Land and Environment Court New South Wales

• Medium Neutral Citation: Kogarah City Council v Armstrong Alliance Pty Ltd (No 2) [2013] NSWLEC 32
• Hearing dates: 15 March 2013
• Decision date: 15 March 2013
• Jurisdiction: Class 4
• Before: Pepper J

Decision

See orders at [28]

• Catchwords: Declarations and Injunctions: development not in conformity with consent - inconsistency between plans as approved and plans as certified - consent declaration - utility of making declaration - submitting appearance by certifier - costs - costs awarded against certifier
• Legislation Cited: Environmental Planning and Assessment Act 1979, ss 109F(1)(a), 121B,; Environmental Planning and Assessment Regulation 2000, reg 145(1)(a); Kogarah Local Environmental Plan 1998, cl 7
• Cases Cited: Bankstown City Council v Sfinarolkis [2011] NSWLEC 179; Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330; Hill Top Residents Action Group Inc v Minister Administering the Sporting Venues Authorities Act 2008 (No 4) [2011] NSWLEC 6; Kogarah City Council v Armstrong Alliance Pty Ltd [2011] NSWLEC 260; Armstrong Alliance Pty Ltd v Kogarah City Council [2012] NSWLEC 1151; Armstrong Alliance v Kogarah City Council [2012] NSWLEC 1360
• Category: Principal judgment
• Parties: Kogarah City Council (Applicant); Armstrong Alliance Pty Ltd (First Respondent); Lyall Ernest Dix (Second Respondent)
• Representation: Mr A M Pickles (Applicant); Mr S B Nash (First Respondent); Mr E Gough (Second Respondent) (Solicitor); Pikes Lawyers (Applicant); One Group Legal (First Respondent); Storey & Gough Lawyers (Second Respondent)
• File Number(s): 41242 of 2011

Ex Tempore Judgment

An Accredited Certifier Certifies Construction Inconsistent with the Development Approval

1 Once again before the Court is an application for declaratory relief sought by a council occasioned by the unlawful certification by an accredited certifier of a development that is markedly different to the approval granted by that council. Regrettably this is becoming an all too common occurrence in this Court. It must not be tolerated. It brings the certification system into disrepute and undermines the planning regime in this State.

2 Indeed, the unlawful conduct by the certifier in the present case is so egregious that the application has been able to be resolved by consent between the parties. This includes the certifier agreeing to a costs order against him notwithstanding that he has filed a submitting appearance.

3 Because one of the orders sought is a declaration that the construction certificate issued by the second respondent, Mr Lyall Dix, the principal certifier at Dix Gardner Pty Ltd, dated 25 May 2011 and numbered 137/11, is invalid and of no effect, the Court must be satisfied that it is appropriate to exercise its discretion to grant this relief, having regard to the evidence before the Court. The Court cannot, absent this satisfaction, simply grant declaratory relief by consent (Bankstown City Council v Sfinarolkis [2011] NSWLEC 179 at [3] and the authorities referred to thereat and Hill Top Residents Action Group Inc v Minister Administering the Sporting Venues Authorities Act 2008 (No 4) [2011] NSWLEC 6 at [12]-[14]).

4 It is first convenient to turn to the factual background giving rise to the Class 4 proceedings. From this background both the utility and the reasons for making the consent orders, including the granting of declaratory relief, become apparent.

The Council Initially Seeks Urgent Interim Relief

5 The proceedings started with a claim for interim relief by the applicant, Kogarah City Council ("the council"), before Preston J as duty judge (Kogarah City Council v Armstrong Alliance Pty Ltd [2011] NSWLEC 260). The injunctive relief was sought against the first respondent, Armstrong Alliance Pty Ltd ("Armstrong") in relation to the carrying out of development at 19 Elizabeth Street, Allawah, ("the premises") otherwise than in accordance with development consent 242/06 granted on 16 November 2006 ("the consent").

6 At the interlocutory hearing, Armstrong, by its solicitor, gave an undertaking in the terms of an order that the council had issued to it pursuant to s 121B of the Environmental Planning and Assessment Act 1979 ("the EPAA") on 21 December 2011. That is to say, that Armstrong would immediately cease all construction works at the premises which were associated with the construction of a residential apartment building.

7 The relief having been sought on 23 December 2011, the proceedings were adjourned to the new term before the Class 4 list judge on 3 February 2012.

8 Armstrong subsequently commenced a Class 1 appeal against the stop work order (the s 121B order) issued by the council. Armstrong was unsuccessful in those proceedings (Armstrong Alliance Pty Ltd v Kogarah City Council [2012] NSWLEC 1151).

9 Further Class 1 proceedings were then commenced by Armstrong by way of appeals against the council's refusal to grant a development application and building certificate to regularise the unlawful works. The appeals were upheld in part by Morris C (Armstrong Alliance v Kogarah City Council [2012] NSWLEC 1360).

Armstrong is Given Approval to Build Five Units but Builds Six

10 It was not in dispute that development consent for multi unit housing at the premises was required under the Kogarah Local Environmental Plan 1998 (cl 7). Thus, as stated above, development consent was obtained by Armstrong for this purpose. The consent remains in force.

11 Specifically, the consent granted approval for a "multi unit housing development 5 x 2 bedroom dwellings and basement car park" on the premises.

12 But as is abundantly apparent from a comparison of the plans as approved by the council and the plans as approved by the certifier in the issuing of the construction certificate, Armstrong is not carrying out the development in accordance with the terms of the consent (both plans were tendered before the Court). To the extent that an explanation of the inconsistencies between the two sets of plans was required, this was provided in the affidavit of Mr Paul Cox, affirmed 18 February 2013. Mr Cox is the Building Coordinator for the council. It was Mr Cox that carried out the inspection of the partly constructed residential flat building at the premises.

13 According to Mr Cox, and as is evident from an examination of the plans referred to above, there are significant inconsistencies between that which has been constructed and that which has been approved. The most significant of the differences include:

(a) an additional unit has been constructed which is not depicted on the plans approved by the council;

(b) an additional storey and outdoor terrace has been constructed which is not shown on the plans approved by the council;

(c) an unapproved elevator shaft to access the unapproved storey and unit has been constructed;

(d) the basement car park on the first level has been increased in size and the layout altered;

(e) the internal layout of several apartments has been altered; and

(f) there is additional excavation on the second level near unit 1.

14 There was no dispute that the building works are in breach of the EPAA. And nor could there be, plainly they are.

15 Moreover, it was agreed that the certifier, Mr Dix, was in breach of the EPAA insofar as, at all relevant times, he was required not to issue a construction certificate for any building work unless the requirements of reg 145(1)(a) of the Environmental Planning and Assessment Regulation 2000 had been complied with (see s 109F(1)(a) of the EPAA). Regulation 145(1)(a) requires that at all times the design and construction of a building not be inconsistent with the terms of the development consent. Clearly this requirement was flagrantly transgressed by Mr Dix. In light of the evidence before the Court, I therefore have no hesitation in finding that the design and construction of the building as depicted in the construction certificate plans was inconsistent with the development consent.

16 Accordingly, the material before the Court discloses an adequate evidentiary basis for declaring the construction certificate to be invalid.

17 In addition, there is not only utility in making such a declaration, there is a very real necessity to do so. This is because unless a formal order of invalidity of the construction certificate is made, the construction certificate remains valid.

18 The declaratory relief sought should therefore be granted.

Release from Undertaking

19 Armstrong seeks to be released from the undertaking given to the Court on 23 December 2011. It also seeks an order that the s 121B stop work order be revoked.

20 The present undertaking and the stop work order forbids the carrying out of any construction work whatsoever on the premises. However, following the successful appeals before Morris C, Armstrong now needs to carry out the works that have been approved by the Commissioner in order to obtain a building certificate.

21 Armstrong is prepared to give a new undertaking in the terms set out in the orders made in conformity with the short minutes of order handed up to the Court to enable it to carry out these works. In these circumstances, it is appropriate that Armstrong be released from its earlier undertaking.

Costs

22 Both Armstrong and Mr Dix consent to an order (in the case of Armstrong, without admissions) that they pay the costs of the council as agreed or assessed.

23 Mr Dix did not take an active role in these proceedings, appearing instead by way of submitting appearance. Nevertheless, it is appropriate that the Court orders costs against him. This is consistent with the established principle that a party cannot necessarily immunise itself from costs by entering a submitting appearance because otherwise a successful applicant, which in the present case is the council, may not be properly compensated for costs.

24 In Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 Biscoe J formulated the following general principles governing the costs order the Court proposes to make in these proceedings (at [50]):

50 The following general guidelines may be formulated, based on the cases and principles reviewed in this judgment, for the exercise of the Court's discretion to order costs where· an applicant successfully brings proceedings that are necessary to have declared invalid or set aside a development consent or decision of a consent authority;

· the consent authority and the beneficiary of the development consent or decision are necessary or proper parties; and · the cause of the invalidity is an error of or attributable to the consent authority and not to the beneficiary:

(a) the applicant will ordinarily be entitled to be compensated by an award in its favour of the costs of the proceedings unless it has engaged in disentitling conduct. (b) where the beneficiary does not defend the proceedings, the applicant's costs will ordinarily be awarded against the consent authority, whether or not the latter enters a submitting appearance. This is because the cause of the litigation is the error of the consent authority and not of the applicant or the beneficiary. The consent authority cannot immunise itself from costs consequences of its own error by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. It is not sufficient that a consent authority should bear the applicant's costs only up to the time of the consent authority's submitting appearance because the applicant must continue to incur costs thereafter in order to establish, by evidence and argument at a hearing, that it is entitled to declaratory and injunctive relief.

(c) where the beneficiary does defend the proceedings, albeit unsuccessfully, the applicant's costs will ordinarily be awarded against both the beneficiary and the consent authority, whether or not the latter enters a submitting appearance. The award of costs against the consent authority is because its error is the cause of the litigation. It cannot immunise itself from costs by entering a submitting appearance for the reason given in (b) above. The award of costs against the beneficiary is because it chose to defend the proceedings. A qualification is that the beneficiary alone may be required to bear the applicant's costs to the extent that they exceed the costs that the applicant would have incurred if both respondents had submitted, being costs attributable to defences that the beneficiary has unsuccessfully raised and the consent authority has not raised. An example may be a defence by the beneficiary that, notwithstanding an invalidating error by the consent authority, the court, for discretionary reasons, ought not to grant any relief. (d) where the consent authority has submitted and the beneficiary has defended but settles with the applicant who then seeks costs only against the consent authority, the applicant's costs will ordinarily be awarded against the consent authority and the latter will ordinarily be entitled to an indemnity for an appropriate proportion of those costs from the beneficiary, subject to the qualification referred to in (c) above. This situation may be unusual but it reflects the present case.

25 These principles were recently endorsed and applied by Preston J in Brown v Randwick City Council (No 2) [2012] NSWLEC 28 (at [25]):

25 Ordinarily, where both the consent authority that grants a development consent or makes a decision and a beneficiary of the development consent or decision are joined as necessary or proper parties to a successful judicial review challenge to the development consent or decision, the successful applicant's costs will be awarded against both the consent authority and the beneficiary. As Biscoe J stated in Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 at [50], the award of costs against the consent authority is because its error is the cause of the litigation. The consent authority cannot immunise itself from costs by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. The award of costs against the beneficiary who chooses to defend proceedings and take an active part in them is because of that choice. If a beneficiary wishes to avoid costs, it must choose not to defend the proceedings.

26 In the present case a declaration of invalidity with respect to the construction certificate has been sought and granted by reason of Mr Dix's unlawful conduct in issuing the certificate contrary to law. Having regard to the principles set out above, it is appropriate that a costs order be made against him.

27 It should be noted that the costs order has been framed on a "without admissions" basis in order to preserve Armstrong's rights against Mr Dix in respect of any future claim that Armstrong may have against him.

Orders

28 The orders of the Court are therefore as follows, by consent the Court:

(1) declares that the construction certificate issued by Dix Gardner Pty Ltd dated 25 May 2011 and numbered 137/11 is invalid and of no effect;

(2) releases the first respondent from the undertaking given to the Court on 23 December 2011;

(3) vacates the orders made by the Court on 6 June 2012 in proceedings 10024 of 2012 by Brown ASC (Armstrong Alliance v Kogarah City Council [2012] NSWLEC 1151) and revokes the order made by the applicant under s 121B of the EPAA on 21 December 2012;

(4) notes the undertaking of the first respondent that:

(a) the first respondent will cease all construction works at Lot 36 DP 4724 being 19 Elizabeth Street, Allawah, that are associated with the construction of a residential flat building except for works required by the orders of Morris C made in Armstrong Alliance v Kogarah City Council [2012] NSWLEC 1360, as set out in Annexure 'A' of the judgment for the issue of the building certificate;

(b) the first respondent will not carry out any other works not caught by paragraph 4(a), unless and until:

(i) a Principal Certifying Authority has been appointed by the first respondent and which appointment has been notified to the applicant, and a construction certificate is obtained for the completion of the remainder of the building works as per the original DA consent no 242/2006 and the construction works in accordance with DA consent no 65/2012 which is the subject of a deferred commencement;

(ii) a building certificate is issued for the building as contemplated by the orders made by Morris C in Armstrong Alliance v Kogarah City Council [2012] NSWLEC 1360; and

(iii) the new deferred commencement consent condition is satisfied in respect of DA 65/2012 as contemplated by the order made by Morris C in Armstrong Alliance v Kogarah City Council [2012] NSWLEC 1360;

(5) orders, without admission by the first respondent, the first and second respondent to pay the applicant's costs of these proceedings as agreed or assessed, except for the costs the subject of the costs order made by Preston J on 23 December 2011; and

(6) orders that the exhibits be returned.

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Decision last updated: 18 March 2013