PARTIES: TYNAN and ORS v MEHARG and NEWCASTLE CITY COUNCIL

JUDGMENT OF: PRIESTLEY JA, HANDLEY JA, STEIN JA

VALIDITY OF BUILDING APPROVALS - breach of condition does not render building approval invalid - validity of amended approval - amendment to be substantially the same as original approval pursuant to s 106, Local Government Act 1993 - failure to comply with s 106 renders amendment invalid - breach of building approvals - no relevant development consent

DISCRETION - miscarriage in exercise of discretion - relevant factors in re-exercise of discretion

The appellants and first respondent own neighbouring properties in the Newcastle local government area. In October 1993, the appellants were granted development consent by Newcastle City Council (the second respondent) to build a second residence - a single-storey, one bedroom dwelling described as a `manager's residence'. Consent was granted on condition that the dwelling be built strictly in compliance with the details set out in the plans. The appellants were subsequently granted a building approval to erect the dwelling which was to be located 12.4 metres from the boundary.

The dispute between the parties arose from the appellants' failure to comply with the conditions of the 1993 building approval and a second building approval, granted in 1995, permitting alterations/additions to the existing building. The 1995 building application also described the dwelling as being 12.4 metres from the boundary. The dwelling had apparently been occupied by the appellant from some time in 1994 and had been built less than one metre from the boundary.

In September 1995, following a site inspection, the Council required the appellants to submit site plans and explain their failure to comply with the approved location of the building. As a consequence, the appellants applied to amend the building approval and for the first time proposed that the building be located less than a metre from the boundary. On 6 February 1996 this amendment was approved.

The trial judge held that the building approvals and the 1996 amendment were invalid and that, as the building was not erected in compliance with the development consent and building approvals, it was unlawful. He made a mandatory injunction requiring its removal.

The appellants do not challenge the failure to comply with the development consent and building approvals, however they submit that his Honour erred in finding the 1993 building approval invalid. In addition, they argue that the exercise of the discretion to grant relief miscarried.

In the cross-appeal, the first respondent submits, inter-alia, that the 1996 amendment is invalid pursuant to s 106 of the Local Government Act 1993 which provides that a Council may amend an approval if it is satisfied that the approval, as amended, will be substantially the same as the original approval.

Also on cross-appeal, the Council argued that the trial judge erred in holding that non-compliance with a condition of the building approval rendered the approval invalid.

1. The trial judge erred in holding that breach of a building approval renders the approval invalid, even where the breach is extensive and flagrant. To the extent that his Honour's finding of invalidity of the 1993 and 1995 building approvals was considered in the discretion exercise, he erred in law.

2. It was not reasonably open to the Council to conclude that the amended approval was substantially the same as the original approval. Accordingly, the amended approval of February 1996 was invalid.

3. The exercise of the discretion by the trial judge, based in part on the invalidity of the building approvals, miscarried. Relevant factors in the re-exercise of the discretion include the seriousness of the breaches, the harm to the environment, the hardship to the appellants and the need for orderly enforcement of public duties. When all factors are weighed up it is clear that the trial judge came to the right conclusion, if for partially the wrong reasons.

1. Declarations 1 and 2 of Sheahan J made 13 February 1998 set aside and the following declaration is substituted:

Declare that the purported amendment dated 6 February 1996 to the building approval No 95/1371 dated 21 August 1995 granted by the second respondent to Jason Tynan on behalf of the appellants was unlawful and is invalid.

5. The date for compliance with Order No. 4 of Sheahan J be amended by substituting 30 November 1998 for 30 April 1998.

6. Appellant to pay the 1st Respondent's costs of the appeal. No order as to costs of the cross-appeals.

The appellants (the Tynans) and the first respondent (Mr Meharg) are adjoining landowners at Lenaghans Drive, Black Hill within the local government area of the second respondent (the Newcastle City Council). They have fallen into dispute over the erection by the appellants of a dwelling house. Central to the litigation between them is the placement of the dwelling less than a metre from the common boundary, instead of 12.4m from it.

After a hearing in the Land and Environment Court, Sheahan J made a number of orders and declarations. The principal order in contention on the appeal is a mandatory injunction requiring the appellants to remove the building, erected in purported compliance with certain building approvals, by 30 April 1998. This date has been extended by the Land and Environment Court to 1 October 1998.

The fundamental submission on behalf of the appellants is that, in making the mandatory order, his Honour's exercise of discretion miscarried. After a brief summary of the salient facts I will return to the issue of the exercise of discretion.

On 15 October 1993 the Council granted development consent to the appellants to erect a detached single-storey, one-bedroom dwelling described as a `manager's residence'. It was to be a second residence on the land. The consent was conditional upon the dwelling being built `strictly in accordance with the details set out on the plans' dated 6 August 1993. The plans sited the building 12.4m from the common boundary. Piers to support the proposed dwelling were erected later in October 1993 (and before any building approval was obtained).

After receiving the development consent the appellants applied for building approval, which was granted on 1 December 1993 (the 1993 building approval). This appears to be an approval to erect a one-bedroom relocatable kit home, again according to the building plan, it was to be sited 12.4m from the boundary.

On 12 July 1995 the appellants lodged a further building application. This application involved a residential building of two storeys and sought approval for `alterations/additions to an existing building'. Approval was granted on 21 August 1995 (the 1995 building approval). Again, it was to the erection of ground and first floor additions to a building to be located 12.4m from the boundary.

After a site inspection in September 1995, the Council required the appellants to submit site plans indicating the building's position in relation to the boundary and an explanation for the non-compliance in its location. As a consequence, the appellants made an application in November 1995 to amend the building approval granted on 21 August 1995 to seek the addition of a verandah and development under the building. For the first time it was proposed that the building be located less than a metre from the boundary. This application was approved by the Council on 6 February 1996. Building works were, however, well and truly advanced prior to this date. Indeed, it appears that the premises were occupied from sometime in 1994.

It is necessary to pause to underline the fact that the original approval was to a small one-bedroom relocatable kit home sited 12.4m from the boundary, while the amended building approval of February 1996 is to a floor space almost twice the size, 2 storeys in height plus a verandah and located less than a metre from the boundary. The appellants had proceeded to erect the latter on the site. At its closest point, it is 0.67m from the boundary.

Sheahan J made three declarations. Number 1 declared that the 1993 building approval was invalid. Declaration 2 declared that the 1995 building approval and the amendment granted 6 February 1996 were invalid. Number 3 declared that the erection of the building was not in compliance with the development consent and building approvals and was unlawful. As mentioned, the court made a mandatory injunction requiring the removal of the building. The appellants do not challenge declaration number 3. They do, however, submit that the building approvals are not invalid. The first respondent concedes that declaration number 1, regarding the building approval of 1 December 1993, is not invalid and consents to it being set-aside. Miss Blackman, Counsel for the first respondent, nonetheless submits that the 1995 building approval and its amendment in February 1996, are invalid.

The concession by Mr Davison SC, on behalf of the appellants, that the building which has been erected lacked the necessary development consent means that the essential question for the court to address is whether the exercise of the discretion to grant relief miscarried.

Leaving aside the requirements of cl 16 of the relevant local environmental plan, with which we need not concern ourselves, it is important to understand that the erection of a dwelling on the land required both development consent (under the Environment Planning and Assessment Act 1979 ) and building approval (under the Local Government Act 1993 ).

Whatever else may be the fact, what is readily apparent and conceded by the appellants, is that they did not have development consent for the building that they purported to erect. It follows that, even assuming the lawfulness of the various building approvals, the appellants' erection of the dwelling was in breach of the Environmental Planning and Assessment Act. This fact inevitably leads to the need for the exercise of the discretion as to whether to grant or withhold relief.

Sheahan J held that the building approvals were invalid. He then had to exercise the discretion to grant or withhold relief. In exercising that discretion it is clear that he must have taken into account his decision on their invalidity. There were undoubtedly substantial breaches of the 1993 and 1995 building approvals. What was built was simply not in compliance therewith. In particular, the building was erected within a metre from the boundary instead of 12.4m. But breach of an approval does not lead to its invalidity. To the extent that his Honour so held, he was wrong. This appears to be conceded by Miss Blackman on behalf of the first respondent. The first declaration made by his Honour should therefore be set aside.

To the extent that his Honour's finding of invalidity of the 1993 and 1995 building approvals was considered in the discretion exercise, his Honour erred in law.

The question of validity of the amendment to the 1995 building approval is not so obvious. It is plain that the 1995 building approval could not be acted upon by the appellants in the absence of a development consent, which they did not have. Without the amendment, the building was constructed in clear breach of that building approval, viz. not 12.4m from the common boundary but very close to it. Moreover, it was erected without the required development consent. These breaches are admitted. It seems that his Honour considered the breaches so substantial that they vitiated the building approvals. This cannot be correct. The approvals cannot be rendered invalid by breach, however extensive and flagrant that breach may be.

As I have mentioned, the amendment to the 1995 building approval in February 1996 needs to be examined. In a notice of contention filed with the cross-appeal, the first respondent contends that the amendment is invalid because it did not comply with s 106 of the Local Government Act. Under that provision the Council may amend an approval if it is satisfied that the approval, as amended, will be substantially the same as the original approval (s 106(3)(a)). After some hesitation, Miss Blackman pressed the contention. She submits that the original building approval of 21 August 1995 was to the erection of a building and additions located 12.4m from the boundary. The amendment proposed the location at less than one metre from the boundary, as well as other changes to the building form. It was not reasonably open to the Council to conclude that the approval as amended will be substantially the same as the original approval. Such a finding would be legally unreasonable. I agree. Approval for the building to be located within a metre from the common boundary, in the circumstances of this case, cannot be seen to be substantially the same as the 1995 approval for the building to be located 12.4 metres from that boundary. It is plainly very different in substance and effect. It was simply not open to the Council to approve the amendment under s 106.

It follows that the amended approval of 6 February 1996 is invalid. This is an important factor in the exercise of the discretion because it means that all of the lawful approvals which the appellants had were conditioned on building 12.4m from the boundary, and no closer.

Because the exercise of discretion was premised in part on invalidity of all building approvals, it is clear that it miscarried. It is difficult to know what part these errors took in his Honour's exercise of discretion. It is, however, apparent that the court is in as good a position as the trial court to re-exercise the discretion. Given the history and subject matter of the proceedings, it would be inconvenient and costly to send the matter back to his Honour. Accordingly, I am satisfied that it is appropriate that this court exercise the discretion afresh. I say this conscious of the strictures of Kirby P expressed in ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 82B.

The guidelines for the exercise of the discretion are helpfully analysed in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 and Fat-Sel, both of which were referred to by Sheahan J. While acknowledging the width of the discretion, a number of factors are relevant to be considered. These include:

* The breaches of the law. The carrying out of development without consent where that is required, and the clear and serious breaches of the 1993 and 1995 building approvals in constructing the building up against the boundary instead of 12m away.

* These breaches were no mere technical breaches of the law. In this regard, one must compare what was actually built with that which was granted development consent in 1993.

* The hardship and other matters personal to the appellants. These were discussed by Sheahan J at Red Book 88.

* The matters personal to the first respondent, discussed by his Honour at Red Book 90.

* The harm to the environment generally. His Honour found this was `not great'.

* Whether or not the appellants were deliberately flouting the law? His Honour found that this was a possibility but did not make any definitive determination.

* Whether any injunction should be softened or mollified by suspending its operation in order to allow the appellants the opportunity to make fresh applications to the Council to regularise the situation. This was rejected by Sheahan J and, I think, rightly so. That the building had been erected in a location where it was not permitted was known to the appellants from around July 1995. They had more than ample opportunity from that time until today to make the necessary application for development consent and building approval. For whatever reason, they have not done so. The practice of the Land and Environment Court, if an application for consent or approval is made before Class 4 civil enforcement proceedings have been heard, is to defer those proceedings until the `merits' application is determined. Even since the judgment by Sheahan J on 13 February 1998 the opportunity has been available to the appellants, which they have chosen not to pursue. In my opinion, little weight should be given to this aspect. In any event, the stay granted by Sheahan J, which has been extended to 1 October 1998, has, in effect, suspended the order for almost 8 months.

* Also relevant to the discretion is the `orderly enforcement' of a `public duty' to comply with the requirements of planning laws (Sedevcic at 339 - 340). Another way of putting this is that there is a public interest in upholding the law and seeing that it is obeyed. As Kirby P said in Sedevcic - `Unless this is done, equal justice may not be secured. Private advantage may be won by a particular individual which others cannot enjoy', (at 340 A). See also Wilson v Iron Gates Pty Limited (Land and Environment Court, unreported, 2 December 1996).

Balancing the discretionary factors enumerated above leads me to conclude that relief should be granted to the first respondent and that the appellants should be ordered to remove the building erected without development consent and in breach of the 1993 and 1995 building approvals. The most important factors to be weighed are the seriousness of the breaches, their continuing nature (unless remedied), the hardship to the appellants, the minor harm to the environment and the need for orderly enforcement of public duties. In my opinion, the weighing exercise falls heavily in favour of making an order remedying the breach. This means that Sheahan J's conclusion was correct even though he erred in law in holding that the 1993 and 1995 building approvals were invalid and in taking such invalidities into account.

With the exception of setting aside declarations 1 and 2 made by his Honour, and substituting a declaration that the amendment to the 1995 building approval, dated 6 February 1996, is invalid, the appeal should be dismissed. A fresh date for compliance with the mandatory injunction is necessary. The date should be amended to two (2) months from today. The cross-appeal of the first respondent should be dismissed. The cross-appeal of the Council in relation to the 1993 building approval should be upheld. The appellants should be ordered to pay the first respondent's costs of the appeal. There should be no order as to the costs of the cross-appeals of the first respondent and second respondent.

1. Declarations 1 and 2 of Sheahan J made 13 February 1998 set aside and the following declaration is substituted:

Declare that the purported amendment dated 6 February 1996 to the building approval No 95/1371 dated 21 August 1995 granted by the second respondent to Jason Tynan on behalf of the appellants was unlawful and is invalid.

5. The date for compliance with Order No. 4 of Sheahan J be amended by substituting 30 November 1998 for 30 April 1998.

6. Appellant to pay the 1st Respondent's costs of the appeal. No order as to costs of the cross-appeals.