BALANCE OF CONVENIENCE
57As to the balance of convenience, the respondents, in summary, made the following oral submissions.
58First, the respondents submit that an interlocutory injunction will interfere with implementation of the July 2011 resolution, the validity of which is not challenged. I do not think that this is a weighty consideration. The applicant's challenge is to the lawfulness of the general manager's conduct in relation to implementation. If that conduct is unlawful, then it is only right that the general manager re - exercise his power lawfully.
59Secondly, the respondents submit that there is evidence that the trees are a continuing danger. That is so, although the applicant does not accept that assessment and sought another independent assessment. Expert reports that the trees represent a danger were reviewed by me in Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSWLEC 231, 179 LGERA 346 at [19] - [30]. However, the council has since 2009 implemented measures to mitigate the risk posed by the trees. Since July 2011, the council has introduced further risk mitigation measures, which include closure of the Art Gallery on Laman Street during adverse weather conditions because the only public access is from Laman Street, and permanently closing Laman Street to vehicles.
60Thirdly, the respondents submit that there is no assurance that the council will have any public liability insurance associated with the trees after 30 November 2011. The respondents also submit that this will place the council in breach of s 382(1) of the Local Government Act 1993, which provides that: "a council must make arrangements for its adequate insurance against public liability and professional liability".
61I have touched on this insurance issue at [ 12 ] above. The council's public liability insurer offered to pay for certain testing of the trees "conditional on all stakeholders being willing to accept that the results of the testing will be the final arbitrament as to the future of the trees". The reasons given by the council for refusing the offer were that the testing was "point in time" testing; the testing results may recommend that one or more of the trees require removal; and removal of individual trees may, according to expert advice, compromise the stability of the remaining trees. The insurer agreed to extend cover to 30 November 2011, subject to continuation of the current risk management steps remaining in place pending resolution of the issues. An email from the insurer to the council of 3 November 2011 says that: "If an extension is needed, maybe we should only grant a small extension..." I accept that there is a risk that the insurer will be off risk after 30 November 2011; however, it seems willing to grant at least a small extension beyond that date if needed.
62The applicant submits that if the insurer goes off risk, it is the council's own fault in refusing to accept the insurer's offer to pay for the testing. The respondents submit that the refusal was justified, given the condition that the insurer wished to impose. I do not think that I can resolve the merits of the refusal on this interlocutory application.
63Assuming that the insurer declines to extend cover beyond a certain date, I do not accept that that fact, of itself, will put the council in breach of s 382(1).
64Fourthly, the respondents submit that the matter has been the subject of much consideration. That is so.
65Fifthly, the respondents submit that there will be significant disruption to public access so long as the July 2011 resolution is not implemented. That is so.
66Sixthly, the respondents submit that the applicant had the opportunity to nominate an expert to assess the trees under a recent agreement between the parties and did not utilise the opportunity. This refers to the written "Agreement to Procure Independent Expert Assessment" dated 21 October 2011 referred to at [ 19 ] above. It was executed on 20 October 2011 and held in escrow until certain amendments were attended to. The agreement recited: that there was a dispute between the parties as to the safety of the trees; the terms of the July 2011 resolution; that the applicant disputed the reliability of the expert opinion on which the council relied to make the resolution; that at present the council's general manager considers it "not practical" to remove the trees; and that the agreement provided for independent assessment of the trees. Clause 2.1 provided that within one business day the applicant must select, in order of preference, which of the three experts listed in Schedule 2 is to be appointed by the Council. However, this appears to have been overridden by handwritten pages apparently forming part of the agreement which stated that the applicant selected one of the three and would not assign a preference to the others because it considered they were unsuitable for the task, either because they had insufficient expertise or were too close to the respondent (a conflict of interest); and that if the applicant's choice of the three was not available the proposed expert assessment would not proceed. As it turned out, the expert selected by the applicant was not available. Assuming it is relevant, I am unable, on the evidence in this interlocutory application, to determine whether or not the applicant's rejection of the other two experts was reasonable. I therefore do not propose to hold that rejection against the applicant when considering the balance of convenience. I note that at the hearing I raised with both parties whether even now they could not revive the 21 October agreement by agreeing on an expert, but there was no substantive response.
67Seventhly, the applicant does not offer the usual undertaking as to damages. Even if it made the offer, the undertaking would likely be virtually worthless because the applicant has no significant assets. The respondents submit that therefore the Court should decline to grant an interlocutory injunction.
68However, the applicant submits that it should not be required to give an undertaking as to damages under r 4.2(3) of the Land and Environment Court Rules 2007. Rule 4.2 provides:
"4.2 Proceedings brought in the public interest
(1) The Court may decide not to make an order for the payment of costs against an unsuccessful applicant in any proceedings if it is satisfied that the proceedings have been brought in the public interest.
(2) The Court may decide not to make an order requiring an applicant in any proceedings to give security for the respondent's costs if it is satisfied that the proceedings have been 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."
69In earlier litigation concerning these trees, Parks and Playgrounds Movement Inc v Newcastle City Council [2010] NSWLEC 231, 179 LGERA 346 at [171] - [173], I considered the public interest costs provision in r 4.2(1) as follows:
"171 A principled three step approach has been developed in determining whether to make no order for costs against an unsuccessful applicant under LECR 4.2(1). First, can the litigation be characterised as having been brought in the public interest? Secondly, if so, is there something more than the mere characterisation of the litigation as having been brought in the public interest? Thirdly, are there any countervailing circumstances which speak against departure from the usual costs rule?: Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) [2010] NSWLEC 59, 173 LGERA 280 at [13]; Hill Top Residents Action Group Inc v Minister for Planning (No 3) [2010] NSWLEC 155 at [39].
172 The following observations as to the answers to these questions are preliminary and subject to considering any contrary submissions that the parties may wish to put.
173 As to the first question, the litigation can be characterised as having been brought in the public interest for it was brought to uphold and enforce a public law statutory obligation and to ensure that the council's power was lawful. As to the second question, there is something more than mere characterisation of the litigation as having been brought in the public interest in two respects: (a) the extent of the public interest in the lawfulness of the council's proposed removal of these much loved Trees is considerable; and (b) the case raised issues of statutory interpretation of general importance, in particular the proper construction of s 88 of the Roads Act and cl 98(2) of ISEPP and their interrelationship with Parts 4 and 5 of the EPA Act. As to the third question, countervailing circumstances, the council foreshadowed a possible submission that certain costs were wasted due to some aspects of the applicant's conduct in respect of which it may seek costs whichever way the proceedings went. If this is to be pressed, I will provide the council with an opportunity to do so."
70In that case, no contrary submission was put by the council to my observations in [173]. Consequently, under r 4.2(1), no order for costs was made against the unsuccessful applicant.
71In the present case, in my view, the litigation can similarly be characterised as having been brought in the public interest for it was brought to uphold a public law statutory obligation of the general manger to implement a council resolution "without undue delay": s 335(1) LGA. Secondly, there is something more than mere characterisation of the litigation as having been brought in the public interest in two respects: (a) the extent of the public interest in the lawfulness of the council's proposed removal of these much loved trees is considerable; and (b) the case raises an issue of statutory interpretation of general importance concerning the existence and content of any obligation of the general manager of a council to give consideration to relevant matters when determining whether there is undue delay under s 335 of the LGA. Finally, there does not appear to be any countervailing circumstances which speak against departure from the usual principle that an undertaking in damages is required.
72Accordingly, I consider that r 4.2(3) is enlivened and that I should exercise my discretion in favour of the applicant. Thus, I do not require the applicant to give the usual undertaking as to damages.
73A number of other balance of convenience considerations were noted in the respondent's written submissions, which were not expressly referred to in its closing oral submissions. I have taken them into account but do not think they are weighty.
74In my view, the following countervailing balance of convenience considerations should be weighed against those referred to above:
(a)If the trees are destroyed they cannot be restored. They are over 70 years old, iconic and much loved by many. The planting of replacement trees is unlikely to restore the area to its former position for decades.
(b)An interlocutory injunction would be for a relatively short time because the Court is able to hear the matter on a final basis in less than three weeks, on 5 and 6 December 2011. The parties estimate that a final hearing will take a day plus.
(c)The strength of the serious question to be tried is relevant. In my view, the applicant's case is not strong. Nevertheless, I consider that is a less significant consideration where the period of interlocutory injunction is relatively short. It will be relatively short due to the ability of the Court to provide final hearing dates in less than three weeks time. That assumes that the proceedings do not resolve in the meantime because of the matter discussed at (d) below.
(d)An interlocutory injunction for a relatively short period would have the incidental effect of disposing of the great bulk, if not all, of the proceedings, including the claim for injunctive relief, if the Council were to consider the Mayor's motion concerning the Premier's offer, which it could lawfully do after 25 November 2011. The Mayor's motion, which would have required consideration of the Premier's offer, was ruled out of order on the basis that it was unlawful under s 372(5) of the LGA: see [ 23 ], [ 29 ], [ 30 ] above. The point of order was based on the proposition that the Mayor's motion could not be put forward within three months after the unsuccessful motion of 25 August 2011 to rescind the July 2011 resolution ie not before 25 November 2011. That is now only eight days away. Assuming that s 372(5) is an impediment to considering the Premier's motion before 25 November 2011, an interlocutory injunction would have the incidental effect of removing the impediment after that date. Senior counsel for the applicant said at an earlier interlocutory hearing that if the council considers the Premier's offer, then the applicant will no longer press for any injunctive relief, and that may well be the end of the entire proceedings: see [8] above. On that basis, if after 25 November 2011 the Mayor's motion were to be considered, even if it were to be defeated, or if the Premier's offer were otherwise to be considered, that would dispose of the bulk or all of the proceedings including the claim for injunctive relief.
75After weighing the various considerations, I conclude that the balance of convenience marginally favours the grant of an interlocutory injunction until final determination of the proceedings.