Solicitors:
C Shaw, Swaab Attorneys (Applicant)
M Bonnano, Leichhardt Municipal Council (Respondent)
File Number(s): 40693 of 2015
[2]
EX TEMPORE Judgment
Rozelle Village Pty Ltd (the Company) has today commenced proceedings in this Court, seeking a permanent injunction to restrain the respondent, Leichhardt Municipal Council (the Council), from taking steps to amend the provisions of a local environmental plan. The Company now seeks an interlocutory injunction to restrain the Council from considering, at a meeting tonight, a report prepared by its staff in which it is recommended to the Council that it adopt a planning proposal which, if adopted, will initiate the process of plan amendment. The Council opposes the grant of any interlocutory order.
The Company is the owner of a parcel of land known as the Balmain Leagues Club Precinct, located proximate to the intersection of Victoria Road and Darling Street at Rozelle (the Site). The development of the Site has been controversial for some years.
In 2008, Balmain Leagues Club Ltd, as owner of the Site at the time, entered into a voluntary planning agreement (VPA) with the Council. The VPA was expressed to be entered into under the provisions of Subdiv 2, Div 6 of Pt 4 of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act). A recital in the VPA records that Balmain Leagues Club, as developer, had requested the Council to amend Leichhardt Local Environmental Plan 2000 (NSW) (LEP 2000) being the principal planning instrument controlling development of the Site at that time.
The amendments sought were identified in the form of a draft amendment to LEP 2000 annexed to the VPA. In essence, the amendment identified the land uses that could be made of the Site. It also specified development standards for the Site that differed from those that would otherwise apply under LEP 2000.
The VPA, which was in the form of a deed, also made provision for the carrying out of works associated with the development of the Site that provided a material public benefit as well as requiring the payment of a monetary contribution to the Council of $750,000. While payment of that amount and the undertaking of works was conditional upon a development consent being granted, the monetary contribution required was secured by bank guarantee in favour of the Council.
On 29 August 2008, LEP 2000 was amended in a manner that was consistent with the draft amending instrument annexed to the VPA. Relevantly, the amendment allowed the Site to be developed with a total floor space ratio of 3.9:1. The permissible uses included shops, commercial premises, residential apartments and an area for the purpose of a club. Floor space ratio controls were imposed upon each of the identified uses. The amendments then made to LEP 2000 also fixed maximum height controls for development of the Site.
By 2009, the Company had acquired the Site. In that year, it submitted an application to the Council for development of the Site. Both the total floor space and building height for that development exceeded the development standards that had been fixed for the Site by the 2008 amendment to LEP 2000.
The determining authority for that application was the Sydney East Joint Regional Planning Panel. On 8 July 2010, the Panel refused the application. Among the reasons for refusal was the unacceptable impact on traffic "in the surrounding streets".
A further development application for development of the Site was prepared and made by the Company in 2012. That application was identified as a "major project" under the provisions of the now repealed Pt 3A of the EPA Act. As a consequence, the determining authority for that application was the Minister. The development application then made also sought development with a floor space ratio and building height exceeding the controls imposed by the 2008 amendment to LEP 2000.
The function of the Minister to determine the 2012 application was delegated to the Planning Assessment Commission. On 11 April 2014, the Commission refused the application, essentially because of the impact that the proposed development would have on the surrounding road network.
Following the rejection of that application and the reasons for it, the Council embarked upon the task of reconsidering the planning controls appropriate for the Site. While a new local environmental plan had been made for the Council's area, namely Leichhardt Local Environmental Plan 2013 (LEP 2013), the Site had been deferred from the operation of that instrument, with the result that the provisions of LEP 2000 continued to apply to development of the Site.
For the purpose of reconsidering the development controls, the Council retained a number of consultants to advise it, particularly directed to the traffic issues that had founded the refusal of the earlier development applications by both the Joint Regional Planning Panel and the Planning Assessment Commission. Not only was a planning consultant retained, but so also was Arup Pty Ltd, a specialist traffic consultant.
At its meeting on 28 April 2015, the Council considered a report from its staff, recording the progress being made as to "the traffic model" and urban design guidelines for the Site. Attached to the report for that meeting was a traffic study or model prepared by Arup, as well as a document identifying design principles.
As a result of discussion with Council officers, the Company's managing director, Ian Wright, had learned of and was provided with a copy of the Arup report on about 22 April 2015. On 21 April, the Council had advised Mr Wright of its intention to consider planning controls for the Site at its meeting on 28 April. Mr Wright was invited to attend that meeting and was also advised of the availability of the agenda and business papers for the meeting on the Council's website. The report prepared for that meeting recorded a previous decision of the Council to continue with the process of rezoning the Site "to a floor space ratio of 1:1 for commercial development and 1.5:1 for mixed use development". That report did not identify, in terms, a "planning proposal" for amendment of either LEP 2000 or LEP 2013.
Planning controls for the Site were further considered by the Council at its meeting on 12 May 2015. Discussion of the Site took place in a closed meeting but the Council's resolution following that discussion was a matter of public record. That resolution adopted a number of measures, including the Arup traffic model and urban design principles for the Site, as well as identifying the proposed height of buildings, floor space, land uses, number of residential units and car parking spaces appropriate for development.
By letter dated 13 May 2015, the Council advised Mr Wright of the terms of the resolution that was passed at its meeting on 12 May. That resolution included a statement that the Council would:
"…commence a process of consulting with key stakeholders - in particular the NSW Department of Planning, the owner, the Balmain Leagues Club and the local community, with a view to preparing a draft planning proposal and Draft VPA for consideration by Council".
The letter to Mr Wright included a request for "a meeting to discuss this matter in greater detail". Although there is no evidence of the content of discussions that took place at any subsequent meeting, Mr Wright acknowledges that at least two meetings were held by him with Council staff. The content of those meetings is not revealed because Mr Wright regarded them as being "without prejudice" meetings.
By letter dated 4 August 2015, and received by the Company on 5 August 2015, the Council advised the Company that it would meet this evening, 11 August 2015, for the purpose of considering a staff report. That report recommended that the Council adopt and thereafter submit to the Minister a planning proposal to amend LEP 2013. The letter advised that the Council agenda for the meeting, together with the report in relation to the planning proposal for the Site, was available on the Council's website, the address of which was provided. The letter further indicated that a person seeking to address the Council could do so by identifying him or herself to the Mayor at the beginning of the meeting. Upon receipt of that letter, the Company consulted its present solicitors. With their assistance, a copy of the report prepared for that meeting, together with the annexures to it, were obtained late on 5 August.
The annexures to the report to be considered at tonight's meeting include the Arup report as well as a detailed planning proposal, prepared by the Council's planning consultant, in which the amendments proposed to LEP 2013 are indicated. Those amendments are essentially those stated in the Council's letter to the Company of 13 May 2015, identifying both land uses and development standards appropriate for the development of the Site. Relevantly, they involve both a reduction in the floor space ratio and height of buildings from those contemplated by the 2008 amendment to LEP 2000.
The Company seeks to restrain the Council from considering that report and taking any steps in response to it on two bases. First, it submits that it has been denied procedural fairness. Second, it contends that if the Council proceeds to take the steps which the report recommends, it will do so in breach of the VPA. That VPA had been registered on title pursuant to s 93H of the EPA Act, with the consequence that the terms of the agreement are by s 93H(3):
"…binding on, and is enforceable against, the owner of the land from time to time as if each owner for the time being had entered into the agreement".
The Company relies on the fact that it is the successor in title to Balmain Leagues Club Ltd and so entitled to rely upon the VPA.
The breach of the VPA alleged by the Company is twofold. First, it relies upon an implied term to the effect that the Council should do nothing to destroy the efficacy of the VPA or anything that would frustrate the fulfilment of the purpose for which the VPA was entered into. The proposed consideration by the Council of the report at its meeting tonight and any action taken to implement the recommendations would be in breach of that implied condition.
Second, it alleges that the proposed actions of the Council involve an anticipatory breach of cl 20 of the VPA which requires that:
"Each Party must promptly execute all documents and do all things that another Party from time to time reasonably requests to affect, perfect or complete this Deed and all transactions incidental to it."
By s 122 of the EPA Act, breach of a voluntary planning agreement constitutes a breach of the Act.
The Council accepts that the critical matters to be considered for the purpose of determining whether an interlocutory injunction is to be granted are first whether there is a serious question to be tried and second, whether an order should be made, having regard to the balance of convenience.
As to the first of those matters, as I understand its submission, the Council accepts that the threshold determination as to the existence of a serious question to be tried is a low threshold. Given the absence of jurisprudence directed to the inter-relationship of a voluntary planning agreement with other provisions of the EPA Act that involve the exercise of a discretionary power, including the taking of steps by a council to amend a planning instrument, the Council accepts, as I do, that there is likely to be a serious question to be tried. I refer to other provisions in the EPA Act with which the VPA is required to interact because, at first blush, it would seem to lead to a strange result if the terms of a voluntary planning agreement could forever, or at least for an extended period of time, constrain the capacity of a local authority in the performance of its quasi-legislative function to instigate the process of amendment to a local environmental plan under the provisions of Div 4 of Pt 3 of the EPA Act, assuming that for a rational planning reason it is appropriate so to do.
My intuitive response to the Company's submission is reinforced by cl 23 of the VPA. That clause provides, in terms, that nothing in the VPA should be construed to operate as a fetter upon the proper exercise by the Council of any statutory discretion or duty. However, as the Council accepts that a serious question is raised as to the ambit of operation of the VPA, it is inappropriate to elaborate further on this aspect of the Company's submissions.
Accepting there is a serious question to be tried, consideration of the balance of convenience assumes some significance. As the Company's counsel acknowledged, in the present case there would appear to be an almost even balance between the position of the Company and that of the Council. That fine balance arises from the circumstance that under the provisions of Div 4 of Pt 3 of the EPA Act, the regime for the preparation of a planning proposal, leading ultimately to the amendment of a local environmental plan, involves a number of steps that are to be taken before any amendment can be effected.
The first step, identified in s 55 of the EPA Act, requires the preparation of a planning proposal. On its face, that provision does not call for any process of consultation prior to the step being taken by a planning authority to prepare the proposal for submission to the Minister. The Minister is then to determine whether the proposal should proceed and, if so, on what basis, including the requirement for community consultation. This is identified as the "gateway determination" (s 56).
It is only after the gateway determination is made that s 57 requires the relevant planning authority to consult with the community in accordance with the community consultation requirements for the proposed instrument. Submissions can then be made as to the content of the proposed amending instrument and if such submissions are made, consideration must be given to them before any further step is taken, leading to the making of the instrument, should that be the ultimate decision taken. In giving this brief description of the relevant statutory provisions, I acknowledge that I truncate the full process but in so doing, identify those matters of importance for present purposes.
In short, there are a number of steps required to be taken before any right or interest of the Company as owner of the Site is affected. Even if I was to assume that, at tonight's meeting, the Council did adopt the recommendation made in the report that it is considering, and, as a consequence, the planning proposal was forwarded to the Minister, the taking of that step would not, of itself, affect any right or interest of the Company.
Further, it is significant that the content of the proposal to amend LEP 2013 is, in substance, that which was identified in the Council's letter of 13 May 2015 to the Company. The issue taken by the Company in claiming a denial of procedural fairness is, in essence, that having received notification of the planning proposal to be considered tonight less than one week ago, it has had inadequate opportunity to prepare a case or submissions in response to matters raised in the report.
On the evidence before me, I do not consider that procedural fairness requires that the exercise of the Council's function under Div 4 of Pt 3 of the EPA Act should be restrained in order to afford additional time for the Company to prepare submissions. The substance of the matters being considered, together with the terms of and foundation for, the recommendation to amend LEP 2013 have all been known to the Company for some months. Further, the Council's letter to the Company of 4 August clearly stated that it would entertain any oral presentation that the Company wished to make at tonight's meeting. It remains at liberty to do so and there is no reason to suggest that the Council would not adhere to the invitation extended in that regard.
Having acknowledged that there is a serious question to be tried arising from the operation of the VPA, it seems to me that the case sought to be made by the Company is not so strong as to require that the process upon which the Council may embark should immediately be brought to a halt. Not the least reason for that is the fact that the step to be taken tonight, if it is taken (about which there can only be speculation), does not of itself affect an interest of the Company. As I have indicated, not only is the Company entitled to make such submissions to tonight's meeting as it may be advised to do, but adequate opportunity is available to it to address the process of plan amendment long before the statutory step is taken that will impinge upon its rights or interest. The balance of convenience does not favour the grant of an interlocutory injunction. The power of the Council to perform its functions under Pt 3 of the EPA Act should not too readily be restrained.
For these reasons, I decline to grant the interlocutory injunction that the Company has sought. Given the likely importance that the Company attaches to the Council's actions, I am prepared to consider an application for an expedited hearing of the proceedings so that the issues sought to be agitated by the Company can more fully be argued and considered before any final step to amend LEP 2013, is taken, if that is the course upon which the Council resolves to embark.
I make the following orders:
1. Dismiss the application for an interlocutory injunction.
2. Stand the matter over to 9.30am on 13 August 2015 to consider any application that might be made by the applicant for an expedited hearing.
3. Applicant to pay the respondent's costs of the interlocutory application.
[3]
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: 17 August 2015