New South Wales Court of Appeal confirms that there does not need to be a "proper planning purpose" for it to grant injunctive relief in its civil enforcement jurisdiction

In brief

The case of Dincel Construction System Pty Ltd v Penrith City Council [2021] NSWCA 133 concerned an appeal under section 58 of the Land and Environment Court Act 1979 (NSW) to the New South Wales Court of Appeal (Court of Appeal) against the decision of the New South Wales Land and Environment Court (Land and Environment Court) made in its Class 4 civil enforcement jurisdiction on application by the Penrith City Council (Council) in the case of Penrith City Council v Dincel Construction System Pty Limited (No 4) [2021] NSWLEC 1.

The Land and Environment Court declared that the First Appellant had carried out works in Kemps Creek without a development consent (unlawful works) in breach of section 4.2 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). The unlawful works included the importation of approximately 42,000 m³ of fill and the construction of earthworks, including two hardstand areas totalling approximately 33,000 m². The Land and Environment Court made a number of orders, including that the unlawful works be removed.

The First Appellant and the Second Appellant (who was the owner of the subject land) appealed to the Court of Appeal against the following four orders made by the Land and Environment Court:

"The Court:
…
(4)   Declares that [the First Appellant] has, by itself, its contractors, servants or agents, carried out development on land at 931 Mamre Road, Kemps Creek otherwise known as Folio 36/258414 by the deposition of fill and construction of an earthen platform in breach of s 4.2 of the EPA Act.
…
(8)   Orders that, by 15 November 2021, [the First Appellant]:

…
(b)   Remove the unlawful works and restore the ground level of the Premises and 931 Mamre Road, Kemps Creek to the ground level that existed prior to the carrying out of the unlawful works; and
(c)   Dispose of the unlawful fill at a waste facility or site that can lawfully accept the unlawful fill.

(9)   Orders that the respondents are to pay Council’s costs of the proceedings unless an application is made for an alternative costs order within 21 days of the date of this judgment.”

While there were 11 grounds of appeal pressed at the hearing, the main issue was whether the primary judge failed to properly exercise his Honour's discretion when making remedial orders which required the First Appellant to remove the unlawful works. The grounds of appeal were largely directed towards the following:

• The hardship that would be suffered by the First Appellant.

• Whether the primary judge was required to find a "proper planning purpose" to grant injunctive relief.

• The findings of the primary judge with respect to the works undertaken on 931 Mamre Road, which was adjacent to the Second Appellant's land at 919-929 Mamre Road.

Ground 1 – Primary judge did not err in the consideration of the hardship that would likely be caused to the First Appellant by making the reinstatement order

The Appellants contended that the primary judge did not make a sufficiently specific finding as to the financial loss the First Appellant would suffer if the First Appellant was required to reinstate the land and remove its products within 28 days. It was argued that the rectification costs would be in excess of $19.5 million and that it was incumbent on the primary judge to make a finding as to whether a reinstatement order would be likely to cause the First Appellant to become insolvent with consequential employee job loss.

The following four reasons were given by the primary judge as to why the evidence of hardship was not persuasive such that injunctive relief should not be ordered:

• The evidence with respect to financial loss was predominantly based upon the premise that the First Appellant had no, or could not acquire, an alternative location to store its product, but the primary judge considered that the First Appellant would be able to secure an alternative storage premise.

• The loss cannot have been an unforeseen risk to the First Appellant as the continued operation of the site was a matter of choice of the Appellants and the losses were, to a large extent, of the First Appellant's own making.

• The First Appellant likely obtained a private financial advantage by purchasing a site without a development consent and then using it for a purpose that was not permissible.

• Given the time the proceedings were on foot, the First Appellant had significant time to anticipate the likely relief that might be ordered and conduct its operations accordingly.

The Court of Appeal rejected Ground 1 and found that the primary judge took into account the potential hardship the reinstatement order would cause the First Appellant and its employees.

Grounds 2, 3 and 4 – Primary judge properly conducted the balancing exercise required to determine the appropriate time for the suspension of the injunctive relief

The Appellants argued that the primary judge's discretion miscarried because significant weight ought to have been given to the fact that the Second Appellant might have been able to "regularise" the unlawful works. To allow that to occur, the Appellants had sought a stay of the injunction for 18 months.

The Court of Appeal rejected these grounds and found that one of the difficulties with Ground 2 was that a development consent could not validly have been granted to "regularise" the unlawful works that had already taken place. The Court of Appeal found no error in the primary judge's reasoning and held that if the injunctive relief was conditioned by the Appellants not obtaining a development consent, it would always be open to the Appellants to argue that the condition had not been fulfilled as a further development application could possibly be made. 

Ground 6 – Land and Environment Court was not required to find a "proper planning purpose" when granting injunctive relief

Ground 5, which alleged that there was inconsistency in the orders of the Land and Environment Court, was not pressed at the hearing.

With respect to Ground 6, the Appellants contended that the reinstatement of the land would serve no proper planning purpose because it was likely that the land would be developed as industrial land shortly after it was reinstated, therefore to require reinstatement would be "Sisyphean".

The Court of Appeal rejected the Appellants' submission that the primary judge was required to consider whether the reinstatement orders served any proper planning purpose. The Court of Appeal confirmed that the Land and Environment Court was not required to find a "proper planning purpose" to grant the injunctive relief and stated that "[i]t would be corrosive of public trust in the operation and enforcement of the planning laws if blatant, deliberate and serious breaches of those laws were ignored on the basis that a planning purpose needed also to be shown before remediation could be ordered." (at [112]).

Ground 7 – Remedying or restraining a breach of the EPA Act is at the heart of the Land and Environment Court’s power to grant injunctive relief, which is not the exercise of the functions of a consent authority

The Appellants submitted that the primary judge was required to consider whether any relief would remedy the breach of the EPA Act, which included a consideration of the following:

• what environmental harms were caused by the unlawful works;

• whether the reinstatement orders would in fact remedy those harms; and

• whether those harms could be remedied by less onerous means so that the orders did not go beyond the attainment of their legitimate objects and serve no purpose other than to punish the First Appellant.

For similar reasons to Ground 6, the Court of Appeal rejected Ground 7 and restated that it was the remedying or restraining of a breach of the EPA Act which was at the heart of the Land and Environment Court’s power. The Court of Appeal held that the Land and Environment Court was not exercising the functions of a consent authority and to do so would confuse the task before it.

Ground 8 – Reinstatement orders were not out of proportion with the ends sought to be achieved because the admitted breaches were serious and deliberate

The Appellants contended that the reinstatement orders were out of proportion with the ends sought to be achieved by the EPA Act in that they placed an enormous financial burden on the First Appellant without securing any practical remedial benefit. It was submitted that without any remedial justification for the severity of the reinstatement orders, they served no purpose other than to punish the First Appellant for the breach of the EPA Act.

The Court of Appeal rejected Ground 8 and found that the orders made by the primary judge were neither unreasonable nor unjust having regard to all of the relevant factors. The admitted breaches were serious and deliberate, and the law was flouted (at [128]).

Ground 9 – It was not procedurally unfair for the primary judge to allow the Council to seek relief with respect to 931 Mamre Road for the first time in closing submissions

In Ground 9 the Appellants argued that it was procedurally unfair for the primary judge to allow the Council to seek injunctive relief with respect to 931 Mamre Road for the first time in the Council's closing submissions.

The Court of Appeal found that there was no appealable error on the primary judge's part and that the Appellants were not taken by surprise by the Council's request for orders to be made requiring the removal of the unlawful fill from 931 Mamre Road.

Ground 10 – Primary judge's finding that the First Appellant was responsible for constructing the earthen mound on 931 Mamre Road was set aside because there was no evidence that the First Appellant was responsible

There are three parts to Ground 10.

Firstly, the Appellants alleged that the primary judge failed to consider the financial and other impacts of the reinstatement orders to the extent that they relate to 931 Mamre Road. The Court of Appeal rejected this submission because the Appellants never sought an opportunity to adduce evidence as to those matters and so the primary judge could not be criticised for failing to address evidence that was not before his Honour.

In the second and third part of Ground 10, the Appellants successfully challenged the primary judge's findings about the fill placed on 931 Mamre Road and who was responsible for those works. The primary judge found that those works were carried out by the First Appellant, but that the First Appellant's evidence did not contain an admission about its responsibility for creating the earthen mound. Rather, there were admissions about the First Appellant's responsibility for the batters only.

The earthen mound was a separate structure created by dumping fill on to 931 Mamre Road, which was not a part of the Appellants’ commercial operation. While there was evidence that the fill was deposited on 931 Mamre Road by the same contractors who deposited fill onto the adjacent land owned by the Second Appellant, it was not established that the First Appellant was responsible for the deposit of the fill on 931 Mamre Road as opposed to the owners of that land.

The Court of Appeal partially allowed Ground 10 and amended orders 4 and 8(b) made by the Land and Environment Court to clarify the extent of the First Appellant's liability and the extent of reinstatement works required.

Ground 11 – No evidence was before the primary judge to allow his Honour to consider the cost of removing the fill from 931 Mamre Road

In Ground 11, the Appellants submitted that the primary judge was required to consider (but did not) the financial and environmental consequences associated with the removal of the fill from 931 Mamre Road.

Having decided to uphold part of Ground 10, the Court of Appeal stated that it was strictly unnecessary to address Ground 11. However, the Court of Appeal stated that Ground 11 would have been rejected because the Appellants did not adduce evidence as to the cost of removing the fill from 931 Mamre Road and should have done so.

Ground 12 – Second Appellant was correctly held to be jointly and severally liable for costs with the First Appellant

The Appellants challenged the primary judge's determination that both of the Appellants should pay the Council's costs of the proceedings. The Court of Appeal found that the Second Appellant as the owner of the land was a necessary party to the proceedings and also took an active part in opposing the relief sought by the Council.

The Court of Appeal rejected the challenge and said that the inescapable conclusion was that "whatever the occupier did on the Land and in the defence of the proceedings was done with the knowledge and concurrence of the owner of the Land" and so the Second Appellant was correctly held to also be liable for the costs of the trial (at [169]). 

Conclusion

In this case, the Court of Appeal reviewed the way the Land and Environment Court's discretion was applied in civil enforcement proceedings. The grounds of appeal were directed towards relieving the Appellants of the severity of the injunctive and reinstatement orders imposed by the Land and Environment Court.

However, the Court of Appeal found that the discretion of the Land and Environment Court was properly exercised and described the matter as being one where there was a deliberate and serious breach of the EPA Act and a contumelious disregard for the order issued by the Council, which required the remediation of the unlawful works.

The Court of Appeal also confirmed that where granting injunctive relief in Class 4 of its jurisdiction, the Land and Environment Court is not required to find a "proper planning purpose". The only justification that is needed by the Land and Environment Court to make a remediation order, is that there has been an admitted or proven breach of the relevant law.