In the recent case of Council of the City of Sydney v Wilson Parking Australia Pty Ltd and Anor  NSWLEC 42, the NSW Land and Environment Court (Court) handed down a detailed and considered judgment on:
- existing and continuous lawful use rights;
- the specific characterisation of a car park use;
- its jurisdiction to entertain claims in contract and estoppel;
- an invalid fetter on the exercise of a public authority's discretion; and
- the applicability of Anshun estoppel.
The Court's findings are set out below.
The first respondent to these proceedings, Wilson Parking Australia 1992 Pty Ltd (Wilson), had operated a car park at the rear of 4-6 York Street, Sydney (Premises) since September 2008.
The operation of the car park had been without development consent, despite the fact that both the Sydney Local Environmental Plan 2005 (2015 LEP) and the Sydney Local Environmental Plan 2012 (2012 LEP), the environmental planning instruments applicable during Wilson's tenure, only permitted the use of the Premises as a car park with such consent.
Wilson had applied to obtain development consent to operate a car park on the Premises in 2008 and 2012. Both applications were determined by the applicant, the City of Sydney Council (Council), by way of refusal. In each case, Wilson had commenced Class 1 appeals to the Land and Environment Court (Court), which were ultimately unsuccessful.
On 8 May 2012, while the second Class 1 proceedings were on foot, Wilson gave an undertaking to the effect that it would cease using the Premises as a car park within 28 days of any adverse final determination of those Class 1 proceedings (Undertaking). In response, the Council undertook not to initiate Class 4 proceedings to restrain Wilson's use of the Premises as a car park while the relevant Class 1 proceedings were on foot. Ultimately, the Class 1 proceedings were dismissed but Wilson did not cease operating its car park on the Premises.
As a result, the Council brought proceedings in Class 4 of the Court's jurisdiction seeking relief in respect of the Undertaking, as well as seeking declaratory and injunctive relief under the Environmental Planning and Assessment Act 1979 (EPA Act) to restrain Wilson's use of the Premises as a car park.
The Council's Class 4 application sought:
- a declaration that Wilson:
- was unlawfully using the Premises; and
- was in breach of a notice issued under section 121B of the EPA Act (121B Notice);
- specific performance of Wilson's Undertaking; and
- an injunction restraining Wilson's continued use of the Premises as a car park:
- on the basis of promissory estoppel, by virtue of Wilson's Undertaking; and
- under section 123 of the EPA Act, on the basis that Wilson's use of the Premises as a car park was a breach of section 76A(1) of the EPA Act.
In response, Wilson contended that:
- it had the benefit of existing use rights and its use of the Premises as a car park was lawful; and
- legal rights concerning the Undertaking were not within the jurisdiction of the Court and, in any case, the Undertaking was not unenforceable.
In further response to Wilson's second contention, the Council claimed that, by reason of Anshun estoppel, Wilson was estopped from claiming existing use rights on the basis that it should, and could, have raised that issue in one or both of the previous Class 1 proceedings.
The Council's claim in relation to a breach of the 121B Notice failed on the basis that the notice had been addressed to the second respondent landowner and not Wilson, as occupier of the Premises.
THE COURT'S JURISDICTION
As a preliminary point, the Court had to decide whether it had jurisdiction to entertain the Council's claims relating to the Undertaking.
Section 16 of the Land and Environment Court Act 1979 (LEC Act) sets out, generally, the jurisdiction of the Court. Section 16(1) and 16(1A) are as follows:
(1) The Court shall have the jurisdiction vested in it by or under this or any other Act.
(1A) The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act.
The Council relied on section 16(1A) of the LEC Act as the source of the Court's jurisdiction to hear and determine its action to enforce the Undertaking.
After considering the case law relating to the scope of the word "ancillary" and the definition of the word "matter", the Court found that it had jurisdiction to determine the Council's claims relating to the Undertaking, stating at :
"In my view the dispute over the enforceability of the undertaking has a close connection to the class 4 dispute in that it purported to resolve it. There was no wider dispute between the parties that the agreement was purporting to resolve. The more difficult question is whether the dispute over enforceability of the undertaking is ancillary or subservient to the class 4 dispute. If this was dependent on the manner in which the Council framed its case then the answer would be "no". The Council's primary claim was to enforce the undertaking and it only relied on s 76A of the [EPA Act] in the event that claim failed. However, it is the substance of the dispute not the manner in which a party pitches its case that engages s 16(1A) of the LEC Act. The origin of the [Undertaking] was a long standing dispute over whether or not Wilson was in breach of s 76A [of the EPA Act]. The Council has now applied to this Court for a judicial determination of that dispute. In substance the dispute as to whether it was resolved by an enforceable undertaking is truly ancillary to the Class 4 dispute."
WAS THE UNDERTAKING ENFORCEABLE?
Following the Court's finding that the determination of issues arising out of the Undertaking was within its jurisdiction, Wilson made five submissions as to why the Council's claim for enforcement of the Undertaking shouldn't succeed. Those were:
- The Undertaking could not be enforced as there was no consideration provided by the Council.
- The Undertaking was an unlawful contract in that it represented an invalid fetter on a statutory power or discretion.
- Wilson had acted under a unilateral mistake, in that Wilson believed at the time that it did not have existing use rights to lawfully operate the Premises as a car park.
- The Undertaking was affected by common mistake as to the existence of existing use rights for the lawful operation of the Premises as a car park.
- Further various discretionary reasons as to why no injunction would issue to enforce the Undertaking.
In relation to the first point, the Court found that the Council's promise to delay commencing enforcement action constituted sufficient consideration for the Undertaking to be enforceable.
The second and third points were rejected by the Court, on the basis that there was no mistake as to the existence of existing use rights. This is discussed further below.
The fifth point, which rehashed previous submissions and included the claim that damages would be an adequate remedy, was also rejected.
However, the Court held at  that the Undertaking was not a valid contractual fetter on the Council's power to bring enforcement proceedings under section 123(1) of the EPA Act. Accordingly, it was not capable of being enforced against either the Council or Wilson. In explaining the basis for this conclusion, the Court stated:
"... This ... needs, however, to be placed in context. It is not unusual for public bodies including regulators and prosecutors to make statements that amount to a promise or commitment not to commence proceedings if certain conditions are fulfilled. Sometimes these commitments have statutory backing so that the public body can be held to the commitment. Otherwise, with the exercise of some administrative powers that can adversely affect a person's rights or interests, the proffering of a promise as to the manner of their exercise can generate a legitimate expectation that it will not be departed from unless the representee is afforded a right to be heard.
 However none of this discourse involves the enforcement of any contractual fetter on the public body's power to commence proceedings. Such a fetter is treated as being inconsistent with the statute conferring the discretionary power... "
The Council had also claimed that, even were the Undertaking not enforceable in contract, Wilson was bound by promissory estoppel and the Undertaking should be enforced in equity.
The submissions on this issue focused on two fundamental aspects of a claim in promissory estoppel: reliance and detriment. While the Court found that the Council had relied upon the Undertaking in not bringing enforcement proceedings against Wilson, the Court also found that it would not be unconscionable for Wilson to depart from the Undertaking.
This finding was underpinned by the equitable principle that a person will generally not be held to their promise where "the potential damage to an allegedly estopped party [is] disproportionately greater than any detriment which would be sustained" by the innocent party: see The Commonwealth v Verwayen (1990) 170 CLR 394 at 441.
In this case the loss that Wilson would have suffered had it not withdrawn from the Undertaking was "disproportionately greater than the relevant form of damage suffered by the Council". Accordingly, Wilson was not estopped from resiling from its promise in the Undertaking.
WAS THERE EXISTING OR CONTINUOUS LAWFUL USE?
A threshold point for consideration by the Court was whether the (assumed lawful) use of the Premises without consent would constitute an "existing use" under sections 106 and 107 of the EPA Act or a "continuous lawful use" under section 109 of the EPA Act. As nothing in either the 2005 LEP or the 2012 LEP prohibited the use of the Premises as a car park (although they did impose limitations on such use), Wilson's claim could only be founded as a claim for "continuous lawful use" under section 109 of the EPA Act.
That issue being resolved, Wilson then faced the daunting task of satisfying the Court that the Premises has been continuously and lawfully used for the purposes of car parking, as alleged, since about 1932. The Court was required to look at each environmental planning instrument applying to the site, starting with the first planning control in 1946 – the Town and Country Planning (General Interim Development) Ordinance.
Central to Wilson's claim was the characterisation of the use of the Premises. Wilson contended that the proper characterisation of the use was as a "carpark", generally defined, while the Council contended that the proper characterisation was "paid carparking".
The Court stated that what was determinative to the characterisation of the use was not the issue of payment, but whether there was "dedicated parking" (i.e. parking allocated to users of a particular building) or "non-dedicated parking" (i.e. a general availability). The Court expanded on the difference between the two uses at :
"Dedicated parking is likely to involve less signage and less traffic movements than non-dedicated parking. It is also more likely to involve parking and usage by delivery trucks servicing the particular buildings in question than non-dedicated parking. Non dedicated parking is more likely to have barriers and booths controlling access and egress by vehicles."
Ultimately, the Court held that the current use of the Premises was for "non-dedicated parking". This was fatal to Wilson's claim. The evidence of the history of the use of the Premises (in particular, the use of the Premises just prior to and at the time that the City of Sydney Planning Scheme Ordinance came into effect on 16 July 1971 (CSPO)), revealed that the use of the Premises was for a combination of dedicated parking and for the unloading and loading of cash trucks associated with the adjacent bank offices. Accordingly, Wilson failed to establish that there was a continuous use of the Premises as a non-dedicated car park, sufficient to engage the protection of continuous use rights at the time that the CSPO came into force.
CAN ANSHUN ESTOPPEL APPLY?
Although unnecessary in the context of the Court's finding that Wilson did not enjoy existing or continuous lawful use rights, the Council had argued that Wilson was precluded by Anshun estoppel from now contending that it enjoyed the benefit of existing or continuous lawful use rights.
The Council's claim was based on the contention that, in either of the previous Class 1 proceedings for development consent for the use of the Premises as a car park, Wilson should have raised the prospect of existing or continuous lawful use rights. By not doing so at that time, the Council submitted that Wilson could not now seek to rely upon those alleged rights, pursuant to the judgment in Port of Melbourne Authority v Anshun (1981) 147 CLR 589.
In rejecting the Council's claim, the Court noted that:
- Wilson had not previously sought to enlarge, intensify, alter, rebuild or change (Alteration Rights) an existing use, with the effect that Wilson could not in any case rely upon existing use provisions in its previous Class 1 proceedings; and
- any rights that might have accrued to Wilson would relate to a continuous lawful use under section 109 of the EPA Act, which does not benefit from the Alteration Rights applicable to existing use rights.
In effect, the Court stated that Wilson was not entitled to rely upon an argument of existing or continuous lawful use rights in the Class 1 proceedings. Therefore, any claim by the Council that Wilson's attempt to rely upon those arguments in the present proceedings was precluded by Anshun estoppel must fail.
The Council further claimed that Wilson should also have brought Class 4 proceedings to seek declaratory relief as to the existence of existing use rights, and "sought to have those proceedings either heard with the class 1 proceedings or at least heard by the same (judicial) member of Court." In dealing with this point, the Court stated at  that:
"... the fact that class 4 proceedings could have been brought by Wilson to vindicate an existing use right does not bring this case within Anshun. Anshun is concerned with estoppels that arise out of earlier proceedings that were finally determined and not with different proceedings that could have been commenced but were not. As events have transpired class 4 proceedings were commenced, namely these proceedings. Properly analysed this aspect of the Council's argument is simply a complaint about the timing of the commencement of class 4 proceedings."
Accordingly, no Anshun estoppel arose against Wilson, which precluded it from relying upon section 109 of the EPA Act. However, as noted above, it was otherwise unable to demonstrate that it enjoyed continuous lawful use rights under that section.
FINDINGS AND IMPLICATIONS
The Court declared that Wilson had been unlawfully using the Premises as a car park and ordered that Wilson be restrained from using the Premises as a car park without obtaining and complying with a development consent.
While much of the consideration in the Court's judgment was focused on the existing use rights claim, the judgment is important for two other reasons.
Firstly, the scope of the Court's ancillary jurisdiction received significant consideration and the Court determined in the case that it could hear claims in contract and in estoppel.
Secondly, the Court provided clear reasoning on the validity of agreements involving public authorities promising to restrain their discretion to bring enforcement proceedings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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