the property was of local heritage significance and met the threshold for individual heritage listing against several applicable criteria.
4. On 7 June 2023, Commissioner Dickson delivered judgment in Belle Living Pty Ltd v Randwick City Council [2023] NSWLEC 1282, a Class 1 appeal against Council's interim heritage order for the property (IHO judgment). Commissioner Dickson upheld the appeal in favour of the first respondent, and revoked the IHO. Commissioner Dickson's findings commence at paragraph [44]. The Commissioner concluded at [58] that: Having considered all the evidence before the Court, and the submission from the members of the public, I am not satisfied that the property is worthy of local heritage listing.
5. On 7 June 2023, the second respondent, Mr Abdul Hammoud of Certicorp Pty Ltd (Certicorp), issued complying development certificate number CCDC-3BER/2022 for the demolition of all existing structures on the property subject to conditions (CDC). The IHO judgment forms part of the CDC.
6. On 9 June 2023, Council issued a development control order pursuant to s 9.34 and item 4 of Part 1, Schedule 5 to the Environmental Planning and Assessment Act 1979 (EPA Act), ordering that the first respondent "stop all demolition work, (removal of walls, ceilings, floors linings, fixtures and fittings and any other internal or external building elements)" (DCO).
7. At 3:49pm on 9 June 2023, Council commenced these proceedings seeking to restrain demolition work. The first respondent submitted that there is no evidence that the first respondent was carrying out demolition work at the property on 9 June 2023. The first respondent denied that it has carried out any demolition work as alleged. In any event, the first respondent did not oppose the grant of interlocutory relief.

Issues in the proceedings

1. Council challenges the CDC, contending that: 1. the CDC was invalidly issued; and 2. the demolition works cannot be carried out as either exempt of complying development, as the dwelling is a draft heritage item within the meaning of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (Codes SEPP).
2. The first respondent identified the following issues in the proceedings: 1. the validity of the CDC; 2. whether the dwelling on the property is a "draft heritage item" as defined in s 1.15 of the Codes SEPP; 3. the validity of the DCO; 4. the legal effect and consequences for the parties of the IHO judgment; and 5. discretion - including issues going to the applicant's conduct in its continuing attempts to pursue the heritage listing of the property.
3. The first respondent proposes to file a cross-summons challenging the validity of the DCO and seeking other relief in relation to Council's on-going attempts to have the property listed as an item of local heritage under the RLEP. At the hearing today, Council undertook to revoke the DCO so long as the injunction restraining the first respondent from demolition works remains in place.

Evidence

1. On Friday, 9 June 2023, Council read the affidavit of Mr Liam Neale Mulligan, solicitor employed by the solicitor for Council, affirmed 9 June 2023.
2. At the hearing today, the first respondent read the affidavit of Mr Ali Hassan, director of Belle Living, sworn 12 June 2023.
3. Mr Ali Hassan deposed that in late August 2022, Mr Hassan Nazzal of Rebuilt Projects, contracted builder for the first respondent, lodged an application for a complying development certificate for the demolition of the building on the property.
4. Mr Hassan deposed that following the IHO judgment, he discussed the commencement of works on the property with Mr Nazzal. He deposed that he never instructed Mr Nazzal to demolish the building on the property, and to the best of his knowledge, Mr Nazzal did not carry out demolition work on the property. Rather, he said that on 9 June 2023, Mr Nazzal attended the property from about 7:30am with subcontracted labourers to commence works to strip out internal elements of the front of the building on the property, including spoiled ceilings, cornices and other elements of the building which were covered with mould and old dental furnishing. After midday on 9 June 2023, a "stop demolition work order", being the DCO, was served at Mr Hassan's office. Mr Hassan said that upon being notified of the DCO, he instructed Mr Nazzal and his workers to stop work and clean up the site. Further, Mr Hassan deposed that as at 12 June 2023, no work had been done on the property since 9 June 2023, and that a tenant was still living in the rear dwelling of the property.

Statutory framework and relevant principles for granting interlocutory relief

1. Section 23 of the Land and Environment Court Act 1979 (NSW) provides: The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, as the Court thinks appropriate.
2. Part 25 of the Uniform Civil Procedure Rule 2005 (NSW) (UCPR) in relation to "interim preservation" also applies to the making of urgent orders in the Land and Environment Court.
3. The general principle justifying the grant of interim relief is the incidental power of courts to ensure the effective exercise of their jurisdiction. [1]
4. In applying for interlocutory relief, the applicant must satisfy the Court that making an order is best calculated to satisfy "the requirements of justice" in the circumstances of the case. [2]
5. The relevant principles to be considered in granting or refusing interlocutory relief are: 1. whether there is a serious question to be tried or that the plaintiff has made out a prima facie case; and 2. whether the balance of convenience favours the granting of an injunction. [3]

Serious question to be tried

1. Council submitted that there is a serious question to be tried as a draft heritage item cannot be demolished as either a complying development (Codes SEPP, s 1.18(1)(c3)) or an exempt development (Codes SEPP, s 2.25).
2. The listing of the property as a heritage item was the subject of a planning proposal placed on public exhibition between 17 April 2023 and 12 May 2023. Council submitted that the fundamental issue in the substantive proceedings is whether the planning proposal regarding the property renders the item a "draft heritage item". It submitted that if the property is a draft heritage item, then: 1. the development is not complying development and the CDC is liable to be declared invalid pursuant to s 4.61 of the EPA Act; 2. the demolition works cannot be carried out as exempt development; and 3. the demolition works require development consent pursuant to s 2.7 of the RLEP. No development consent has been granted in this case.

Draft heritage item

1. Sections 1.17A and 1.18 of the Codes SEPP establish general limits on when development can be categorised as complying development.
2. Relevantly, s 1.17A(1)(d) states that to be complying development, the development must not be carried out on land that: 1. comprises an item that is listed on the State Heritage Register under the Heritage Act 1977 (NSW) or on which such an item is located, or 2. is subject to an interim heritage order under that Act or on which is located an item that is so subject, or 3. is identified as an item of environmental heritage or a heritage item by an environmental planning instrument or on which is located an item that is so identified.
3. Section 1.18(1)(c3) provides, additionally, that to be complying development under the Codes SEPP, the development must not be carried out on land "that comprises, or on which there is, a draft heritage item".
4. Council submitted that considered in the context of s 1.17A, a draft heritage item must be something other than a heritage item in an environmental planning instrument. Otherwise, there would be no need to include the additional specification in s 1.18.
5. Council submitted that the application of the definitions of heritage item and draft heritage item in s 1.5 of the Codes SEPP in this context creates an anomalous result: heritage item means a building, work, archaeological site, tree, place or Aboriginal object identified as a heritage item in an environmental planning instrument. draft heritage item means a building, work, archeological site, tree, place or aboriginal object identified as a heritage item in a local environmental plan that has been subject to community consultation, other than an item that was consulted on before 1 March 2006, but has not been included in a plan before 27 February 2009.
6. All local environmental plans are environmental planning instruments: ss 1.4, 3.13 EPA Act. Most are the subject of community consultation before they are made. Council submitted that the literal meaning of the words in the definition of "draft heritage item" means that a "draft heritage item" is encompassed wholly within "heritage item"; and that renders redundant the clear drafting decision made in ss 1.17A and 1.18. It also makes redundant the numerous references throughout the Codes SEPP to "heritage item or draft heritage item".
7. Further, Council submitted that the definitions must be interpreted in the context in which they appear in the instrument, relying on Kelly v R at [103]. [4] If the definition would result in the section being inconsistent with the meaning that it was plainly intended to have, the Court can depart from the literal words. [5]
8. The definitions were adopted in 2008, when amendments to a local environmental plan (LEP) occurred first through exhibition of a draft LEP for public consultation. Applied in this context, Council submitted that the different references to heritage item and draft heritage item were intended to capture those heritage items listed and those: 1. the subject of a proposal to amend an LEP to list the item; 2. on which public consultation had concluded.
9. Further, Council submitted that: 1. the date range of 1 March 2006 to 27 February 2009 is a "long stop to ensure development was not precluded well into the future on an item never listed"; 2. the draft LEP process was changed with the introduction of the process for a planning proposal and gateway determination. That did not change the purpose of the definition of draft heritage item; and 3. that purpose, and the legislative choice to deal with heritage items and draft heritage items separately, only has effect if the reference in the definition to a local environmental plan that has been subject to public consultation includes a planning proposal that has been subject to public consultation.

Finding on serious question to be tried

1. The first respondent accepts that there is a serious question to be tried at least in relation to the validity of the CDC and the proper construction of s 1.5 of the Codes SEPP.
2. I find that there is a serious question to be tried.

Balance of convenience

1. In Tegra (NSW) Pty Ltd v Gundagai Shire Council (Tegra), [6] Preston CJ set out the following factors that the Court may consider are relevant in determining the balance of convenience, namely: 1. whether irreparable injury will be caused, including harm to the environment and to the enforcement of the law (at [18]); 2. whether damages are an adequate remedy, or where the nature of the action does not permit of an award of damages to the applicant (at [26]); 3. whether an undertaking as to damages was offered (at [29] - [31]); 4. where the status quo lies, including preserving the environment from harm, and particularly irreversible damage (at [35]); 5. the nature of interlocutory relief sought, including whether the interlocutory injunctive relief sought is prohibitory or mandatory (at [37] - [38]); 6. the relative strength of each party's case (at [41]); 7. equitable considerations, in particular, delay (at [43]); 8. any prejudice to third parties, such as whether hardship might be inflicted by an interlocutory injunction upon an innocent third party not joined to the proceedings or the public (at [51]); 9. the public interest, whether in relation to the proper enforcement of public welfare statutes, the reliable and predictable public administration of the law, as well as in protecting the environment and cultural heritage (at [54] - [56]); and 10. whether there will be a long time period until the final hearing, as such that the grant of an interlocutory prohibitory injunction restraining a respondent from carrying out activities may cause considerable hardship such as restraining business. Conversely, if the injunction is not granted, considerable injury may be caused to an applicant, the environment or the public interest by the respondent carrying out its activities over a lengthy period (at [58]).
2. Council submitted that the balance of convenience weighs in favour of granting an interlocutory injunction for the following reasons: 1. If the building is demolished, the relief sought by Council to prevent demolition pending development consent will be rendered ineffectual. The maintenance of the status quo in such circumstances is the basis for an interlocutory injunction, relying on Tegra at [34]-[35]. 2. The harm caused by demolition of a potential heritage item is irreversible. Although the Court sitting in Class 1 revoked the interim heritage order that applied to the site, that is not determinative of the public process for its listing, nor is it determinative of the potential harm. 3. There is a strong public interest in the maintenance of the integrity of the planning system, relying on Warringah Shire Council v Sedevcic at 339-340. [7] If Council is correct that the CDC is invalid, then the first respondent should not obtain a private advantage from being permitted to carry out the works in any event. 4. Prejudice from delay to demolition appears to be limited. The CDC is limited to demolition. There is no approval for construction, nor other development, after demolition. 5. Any prejudice from delay could also potentially be addressed by setting down the hearing of the substantive application on a date available to the Court in June or July 2023. 6. The Council has acted promptly in bringing the proceedings. It commenced on the very date it became aware of the issue of the CDC, being two days after its issue.
3. The first respondent initially denied that the balance of convenience favours the grant of an injunction in the terms sought by the applicant, or at all. However, at the hearing today, the first respondent accepted the making of an interlocutory injunction in the terms sought by Council, subject to the resolution of the carve out in relation to urgent repairs and the question of the usual undertaking as to damages.

Finding on balance of convenience

1. I find that the balance of convenience favours the continuation of the interlocutory injunction for the following reasons: 1. the first respondent has obtained a complying development certificate for the demolition of the building on the property; 2. Mr Hassan deposed that following the IHO judgment, Mr Nazzal commenced strip out works at the property on the morning of Friday, 9 June 2023; and 3. if Council be correct that the property is a draft heritage item, then: 1. the development is not complying development and the CDC is liable to be declared invalid pursuant to s 4.61 of the EPA Act; 2. the demolition works cannot be carried out as exempt development; and 3. the demolition works require development consent pursuant to s 2.7 of the RLEP. No development consent has been granted in this case.
2. I otherwise accept Council's submissions at [47] above that the balance of convenience weighs in favour of granting an interlocutory injunction.

The usual undertaking as to damages

1. As noted above at [2], at the hearing on Friday, 9 June 2023, Council gave the usual undertaking as to damages. Today, the first respondent submitted that Council should be required to continue the undertaking as the price for obtaining interlocutory relief, failing which the Court's interlocutory order of Friday, 9 June 2023 should be dissolved.
2. The first respondent submitted that it will take a pragmatic approach to the future conduct of the proceedings consistent with its obligation to advance the overriding purpose in s 56(1) of the Civil Procedure Act 2005 (NSW). It envisaged by way of consent orders and directions that the proceedings, including its foreshadowed cross-summons, could be listed for final hearing within the next 3 weeks, subject to the convenience of the Court. It said that it would (and did) provide short minutes of order at the hearing today for that purpose.
3. Council submitted that the Court should have regard to rule 4.2(3) of the Land and Environment Court Rules 2007 (NSW) (LEC Rules), which provides: 4.2 Proceedings brought in the public interest (3) In any proceedings on an application for an interlocutory injunction or interlocutory order, the Court may decide not to require the applicant to give any undertaking as to damages in relation to: (a) the injunction or order sought by the applicant, or (b) an undertaking offered by the respondent in response to the application, if it is satisfied that the proceedings have been brought in the public interest.
4. In light of the nature of the proceedings, being proceedings plainly in the public interest, and having regard r 4.2(3) of the LEC Rules and the authorities, [8] I do not consider it appropriate to require Council to continue the undertaking as to damages given on Friday, 9 June 2023.
5. Contrary to the first respondent's submission, there was no evidence before me that the proceedings have been brought "at the behest" of the neighbours at 1 Berwick Street, or that Council is acting in the interests of the neighbours at 1 Berwick Street.

Conclusion and orders

1. In accordance with the short minutes of order provided by the parties at about 4:00pm today, the Court makes the following order: 1. Until further order, the first respondent by itself or by its employees, contractors, servants or other agents is restrained from carrying out demolition works to the dwelling house and dental surgery located at 3 Berwick Street, Coogee 2034, being Lot B DP 313214 (the property), with the exception of that work that is necessary for urgent repairs arising during the course of this order. The Court notes that subject to the making of order 1, the applicant undertakes to revoke the Development Control Order reference number EPAA-02/7098 dated 9 June 2023 addressed to the first respondent Belle Living Pty Ltd within 24 hours of the date of these orders.
2. The Court also directs: 1. The first respondent is to file and serve its response to the summons by 16 June 2023. 2. The first respondent is to file and serve any cross-summons by 16 June 2023. 3. The parties are to confer for the purpose of producing, and if possible produce, an agreed statement of facts and bundle of documents by 20 June 2023. 4. By 22 June 2023: 1. The applicant is to file and serve any further evidence in chief on its summons, and its bundle of documents. 2. The first respondent is to file and serve any evidence in chief on its cross-summons and its bundle of documents. 1. By 27 June 2023: 1. The first respondent is to file and serve any evidence in reply on the Council's summons, and its bundle of documents. 2. The Council is to file and serve any evidence in reply on the cross-summons. 1. Any party seeking leave to cross-examine a witness is to make that application within 3 days of service upon it of that witness's affidavit. 2. The proceedings including any cross-summons are listed for hearing for two days on 4 and 5 July 2023. 3. The parties are to confer and prepare a paginated Court Book with a table of contents in a white folder (or folders) containing the following sections with dividers between them: 1. a copy of the summons and each respondent's response to the summons; 2. an agreed list (or competing lists) of the real issues for determination; 3. a summary of the applicant's argument (not exceeding 10 pages); 4. the decision under review and the statement of reasons (if any) of the decision-maker; 5. any statement of facts able to be agreed between the parties; 6. an agreed chronology or, failing agreement, the respective chronologies of the parties; 7. an agreed schedule of any relevant legislative provisions or, failing agreement, the respective schedules of the parties of any relevant legislative provisions; 8. each party's list of objections (if any) to evidence; 9. spaces for the summary of the respondent's argument and any summary of the applicant's argument in reply (when filed). 1. The parties are to confer and prepare a paginated Evidence Book in a non-white folder (or folders) with a table of contents containing the following copy documents with dividers between them: 1. documents the parties jointly or separately propose to tender; 2. affidavits of the applicant's lay witnesses; 3. affidavits of the respondent's lay witnesses; 4. expert reports grouped by discipline. 1. The applicant, by 28 June 2023, is to file and serve the Court Book, the Evidence Book, and: 1. The first respondent is to file and serve a summary of its argument on the summons (not exceeding 10 pages); 2. The applicant is to file and serve a summary of its argument on the cross-summons (not exceeding 10 pages). 1. By 30 June 2023: 1. The first respondent is to file and serve a summary of its argument on the summons (not exceeding 10 pages); 2. The applicant is to file and serve a summary of its argument on the cross-summons (not exceeding 10 pages). 1. By 3 July 2023: 1. The applicant is to file and serve a summary of its argument in reply on the summons (not exceeding 5 pages); 2. The first respondent is to file and serve a summary of its argument in reply on the cross-summons (not exceeding 5 pages).

Endnotes

1. Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30 at [128] (Gaudron J).
2. Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 218 (McLelland J).
3. Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153; [1986] HCA 58 (Mason ACJ); Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63 at [13] (Gleeson CJ).
4. (2004) 218 CLR 216; [2004] HCA 12 (McHugh J).
5. Esso Australia Pty Ltd v Australian Workers' Union (2017) 263 CLR 551; [2017] HCA 54 at [52] (Kiefel CJ, Keane, Nettle and Edelman JJ).
6. [2007] NSWLEC 806; (2007) 160 LGERA 1 (Preston CJ).
7. (1987) 10 NSWLR 335 (Kirby P, Mahoney JA, Clarke JA).
8. Tegra at [29] (Preston CJ); Willoughby City Council v Sahade [2000] NSWLEC 38 at [24] (Pearlman J); Boronia Park Preservation Group v MSMG Developments Pty Ltd [2015] NSWLEC 112; (2015) 209 LGERA 259 at [73] (Pepper J); Central Coast Council v 422 Pacific Highway Wyong Pty Ltd [2018] NSWLEC 38 at [22] (Moore J). 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: 14 June 2023