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August 2012 – Wollondilly Shire Council v 820 Cawdor Road Pty Ltd [2012]

On 7 August 2012 Lloyd AJ of the Land and Environment Court in Wollondilly Shire Council v 820 Cawdor Road Pty Ltd [2012] NSWLEC 183 delivered judgment in regards to costs in Class 4 Civil Enforcement proceedings.

The Background and Facts

On 5 April 2012, in Wollondilly Shire Council v 820 Cawdor Road Pty Ltd [2012] NSWLEC 71 Lloyd AJ delivered a judgment that dismissed Wollondilly Shire Council’s (“Council”) summons seeking declarations and orders against the owner of the property, 820 Cawdor Road Pty Ltd, and the occupier of a building upon the property, Mr Richard Garton (“Mr Garton”).

The building that Mr Garton occupied was dilapidated, contained no kitchen, bathroom, toilet, laundry, running water, electricity, stove, refrigerator, heating or cooling. Mr Garton was a 67 year old recluse with a history of suffering from Manic Depressive Disorder, and had lived in the building for the past 20 years. He used a toilet in another building on the property which appeared to be connected to a septic tank, but which he flushed with a bucket.

Council argued that Mr Garton’s use of the building as a dwelling contravened the Wollondilly Local Environment Plan 2011 (“WLEP”) as there were already two lawfully erected dwellings on the land, and more than two dwellings was prohibited. Furthermore, the building was structurally unstable. The definition of dwelling in the WLEP was defined as “…a room or a suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile”.

The consulting civil and structural engineer who gave evidence for Council was of the opinion that whilst the building was originally over-designed, it was now manifestly unsound and unsafe, and in particular was an obvious risk of collapse due to wind action. It had a lifespan of up to ten years in the absence of any abnormal winds. Furthermore, the integrity of the building was beyond salvation and could not be readily rectified except by virtually complete demolition and reconstruction. However, a staged removal and reconstruction would not affect the structural stability of the building.

The Solicitor for 820 Cawdor Road Pty Ltd gave an undertaking on behalf of his client that it would not allow the use of the toilet (by Mr Garton) in the other building unless and until the Council granted an approval to operate a system of sewerage management within the meaning of s68A of the Local Government Act.

The Findings

Lloyd AJ held that Mr Garton’s use of the building was for the purpose of a dwelling under the WLEP and was therefore unlawful, however his environmental footprint was minimal. His presence was not harming or disturbing anyone. There was no evidence of any other environmental harm.  To order Mr Garton out when he had nowhere else to go, where he was unsuited to commercial or community living, and when to do so would remove him from a largely stress-free existence to a situation which would be both stressful and possibly catastrophic to his mental state would be a wrongful exercise of the Court’s discretion[1].

Lloyd AJ found that this was not a normal case, and notwithstanding the fact that the use or occupation of a land may be unlawful, the Court retains a wide discretion under section 124 of the Environmental Planning and Assessment Act 1979. Section 124 provides as follows (our emphasis):

124 Orders of the Court

(1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach…”

Lloyd AJ held that (our emphasis):

“I have noted, however, the wishes of Mr Garton at [4] above: ‘If given the chance to upgrade the building, I would most likely decline this offer as it is comfortable and the change would ruin my familiarity with it’. He can stay there. If the building becomes an imminent danger, then there is, I understand, a disused caravan on the property which Mr Garton might be able to use whilst essential repairs are carried out, but this will be a matter for both Mr Garton and the owners of the property to sort out.”

Accordingly, Lloyd AJ dismissed the Council’s summons and reserved the question of costs.

Motion for Costs

On 27 July 2012 the Court heard the costs hearing for the proceedings. The Court accepted the precedent provided in Latoudis v Casey [1990] HCA 59 that an award for costs is not by way of punishment to an unsuccessful party, but compensatory, with the rationale being that such an order is just and reasonable to reimburse the party for the expense which he or she has been put by the party who has caused the party to incur the costs of the litigation.

Lloyd AJ noted that Part 42.1 of the Uniform Civil Procedure Rules 2005 (“UCPR”) provides that:

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs”.

Lloyd AJ referred to the case of Hastings Point Progress Association Inc v Tweed Shire Council [2010] NSWCA 39 per Young JA (McColl JA concurring) where it was held that the above rule under the UCPR:

“…speaks for itself. However, judicial exposition has noted that it means that a person seeking to displace its prima facie effect must show that there is something out of the ordinary in the case in order to justify the departure…”

Furthermore, the case of Oshlack v Richmond River Council [1998] HCA 193 per McHugh J (Brennan CJ concurring) was cited as follows:

By far the most important factor which courts have viewed as guiding the exercise of the costs discretion is the result of the litigation. A successful litigant is generally entitled to an award of costs”.

Lloyd AJ questioned the council’s pursuit of Mr Garton following service upon it of the medico legal report and Mr Garton’s affidavit, and stated (our emphasis):

…It would have been self evident to the council upon receiving both the report and Mr Garton’s affidavit that there was a powerful, even persuasive, case for the exercise of the Court’s discretion in favour of the respondents. Although the medico – legal report suggests that Mr Garton would adjust to life in an alternative dwelling on the property, the affidavit of Mr Garton is strongly to the contrary, in which he states that he is used to living in the building which is well suited to him and if given the chance to upgrade he would most likely decline as the change would ruin his familiarity with the building.”[2] 

Lloyd AJ proceeded to order that the Council pay the respondents’ costs of the proceedings and the motion for costs.

This judgment demonstrates the application of the Land and Environment Court’s discretion not to make orders, and raises the awarding of costs against a Council even though the Council establishes that there has been a breach of the Environmental Planning and Assessment Act 1979. Furthermore, several issues arise with the judgment such as:

  1. Whether Council would have been liable if it did not take action and it knew about the dangerous condition of the building and that Mr Garton was living in it?
  2. Whether Council would have been ordered to pay the respondents costs of the proceedings if it had tried to discontinue the proceedings upon receiving the medico-legal report and Mr Garton’s affidavit?

It will be interesting to see whether the Land and Environment Court distinguishes this judgment on the basis that it was “not a normal case”.

Note: This information is not to be relied upon as legal advice.

[1] Wollondilly Shire Council v 820 Cawdor Road Pty Ltd [2012] NSWLEC 71 at [9]

[2] Wollondilly Shire Council v 820 Cawdor Road Pty Ltd [2012] NSWLEC 183 at [16]

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