Agostino v Penrith City Council

Agostino v Penrith City Council (2002) 123 LGERA 305 Blue Mountains City Council v Laurence Browning Pty Ltd (2006) 150 LGERA 130 Lowy v Land and Environment Court of New South Wales (2002) 123 LGERA 179 Marzouk v Penrith City Council [2007] NSWLEC 415 North Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222 CASES CITED: Residents Against Improper Development Inc v Chase Property Investments Pty Ltd (2006) 149 LGERA 360 Segal v Waverley Council (2005) 64 NSWLR 177 Shire of Perth v O'Keefe (1964) 110 CLR 529 Strathfield Municipal Council v Poynting (2001) 116 LGERA 319 Warlam Pty Ltd v Marrickville Council [2009] NSWLEC 23 Woollahra Municipal Council v Carr (1987) 62 LGRA 263

APPLICANT Ms S Duggan SOLICITORS LEGAL REPRESENTATIVES: Conomos Legal RESPONDENT Mr C Drury (solicitor) SOLICITORS DLA Phillips Fox

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT 1 Her Honour: A preliminary point of law has arisen in these Class 1 proceedings on the Council's Notice of Motion. It requires the Court to consider: Whether the provision in Clause 41(3) of Penrith Local Environmental Plan No 201 (Rural Lands) of a maximum floor area of 150 square metres for a fruit and vegetable store permitted by that clause, comprises a development standard or a prohibition upon development for the purposes of a fruit and vegetable store having an area greater than 150 square metres.

2 The issue raised is whether the LEP control in cl 41(3) of the Penrith Local Environmental Plan No 201 (Rural Lands) (the LEP) is a development standard. If it is not it cannot be the subject of a State Environmental Planning Policy No 1 - Development Standards (SEPP 1) objection seeking to vary it. Clause 41 applies to the Applicant's land only. The same clause was considered by Cowdroy J in Agostino v Penrith City Council (2002) 123 LGERA 305 (Agostino No 1) in Class 1 proceedings involving the same applicants concerning a different development application to that now before the Court. Cowdroy J held that the clause was not a development standard so that the proposed development was prohibited.

3 I am determining the same issue for the same applicants as was before Cowdroy J. The Council did not raise res judicata as a bar to the determination of the same issue. Given that Class 1 proceedings are merit appeals considering whether a proposed development ought be approved, and that there is no legal impediment to the lodging of new development applications by the Applicants, the issue of res judicata does not arise, a conclusion supported by the decision in Warlam Pty Ltd v Marrickville Council [2009] NSWLEC 23 at [44]. 4 One consideration is whether in the interests of judicial comity I should follow the decision of Cowdroy J. The practice in this Court is that where another judge of the Court has considered the same issue a judge will apply that decision unless he or she considers it to be demonstrably wrong, see Tobias JA in Segal v Waverley Council (2005) 64 NSWLR 177 at [48].

5 The parties filed a statement of facts and contentions which identifies the relevant statutory controls. Both parties agreed that the Penrith LEP should be considered as a whole. The land is zoned rural 1(a) under the LEP. Clauses 9(1)(2)(3) provide: (1) The objectives of a zone are set out in the Table to this clause under the heading "Objectives of zone" appearing in the matter relating to the zone.

(2) Except as otherwise provided by this plan, in relation to land within a zone specified in the Table to this clause, the purposes (if any) for which: (a) development may be carried out without development consent, and (b) development may be carried out only with development consent, and (c) development is prohibited, are specified under the headings "Without development consent", "Only with development consent" and "Prohibited", respectively, appearing in the matter relating to the zone. (3) Except as otherwise provided by this plan, the council shall not grant consent to the carrying out of development on land to which this plan applies unless the council is of the opinion that the carrying out of the development is consistent with the objectives of the plan and the zone within which the development is proposed to be carried out. 6 "Shop" is included in the Table of the rural 1(a) zone as prohibited development. This prohibition does not apply to "convenience stores, general stores and produce stores". It is agreed by the parties these exceptions to the prohibited development of shops do not apply to the Applicants' fruit and vegetable store. The development is prohibited as a shop. 7 Clause 41, the clause in issue, was included in the LEP in its current form in 1997 and states: 41 Development of certain land at Llandilo (1) This clause applies to land situated adjacent to Third Avenue, Llandilo, being Lot 2, DP 221473, shown edged heavy black on the map marked "Penrith Local Environmental Plan No 201 (Rural Lands) (Amendment No 1)".

(2) For the purpose of this clause: floor area means the whole of the area used for the display and storage of goods and merchandise within a fruit and vegetable store, but does not include an area used for the bulk storage of produce (whether in a cool room or otherwise) pending display or sale. fruit and vegetable store means a building or place used primarily for selling or exposing for sale by retail, fruit and vegetables and, as an ancillary use only, the selling or exposing or offering for sale by retail of bread, milk, cigarettes, confectionary, soft drinks, fruit juice, flowers, potted plants, pasta, eggs and honey only. (3) Notwithstanding any other provision of this plan, a person may, with the consent of the council, carry out development on land to which this clause applies for the purposes of a fruit and vegetable store with a maximum floor area of 150 sq.m.

(4) The council shall not grant consent to the carrying out of development as referred to in subclause (3) unless arrangements satisfactory to the council have been made with the council with regard to the supply of water and disposal of effluent.

8 Other clauses of the LEP referred to in argument were cl 18 and cl 42. Clause 18 provides: 18 Convenience and general stores The council shall only grant consent to the establishment of a convenience store or general store on land to which this plan applies where the gross floor area of the store does not exceed 200 square metres and the store is more than 3 kilometres from another general store or convenience store in the area. Clause 42 provides: 42 Development of certain land at Mamre Road, Kemps Creek (1) This clause applies to land at Mamre Road, Kemps Creek, being land shown edged heavy black on the map marked "Penrith Local Environmental Plan No 201 (Rural Lands) Amendment No 10". (2) Despite any other provision of this plan, a person may, with the consent of the Council, carry out development on the land to which this clause applies for the purposes of a produce store and wholesale and retail plant nursery. (3) The Council must not grant consent to the carrying out of such development unless: (a) the Council has taken into consideration whether the development would adversely affect the existing or future service and safety levels of roads into and out of the development site, and (b) vehicular access into the development site is via the signal-equipped intersection of Mamre Road and Baker's Lane. (4) In this clause: produce store means a building or place, not exceeding 650m2 in gross floor area with an attached awning not exceeding 330m2, that is used for the sale by retail or storage of: (a) grain, or (b) stock feed, or (c) fertilizer, or (d) veterinary medicine, and includes any ancillary office or toilet facilities. wholesale and retail plant nursery means a building or place used for any one or more of the following purposes: (a) the growing and retail selling of plants, where the growing and propagation area does not exceed 1,600m2, (b) the storage of nursery items within a shade house, (c) the storage and retail selling of bulk landscape supplies including sand, mulch and compost, and materials such as fence rails, posts, gates, logs and firewood.

9 "Development standards" are defined in s 4 of the Environmental Planning and Assessment Act 1979 (the EP&A Act) as: … provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, including, but without limiting the generality of the foregoing, requirements or standards in respect of: (a) the area, shape or frontage of any land, the dimensions of any land, buildings or works, or the distance of any land, building or work from any specified point, (b) the proportion or percentage of the area of a site which a building or work may occupy, (c) the character, location, siting, bulk, scale, shape, size, height, density, design or external appearance of a building or work, … An LEP is defined as an environmental planning instrument made under the EP&A Act.

Council's submissions 10 The Court of Appeal in Blue Mountains City Council v Laurence Browning Pty Ltd (2006) 150 LGERA 130, particularly Basten and Ipp JJA, considered the difficulties of applying the two part test for determining whether a provision constitutes a development standard formulated by Giles JA in Strathfield Municipal Council v Poynting (2001) 116 LGERA 319 at 343. Accordingly, the primary approach the Court should adopt is to construe cl 41(3) in light of the LEP as a whole, per Basten J at [85] in Browning. Use must be for a purpose per Shire of Perth v O'Keefe (1964) 110 CLR 529. The relevant purpose for which development is allowed by cl 41 is a fruit and vegetable store with a maximum floor area of 150 sq m, not simply the purpose of fruit and vegetable store. This provision is to be contrasted with cl 18 of the LEP which refers to convenience stores in similar terms and which the Applicant argues contains a development standard.

11 If the approach in Poynting is adopted, Cowdroy J's decision correctly applies the approach in Poynting. Although decided before Browning his Honour essentially decided the issues in accordance with the approach adopted by Basten and Ipp JJA in Browning. In the interests of judicial comity his decision ought be followed.

Applicant's submissions 12 Whether a provision in a LEP is a development standard is recognised by the Court of Appeal in Poynting, Lowy v Land and Environment Court of New South Wales (2002) 123 LGERA 179, Residents Against Improper Development Inc v Chase Property Investments Pty Ltd (2006) 149 LGERA 360 (RAID) and Browning as raising difficult issues of construction. North Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222 and Poynting developed tests to use in answering this question. The approach in Poynting was revisited in Browning. Browning did not override Poynting but recognises that one test will not satisfy all the circumstances that could arise. Basten and Ipp JJA did not consider the approach in Poynting was helpful in the circumstances in Browning. The Blue Mountains LEP considered in Browning contained provisions described as zoning subscripts and that wording is therefore used by the Court of Appeal in Browning. Poynting is not abandoned in Browning and it should be considered.

13 Tobias JA adopted a different approach in Browning, based on Poynting, to arrive at the same end result, that is that the provision did not relate to the development the subject of the application but to circumstances beyond it and was therefore not a development standard. The provisions and reasoning in Browning are analogous to the approach adopted in Woollahra Municipal Council v Carr (1985) 62 LGRA 263, in which Samuels, Priestley and McHugh JJA also concluded the relevant provision was not a development standard.

14 The primary approach that should be adopted is what is the proper construction of the definition of development standard in s 4 of the EP&A Act. The Council is correct when it states that the whole of the LEP needs to be considered. Clause 9(2) (that "except as otherwise provided by this plan" ) means that the Council's argument that cl 41(3) makes permissible what is otherwise prohibited is wrong. The fact that shops are prohibited in the rural 1(a) zone does not affect cl 41 of the LEP. The LEP intends that there will be other ways the Council can control development, see for example cl 32, cl 32A and cl 33A of the LEP.

15 The purpose of cl 41 is to permit a fruit and vegetable store on the Applicant's land. The question is whether a floor area of 150 sq m or more is prohibited in every circumstance or is capable of variation under SEPP 1. Clause 41 permits development as a fruit and vegetable store as defined in subclause (2). There is no limitation on the location of a building on the land. The floor area referred to in cl 41(3) does not refer to the whole area used for the fruit and vegetable store as the area for the storage of produce is excluded under the definition in cl 41(2). Unlike the definition of produce store in cl 42, the definition of fruit and vegetable store in cl 41(2) does not include the limitation based on floor area. Further cl 18, which the Council relied on, is a development standard as it regulates an aspect of development. Clause 41 is analogous to cl 18, not cl 42.

16 If the two step process in Poynting is applied, whether the development is prohibited under all circumstances should be answered in the negative as fruit and vegetable stores up to 150 sq m are permissible in the zone. The 150 sq m is a provision which fixes an aspect of the development, the second step, and is therefore a development standard. The development permitted is properly characterised as a fruit and vegetable store. The reasoning of Cowdroy J at [14]-[16] in Agostino No 1 is incorrect and should not be followed.

Finding 17 Many cases in this Court and the Court of Appeal have considered the issue of whether a provision in an LEP is a development standard, and therefore able to be the subject of a SEPP 1 application. In the Court of Appeal in Mayoh (1990) Clarke JA stated at 236 that a clause prohibiting the carrying out of a particular development on land is different to one specifying requirements to be complied with in carrying out that development. In Mayoh development of a residential flat building was prohibited under the relevant LEP if, inter alia, any principal building on adjoining land was less than three storeys measured vertically above any point at natural ground level. The majority (Mahoney and Clarke JJA, Kirby P dissenting) held that the height restriction was not a development standard.

18 In Poynting (2001) Giles JA (Heydon JA Young CJ in Eq concurring) identified the two step process at 343 which has been applied in numerous cases since: A provision prohibiting the development in question (the use of land, subdivision of land, erection of a building etc, see the definition of "development" in the Act) under any circumstances will be a provision controlling development, but it will not be a development standard. The availability of SEPP No 1 will fail at the first step. Beyond this, the debate should be over the second step, whether the provision specifies a requirement or fixes a standard in relation to an aspect of the (non-prohibited) development. I consider one can profitably return to the observations of McHugh JA in Woollahra Municipal Council v Carr , to his Honour's reminder of the need to define the development and its aspects before it can be determined whether the provision in question is a development standard. Referring again to the definition of `development standards', there must be a provision in relation to the carrying out of development, and then the provision must specify a requirement or fix a standard in respect of an aspect of that development. Having identified the development in relation to which there is the provision, the aspects of that development must be considered in order to say whether the provision specifies a requirement or fixes a standard in respect of an aspect of the development. … In the debate over the second step, whether the provision specifies a requirement or fixes a standard in relation to an aspect of the (non-prohibited) development, the key will be identification of a relevant aspect of the development. The list of aspects in paragraphs (a) to (n) of the definition of "development standards" in s 4(1) of the Act shows that a broad view of what is an aspect of a development should be taken. North Sydney Municipal Council v P D Mayoh Pty Ltd (No 2) must be regarded as a case in which the majority considered that the provision in substance prohibited the development under any circumstances, not because of something in the definition of the development (see Clarke JA's comments on the observations of McHugh JA in Woollahra Municipal Council v Carr ) but because, as part of the environmental planning instrument as a whole, in the prohibition on erection of a residential flat building the governing characteristic was land with adjoining high buildings, so there was relevantly a prohibition on development in any circumstances.

19 This approach was also applied by Giles JA in Lowy (2003) (Mason P concurring, Handley JA dissenting). Two more recent Court of Appeal decisions have considered the question of whether a provision in an LEP is a development standard, with some differences in approach. In RAID (handed down in 2005), Tobias JA (Giles JA and McClellan CJ at CL concurring) considered whether the trial judge had correctly applied the two part test in Poynting. The LEP provision in issue provided that the council was prohibited from giving consent to the subdivision of land or to the carrying out of development the council considered to be significant unless a reticulated sewerage system was provided for, and there was previous certification that the sewage treatment plant serving the area had the capacity to accommodate the additional development. The decision of the trial judge that the provision was a development standard was upheld.

20 Browning, handed down in 2005 four days after RAID, had to consider whether a provision in an LEP prohibiting subdivision until consolidation of lots had occurred was a development standard. In holding that it was not, Basten JA stated at [79]-[80]: …if an LEP prohibits a particular form of development in a particular zone, that provision will not generally be considered a development standard, whereas if a particular form of development is permitted with consent in the specified zone, but further and separately identified controls are imposed on such developments, the further controls may constitute development standards. Self-evidently, the drafter of an LEP may be able to achieve the desired result either by a zoning provision, or by a development standard: the way in which it is done will be important, because of the need to distinguish a development standard from other forms of prohibition. A legitimate concern about substance and form should not be allowed to blur the distinction between result and means.

The approach required by the definition, so understood, places considerable weight on the degree of specificity with which the proposed development is defined. If the proposed development is very broadly defined, even its essential elements will become external standards. On the other hand, to include within the identification of the proposed development all aspects of the proposed use of the land is likely to incorporate what should properly be seen as aspects regulated by development standards, because external to the essential elements of the development. The correct approach depends on the terms of the planning instrument in the particular case. Thus, if an LEP distinguishes by zoning between residential flats and dwelling houses, an application to erect a block of flats should not be treated simply as an application to erect a building, or an essential distinction between a dwelling house and a block of flats will be obscured. The reason why that distinction is important (on the present hypothesis) is that the relevant LEP distinguishes between a dwelling house and residential flats for zoning purposes. 21 Basten JA did not apply the two step approach in Poynting as he did not consider it was helpful given the particular LEP provisions before him. He considered at [85] that whether a particular provision was a development standard had to be determined by considering the definition in s 4 of the EP&A Act and the particular provision. Basten JA held the provision was not a development standard. Ipp JA agreed with these findings at [27]. His Honour also identified the difficulties of applying the definition of development standard in s 4(1) at [3]-[10]. 22 In the same case, Tobias JA applied Poynting and Carr to hold that the zoning subscript was a characteristic of the land which had to be satisfied before consent could be granted. It was not therefore a development standard. All judges of appeal agreed that a prohibition on a particular kind of development would not be a development standard if it was an essential element of the particular development, rather than a standard or requirement in respect of an aspect of the proposed development (relying on Giles JA in Lowy at [36]). 23 Talbot J in Marzouk v Penrith City Council [2007] NSWLEC 415 considered Browning, particularly the decision of Tobias JA, in determining whether a provision in an LEP was a development standard. His Honour held that cl 17 of the Penrith LEP, which permitted shops or professional suites where the total of those developments approved did not exceed a certain size in a particular zone and which were otherwise prohibited under that zone, was not a development standard. It could not therefore be the subject of a SEPP 1 application. His reasoning in [13] was that shops of a particular kind were allowed in specified circumstances which were not solely referable to the internal characteristics of the development itself.

24 The LEP provisions considered in Carr, concerning limits on the number of dentists which constituted professional rooms, Mayoh, prohibiting development of apartments depending on the height of neighbouring buildings, Browning, concerning a requirement to consolidate lots, and Marzouk were all held not to be development standards. The provisions considered in Poynting, which prohibited development over a particular square metre size and dimension, Lowy, which specified the types of buildings which could be erected with council consent on the harbour foreshore (other buildings being prohibited), and RAID, which required developments to include specific sewage measures, were held to be development standards. As observed in several cases (including Mayoh and Browning) each case must depend on the particular provisions of the LEP in issue so that comparisons with similar provisions in other cases is of limited assistance.

25 In Agostino No 1, Cowdroy applied the two step approach in Poynting to conclude that cl 41(3) was not a development standard. That case was determined before Browning was determined. 26 Given the different reasoning of the Court of Appeal in RAID, which applied the approach in Poynting, and Browning, in which not all of the three judges of appeal applied Poynting, it appears necessary to consider the application of the two step process in Poynting and also the approach proposed by Basten JA (Ipp JA concurring) of considering cl 41(3) in the context of the LEP as a whole. I note that the reasoning of Giles JA in Poynting (cited at par 18) also referred approvingly to the reasoning in Mayoh embracing the need to consider the particular provision in issue in the context of the whole document. 27 In relation to the definition of development standard, s 4(c) refers to the size of a building so that floor area is within the definition of development standard. Considering the LEP as a whole, shops are prohibited in the Rural 1(a) zone so that in the absence of any other provision in the LEP the Applicant's proposed fruit and vegetable store would be prohibited in the rural zone. Clause 41 of the LEP applies solely to the Applicant's land. The definition of floor area contained within the clause does not include the whole of the area of the fruit and vegetable store as also defined in the clause. The area used for bulk storage of produce is not included for the purposes of the maximum floor area of 150 sq m referred to in subclause (3). 28 There are other clauses in the LEP which regulate shops of different kinds. Clause 18 applies generally to convenience and general stores on land to which the plan applies to permit such development with consent where the development's gross floor area does not exceed 200 sq m and is more than three kilometres from other similar stores. That clause would not overcome the prohibition on a fruit and vegetable store on the Applicant's land as found in the zoning Table. It is likely that the limits on floor area and distance from other stores provided in cl 18 would be considered development standards. 29 Clause 42 applies to specified land in the rural zone (as does cl 41 in relation to the Applicant's land) and allows development with consent of a produce shop and wholesale and retail plant nursery. The Applicant accepted that cl 42 did contain a prohibition on particular shops (and was not therefore a development standard) but argued that as the whole of the area of a produce store was included in the definition in cl 42(4), unlike cl 41(2), that supported a finding that the floor area in cl 41(3) is a development standard. The Applicant's submissions emphasised that the maximum floor area in cl 41(3) is but an aspect of the development, given that fruit and vegetable stores up to 150 sq m are permissible with consent under the clause. This argument was said to be strengthened by the fact that floor area as defined in the definition does not include the whole of the area of fruit and vegetable store, in contrast to cl 42 of the LEP. Clause 42 contains a definition of produce store and wholesale and retail plant nursery which includes all of the areas occupied by such stores. I do not consider that is an important distinction in the LEP, it simply reflects different drafting approaches taken to the LEP at different times. Clause 41 was inserted into the LEP in March 1992 and amended in December 1997 whereas cl 42 was inserted in May 2004.

30 That shops including fruit and vegetable stores are otherwise prohibited on the Applicant's land but for cl 41(3) is important in determining whether cl 41(3) is a development standard, contrary to the Applicant's submission (par 14). When the provisions of the LEP are considered as a whole the requirement in cl 41(3) that a fruit and vegetable store on the Applicant's land have no more than 150 sq m of floor space as defined in the clause is the description of the permissible development. The floor area is not a separately identified control imposed on the development, but rather is an essential element of the development, which are considerations referred to by Basten JA in Browning at [79]-[80] (at par 20). This suggests that cl 41(3) is not a development standard. That conclusion is not undermined by the existence of clause 18 which does deal generally with development standards for certain types of shops. That conclusion is supported by the provisions in clause 42 as discussed in the previous paragraph. 31 If the approach identified by Giles JA in Poynting is applied, in relation to the first step cl 41(3) does not prohibit the development of a fruit and vegetable store under any circumstances. It is therefore necessary to consider the second step, whether that clause specifies a requirement in relation to an aspect of the development. Applying the second step depends on how I characterise or describe the development the subject of the clause. The Council argues that the proper characterisation or description is that a fruit and vegetable store with a floor area as defined in the clause over 150 sq m is prohibited development. The Applicant argues that a fruit and vegetable store is not prohibited depending on an aspect of that type of development, namely the maximum floor size as defined in that clause. Stores with a floor area up to 150 sq m are not prohibited and that is an aspect of the development which suggests that it is a development standard. The characterisation or description of the development prohibited but for cl 41(3) propounded by the Council is correct in the scheme of the LEP described above. On this basis also I consider that cl 41(3) is not a development standard. 32 My finding on the preliminary point of law is that clause 41(3) of Penrith Local Environmental Plan No 201 (Rural Lands) of a maximum floor area of 150 square metres for a fruit and vegetable store permitted by that clause comprises a prohibition upon development for the purposes of a fruit and vegetable store having an area greater than 150 square metres.

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