Bushcliff Pty Ltd v Redland Shire Council [1996] QSC 169

IN THE SUPREME COURT OF QUEENSLAND Brisbane No 7235 of 1996 Before the Hon. Justice White [Bushcliff Pty Ltd v. Redland Shire Council] BETWEEN: BUSHCLIFF PTY LTD (ACN 058 736 879) Applicant AND: REDLAND SHIRE COUNCIL Respondent REASONS FOR JUDGMENT - WHITE J Judgment delivered 31/08/1996 Reasons for Judgment delivered 23/09/1996 CATCHWORDS: INTERLOCUTORY INJUNCTION - Judicial Review Act - Local Government determination to put amended strategic plan on public display - decision - serious question - natural justice - improper purpose. Counsel: Mr M Hinson for the applicant Mr W Cochrane for the respondent Solicitors: Corrs Chambers Westgarth for the applicant King & Company for the respondent Hearing Date: 31 August 1996 -- 1 of 14 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane No 7235 of 1996 [Bushcliff Pty Ltd v. Redland Shire Council] BETWEEN: BUSHCLIFF PTY LTD (ACN 058 736 879) Applicant AND: REDLAND SHIRE COUNCIL Respondent REASONS FOR JUDGMENT - WHITE J Judgment delivered 31/08/1996 Reasons for Judgment delivered 23/09/1996 Bushcliff Pty Ltd has brought an application for judicial review of a decision by the Redland Shire Council ("the Council") to put on public display amendments to the Planning Scheme for the Shire which depict, inter alia a change in the designation of certain Council land adjacent to land owned by Bushcliff. Bushcliff sought an urgent injunction on Saturday, 31 August 1996 to restrain the Council from placing the new draft Strategic Plan on public display on Monday, 2 September 1996 showing the subject land with a changed designation from that which appeared previously. I refused to grant the injunction giving brief reasons and now give fuller reasons. By a contract bearing date 24 February 1994 Bushcliff purchased certain land from Lensworth Properties Pty Ltd exercising power of sale as mortgagee. The registered proprietor of the land was Glenkoo Holdings Pty Ltd. That land -- 2 of 14 -- 2 at Wellington Point was rezoned into the Comprehensive Development and Residential A zone to enable a canal residential subdivision to be developed in 1992 ("the development land"). A Development Agreement ("the Deed") was entered into between Glenkoo and the Council in respect of the development. The development is described as the Wellington Harbour Canal Estate. So far as is relevant to this application the Council agreed to transfer to Glenkoo certain Council land adjoining part of the Glenkoo land and zoned Rural Non-Urban and Unzoned to be incorporated in the residential allotment canal subdivision and be rezoned into the development zone. No monetary compensation was contemplated by the agreement but Glenkoo was to carry out development works which have been estimated to be valued at $1.4 million. The State Department of the Environment gave approval for canals in the development which approval has been extended from time to time, is current and has been extended to Bushcliff. At the time when Glenkoo's mortgagee sold the land to Bushcliff the Council land had not been transferred to Glenkoo. The contract between the mortgagee and Bushcliff provided that Bushcliff would enter into a deed of novation of the Deed with the Council to fulfil the unperformed provisions of the Deed before the completion date of the contract. No deed of novation has been entered into between Bushcliff and the Council. The Deed between Glenkoo and the Council provided that Glenkoo would not sell the development land without the purchaser entering into a deed of novation of the Deed with the Council. -- 3 of 14 -- 3 Bushcliff engaged in extensive discussions with the Council and other authorities in respect of the development conditions and necessary approvals to proceed with the development. On 14 November 1995 the minutes of the Environment Planning and Development Committee of the Council state that "Contemporary circumstances in relation to the external and development works [of the Wellington Harbour Canal Estate] have necessitated the review of the sealed development agreement." At a general meeting of the Council on 22 November 1995 the following appears in the minutes "Following ongoing consideration of issues associated with exchange of Council land (7 hectares), Council are in receipt of legal advice on the matter. The advice is to the effect that Council is not obligated by the provision of Deeds to exchange lands. Accordingly, if such exchange is not seen as beneficial to the community, Council may wish to further consider the issue of exchange." The Council resolved "That in accordance with legal advice received, Council observes that it is not constrained by previous deeds of rezoning concerning the matter in consideration how to deal with land in Council's ownership." On 6 August 1996 a draft Strategic Plan was presented to the Environment Planning and Development Committee of the Council. The minutes note that it is "a major reform for the delivery of VISION 2005. The new Strategic Plan expresses the major environment, planning and development policies of the Council". The Committee recommended that the draft Strategic Plan be adopted by the Council for the purpose of statutory public exhibition. -- 4 of 14 -- 4 On 20 August 1996 the Council considered the Wellington Harbour Canal Estate. The matter received detailed coverage in the minutes extending to some seven pages. It appears from the minutes that Mr Eagles, the project manager for Bushcliff, had addressed the Environment, Planning and Development Committee of the Council on 6 August 1996. The minutes set out a precis of what is described as a detailed submission from the Bayview Group of Companies (of which Bushcliff is one). This included a summary of the advice received from senior counsel by Bushcliff in respect of the Deed, the support of community groups for Bushcliff's development project and that there was State Government approval for the canal development. From the minutes it can be inferred that there was an extensive canvassing of all the issues. The Council reaffirmed its decision of 22 November 1995 to retain the Council land and resolved that it no longer favoured the establishment of a residential canal estate in the area using Council owned land. By its letter dated 30 August 1996 the solicitors for Bushcliff wrote to the Council that the proposed designation of the Council land as "open space" was causing concern to Bushcliff and it should be designated in the draft Strategic Plan consistently with the Council's intentions as expressed in the Deed until the matter was resolved. They pointed out that designating the land as "open space" would be likely to prejudice Bushcliff's position in its future negotiations with the Council, in any proposed litigation and, after a successful outcome, since the amendments showed publicly what the Council -- 5 of 14 -- 5 preferred. The solicitors requested that the proposed designation should be changed on the Plan to accord with the status quo or that the draft Strategic Plan should be withdrawn from public display altogether. Mr Cochrane, for the Council, took the preliminary point that a decision of the kind challenged was not susceptible to judicial review in that it was neither substantive nor final. There was no dispute that Bushcliff had standing, if the determination was a "decision". It is necessary to look briefly at the procedure involved in amending a Planning Scheme. A notice appeared in The Courier-Mail on Saturday, 31 August 1996 inserted pursuant to s.2.18 of the Local Government (Planning and Environment) Act 1990 ("the Act"). It was designated "Public Notice of Proposal To Amend Planning Scheme". It read relevantly "Redland Shire Council proposes to amend the Planning Scheme for the Shire of Redlands. The proposed amendment involves the introduction of a new Strategic Plan for Redland Shire. The Strategic Plan will provided broad directions for the overall development of the Redland Shire for the next decade and beyond." By s.2.18(2) of the Act a local government may propose to amend a planning scheme by including a strategic plan or amending an existing strategic plan. Where there is a proposal to amend a planning scheme the Council must give public notice of the proposal by advertisement published at least once in a newspaper. The proposal is required to be kept open to inspection from the date public notice is first given to the last day designed for the receipt of submissions. The notice -- 6 of 14 -- 6 provided that the proposed amendment would be open for public inspection from Monday, 2 September to Friday, 1 November 1996 in respect of which written submissions could be made. Section 2.18(8) and (9) of the Act require the Council to provide relevant documents associated with the proposed amendment to the planning scheme to a person who requests the same and that submissions may be made in respect of the proposal. By s.2.19(1) the Council is required to consider every submission made in accordance with s.2.18(9) and (10), and certain matters are required to be taken into account by the Council when reaching its decision in respect to the proposal. The Council is then required to decide by resolution if the proposal the subject of the public notice should proceed, with or without conditions, or with modifications resulting from the submissions or should not be proceeded with. The proposal to amend may then be approved in whole or in part or approval may be refused by the Governor-in-Council. Mr Cochrane submitted that there would be a final or substantive decision only after the exposure of the proposed amendment to the public and the consideration of submissions. A decision to which the Judicial Review Act applies is defined in s.4 to mean "A decision of an administrative character made, proposed to be made, or required to be made, under an enactment (whether or not in the exercise of a discretion)." Mason CJ in Australian Broadcasting Tribunal v. Bond (1990) 170 CLR 321 noted at p. 337 that a reviewable "decision" is one for which provision is made by or under a statute. He continued -- 7 of 14 -- 7 "That would generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment. Another essential quality of a reviewable decision is that it be a substantive determination." His Honour added at p. 338 "To say that a reviewable decision is an ultimate or operative determination does not mean that antecedent conclusions or findings which contribute to the ultimate or operative decision are beyond reach. Review of an ultimate or operative decision on permissible grounds will expose for consideration the reasons which are given for the making of the decision and the processes by which it is made." In R. v. Brisbane City Council, ex parte Read [1986] 2 Qd. R. 22 the Full Court was concerned to characterise a determination by the respondent Council to grant a rezoning application. Thomas J at p. 41 regarded the Council's determination as an important step on the path to a rezoning. He said "... the trend of authority favours the view that where a body makes preliminary findings or recommendations which are a prerequisite of or lead to the making of a final decision which will prejudicially affect a person's rights writs of certiorari or prohibition are available ..." He said of the determination under consideration at p. 42 "In the present case the determination was a preliminary decision to approve an application for rezoning, and was one of a number of steps required to be taken by the Council if a rezoning were to be effected. These steps would include application by the Council to the Minister in the manner envisaged by s6(14)(b). The Council's right to participate actively against the objectors' interests during the appeal, and then to be the moving body which would -- 8 of 14 -- 8 present the rezoning application to the Minister could be seen at least in a factual sense as further steps by the Council to effectuate the preliminary "decision" which is here questioned. The character of the Council's determination clearly amounts to a determination which is a necessary link in the chain which leads to a final decision which prejudicially effects the objectors' rights." See also Noosa Shire Council v. Resort Management Services Ltd (1993) 81 LGERA 295. A Strategic Plan includes a map or series of maps "depicting preferred dominant land uses for the area", s.2.4 of the Act. The redesignation of the Council land indicates clearly that the Council no longer supports the canal development as it was previously envisaged. In planning terms this is recognised as being influential on a development, HA Bachrach Pty Ltd v. Minister for Housing (1994) 85 LGERA 134 per Kiefel J at p. 137. I have little difficulty in coming to the conclusion that the determination of the Council to indicate a changed designation for the Council land and to put it out to public inspection constitutes a decision which is reviewable. Grounds for Review Bushcliff has two grounds for review. The first, that the Council failed to accord it natural justice in that it did not "properly advise" Bushcliff of its intention to change the designation of the land from "marine oriented development" to "open space" and afford Bushcliff an opportunity to be heard in relation to the making of the decision. Bushcliff further complains that the decision to place the draft Strategic Plan on public display showing the changed designation was an improper exercise of its power in that it failed adequately to -- 9 of 14 -- 9 consider the dispute and negotiations existing between Bushcliff and the Council, the validity of the Deed, and the Council's obligations with respect to the land. Bushcliff contends that the Council exercised the power of redesignating the land for a purpose other than a proper purpose. Both Mr Eagles and Mr Garry White, the director of Planning and Development Services with the Council, gave oral evidence. Mr Eagles is a well qualified and experienced town planner. He said that in planning terms he could see no basis for changing the designation of the Council owned land from its current designation under the current Strategic Plan as canal development/marina to special protection (so far as part of the adjoining foreshores was concerned) and open space. Mr White said that in planning terms the only basis for designating the Council land as open space in the draft Strategic Plan was to reflect the current use of the land and its status as an open area with a drain running through it and its use. He agreed that it was somewhat unusual for the Council to change the approved development designation but understandable in that the Council now held the view that the land which was previously proposed to be rezoned could be better used for open space purposes. Mr White indicated that there had been a change in Council philosophy from that which had prevailed at the time when the agreement was reached with Glenkoo. He said that the proposed Strategic Plan reflected a very strong emphasis on conservation and parkland protection. (a) Breach of natural justice -- 10 of 14 -- 10 As I have indicated the applicant has a sufficient interest in the determination of the Council to amend the Strategic Plan in respect of the Council land for standing purposes. In my view those interests would attract the principles of natural justice. The statutory scheme enables submissions to be made by members of the public including Bushcliff and to have those submissions considered before the proposal is placed before the Governor-in- Council to amend the planning scheme. Bushcliff submits that that is insufficient given the damage which it asserts may be done to it if the preferred designation of the Council for the Council land goes to public display. If that is accepted and there was an obligation upon the Council to hear Bushcliff then Bushcliff faces some difficulties. It has already conferred with and made submissions to the Council's officers in respect of its entitlement to the Council land. Mr Eagles has addressed the Environment, Planning and Development Committee of the Council on that matter on 6 August 1996. The Council meeting, as the minutes reveal, had a detailed presentation of Bushcliff's arguments in favour of the Deed including a precis of counsel's opinion on the legal issues. I am not persuaded that the ground based on natural justice has any substance. (b) Decision for an improper purpose Bushcliff has submitted that by redesignating the Council land the Council has in effect pre-empted the outcome of the dispute over the Deed and has thus utilised its planning powers for an improper purpose. -- 11 of 14 -- 11 Mr Cochrane has submitted that Bushcliff has been claiming the benefit of the Deed for a commercially significant period of time and there has been opportunity to test its position by litigation. Both parties have obtained senior counsel's opinion which varies as to the validity of the Deed and as to its novation. Bushcliff's legal advice is to the effect that by its actions vis a vis Bushcliff the Deed has in fact been novated to Bushcliff. Glenkoo has agreed to join in any action against the Council to obtain whatever declarations may be necessary. The Council has contemplated the question of damages and/or compensation to Bushcliff and taken advice in that respect. The issue of whether of Glenkoo was in default under the Deed by virtue of default to its mortgagee is another factor. Mr Cochrane submitted that the redesignation of the land was based on proper planning principles and the Council had a public duty to carry out those planning principles. There is no direct evidence of an improper purpose on the part of the Council in redesignating the land. The Council officer's recommendation to the Council that from a planning perspective additional material had not been presented which could give rise to a change of recommendation to that which led to the original planning approval might be regarded as evidence from which the inference of ulterior motive might be drawn. The material as it presently stands does not persuade me that it is likely to be resolved in favour of Bushcliff but I am of the view that there is a serious question to be tried about this -- 12 of 14 -- 12 matter. Balance of convenience Mr Eagles has said that should the Council land remain with its new designation of "open space" Bushcliff will not proceed with the development of its own land the designation of which has not been altered under the proposed amendments since it was not a commercially viable proposition without the Council land. I am in no position to make any judgment about the strength of Bushcliff's case or otherwise were it to commence an action against the Council for failure to novate the Deed. Mr Eagles gave evidence about the quantum of the loss. The return on each block of land which was to be developed has been calculated. It is not contested that the Council would be able to meet any order for damages were Bushcliff to be successful. Advertising has occurred in respect of public submissions for the proposed amendment of the Strategic Plan and maps and other associated materials have been prepared to give to members of the public seeking them. If I were persuaded that the proposal should not go to public display with the Council land redesignated then the inconvenience would be of little moment because the Council was aware of Bushcliff's position. There is no relevant text which is the subject of challenge. It is only the accompanying maps to which objection is taken. Bushcliff, whilst threatening injunctive proceedings and litigation in order to resolve the dispute has yet to formulate an action against the Council. There was no indication from -- 13 of 14 -- 13 Mr Hinson for Bushcliff that any action was immediately contemplated and the decision to challenge the Council's action by way of an application for judicial review suggests that such a decision is yet to be taken. In all the circumstances I concluded that the balance of convenience did not favour the injunction. Bushcliff may make submissions to the Council in respect of the redesignation and can seek to influence others who support its position to make submissions to the Council. I concluded that there was a serious question to be tried on the question of the improper use of the Council's power nonetheless the balance of convenience did not favour an injunction restraining the Council from exposing to public scrutiny the proposed amended Strategic Plan. The orders made were 1. Refuse the application for injunction. 2. Adjourn the further hearing of the application for judicial review to a date to be fixed. 3. Costs were reserved. -- 14 of 14 --