Sky Design and Concepts Pty Limited v Pittwater Council [2009] NSWLEC 129 | Case summary

JUDGMENT Introduction 1 His Honour: This judgment responds to a Notice of Motion filed by the applicant on 24 March 2009, seeking a review of a decision given by the Acting Registrar on 25 February 2009 on a Notice of Motion by the respondent that the applicant provide security for costs. 2 This "review" motion also seeks an order that these proceedings be transferred to the Supreme Court, and there are two other Notices of Motion presently before the court as well. 3 The applicant company is always represented by its sole director, secretary, and shareholder, its guiding mind and advocate, Mr Stephen May, who carries on business as a builder. The proceedings 4 The applicant's relevant DA (No.613/07) was refused by Council following the filing on 28 November 2007, of the applicant's class 1 appeal against its deemed refusal. That appeal was dismissed by Hoffman C on 7 May 2008 ([2008] NSWLEC 1170), and the applicant's s 56A appeal against that decision was dismissed by me on 26 November 2008 ([2008] NSWLEC 313). 5 In the s 56A appeal I found that the applicant company had failed to establish any error of law on the part of the Commissioner in his decision to dismiss the appeal. No appeal was lodged with the Court of Appeal against my decision. 6 Since November 2008 a huge volume of documents has been generated in this court - notices of motion, affidavits, written submissions, court transcript, attempts to subpoena the Council's General Manager on a question of law, and so on. 7 The large amount of court time spent on various types of litigious combat between these parties may well come to be seen as unacceptably wasteful of everyone's time and resources. 8 However, it is significant to note that none of the proceedings subsequent to the s 56A decision can result in the applicant obtaining consent for the alterations/additions at the heart of the dispute. Notices of Motion 9 Council lodged a Notice of Motion on 12 December 2008 seeking an order in its favour for the costs of the s 56A appeal ("the costs motion"), and that motion was listed for hearing on 27 April 2009. 10 A second Notice of Motion listed for hearing that day was the motion by the applicant dated 19 December 2008 to have the Court set aside the decisions of both Hoffman C and myself ("the set-aside motion"). 11 A third Notice of Motion, and the only one the subject of this judgment ("the review motion"), flows from a considered decision by the Acting Registrar on a Notice of Motion brought by the Council on 19 February 2009 seeking an order for security of costs in its favour in respect of the set-aside motion. 12 The Acting Registrar granted the Council's application for security on 25 February 2009, and the review motion filed on 24 March 2009 was listed before Biscoe J as the Duty Judge on 2 April 2009. It could not proceed on that date, as the Acting Registrar's reasons for judgment and the transcript of the hearing before her were not available. His Honour stayed some of the Acting Registrar's orders pending their review ([2009] NSWLEC 49). 13 When those transcripts became available to both parties on 27 April 2009, the matter was in my list for hearing, and the parties agreed that I should hear and determine the review motion first, to be followed in due course by the set-aside motion, and then lastly by the costs motion (together with any other costs issues then outstanding between the parties). 14 I unsuccessfully sought to have the parties accede to my making an order that the whole dispute now surrounding this refused development application go to mediation, and I reluctantly accept that a mediation is not a viable option, given their entrenched positions. 15 Mr May, on behalf of the applicant company, indicated that he was comfortable that I should deal with all outstanding Notices of Motion (T27.4.09, p20, LL5-7). Background 16 The existing development on this site was before the court as early as 2005, so Mr May has clearly been pursuing his objectives for the site for some years. The Court's records include orders made in proceedings 11044 of 2005 on 19 December 2005 and 5 October 2007, and one published judgment in that matter by Hussey C dated 28 September 2007. Both those relevant appeals by the applicant were allowed by the Court. As entered, the October 2007 orders refer on their face to No.220, but the December 2005 orders refer to No.222. The September 2007 judgment indicates that to be clearly and simply a typographical error. I have arranged for the archived file to be retrieved so it can travel with the current court file, pending the determination of the outstanding Notices of Motion. 17 DA613/07 sought approval for additions/alterations to the existing modest residential building, an addition intended to "complete" a four-storey house on land owned by Mr May's wife, Ivana Maria May, at No.220 McCarr's Creek Road, Church Point. It is the May family home. The only objector to the DA was Mr Rowan of No.222 McCarr's Creek Road. 18 In the course of his judgment dismissing the 2008 class 1 appeal, Hoffman C inferred that the issues working against an approval of the next stage of the applicant's project could be resolved by sensible negotiations among the company, the Council and Mr Rowan, Council having apparently rejected the subject application not because no exceptions are allowed to its indicative planning provisions, but because the applicant's current design is unacceptable because of its impacts. Whereas the existing development on the site has little impact on the premises at 222 McCarr's Creek Road, the proposal in DA 613/07 is thought to increase the level of impact substantially. 19 The evidence of the expert planner before Hoffman C indicated that it would be feasible to achieve some of the applicant's objectives with relatively minor modification of the proposal. 20 Regrettably, the dispute between the applicant (or at least, and in effect, Mr May) and the respondent Council has now inflamed to such a point that I cannot see any sensible negotiations taking place between them. 21 If the set-aside motion were to succeed, that would appear to leave standing the refusal by the Council of the applicant's DA, some compromise on which, if legal and possible, should be the focus of all concerned. However, Mr May's position would appear to be intractable (T27.4.09, p7, L9), and he will not consider submitting to Council a revised development proposal. 22 As I said in par [5] of my judgment on the s 56A appeal, "this project has quite a history before the Council, and Mr May has many complaints about (1) the way the Council has dealt with it; (2) the way the Council conducted these proceedings; and (3) the Commissioner's decision in his class 1 appeal". At [6] I noted that "Council has been prepared to entertain the building of a substantial residential project on this fairly confined and restricted site, but the company appears to have dealt with Council on an adversarial basis, and has declined to negotiate". At [13] I said that "many of Mr May's arguments on this appeal repeated factual and merits arguments he made unsuccessfully before the Commissioner, where he argued he and his company 'should be entitled' to do what they planned and desire on their valuable land. Clearly Mr May's intention in bringing this s56A appeal is to have the development application now determined in his company's favour by a judge of the court, or a 'higher authority' than Council or a Commissioner". 23 In an extraordinary reversal, Mr May now claims (T27.4.08 pp17, 18 & 22), that his development cannot be approved because it is really for a dual occupancy, which would appear to be prohibited by the applicable LEP. It seems that he recently gained this impression from informal inquiries of the Department of Planning. If that opinion is correct, the court wonders why is he pursuing these Notices of Motion with the stated determination to get his project approved, even though that cannot be an outcome of the proceedings? 24 Essentially, Mr May is now seeking damages/compensation from the Council for its alleged negligence in not refusing to consider his DA on the basis that it sought a prohibited dual occupancy in that it will establish "separate living accommodation" (see T27.4.09, pp17, 18 & 22). The decision to be reviewed 25 On 25 February 2009 (as recorded at [31] of the transcript of her judgment now on the court file) the Acting Registrar made the following orders:

(1) the exceptional nature of the jurisdiction to reopen and set aside, rendering the set aside motion reasonably unlikely to succeed, (2) Mr May's well documented resistance on behalf of the applicant company to any inquiry or notice to produce in respect of its financial position, there being no useful information available from the corporate regulator regarding the company's capacity to meet any order for costs, and (3) the facts that the company does not own the subject land, and that nett value is unknown, as it is subject to a registered mortgage. 33 There was some discussion at the hearing as to whether Mr May was actually refusing to produce the company's records, or just unable to produce them. His stated position certainly moved from declining to produce to claiming to have no relevant documents, and he appeared to be saying that he could not match his available material to the relevant dates nominated in the notice to produce. The Corporations Law does not exempt a company such as the applicant from keeping proper financial records even though there are exemptions from filing them. 34 During argument before the Acting Registrar, Mr May made the rather impromptu suggestion that he might personally guarantee the company's liability for costs, but the Council was not prepared to agree to that in the absence of proper material upon which to assess his capacity to pay, and the uncertainty as to whether he was offering his guarantee as an individual citizen or as a director of the company (T25.2.09, p10, LL21-42, and p11, L35-p12, L18). The power to review the Registrar's decision 35 Uniform Civil Procedure Rule 49.19 provides: "If in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit." 36 Uniform Civil Procedure Rule 49.20 requires the application for review to be made by Notice of Motion filed within 28 days of the date of the order challenged. 37 I reviewed and applied the authorities on such applications in Mir v Valuer General ("Mir") [2009] NSWLEC 15, especially Tomko v Palasty (No.2) [2007] NSWCA 369; 71 NSWLR 61. 38 It is not necessary for the applicant for review to prove an error of law; there could be changed circumstances or fresh evidence, and there could be an argument resting on the "interests of justice in the circumstances of the case". The court must be satisfied on review that the order (or direction etc.) challenged was "reasonable". Connell v Armidale City Council [1995] NSWLEC 110. I overturned the order in Mir in all the circumstances of that case. Consideration 39 Immediately after Mr May filed the applicant's set-aside motion (on 19 December) the respondent wrote to him (on 22 December) suggesting that it had no foundation, and would not succeed, and that, if successful and proven correct, the Council would seek an order for costs. It asked Mr May to provide some level of comfort that the company could meet such a costs order. It subsequently served on him a notice to produce. The notice was in no way onerous or oppressive, but Mr May challenged it on 12 February 2009. 40 On 18 February 2009, when he said he had no documents to produce, the respondent Council became concerned at the apparent lack of depth in the applicant's filed submissions, and decided to seek the security order. 41 Mr May continued to resist production of financial information, but made no substantive submissions, apart from suggesting that the respondent's actions always amount to a "denial of natural justice" and complaining about the motion's lateness ("12th hour" - see T27.4.09, p22). 42 The Acting Registrar granted the respondent's motion, and also ordered the applicant to pay a fixed sum of $2,500 in respect of the respondent's costs of appearances before her on 12, 18 and 25 February. 43 Making the security order was clearly reasonable in all the circumstances, and I agree with the Acting Registrar (par [22] of her judgment) that it will not "operate to prevent the applicant pursuing a reasonable claim". Mr May did not argue before me that the security order is oppressive. 44 This is entirely personal litigation with none of the elements of "public interest litigation" - see Teoh at [127]-[133]. Although he repeated his argument that the order for security is actually a "retrospective costs order", its true nature has been explained to him on several occasions, and it does not prejudge any question of costs which might arise after the set-aside motion has been determined. (Regrettably, Mr May persistently resists obtaining legal representation, and the court suspects he has not obtained any professional legal advice at all on his situation). 45 No grounds have been argued for any order to be made transferring the proceedings to the Supreme Court. All the motions brought since November 2008 come within the statutory jurisdiction of this court. Mr May may well decide to bring separate Supreme Court proceedings to pursue his rather unusual damages claim against the Council, but the current matters before this court should remain here. 46 The essence of the Acting Registrar's security order should remain, including its self-executing element, but I accept Ms Carpenter's submission that the self-executing dismissal of the set-aside motion should be expressly accompanied by an order for costs in favour of the respondent. That being so, I do not believe it appropriate that the period within which the bank guarantee should be obtained should be shortened to 48 hours as she submitted (T27.4.09, p40), even though the relevant order was not stayed by Biscoe J and should have been complied with some months ago. 47 The respondent has also asked for a further fixed-amount costs order in its favour, in respect of this Notice of Motion, and I consider that appropriate. Ms Carpenter asked for $6,275, which seems reasonable, but it includes the costs of the hearing before Biscoe J on 2 April. I consider that each party should pay its own costs of that day, so I will specify in the costs order an amount of $5,000. 48 The orders of the court will, therefore, be: 1. That the orders made by the Acting Registrar on 25 February 2009 and by Biscoe J on 2 April 2009 be vacated. 2. That the applicant's Notice of Motion of 24 March 2009 be dismissed. 3. That the applicant provide by 31 August 2009 security for costs of the respondent in the sum of $15,175 by way of unconditional bank guarantee in a form acceptable to the Registrar. 4. That the applicant pay the following costs to the respondent by 31 August 2009: (a) $2,500 in respect of the proceedings before the Acting Registrar on 12, 18 and 25 February 2009. (b) $5,000 in respect of the Notice of Motion of 24 March heard by Sheahan J on 27 April 2009. 5. That each party pay its own costs of the hearing before Biscoe J on 2 April 2009. 6. That, if the applicant fails to provide the security for costs as provided in Order 3 by 31 August 2009, the applicant's Notice of Motion of 19 December 2008 is dismissed with costs, such costs to be agreed or assessed according to law. 7. That the Notice of Motion of the respondent dated 12 December 2008 be stood over to the Registrar's call over list on Friday 18 September 2009, to be set down for hearing, in the absence of agreement being reached between the parties by that date on the question of the costs of the applicant's unsuccessful appeal under s 56A of the Land and Environment Court Act 1979. 8. That, if the applicant complies with Order 3 by 31 August 2009, its Notice of Motion of 19 December 2008 be included in the Registrar's call over list on Friday 18 September 2009 to be also set down for hearing.

Sky Design and Concepts Pty Limited v Pittwater Council

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