In brief

The case of Council of the City of the Gold Coast v Ashtrail Pty Ltd & Anor (No.2) [2019] QPEC 26 concerned an application made by two related companies (Respondents) seeking to stay orders made by the Planning and Environment Court the subject of the decision in Council of the City of the Gold Coast v Ashtrail Pty Ltd & Anor [2019] QPEC 12 (Original Decision). In the Original Decision, the Council of the City of the Gold Coast (Council) sought declaratory relief and consequential enforcement orders against the Respondents with respect to alleged non-compliance with particular conditions of a development approval for a material change of use of the land. 

The Court held that the orders ought to be stayed pending the determination of the application for leave to appeal, and the determination of the appeal if leave is granted, as the Respondents would suffer "irreparable harm" if they were to immediately meet the development approval conditions. 

Background

In the Original Decision, the Court found that the Respondents committed a development offence under section 164 of the Planning Act 2016, as they failed to comply with the development approval conditions. The development approval conditions required the Respondents to pay the sum of $1.14 million to the Council for water and sewerage network infrastructure contributions, and to implement conditions relating to the design and construction of roadworks, footpaths, bikeways and land dedication. As a result, the Court ordered, among other things, that the Respondents comply with the development approval conditions. 

The Respondents made an application for leave to appeal the Original Decision to the Court of Appeal. Relevantly, the Respondents sought to stay the effect and consequences of the Original Decision pending the outcome of its application for leave to appeal, and the subsequent determination of that appeal.

Issues

The Court considered the following issues:

  • whether not granting a stay would result in "irreparable harm" to the Respondents and other third parties; and

  • whether granting a stay would cause unwarranted prejudice to the Council.

Court found that the Respondents would face irreparable harm should the stay not be granted

The Respondents submitted that if the Order was neither suspended nor stayed, the outcome of the application for leave to appeal to the Court of Appeal would be rendered nugatory, as compliance with the development approval conditions would result in "irreparable harm" to its companies. Relevantly, the Respondents alleged that they would be required to close an industrial training business or sell their land if they were to comply with the Original Decision. The Respondents also argued that a failure to grant a stay would cause "irreparable harm" to third parties with respect to the industrial training business for the following reasons:

  • the 1,419 students who are currently enrolled for traineeship and apprenticeship qualifications will have adverse financial consequences, as well as uncertainty in respect of their courses and credits;

  • closure of the training business would remove roughly 6,000 units of competency courses for industry qualifications; and

  • 72 employees would lose their means of employment.

The Respondents relied upon expert evidence of a chartered accountant (Expert) who was of the opinion that the Respondents did not have sufficient funds to meet the immediate requirement to pay the infrastructure contribution required to be paid as a consequence of the Original Decision in the sum of $1.14 million. The Expert found that if the Respondents were required to immediately pay the infrastructure contribution, the Respondents' businesses may cease to operate, an administrator or liquidator may be appointed, or the National Australia Bank may commence proceedings to protect its interests. The Expert identified that if any of the Respondents' businesses or properties were sold, particularly the property located in Ormeau at the Gold Coast, there would likely be "negative ramifications" for the Respondents, and that liquidation would result in adverse impacts not only for the Respondents but also the Respondents' employees and students. 

The Council submitted that if the Respondents had to sell their real property it would not cause serious detriment as the Respondents could "reinvest [the proceeds of the sale] and buy another property". The Court rejected the Council's submission as the Court found that the payment or repayment of money in lieu of obtaining or retaining ownership of real property "does not place the deprived proprietor in substantially the same situation".

In considering the impacts upon the Respondents' finances and business operation, the Court referred to the decision of Commissioner of Taxation of the Commonwealth of Australia v The Myer Emporium Ltd [1986] 160 CLR 220; HCA 13, which concerned an application seeking to stay orders pending the hearing and determination of an appeal to the High Court. Relevantly, the High Court found that a stay ought to be granted if there was a real risk that it would not be possible for a successful party to be restored substantially to its former position if the judgment made in the first instance was executed.  

The Court accepted the Expert's evidence, and concluded that in the short to medium term, the Respondents would not be able to meet the development approval conditions without the sale of the Respondents' real property. The Court found that the evidence established "little room for doubt" that if any of the Respondents' properties and associated businesses were to be sold, the Respondents would not be able to be restored substantially to their former position. 

The Court consequently concluded that the Respondents would suffer "irreparable harm" should a stay not be granted.

Court found that there was no meaningful prejudice that the Council would suffer if a stay was granted

The Court noted that the Council was unable to point to any meaningful prejudice which might affect the Council or its constituents should the Court grant a stay. 

The Council, however, expressed concerns to the Court that the Respondents may dispose their assets or dilute the net value of their assets by adding debt.

During the course of the proceedings, one of the Respondents' companies gave an undertaking to the Court that it would not dispose any of its real property and, following which, the other corporate entities linked to the Respondents followed suit. The Court found that such an undertaking would adequately protect against "untoward consequences of the grant of a stay" and that the undertaking would provide reasonable protection of the Council's interests.

The Court therefore held that the Council or its constituents would not suffer any prejudice should a stay be granted.

Conclusion

The Court held that the Order be stayed pending the determination of the application for leave to appeal and subsequent determination of an appeal should leave be granted. 

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2019.

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