Bravado P/L v District Council of Grant & Anor [2005] SAERDC 69 (5 August 2005)

Last Updated: 9 August 2005

ENVIRONMENT, RESOURCES AND DEVELOPMENT COURT OF SOUTH AUSTRALIA

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BRAVADO P/L v DISTRICT COUNCIL OF GRANT & ANOR

Judgment of Her Honour Judge Cole

5 August 2005

LOCAL GOVERNMENT - TOWN PLANNING

Council processed development application as a Category 3 development - consent granted subject to conditions - appeal lodged against consent by representor - preliminary hearing of an application by second respondent pursuant to s 17(4) of the Environment, Resources & Development Court Act 1993 for appeal to be dismissed on grounds that the predominant motivation for the proceedings was an improper purpose or that the appeal was an abuse of process - application dismissed.
Development Act 1993; Development Regulations 1993; Environment, Resources and Development Court Act 1993 s 17(4); Development (System Improvement Program) Amendment Act 2000, referred to.
Harrow Trust v Adelaide Hebrew Congregation Inc & City of Burnside (No 2) (2003) 85 SASR 10; ABC Developmental Learning Centres Pty Ltd v City of Tea Tree Gully & Ors [2004] SAERDC 111, considered.

BRAVADO P/L v DISTRICT COUNCIL OF GRANT & ANOR
[2005] SAERDC 69


THE COURT DELIVERED THE FOLLOWING JUDGMENT:

1

This is a decision in relation to the application by Bunnings Pty Ltd ("Bunnings") for the dismissal of the appeal lodged by Bravado Pty Ltd ("Bravado") under the Development Act 1993. The appeal relates to the decision of the District Council of Grant ("the Council") to grant provisional development plan consent to a development application made by Bunnings. Bunnings seeks to have the appeal dismissed without the matter proceeding to a full hearing on the planning merits of the development application.

Background

2	On 7 July 2004, Bunnings lodged Development Application No. 732/196/04 with the Council, seeking provisional development plan consent pursuant to the Development Act 1993 to construct on Lot 69 Jubilee Highway West, Suttontown ("the land"), a Bunnings warehouse and associated carparking. Bunnings was described in evidence by Mr Gotsis, who is the property development manager for SA and WA of Bunnings’ parent company, Wesfarmers Ltd, as "a hardware and home improvement supplier which operates stores throughout Australia". Mr Gotsis described the land as being "located on the outskirts of the City of Mount Gambier, at the intersection of Jubilee Highway West and O’Leary Road, within the area of the District Council of Grant".
3	The Council processed the development application as a Category 3 kind of development. Public notification was given accordingly. The Council received five representations from third parties in relation to the application. One of those representations was made by Jensen Planning and Design ("Jensen") on behalf of Bravado. That representation put the view that the application should be refused on the basis of a reasonably detailed assessment of the planning merits of the proposed development. An argument that the proposal should have been processed as a non-complying kind of development was also set out in the representation, together with an argument that the Development Assessment Commission was the appropriate authority to decide the application pursuant to clause 13 of Schedule 10 of the Development Regulations 1993.
4	On 11 November 2004, the Council granted provisional development plan consent to the development application, subject to 28 conditions.
5	On 30 November 2004, Bravado filed a notice of appeal in this Court in respect of the grant of provisional development plan consent.

Right of Appeal

6	The Development Act 1993 provides, in s 86(1)(b):-

s.86(1) The following applications may be made to the Court –

...
(b) a person who is entitled to be given notice in respect of a Category 3 development under section 38 may appeal to the Court against that decision (subject to the limitations imposed by that section);

7	There is no doubt that Bravado has a right to appeal pursuant to s 86(1)(b).

Application for dismissal

Environment, Resources and Development Court Act 1993 s 17(4)

8	The application for the dismissal of Bravado’s appeal was made pursuant to s 17(4) of the Environment, Resources and Development Court Act 1993, which provides:-

(4) Subject to rules of the Court, the Court may, if of the opinion that it is appropriate to do so, on its own initiative or on the application of a party to the relevant proceedings –
(a) dismiss or determine any proceedings that appear -

(i) to be frivolous or vexatious; or
(ii) to have been instituted or prosecuted for the purpose of delay or obstruction, or for some other improper purpose;

(b) after hearing the applicant in the proceedings, find in favour of the respondent without hearing the respondent;
(c) give summary judgment against a party –

(i) who obstructs or unnecessarily delays the proceedings; or
(ii) who appears to be continuing to participate in the proceedings for the purpose of delay or obstruction, or for some other improper purpose; or
(iii) who fails to attend any proceedings or fails to comply with a regulation, or a rule or order of the Court.

9	Mr Roder, counsel for Bunnings, conceded that the representation and the appeal lodged on Bravado’s behalf contained some arguable matters of substance, but alleged that the appeal had been instituted for the predominant purpose of delaying, obstructing or preventing commercial competition, which, Mr Roder argued, is an improper purpose within the meaning of s 17(4)(a)(ii).
10	Mr Roder relied on the judgment of Bleby J in Harrow Trust v Adelaide Hebrew Congregation Inc & City of Burnside (No. 2) (2003) 85 SASR 10. In that case, Bleby J determined that the predominant motivation for the institution of the proceedings could constitute the "improper purpose" referred to in s 17(4). Consistent with that decision, in order to succeed pursuant to s 17(4) in this matter, Mr Roder must show on the balance of probabilities that the desire to prevent, obstruct or delay Bunnings setting up in commercial competition to Mitre 10 was the predominant motivation for the institution of the appeal by Bravado.
11	Mr Hayes QC, counsel for Bravado, argued that the structure of the legislation – the Environment, Resources and Development Court Act 1993 and the Development Act 1993 - did not support the use which Mr Roder sought to make of s 17(4). Mr Hayes QC argued that the making of a representation under the Development Act 1993 in the circumstances of a case such as this confers a right of appeal. He argued that it was not the intention of s 17(4) to take away from that right to appeal. Rather, the purpose of s 17(4) was to prevent the use of proceedings for a collateral purpose. Section 17 was aimed against those who sought, by the fact of having appealed, and in the conduct of that appeal, to achieve delay, or leverage or some other advantage. Mr Hayes QC argued that s 17 does not deal with what might have motivated an appellant to appeal in terms of achieving an outcome in the proceedings. Mr Hayes’ argument on this point cannot succeed in this Court at this time. This Court is bound by the decision in Harrow Trust.
12	Mr Hayes QC pointed to Division 3 of Part 11 of the Development Act 1993, which deals with the initiation of proceedings to gain a commercial competitive advantage. The consequence of a finding that the sole or predominant purpose of proceedings related to a development was to delay or prevent the development in order to obtain commercial benefit, pursuant to s 88C, is that the proponent of the development is entitled to recover his or her loss suffered on account of the proceedings. Mr Hayes QC argued that that was the only consequence the legislature wished to have visited upon an appellant whose sole or predominant motivation was commercial competition. Had the legislature wished to provide for the striking out of proceedings when such a motivation was proven, it might have been expected to say so explicitly in Division 3 of Part 11 of the Development Act 1993. I reject this submission. I note that the provision with respect to "improper purpose" was inserted into s 17(4) of the Environment, Resources and Development Court Act 1993 by the same amending Act which inserted Division 3 of Part 11 into the Development Act 1993; the Development (System Improvement Program) Amendment Act 2000. It may be that it was considered that there was already a mechanism in place for the striking out of proceedings, namely s 17(4), the ambit of which was being widened and that there was no need to duplicate it in the Development Act 1993. It seems to me that the Development Act 1993 in Division 3 Part 11 clearly indicates that the institution and prosecution of proceedings for the sole or predominant purpose of the delay, obstruction or prevention of a development for commercial benefit is an improper purpose.
13	It follows that if the evidence supports Mr Roder’s argument that the predominant motivation for Bravado’s appeal was to delay, obstruct or prevent the development proceeding, for commercial benefit, then the proceedings should be dismissed or determined under s 17(4)(ii) of the Environment, Resources and Development Court Act 1993: see ABC Developmental Learning Centres Pty Ltd v City of Tea Tree Gully & Ors [2004] SAERDC 111.
14	There was no direct evidence of Bravado’s purpose in instituting its appeal. Mr Roder argued that an inference can be drawn from the evidence as to what the predominant purpose of the appeal is.
15	In Bunnings’ case, evidence was given by Mr Gotsis of Wesfarmers Ltd and by Mr Bruins and Mr James, both of whom are directors of Calula Estate Pty Ltd, which is the registered proprietor of the land. Mr Gotsis gave evidence that, if established on the land, Bunnings would be in direct competition with the existing Mitre 10 store in Mount Gambier. I accept this. Mr Gotsis said that a development application to establish a Harvey Norman store on land in a Light Industry Zone was lodged with the City of Mt Gambier on 25 August 1999 and approved on 17 April 2000. Neither Bravado nor Gateway Hardware Pty Ltd made a representation in relation to that application. Mr Gotsis’ view was that Harvey Norman would not be in competition with Mitre 10. Mrs Vause, a Director and Company Secretary of Bravdo, in evidence, said there would be competition in some areas, such as outdoor furniture and small electrical appliances. I find that there would be competition between Harvey Norman and Mitre 10, but to a minor extent relative to the competition between Mitre 10 and Bunnings. Mr Gotsis pointed out that the Mitre 10 shop was located in a Light Industry Zone in Mount Gambier.
16	Mr James gave evidence of a series of conversations he had had with Mrs Vause concerning the land. He said that he contacted Mrs Vause in May 2003 by telephone and told her that the land was available for sale. He said that Mrs Vause asked to meet with him to discuss the possibility of Mitre 10 moving to the land. Mr James prepared a concept plan and arranged a meeting with Mrs Vause. Mr James believes that, at that meeting, he told Mrs Vause that the zoning of the land was Light Industry. Mrs Vause denies that he told her that. There was some further interaction, following which Mrs Vause told Mr James that it was not economically viable for Mitre 10 to move to the land. Mr James gave evidence that during a telephone conversation with him, Mrs Vause said that "by her calculations, based on the existing turnover of the Mitre 10 and Banner stores at Mount Gambier the market would not support a third store so that if Bunnings established at or near Mount Gambier then the town would need to lose one of the other operations".
17	Mr Bruins also gave evidence of conversations with Mrs Vause. He said that, during one conversation, Mrs Vause told him that Bunnings had offered to purchase her business. Mr Bruins said that Mrs Vause said to him, referring to Bunnings "I would not sell to them no matter what they paid me". Mr Bruins said that he operates a paint shop in Mount Gambier, and that he and Mrs Vause had discussed the likely effect of Bunnings on their businesses. He said that Mrs Vause had told him that she would prefer it if Bunnings did not come to Mount Gambier. Mr Bruins said that he and Mrs Vause discussed the likely cost of moving Mitre 10 to the land, and Mrs Vause said that in view of the cost of relocating, and her age, she was not prepared to move Mitre 10. She did not mention to Mr Bruins any concerns regarding the zoning of the land. Mr Bruins said that Mrs Vause told him that she had had negotiations with Bunnings in relation to the possible purchase of the Mitre 10 shop by Bunnings, and that she gave him the impression that the negotiations had annoyed her. Mr Bruins said that Mrs Vause said she would not sell to Bunnings no matter what they paid her, on principle.
18	An affidavit of Mr Manos, solicitor for Bravado, was tendered. In his affidavit, Mr Manos said that he was responsible for the filing of a Notice of Disclosure pursuant to s 88B of the Development Act 1993, and that he filed it on 19 January 2005. Mr Manos said that he had no instructions to delay the filing of the Notice and, effectively, that the timing of its filing was entirely in his hands.
19	Mrs Vause’s evidence differed in some respects from the evidence given in Bunnings' case. She denied, for example, that Mr James told her that the land was zoned Light Industry. She said that she gained the impression from the plan of the land provided to her by Mr James that the portion of the land upon which a new Mitre 10 could be established was zoned Commercial. She said that she found out later, from officers of the Council, that it was zoned Light Industry. She denied that she had said that she would never sell to Bunnings at any price. She agreed that Bunnings had approached her to discuss the possibility of purchasing the Mitre 10 shop, and said that she had told Bunnings’ representative that any business was for sale at the right price. She said that insofar as she had discussed the likely outcome of Bunnings establishing in the area, if she had said that three outlets could not be supported, she was doing no more than repeating what Mr Beisley of Bunnings had said to her when they were discussing the possible sale of Mitre 10, and that her own opinion was that Mitre 10 could respond successfully to competition.
20	Mrs Vause had made a statement, which was tendered in evidence. In her statement, Mrs Vause said that she had given instructions to Jensen in relation to the formulation of a representation on Gateway Mitre 10 Home and Trade letterhead, and that she had also used a Mitre 10 fax sheet to communicate with Ms Kelly of Jensen. Mrs Vause explained in evidence that Bravado has neither a letterhead nor a fax sheet. In her statement, Mrs Vause said that she ultimately instructed Jensen to make the representation in the name of Bravado for these reasons:-

a. Bravado Pty Ltd is the owner of land within DC Grant. None of the other companies in which I have an interest nor do any other family members own land in DC Grant.
b. Whilst I was not wishing to withhold the fact that I was associated with Mitre 10, I was of the opinion that if the representation was lodged in the name of Mitre 10 (or in an associated company) Council was less likely to pay proper respect to the representation as in effect it may dismiss the representation as being an objection from a trade competitor.
c. Bravado Pty Ltd is an investment company. It owns three properties in the City of Mt Gambier and one in DC Grant. It is always looking for additional investment opportunities. The proposed development could affect Bravado’s investment strategy. What I mean by that is that if land is zoned in a particular way but that land is used for a different purpose, that can affect investment properties and investment decisions. This of course relates more to the future because at the time of the representation Bravado did not have any land immediately nearby to the proposed Bunnings site.
d. If I had put it in the name of Hood Telford Superspreaders Pty Ltd it may have effected (sic) the Hood Family who operate a superspreading business in Mount Gambier and I did not wish anyone to assume that they were in any way connected to the appeal.

21	Hood Telford Superspreaders Pty Ltd owns the site of the Mitre 10 outlet.
22	Mrs Vause was cross-examined at length in relation to the reasons she gave for using Bravado as the representor and therefore the appellant. Her evidence was at many points circuitous and unhelpful.
23	The onus is on Bunnings to show that the predominant motivation for the institution or prosecution of the appeal was an improper purpose. Bunnings alleges that the improper purpose motivating Bravado was the desire to delay, obstruct or prevent the establishment of commercial competition. Mr Roder argued that the presence of that motivation could be inferred from the evidence related above. I have not attempted to resolve the differences between Mrs Vause’s recollections of her various meetings and conversations and the recollection of the other witnesses. I accept that Mrs Vause’s motivation can be attributed to Bravado. However, even if the evidence most favourable to Bunnings case is accepted, that evidence falls well short of conveying the inference that the desire to delay, obstruct or prevent the establishment of commercial competition was Mrs Vause’s predominant motivation. It is true that a rational explanation for both her decision to bring about an appeal and her decision to use Bravado as the vehicle for that appeal do not emerge clearly from her evidence. However, it does not follow that the inference argued for must therefore be drawn. The onus is on Bunnings, and it has not been discharged.

Abuse of Process

24

Mr Roder also argued that the appeal proceedings are an abuse of process. Exhibit FG 6 to Mr Gotsis’ affidavit was a company search in relation to Bravado. This search showed that the Directors of Bravado are Dianne Kay Vause ("Mrs Vause") and Douglas Graham Vause ("Mr Vause"). Mr and Mrs Vause are husband and wife. Mrs Vause is Bravado’s company secretary. Mr and Mrs Vause are the only shareholders of Bravado. It was clearly established in Mrs Vause’s evidence that the purpose of Bravado was to acquire and hold investment properties. Mrs Vause said that Bravado had existed for about 18 years (the company search gives a registration date of 12 December 1988). To date, it has only held residential properties. Only one of the properties it presently holds is within the area of the Council. That property is at Pelican Point and it was Mrs Vause’s evidence that it was a half hour drive from the land. Further documents exhibited to Mr Gotsis’ affidavit showed that Mr and Mrs Vause are the only directors of Gateway Hardware Pty Ltd. They are also shareholders of that company. Mrs Vause said in her affidavit of 21 March 2005 that Gateway Hardware Pty Ltd is the company which operates the Mitre 10 store in Mount Gambier. Mr Roder argued that Bravado was used as the vehicle with which to appeal against Bunnings’ provisional development plan consent to obscure the involvement of Gateway Hardware Pty Ltd in the matter, and therefore deflect suspicion as to the motivation for the appeal. Mr Roder argued that this amounted to an abuse of process.

25

The evidence upon which Mr Roder relied for this argument was the use of Gateway Hardware Pty Ltd letterhead and Mitre 10 fax headers by Mrs Vause when communicating with Jensen. On 27 September 2004, Mrs Vause sent a facsimile to Jensen which said:-

Please proceed with objection to Bunnings proposed development in Mount Gambier. Thought it might be better to put in name of one of our other companies – Bravado Pty Ltd of c/o Joe D’Agostino & Co, 7 Penola Road, Mount Gambier, 5290. This will keep Gateway Hardware off the records. Please let me have your thoughts on this. Also can you look at the Banner application when this comes forth.

26	Mrs Vause, in her evidence, said that she decided to use Bravado as the representor because she believed that there was a possibility that if she used Gateway Hardware Pty Ltd, the objection would be viewed less seriously, because it might be perceived as the objection of a trade competitor. She maintained that Bravado’s investment properties, and future investment decisions might be affected by the outcome of the appeal.
27	In the end, it seems to me that the situation is that the objection was Mrs Vause’s, and the effect of her evidence was that in formulating that objection, she had in mind the interests of all of the entities in which she has an interest. I do not think that on the balance of probabilities, the evidence supports an inference that Bravado was being used purely and simply as a front for Gateway Hardware Pty Ltd.
28	The application by Bunnings to dismiss Bravado’s appeal is refused.