Seven Network Ltd v QIC Pty Ltd

Development consent for building works 9On 20 December 2011, the City of Sydney Council (the Council) granted development consent for works in and around the Building. The development for which consent was granted is described as being: "Alterations and additions to entrance levels of existing commercial building, including slab infill, stair and lift alterations and new Phillip Street and Elizabeth Street entrances and street awnings." 10The development consent granted on 20 December 2011 was modified on 11 January 2012 (the development consent). In its modified form, condition (32) is central to the present application. It is found in Sch 1C of the development consent which identifies those conditions applicable "during construction/prior to occupation/completion". Condition (32) relevantly requires that: "(a)all work, including demolition, excavation and building work must comply with the construction noise criteria contained within the City of Sydney Code of Practice for Construction Hours/Noise 1992 for each time zone during which any works are carried out and Australian Standard 2436-2010 Guide to Noise Control on Construction, Maintenance and Demolition Sites'. ... (c)all external building works, including demolition, excavation and construction work, and loading/unloading of bulky goods and equipment must only be carried out between the hours of 7.00am and 7.00pm on Mondays to Fridays inclusive, and 7.00am to 5.00pm on Saturdays. These are not to be undertaken on Sundays or Public Holidays. (d)notwithstanding (c) above, internal works within the building and internal deliveries within the loading dock, with no trucks or vehicles standing or queuing on surrounding streets, may be carried out 24 hours a day, seven days a week. ...". 11Seven apprehends that noise proposed from works to be undertaken on 25 August will breach this condition. Seven's apprehension in that regard is founded upon the level of noise experienced from activities carried out in and around the Building in the recent past, but particularly activities that took place on Saturday 18 August.

Evidence 12The evidence before me was essentially contained in two affidavits, the first of which was sworn by Justine Munsie on 24 August 2012. Ms Munsie is a partner in the solicitor's firm representing Seven. Her evidence was based upon information and belief obtained from employees of her client as well as copies of email communications passing between those employees and those representing QIC. It is upon her evidence that I rely in setting out both the facts to which I have already referred, as well as those to which I will shortly refer when addressing past noise being created by some of the building works being undertaken on behalf of QIC. 13The other evidence before me was an affidavit sworn on 24 August by Steven Cooper, an acoustical and vibrations consulting engineer. Mr Cooper had carried out noise measurements from within the Seven tenancies and made assessment of the sound levels of equipment being used or intended to be used for the carrying out of the building works in and around the Building.

Representation at the hearing 14These proceedings were not commenced until about 5.50pm on Friday 24 August when Seven filed its summons and present notice of motion for an interlocutory injunction. Early in the morning of that day, Seven had written to the agent responsible for managing the Building on behalf of QIC, indicating that unless an undertaking was given by 10.00am that there would be no excessive noise or vibration from building works proposed for the following day, an injunction would be sought. A response was received prior to 10.00am from solicitors acting on behalf of QIC declining to give such an undertaking and requesting that they be notified should an application for injunction be sought. 15Such notification was given late in the afternoon of 24 August, as a result of which QIC was represented at the hearing before me by Mr L V Gyles SC. He indicated that he had only been provided with copies of the summons, notice of motion and affidavits relied upon in support of that notice of motion, shortly before the hearing commenced. 16Mr C W McEwen SC appeared on behalf of Seven. He informed me, on instructions, that at about 5.00pm his solicitor had notified Built of the intention to commence proceedings and seek interlocutory relief at about 6.00pm. As related by Mr McEwen, the response from Built's representative was that the company intended to attend the hearing but first proposed to consult with its solicitors, nominated as Gadens Lawyers, a Sydney city law firm. Notwithstanding this indication, there was no appearance by or on behalf of Built when the matter was called for hearing. 17Accordingly, I adjourned the hearing for a short time, with the request that further contact be made with Built or Gadens to determine whether either intended to appear on the hearing for interlocutory relief. When the hearing resumed, I was told that contact had been made with a partner in the law firm of Gadens who indicated that he was acting for Built, but that his client would not be represented before me that evening as Built had not been served with any Court process. Accordingly, the hearing before me proceeded on an ex parte basis as against Built.

History of noise complaint 18The evidence of past complaint concerning noise from the building works is essentially founded upon the exchange of emails between employees of Seven and Gillian McAllister, described as the General Manager, Colonial Centre for Colliers International, being the entity having apparent responsibility for management of the Building on behalf of QIC. A number of email communications directed to Ms McAllister appear to have been copied to the State Property Authority but the latter indicated that as the works were being undertaken by or on behalf of QIC, the concerns of Seven needed to be addressed to QIC, through its agent Colliers. 19The email evidence indicates that in April last a complaint was made to QIC as to the impacts that noisy works were having upon the conduct of activities within the Seven tenancy areas. A meeting was held between representatives of the parties and QIC's head of commercial asset management gave an assurance that the noise complaints were being taken seriously and noisy works would be confined to nominated hours. Notwithstanding that assurance, complaints were made thereafter that "jackhammering was louder than ever"; noise levels were so high that staff could no longer work and had to leave the Building and loud noise, including jackhammering, was being undertaken outside the hours nominated for work of that kind. 20Complaints from Seven to Ms McAllister are recorded into June 2012. Those complaints were directed to vibrations, said to be felt in sections of the Building from the operation of bobcats being used to break up concrete adjacent to the Building. It was claimed that although an indication was given that rubber attachments would be used to break up pavement adjacent to the Building, such an implement or implements did not appear to have been used. Reference is made in an email of 5 June 2012 when a staff member of Seven is reported to have said, "when I looked out, it seemed as if the guy in the bobcat was lifting large slabs from the footpath - then dropping them to smash them into smaller pieces. Several staff noticed actual vibrations in their desks." 21Reference to work external to the Building seems to be related to a requirement said to have been imposed upon QIC by the Council to replace the existing paving with new paving around the Building at its three street frontages. 22However, the events that are said by Seven to have triggered the present application for interlocutory relief are those that occurred on Saturday 18 August. 23On that day, staff of Seven were working in the newsroom located within the tenanted premises. Building work was being undertaken immediately outside the area of the newsroom. That work initially involved the use of a hydraulic hammer attached to an excavator and was followed by the operation of hand held jackhammers. According to the email record, the noise from that excavation resulted in: (i) a planned conference call having to be delayed because audible conversation by telephone was not possible; (ii) conversation among those sitting in the newsroom in close proximity to each other was not possible for periods during the day; (iii) a planned "voice over" recording could not be undertaken in a sound booth until there was a break in excavation noise which resumed after that break. This disruption to the activities of Seven occurred from before 9.26am until after 1.38pm when the activity was stopped. 24A short video recording said to show this work being undertaken was made by a Seven employee. Unfortunately, that video, although tendered in evidence, could not be played on the video system in the Court room available to me on 24 August. 25These complaints by employees at Seven were conveyed to Ms McAllister during the morning of 18 August. She, in turn, contacted Mr Amos, the site manager employed by Built, who stated that nothing was being done that differed from recent works undertaken at or in the vicinity of the Building. Further, what was being done was in accordance with the work schedule. He acknowledged that jackhammers and a "small excavator" were being used "to remove paving above the data room". 26Mr Amos recorded in his email to Ms McAllister that he had visited Channel Seven that morning and explained works being carried out to "IT guys and security". 27The noise impact upon Seven's activities that are said to have occurred on 18 August were the subject of further emails and correspondence between 20 and 24 August. On Monday 20, Ms McAllister explained the need for the jackhammering work that had been undertaken on Saturday. She also explained why she believed the noise that had been experienced may not have travelled "to the street per other areas". Ms McAllister further indicated to Seven that, weather permitting, work would be completed over the next three Saturdays. 28On Monday 20 August, solicitors acting for Seven advised the Council of the problems being occasioned by the construction work in and around the Building. They sought to have the Council take action to ensure that building work was undertaken in accordance with the development consent. By their letter, Seven's solicitors also advised the Council that noise measurements had been carried out on behalf of Seven which indicated that work was not being carried out in accordance with the development consent. 29On Tuesday 21 August, Mr D Porter from Seven sent an email to Ms McAllister in the following terms: "Thanks for your response. Given the involvement of Council now it will be apparent to Colliers, the building owners, our lessor and the Builders that Seven will no longer tolerate any disturbance to its operations. Seven will now work cooperatively with Council to ensure the site fully complies with the obligations under the development consent and the lease. In any case we will reserve our rights. It is apparent that our attempts to be reasonable have not been treated seriously." 30On Thursday 23 August, Ms McAllister forwarded to Mr Porter a works schedule "for the period Friday 24 August - Monday 3 September." Her email indicated that external paving works would be commencing from Saturday 25 August, that being the area "in which additional measures are in place for aesthetic purposes along with (further) restricted working hours during the week days." It was also indicated that "Area 5 work" would be continuing over the weekend. 31The works schedule to which Ms McAllister's email referred included works proposed to be carried out between 9.00am and 2.00pm on Saturday and included a section headed "(NOISY WORKS)". The relevant part of the Schedule is that which is Attachment A to the orders made by me on 24 August and is also attached to this judgment. It will be seen from the Schedule that equipment to be used for some of those works is described and includes "jackhammer", "excavator with ripper + concrete saw + hammer attachment" and "hammer drill". Areas 5 and 9 referred to in that email are identified in the plan that was Annexure B to the orders that I made and which is also annexed to this judgment. 32In order to complete the chronology of events I should record that on Friday 24 August the general counsel for the Council did respond, by email, to the letter sent to the Council earlier in the week by the solicitors acting for Seven. The response indicated that the Building and its environs had been visited by Council officers on Wednesday 22 and Thursday 23 August who "saw no evidence of any breaches of the relevant consent." That is unsurprising as the works of which complaint was made by Seven were not being undertaken at that time. Given the prospect that further work during the coming weekend might give rise to problems of the kind that had arisen during the weekend of 18 August, the Council's general counsel indicated that City rangers would be inspecting the site during the course of the weekend.

Noise evidence 33As I earlier recorded, affidavit evidence from Steven Cooper, an acoustical engineer, was read. Background noise measurements undertaken by Mr Cooper in an area described as the "Channel Seven façade in Martin Place on the Phillip Street end during the day", in the absence of construction noise, were recorded to be in a range of 52 dB(A) to 61 dB(a). These measurements were undertaken by Mr Cooper in both April and again in early August 2012. 34In his evidence, Mr Cooper also identified the sound pressure levels of various items of equipment as those levels are identified in Australian Standard 2436-2010. That is the Australian Standard referred to in condition (32) of the development consent. Jackhammers are reported as having a sound pressure level at 10m of 93 dB(A), pneumatic hand tools as having a level at a similar distance of 88 dB(A), a concrete saw of 89 dB(A) and a front end loader of 85 dB(A). 35The Council's Code of Practice for Construction Hours/Noise 1992, also identified in condition (32) of the development consent, stipulates the noise criteria which is not to be exceeded at various times during the day. For the period between 8.00am and 5.00pm on Saturday, the noise criteria is identified as being "background level + 5 dB(A) + 5 dB(A) to be determined on a site basis". Taking into account the requirements of this Code and the noise level from equipment used on 18 August and expected to be used on 25 August in accordance with the Schedule of Works, Mr Cooper expressed the opinion that the Council's Code requirements for noise criteria could not be met. A comparison of the figures that had been identified are referred to in supporting that opinion.

Serious question to be tried 36Seven brings its proceedings pursuant to the provisions of s 123(1) of the Environmental Planning and Assessment Act 1979 (EPA Act). It seeks to restrain a breach of the EPA Act by asserting an apprehended breach of condition (32) of the development consent granted for alterations and additions to the Building. A breach of the EPA Act includes a threatened or apprehended contravention of a development consent: s 122 EPA Act. 37On the untested evidence adduced before me for what, in effect, has been an ex parte hearing, I am satisfied that Seven has an arguable case for apprehended breach of the development consent. The material supporting that conclusion is fundamentally the evidence of Mr Cooper coupled with the experience had by employees of Seven on Saturday 18 August. In accordance with authority, I do not need to be satisfied that Seven will succeed at a final hearing of the proceedings. 38I do not understand Mr Gyles to contend that there is no serious question to be tried. Rather, it is his submission that the balance of convenience does not favour the grant of an interlocutory order. It is to that matter that I now turn.

Balance of convenience 39In addressing the balance of convenience, I record that Seven offered, through Mr McEwen, the usual undertaking as to damages in the event that an interlocutory order was granted. QIC accepted that Seven had the capacity to meet any claim for damages should the occasion arise to enforce the undertaking that had been given to the Court. 40Without intending disservice to the careful submissions made by Mr Gyles on behalf of QIC, the grounds for opposing the grant of any interlocutory order were essentially twofold. First, he submitted that damages were an adequate remedy should breach be established. Second, he submitted that the delay in bringing the proceedings was so great that it was fatal to Seven's application. 41The adequacy of damages is, as a matter of general principle, an important consideration when determining an entitlement to an interlocutory injunction (Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153). However, damages may not be an adequate remedy in all proceedings, such as those of the present kind in which civil enforcement is sought under s 123 of the EPA Act (Tegra (NSW) Pty Ltd v Gundagai Shire Council [2007] NSWLEC 806; (2007) 160 LGERA 1 at [26]). The remedies available to Seven under s 124 do not include an award of damages. I also observe that the potential disruption to a major television network, should that occur, may well present difficulty in the calculation of damages likely to be suffered (Donnelly v Amalgamated Television Services Pty Ltd (1998) 45 NSWLR 570 at 575). 42In the context of available alternate remedies, Mr Gyles submitted that an abatement of rent by reason of the operating difficulties that might occur would be an appropriate remedy available to Seven. However, a difficulty arising from this submission is the fact that the lease under which a claim for abatement might arise is not a lease to which QIC is a party. The building work that is the source of Seven's proceedings is not work for which the sublessor to Seven is responsible. Problems may therefore arise in claiming that the sublessor is responsible for breach of its covenant for quiet enjoyment. The fact that such a difficulty exists militates against this submission as founding refusal of Seven's application. 43The issue of delay in bringing these proceedings has occasioned me considerable concern. Mr Gyles rightly points to the evidence of complaints by Seven to QIC and, indirectly to Built, arising from alterations and additions being carried out to the Building. These complaints date back to April 2012. Further, he submits that even if the trigger for the present application was an apprehension that the disruption to activities of Seven experienced on Saturday 18 August would be repeated over the weekend of 25 August, proceedings ought to have been commenced on Monday 20 August, not in the evening of Friday 24 August. Mr Gyles also pointed to the difficulty occasioned by delay in notifying the intention to seek the present order resulting in the absence of Built from the present hearing. He submitted that considerable difficulty may be occasioned to Built in notifying its subcontractors that work planned to commence less than 12 hours from the making of any order could not proceed. 44Finally, Mr Gyles stated that the contract with Built for the work being undertaken pursuant to the development consent was a 20 week contract, 17 weeks of which had already passed. Thus, it was submitted, it was too late to stop the work being completed. 45Although there is substance in these submissions, ultimately I was not persuaded that they weighed against the grant of an injunction restraining work on an interim basis for the weekend of 25 August. 46Clearly, the evidence did demonstrate complaint about the Building activities and their impact upon Seven extending over some months. Further, Seven had received two noise assessment reports from Mr Cooper that indicated a likely breach of condition (32) of the development consent. However, the evidence also shows that Seven had endeavoured to negotiate a resolution of its concerns in a commercially understandable manner. 47Moreover, the evidence left me with the impression that until the acute interference occasioned to Seven's commercial activities on 18 August, it was exercising a degree of tolerance and restraint in the expectation that intrusive building activities would be constrained. Having had the experience of 18 August, Seven's first response was an appeal to the statutory regulator, namely the Council, for assistance in controlling what Seven asserted to be work conducted in breach of the development consent. 48No such assistance was in the offering when, on Thursday 23 August, QIC, through Colliers, notified Seven of the works proposed for the ensuing weekends. Understandably, the description of those works as "NOISY WORKS", together with the equipment identified proposed to be used, caused Seven to apprehend that the carrying out of those works would have a consequence similar to that experienced on the previous weekend. Thereafter, the undertaking sought by Seven from QIC as to the manner in which those works would be performed was not provided in terms offering assurance that noise levels would be contained within the limits imposed by condition (32) of the development consent. 49While Seven could have moved with a little more urgency than it did during Friday 24 August, particularly in notifying Built that proceedings were to be commenced and the present application made, the delay in question is really to be measured in hours rather than days. The events of the week leading up to the present application being brought demonstrated that, regrettably, commercial negotiation had apparently been exhausted and protection of the status quo was necessary until the impasse reached between the parties could be fully debated. The status quo for present purposes, is the limitation upon work having the potential to breach condition (32) of the development consent. 50Recognising the potential prejudice to both QIC and Built, I concluded that a limited period of restraint was appropriate (cf International Finance Trust Co Ltd v NSW Crime Commission [2009] HCA 49; (2009) 240 CLR 319 per Heydon J at [149]). The evidence of background noise and impact from machinery identified as likely to be used in works to be undertaken on 25 August was limited to the street frontages of the tenanted premises, generally at the corners of the Building between Martin Place, Phillip Street and Elizabeth Street. These were areas identified as areas 5 and 9 on a plan that accompanied the works schedule provided on 23 August. It was therefore appropriate that the restriction upon work able to be undertaken in accordance with the works schedule be limited to those areas. 51For these reasons, I made the following orders:

1. Upon the applicant, by its counsel, giving the usual undertaking as to damages the respondents by themselves, their employees, agents, contractors and sub-contractors be restrained until 12.00 noon on Monday 27 August 2012 from carrying out development at or in proximity to the Building known as 52 Martin Place, Sydney, being that development comprising works proposed to be carried out between 9.00am and 2.00pm on 25 and 26 August 2012 and being the works described as "NOISY WORKS" in the Schedule of Works provided by Gillian McAllister to David Porter on Thursday 23 August 2012 a copy of which Schedule is attachment A to these orders but confined to such works as are to be carried out in areas 5 and 9 identified on the plan that is attachment B to these orders.
2. Order that service of these orders upon the second respondent be effected by: (a) telephone notification from the solicitor for the applicant to the solicitor acting for the second respondent said to be engaged in the firm of Gadens Solicitors, Sydney, such notification to be given by 9.30pm tonight. (b) telephone notification from the solicitor for the applicant to John Amos, site manager for the second respondent on mobile telephone number 0401691330, that notification to be given by 10.30pm tonight. (c) by emailing a copy of this order to John Amos at email address johnamos@built.com.au by 10.30pm tonight.
3. Stand over the applicant's notice of motion to 10.00am on Monday 27 August 2012.
4. Costs reserved.

Annexure A and B 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: 04 September 2012