South Sydney City Council -V- Nettlefold Advertising Pty Limited & Anor [1999] NSWLEC 21

:- Discretion Delay Environmental harm KEY ISSUES: Public policy Hardship Utility Advertising sign

Discretion Delay Environmental harm LEGISLATION CITED: Public policy Hardship Utility Advertising sign

DATES OF HEARING: 07/03/1998; 02/04/1999; 02/05/1999

DATE OF JUDGMENT DELIVERY: 02/12/1999

Solicitors: Pike, Pike & Fenwick LEGAL REPRESENTATIVES: Mr S B Austin QC

Solicitors: Abbot Tout

On 27 August 1998, I made findings of fact in these proceedings, but I adjourned the proceedings for further hearing on the question of the exercise of the Court's discretion under s 124 of the Environmental Planning and Assessment Act 1979.

The proceedings concern an advertising sign erected on the roof of a building at 217 Oxford Street, Darlinghurst ("the premises"). I found that the respondents were not authorised to use the advertising sign in its present configuration. It is unnecessary to repeat in detail the full findings which I made, since these are set out in my judgment (see South Sydney City Council v Nettlefold Advertising Pty Ltd and Anor , 27 August 1998, unreported). For present purposes, however, the following facts are relevant:

· An advertising sign has existed on the premises since about 1935;

· In 1981, development consent was granted by Sydney City Council (the premises then being within its local government area) in respect of certain structural alterations to the advertising sign;

· The alterations comprised the cladding of the support structure, the fitting of external lights, and the installation of a more complex structure of supporting struts;

· That development consent was subject to a condition that it would lapse after a period of five years.

By its class 4 application, the council sought an order that the respondents remove the advertising sign from the roof of the premises. The question which now arises for determination is whether the Court, in the exercise of its discretion, should make such an order.

As was pointed out by Kirby P (as he then was) in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339, the discretionary power conferred on the Court by s 124 is wide and unfettered, and the Court is not limited in the circumstances which it may take into account in the exercise of its discretion.

However, a number of guidelines were enunciated by Kirby P in Sedevcic at pp 339 - 341 in the interest of achieving a generally consistent application of the law, and I have borne those guidelines in mind when considering the various factors relevant to the exercise of discretion in this case.

A significant factor in this case is the council's delay in bringing the proceedings (cf Sedevcic at 339).

The development consent lapsed in 1986, and as a consequence the right to use the structure in its present configuration also ceased at that time (see my judgment at p 6). The proceedings were commenced in November 1997, some 11 years later.

The explanation for that delay proffered by the council was that it was simply unaware until 1997 that the development consent had lapsed. The fact that the development consent relating to the advertising sign in this case had a time limitation came to light only when, in connection with a development application in relation to another advertising sign in the vicinity, a South Sydney Council officer, Mr M W Benson, undertook some research to see if a precedent for the area had been established. Mr Austin QC, who appeared for the respondents, is correct in his submission that this merely explains the delay but it does not detract from its significance.

Mr Benson's evidence was that South Sydney Council has no automatic call-up system which is triggered by the lapse of time and that it has insufficient staff resources to monitor or audit every advertising sign within the local government area. Nonetheless, there is an actual file in existence in relation to the advertising sign in the archives of the Sydney City Council, and South Sydney Council has virtually unrestricted access to that file.

In response to the significance of the delay in bringing the action, South Sydney Council raises two matters. First, it points to the fact that on 7 April 1997 South Sydney Council notified Mr Despot, the owner of the premises, of the breach of the statute by the continuing display of the advertising sign without development consent, and it gave a similar notification to the second respondent on 30 May 1997. In each case, it alerted the recipients that the advertising sign was permissible with development consent. Nevertheless, the respondents have not made a development application. Hence, in the submission of Mr Hawkes, for South Sydney Council, the significance of the delay on its part is mitigated by the respondents' own delay in failing to submit a development application.

Secondly, South Sydney Council claims that, in failing to bring proceedings, it has not been guilty of wilful negligence or incompetence. Its failure arose administratively, because there is no automatic call-up system, and the relevant records are not held by it. Mr Hawkes relied, by analogy, on the decision of Bignold J in Penrith City Council v Clarendon Group Services Pty Limited (20 May 1998, unreported) where the council's delay in taking enforcement action (which was caused, as his Honour expressed it at p 38, by "bureaucratic bungling or incompetence") was found to be insufficiently serious to lead to the Court withholding the relief there sought. However, it is important to note that, in that case, the Court took into account several other factors in the exercise of its discretion to grant a mandatory injunction. 12. It is hardly surprising that the respondents failed to lodge a development application. In its letter of 30 May 1997 to the second respondent, South Sydney Council stated that it would be "unlikely" that the council would grant development consent. Furthermore, in giving evidence on behalf of the respondents, Mr D Rath, the development manager of the second respondent, stated that the second respondent had obtained legal advice to the effect that it had a case for resisting the council's action.

Despite the two matters which South Sydney Council has raised, I am of the opinion that the delay in bringing proceedings remains a significant factor to be taken into account in the exercise of the Court's discretion.

Another factor to take into consideration is whether, far from having an adverse impact upon the environment or the amenity of the neighbourhood, the advertising sign is in fact part of the character and fabric of the locality, and has a beneficial effect, from a heritage point of view (cf Sedevcic at 339).

Evidence supporting such a view was given on behalf of the respondents by Mr R Staas, a heritage consultant and architect, by Associate Professor J G Toon, director of the Planning Research Centre at the University of Sydney, and by Dr R J Lamb, a consultant in landscape assessment and landscape heritage.

Mr Staas was of the opinion that the advertising sign has a landmark heritage value, being part of the urban fabric of Taylor Square for more than 60 years. Mr Staas' view was that the premises were located within the area generally described as Taylor Square, although located about 50 metres east of the intersection of Oxford and Flinders Streets. He agreed with the results of a study entitled "Taylor Square Urban Design Study" prepared by Wilkinson Candalepas & Associates Pty Ltd in which it was said that roof top media displays in Taylor Square have become intrinsic to its urban character.

Professor Toon's opinion was that the advertising sign, when viewed from Oxford Street, is part of a visual continuum, and can be viewed as an extension of the urban node of Taylor Square. He conceded that its current design was undesirable, in that it lacked integration with the premises themselves. Nevertheless, he did not regard it as a visual intrusion.

Dr Lamb considered that the advertising sign had a social value from a heritage perspective, based on the time it has been in existence, its visual isolation, its landmark qualities in the streetscape, the rarity of signs such as this in the locality now, and its long association in memory with Penfolds Wines, which was the neon display in the years following 1935.

Mr N Horiatopoulos is an architect employed by South Sydney Council as urban design co-ordinator. His opinion was that the advertising sign is an intrusive element in the skyline, that it is incompatible with the integrity of the lines of the existing buildings in the streetscape, and furthermore it is not part of the urban node of Taylor Square.

Further evidence for the council was given by Mr V Murphy, an urban design and heritage consultant. Mr Murphy took issue with Dr Lamb's assessment of the social heritage value of the advertising sign. Mr Murphy said that the social significance of an item depends upon "contemporary community esteem", which requires that the item be important for its associations with an identifiable group and crucial to a community's sense of place. In his opinion, there is no evidence to support contemporary community esteem. There is a memory of the original neon sign, but the removal of the current sign would not, in his opinion, be noticed by former residents and visitors to the area. He stated that it is not a particularly good example of its type, is not rare, and has lost most of its original interesting qualities. He considered that the location of the sign is the only historical element which persists, and it is the streetscape which is significant, not the sign.

In considering these matters, I have kept in mind the fact that the Court is concerned here with the exercise of its discretion to grant or withhold relief, not with an assessment of the merits of the advertising sign. It is not whether the sign in its location is good or bad on the merits, rather it is whether the sign impacts upon the environment or the amenity of the neighbourhood in such a way as to support an order for its removal. In this connection, I prefer the evidence of Mr Staas, Professor Toon and Dr Lamb. I accept that the advertising sign is part of the commercial character of the area, that it forms a continuum in the view to the east along Oxford Street, and that, by virtue of the length of time it has been there, it has some historical value, although I recognise that it is not the same sign as was originally built about 1935.

South Sydney Council contended that an important factor to take into account was the public interest in compliance with the law, and the council's action in enforcing a public duty imposed under the statute (cf Sedevcic at 339-340).

In Woollahra Municipal Council v Carr (1982) 47 LGRA 105, Perrignon J (at p 110) decided that the "… public interest which is involved in the prevention of continuing breaches …"outweighed considerations of financial hardship and the fact that the impact upon the amenity of the neighbourhood was minor. His Honour's view of the wider interpretation of public injury was quoted with approval in North Sydney Municipal Council v Ekstein & Anor (1985) 54 LGRA 440 AT 450.

Mr Austin QC submitted that both Carr and Ekstein were distinguishable, because in both those cases, the use being carried out by each of the respective respondents was prohibited under the relevant instruments, whereas in this case the use is one which is permissible with consent.

Despite Mr Austin's submission, I consider that the public interest in compliance with the law is a factor which I should weigh up in the exercise of the Court's discretion.

A submission was put by Mr Hawkes to the effect that not only is the present structure unauthorised, but an advertising sign of this nature is contrary to South Sydney Council's current policy. Mr Benson gave evidence about the criteria set out in South Sydney Council's Development Control Plan 1997 - Urban Design in relation to the environmental design of signs. However, the Development Control Plan does not amount to a council policy against advertising signs of this nature. Rather it sets out the criteria to be taken into account in the design and development process (see section 2 Part A). I do not, therefore, consider that the advertising sign is in itself contrary to a council policy.

In April 1997, the advertising sign came into the control of the second respondent as a consequence of its acquisition of the first respondent. A few months prior to that acquisition, the first respondent had entered into a lease of the "roof area and bracing" on the premises with the owner of the premises, Mr Despot. The lease was for a period of eight years at a commencing rental of $76,000 pa and thereafter increasing on a yearly basis.

In connection with its acquisition of the first respondent, a due diligence report was prepared by the second respondent's solicitors which included a report on the lease. The report noted that the permitted use under the lease covered the continuing use of the advertising sign, but no mention was made of any planning difficulties.

In these circumstances, the second respondent has entered into contracts for displays on the advertising sign until October 1999. Its projected income from the advertising sign is $300,000 per annum for the remaining period of the lease. Furthermore, the second respondent has entered into a memorandum of understanding with SOCOG for the provision of relevant signage for the Olympic Games, which denotes this advertising sign as suitable for that purpose, and which confers upon the second respondent a commercial advantage in securing sales of the advertising space to sponsors of the Games.

In addition to these commercial matters, Mr Despot gave evidence of the hardship he would suffer if the advertising sign was removed. The income which he receives from the lease of the advertising sign to the second respondent provides for him "an essential ingredient" in funding the mortgage on the premises and the adjoining premises, which he also owns. He claimed that the loss of income will affect the future operation of the restaurant he runs at the premises and the restaurant which he leases in the adjoining premises.

I accept that there is a degree of hardship in this case, although not to the extent which the second respondent and Mr Despot claimed. Some of the contracts for displays on the advertising sign were entered into by the second respondent after it had notification from South Sydney Council that the operation of the sign was unauthorised. Furthermore, I am unable to accept that the loss of income to Mr Despot will have the serious effect upon the restaurant business which he anticipates. But there is no doubt that the second respondent was entitled to assume, in the circumstances, that it had a source of income from the advertising sign, and there is no doubt that the loss of a rental income, currently about $81,000 per annum, will have an impact upon the personal finances of Mr Despot.

Mr Austin contended that another factor to be taken into account in the exercise of the Court's discretion was the doubt arising from the width of the order sought, and the lack of utility in requiring removal of the unauthorised structure.

Although South Sydney Council seeks an order requiring the removal of the "illuminated sky sign" on the premises, Mr Austin pointed out that the order can extend only to those parts of the advertising sign which are currently unauthorised, being the current advertising display (the billboard), the cladding, the lights, and perhaps some of the struts. But there would remain a supporting frame, which, in Mr Austin's submission, may have the benefit of existing use rights (see p 6 of my judgment) and which, in any event, is not in the control of the respondents. Accordingly, there would remain a supporting frame on the roof of the premises and against the skyline.

Mr Hawkes contended that the whole of the structure upon the roof of the premises was unauthorised, and the whole should be removed. This arises, he said, from the terms of the 1981 consent which has now lapsed. As I found in my judgment (at p 3), the consent expressly incorporated the "… existing A-frame on the roof …" The effect of those words, Mr Hawkes said, was that the 1981 consent covered the structure that was in place at that time, as well as the alterations to be made to it.

However, another aspect of utility is, in Mr Austin's submission, the present attitude of South Sydney Council. Shortly before the hearing commenced, a committee of the council had resolved to recommend development consent in respect of a sign of similar character and dimension upon premises at 191 Oxford Street, some 50 metres west of the premises the subject of these proceedings. Furthermore, according to the evidence of Mr Horiatopoulos, the Taylor Square Urban Design study was prepared in connection with a prospective (but not yet current) development application in respect of the existing sign over the Oxford Hotel at the corner of Oxford and Bourke Streets. Mr Austin submitted that these matters indicate a recent attitudinal change on the part of South Sydney Council, and its implacable opposition to advertising signs may have mellowed. The respondents were therefore prepared to undertake to the Court that they would lodge a development application for a replacement sign on the premises, and that, pending the determination of that application, they would comply with various suggested conditions relating to the current operation of the advertising sign. Upon that undertaking being given, the class 4 application should simply be dismissed.

I have carefully considered all the factors which I have outlined, and I have come to the conclusion that I should withhold the relief which South Sydney Council seeks.

It is not a question as to whether the advertising sign could be better integrated with the premises, or whether or not it has planning merit. It is a question of weighing up all the factors relevant to the exercise of discretion. One of those factors is environmental impact. As to that, I do not accept that the name "Taylor Square" is confined to the intersection of Oxford, Flinders and Bourke Streets, but rather I accept that the advertising sign is within the perimeter of the whole area loosely termed "Taylor Square", and as such it is part of the character of Taylor Square. The sign has historical and social value (based on what it originally was) and in its contemporary form is compatible with the commercial and restaurant character of Taylor Square).

Weighing up all the factors, I consider that the significant delay in bringing these proceedings, the lack of environmental harm or adverse impact upon the amenity of the neighbourhood, the questions about the utility of the order, and the financial hardship to the second respondent and to Mr Despot, outweigh the public interest in enforcing compliance with the law.

In accordance with that conclusion, my formal orders are as follows:

I HEREBY CERTIFY THAT THIS AND THE PRECEDING PAGES 10 ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.

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.