AS Investment Company Pty Ltd v Liverpool City Council

Land and Environment Court (NSW)|2018-11-15

Judgment

COMMISSIONER: Pleasure Point Road, in Pleasure Point, runs from Heathcote Road at its southern juncture to the Georges River to the north. AS Investment Company Pty Ltd ("AS Investment") seeks development consent for a two lot subdivision of Lot 74 in DP 1134477, located at 76 Pleasure Point Road close to the intersection with Heathcote Road. A development application seeking the same was refused by the Liverpool Local Planning Panel on 7 May 2018. AS Investment appeals against that decision pursuant to s 8.7 of the Environmental Planning and Assessment Act 1979 ("the EPA Act"). Liverpool City Council ("the Council") is the respondent on the appeal, pursuant to s 8.15(4) of the EPA Act.
The Council contends that the subdivision is prohibited by the operation of cl 7.12 of the Liverpool Local Environmental Plan 2008 ("LLEP 2008"). That clause provides: 7.12 Maximum number of lots The total number of lots created by the subdivision of land in an area of land identified as "Restricted Lot Yield" on the Dwelling Density Map must not exceed the number shown on that map for that area.
The map, to which cl 7.12 refers, shows the following restricted lot yield (at Figure 1):
The site (Lot 74) and Lots 71, 72 and 73, comprise four lots within the southernmost parcel of land that is subject to the above restricted lot yield of four lots. As a result, the Council's position is that the subdivision of the site into two lots would result in a fifth lot within the parcel, in breach of the maximum lot yield, and that the proposed subdivision is therefore prohibited.

The site and the locality

The site has an area of 17,850m2 and has a frontage of 20m to Pleasure Point Road. The site wraps around the rear of the adjacent Lot 73 in a similar manner to a battle-axe block, as pictured in Figure 2.
The site comprises both land zoned R5 Large Lot Residential and E2 Environmental Conservation pursuant to the provisions of the LLEP 2008.
To the west of the site, on the other side of Pleasure Point Road, is a large expanse of cleared R2 Low Density Residential zoned land. To the east of the site is land that is densely vegetated and zoned SP2 Infrastructure (Defence).

The Planning Framework

Clause 2.6 of the LLEP 2008 permits the subdivision of land with development consent. It provides: 2.6 Subdivision - consent requirements (1) Land to which this Plan applies may be subdivided, but only with development consent. (2) Development consent must not be granted for the subdivision of land on which a secondary dwelling is situated if the subdivision would result in the principal dwelling and the secondary dwelling being situated on separate lots, unless the resulting lots are not less than the minimum size shown on the Lot Size Map in relation to that land.
As set out above, cl 7.12 restricts the total number of lots created by a subdivision in the following manner: 7.12 Maximum number of lots The total number of lots created by the subdivision of land in an area of land identified as "Restricted Lot Yield" on the Dwelling Density Map must not exceed the number shown on that map for that area.
If cl 7.12 is a development standard, cl 4.6 of the LLEP 2008 allows consent to be granted notwithstanding a breach of the standard. A development standard is defined in s 1.4 of the EPA Act as follows (insofar as relevant): development standards means 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: … (e) the intensity or density of the use of any land, building or work, …
Clause 4.6 allows consent to be granted in circumstances of a breach of a development standard only if certain pre-conditions are met, and provides as follows: 4.6 Exceptions to development standards (1) The objectives of this clause are as follows: (a) to provide an appropriate degree of flexibility in applying certain development standards to particular development, (b) to achieve better outcomes for and from development by allowing flexibility in particular circumstances. (2) Development consent may, subject to this clause, be granted for development even though the development would contravene a development standard imposed by this or any other environmental planning instrument. However, this clause does not apply to a development standard that is expressly excluded from the operation of this clause. (3) Development consent must not be granted for development that contravenes a development standard unless the consent authority has considered a written request from the applicant that seeks to justify the contravention of the development standard by demonstrating: (a) that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and (b) that there are sufficient environmental planning grounds to justify contravening the development standard. (4) Development consent must not be granted for development that contravenes a development standard unless: (a) the consent authority is satisfied that: (i) the applicant's written request has adequately addressed the matters required to be demonstrated by subclause (3), and (ii) the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and (b) the concurrence of the Secretary has been obtained. …

Whether cl 7.12 is a prohibition or a development standard

Section 1.5 of the EPA Act defines "development" by reference to a list of development types, which includes the subdivision of land. Pursuant to s 3.14(1)(b) of the EPA Act, an environmental planning instrument may make provision for "controlling (whether by the imposing of development standards or otherwise) development". The word "control", in relation to development, is defined in s 1.4 of the EPA Act to mean "consent to, permit, regulate, restrict or prohibit that development…". A provision in an environmental planning instrument can therefore control development by a development standard (as defined in s 1.5) or by some other way, such as by prohibition.
The question of whether a provision in an environmental planning instrument is a development standard or a prohibition has been the subject of much judicial discourse. A common thread in that discourse is the two step approach of Giles JA in Strathfield Municipal Council v Poynting (2001) 116 LGERA 319; [2001] NSWCA 270. The first step requires determination of whether the proposed development is prohibited under any circumstances by the relevant provision, where that provision is construed in the context of the LEP as a whole. The second step requires determination of whether the provision specifies a requirement or fixes a standard in relation to an aspect of the proposed development.

The Council submits that cl 7.12 is a prohibition

Consistent with the reasoning of Tobias JA in Agostino v Penrith City Council (2010) 172 LGERA 380; [2010] NSWCA 20 (at [43]), the Council points out that the resolution of the question requires the construction of the provisions of the LLEP 2008. In considering cl 7.12 in its context, the Council submits that the breach of the restricted lot yield in cl 7.12 controls development by prohibiting the proposed subdivision. The Council says that whilst subdivision of land is permissible with development consent pursuant to cl 2.6 of the LLEP 2008, the subdivision of land referred to in the Dwelling Density Map beyond the number of lots in the restricted lot yield is prohibited by cl 7.12.
The Council points out that cl 2.6 of the LLEP 2008, which makes subdivision permissible with development consent, is a compulsory clause within the Standard Instrument - Principal Local Environmental Plan. Clause 1.2(1) of the LLEP 2008 makes it clear that it is an instrument that adopts the Standard Instrument. As such, cl 2.6 is a general clause that applies to the land to which the LLEP 2008 applies. By contrast, cl 7.12 is a specific restriction on the permissibility of subdivision. The Council says that the clause identifies specific parcels of land and imposes specific limitations on the subdivision of each parcel. The Council submits that there are two conclusions that can be drawn from contrasting the provisions. Firstly, the Council submits that, given that the general permissibility of subdivision arises from a compulsory clause (cl 2.6), the only way to impose a prohibition on the subdivision of land in certain areas or in certain circumstances is to create a separate provision to do so. The Council submits that cl 7.12 is such a separate provision. Secondly, the Council submits that a specific clause concerning permissibility prevails over the general permissibility provision in cl 2.6. In support of this, the Council relies on the decision of the High Court in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1, in which Gavan Duffy CJ and Dixon J stated (at 7): "When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power."
As such, the Council submits that the restrictions on the permissibility of subdivision expressed in cl 7.12 prevail over the general permissibility found in cl 2.6.
The Council also relies on the decision of Pain J in Karimbla Constructions Services (NSW) Pty Ltd v Pittwater Council [2015] NSWLEC 83, in which Her Honour found that merely because development of a certain type is permissible in the zone does not mean that the relevant clause cannot impose a prohibition (at [36]).
The Council also submits that, having regard to the context of cl 7.12 within the instrument as a whole, the clause appears as a separate provision and does not fall within "Part 4 Principal development standards". The Council says the clause is distinct from those provisions such as height and minimum lot size, which are clearly development standards and appear within Part 4.
Further, the Council points out that cl 7.12 has no objectives, unlike each of the development standards contained in Part 4 and some of the standards found in Part 7. This lack of stated objectives within cl 7.12 is another reason why the Council submits that cl 7.12 should not be construed as a development standard. The Council submits that the development standards contained within the LLEP 2008 typically contain objectives, whereas a number of the other clauses that do not contain objectives cannot be construed as development standards. The Council further submits that it is difficult to see how a written request made under cl 4.6 can demonstrate that the proposed development is consistent with the objectives of the standard where there are no stated objectives. Whilst cl 7.12 is not listed in cl 4.6(8) as a provision that, if breached, precludes the grant of development consent, the Council relies on the reasoning by Pain J in Karimbla Constructions Services (NSW) Pty Ltd v Pittwater Council that the reason why the clause is not identified in cl 4.6(8) is because the clause in question is not a development standard.
Turning to the first step in Strathfield Municipal Council v Poynting and in considering the construction of cl 7.12 in the context of the LEP as a whole, the Council submits that the proposed development is prohibited under any circumstances as the words "must not exceed the number shown on that map for that area" have the character of a prohibition. The Council submits that cl 7.12 is a condition precedent to the permissibility of subdivision on the land concerned, the breach of which results in the proposed development being prohibited in any circumstances.
Considering then the second step in Strathfield Municipal Council v Poynting, the Council submits that cl 7.12 does not contain a specification in relation to an "aspect" of the development. Instead, the Council submits that it is a blanket maximum imposed for particular land rather than a specification in relation to an aspect of the subdivision. In response to AS Investment's submission, outlined below, that the requirement falls squarely within the definition of development standard within aspect (e), "the intensity or density of the use of any land, building or work", the Council submits that it is arguable whether a restricted lot yield actually controls density or intensity of use. The Council points out that density is usually controlled by the control on the number of dwellings per hectare or the sizes of lots in conjunction with the type of development to be carried out on the subdivided lots.
In support of its position that cl 7.12 does not contain a specification in relation to an aspect of the development, and therefore does not fall within the definition of a development standard, the Council also relies on the reasoning in Karimbla Constructions Services (NSW) Pty Ltd v Pittwater Council. At [45], Pain J found that: "The pre-condition in cl 6.1(3) operates by reference to the number of dwellings to be erected on the whole of the land comprising the relevant sector or buffer area. It does not operate by reference to the number of dwellings to be erected as part of a particular development. Thus, cl 6.1(3) imposes a requirement comprising the Council's satisfaction as to the existence of an attribute of the whole of the land comprising the relevant sector or buffer area within which a proposed development is to be carried out. It does not impose a requirement relating to the carrying out of an aspect of a proposed development. Whether or not the Council is satisfied that the relevant area of land has the required attribute determines whether a proposed development is permissible at all, but it cannot be properly regarded as a requirement relating to the carrying out of an aspect of that development."
Applying this approach, the Council submits that cl 7.12 imposes a blanket maximum that applies to the whole of the specified land the subject of the restricted lot yield, and does not operate by reference to the carrying out of an aspect of the particular development.
The Council further submits that cl 7.12 could not be a development standard in circumstances where a minimum lot size, imposed as a development standard by cl 4.1 of the LLEP 2008, would allow up to 12 lots to be created on the area the subject of the restricted lot yield. The Council points out that the two clauses are at odds, with no guidance as to the objectives behind the 4 lot restricted lot yield. The Council says, therefore, that the resolution of this inconsistency is achieved as cl 7.12 is not a development standard but instead prohibits the development in question under any circumstances.
Finally, the Council relies on the history of cl 7.12 and its predecessor in order to establish that it was intended as a prohibition on the subdivision of land beyond the specified lot yield. Specifically, cl 7.12 has its genesis in the Liverpool Local Environmental Plan 1997 (Amendment No 84) ("LEP Amendment No. 84"). The pre-exhibition report on the amendment application states as follows: "Council has received an application to rezone lots 4, 5, 6 and 7 Pleasure Point Road, Pleasure Point to make permissible with consent the development of 16 residential lots … It is therefore proposed that Council prepare and exhibit a draft to Liverpool Local Environmental Plan 1997 to make permissible with consent the development of 16 lots on the subject land."
In the proposed exhibition copy of the LEP Amendment, which was attached to the pre-exhibition report, the aim of the draft LEP Amendment included: "(c) to allow, with the consent of Liverpool City Council, the subdivision of the portion of the lots zoned Rural (1d) to create a total of 16 lots from the existing 4 lots (d) to ensure the development of the potential 16 lots only enables the development of a maximum of 16 dwellings."
The proposed LEP amendment, as exhibited, proposed to insert cl 38A, which relevantly provided: "(1) This clause applies to Lots ... 7, DP 239468 … (3) Council must not grant consent to the subdivision of each of the lots referred to in Subclause 1 into more than 4 lots. (4) Notwithstanding any other provision of this plan, Council must not grant consent to development of more than one dwelling on each allotment."
The subsequent Adoption Report states that "The applicant seeks to rezone the land to make permissible with consent the subdivision of the subject four lots into 16 lots".
LEP Amendment No. 84, as made, inserted cl 38A as follows (insofar as it is relevant): (1) This clause applies to Lots ... 7, DP 239468 ... (2) . . . The land to which this clause applies may, with the consent of the Council, be subdivided, but only if: (a) each of the lots referred to in subclause (1) is subdivided into not more than 4 lots, creating a maximum of 16 lots, and ... (3) Dual occupancy housing is prohibited on the lots created under subclause (2).
The Council submits that each of the LEP Amendment Application, the Pre-Exhibition report, the Adoption Report and the LEP Amendment No 84 support the position that the clause was inserted to make the subdivision into 4 lots permissible with development consent, rather than to impose a development standard.

AS Investment submits that cl 7.12 is a development standard

AS Investment's position is that, with subdivision made permissible pursuant to cl 2.6 of the LLEP 2008, any requirement of the subdivision must be a development standard, including that contained in cl 7.12.
In support of this position, AS Investment submits that, in approaching the two step approach in Strathfield Municipal Council v Poynting, care must be taken to look at the provision itself, the framing of the two steps, and the outcome of applying the steps.
The first element that AS Investment submits is integral to framing the steps is the way in which the development is characterised. AS Investment submits that the Council has erroneously characterised the development as a subdivision that ultimately produces 5 lots. AS Investment submits that, in Strathfield Municipal Council v Poynting, the development was simply characterised as "subdivision" and it would be contrary to authority to characterise the present development as something other than simply "subdivision".
The second matter that AS Investment submits is integral to considering the two steps, and the first step in particular, is the reasoning in Strathfield Municipal Council v Poynting that a prohibition must be absolute and without qualification in order to meet the requirement that it prohibits development in "any circumstances". In this respect, AS Investment submits that the conclusion of Pain J in Karimbla Constructions Services (NSW) Pty Ltd v Pittwater Council was reached because the dwelling yield for the area the subject of the development application was "no dwellings".
In applying these two elements to the first step in Strathfield Municipal Council v Poynting, AS Investment submits that cl 7.12 does not prohibit the development in question (that being subdivision) in any circumstances, given that subdivision is permissible pursuant to cl 2.6 in all zones, including that to which cl 7.12 applies. Accordingly, there are circumstances, such as where the subdivision yields less than the maximum lots shown, where the subdivision may proceed. AS Investment therefore submits that cl 7.12 is not an absolute prohibition.
In considering the second step, AS Investment submits that with the development being properly characterised as 'subdivision', cl 7.12 specifies an aspect of the subdivision, which is the lot yield. AS Investment therefore submits that it falls within the definition of a "development standard". In further support of this submission, AS Investment says that the lot yield clearly fits within (e) of that definition, being the regulation of "the intensity or density of the use of any land, building or work…"
In support of its position, AS Investment relies on the decision of Robson J in Principal Healthcare Finance Pty Ltd v Council of the City of Ryde (2016) 222 LGERA 212; [2016] NSWLEC 153. In that decision, His Honour found that a provision concerning location and access to facilities for a seniors living development was a development standard and not a prohibition. His Honour reached that conclusion as he considered that, in the context of the relevant instrument, the criteria for location and access to facilities were not "essential conditions" and the instrument did not act to prohibit seniors living developments.
AS Investment submits that cl 7.12 is similar to the provision considered by Senior Commissioner Dixon in Oneten Properties Pty Ltd v Hawkesbury City Council; Jeanette & anor v Hawkesbury City Council [2016] NSWLEC 1405. The Senior Commissioner found the provision, cl 4.1E(4)(a) of the Hawkesbury Local Environment Plan 2012 ("HLEP 2012") to be a development standard. Clause 4.1E(4)(a) provided: (4) Despite clauses 4.1, 4.1AA, 4.1A and 4.1C, if land to which this clause applies contains an environmental constraint area, development consent must not be granted for the subdivision of that lot unless: (a) the number of lots to be created for a dwelling house by the subdivision will not exceed the area of the original lot for the land to be subdivided, in hectares, divided by 4,
AS Investment submits that the Senior Commissioner's findings at [72] and [77] make very clear that the permissibility question is focused on the development being identified as "subdivision" and not "four lot subdivision". In interpreting the provision, the Senior Commissioner found that the clause "does not create a precondition for development" (at [78]) but instead imposes an additional restraint on the subdivision of land. In considering the text of the provision, she states (at [76]-[77]): "76 Put simply, the clause does not refer to the number of lots created by all subdivisions of the original lot, but instead specifically relates to the number of lots created by the subdivision. It is only concerned with the subdivision the subject of the application and not past subdivisions. If Council's interpretation were correct, the words "by the subdivision" in the clause, and "that included that land" in the definition, would be unnecessary. 77 Nothing in cl 4.1E requires the previously subdivided lots to be counted in the calculation. Clause 4.1E is not concerned with the number of lots "resulting" from the "original lot" but, rather, the number of lots "created by the subdivision". The difference in language between cl 4.1E and cl 4.1 is designed to achieve a different result. In other words, I accept, as the Applicants contend, cl 4.1 is designed to achieve a minimum lot size and cl 4.1E is designed to restrict the number of lots that may be created by reference to the size of the original lot…"
AS Investment submits that the clause considered by the Senior Commissioner is similar to cl 7.12, and that therefore her reasoning is instructive for the present proceedings.
AS Investment also relies on the principles outlined by Jagot J in Laurence Browning v Blue Mountains City Council [2006] NSWLEC 74 at [26], which have been adopted by the Court on many occasions. In applying these principles, AS Investment submits that the overarching permissibility in cl 2.6, as well as the minimum lot size in cl 4.1, work together with cl 7.12 to regulate subdivision, and that cl 7.12 regulates an aspect of subdivision. That aspect that is regulated is a requirement or standard for the maximum number of lots. AS Investment therefore submits that subdivision is permissible independently to the maximum subdivided lots to be produced, and that the maximum lot yield is a development standard.
Further, in written submissions, AS Investment says that decisions of this Court and the Court of Appeal have identified three broad categories of provisions of environmental planning instruments that are not development standards because they could not answer the first "step" required by Strathfield Municipal Council v Poynting. AS Investment submits that they are each provisions that identify "essential elements" of a development, and fall within three categories - zoning requirements (such as Blue Mountains City Council v Laurence Browning Pty Ltd (2006) 150 LGERA 130; [2006] NSWCA 331), definitional requirements (such as Agostino v Penrith City Council and Woollahra Muncipal Council v Carr (1987) 62 LGRA 263), and locational requirements (such as Karimbla Constructions Services v Pittwater Council and North Sydney Municipal Council v PD Mayoh Pty Ltd (1990) LGERA 222).
AS Investment says that, in considering the application of Strathfield Municipal Council v Poynting to various provisions, the authorities are instructive but this is not an area of the law in which cases are genuinely distinguished. As each case examines a different clause of a different instrument, AS Investment submits that whilst the results may be distinguished, the approach is relatively logical and uniform.
Notwithstanding this, AS Investment submits that cl 7.12 of the LLEP 2008 can be distinguished from the clauses considered in each of the above categories of decisions. Firstly, it submits that cl 7.12 is not a "zoning subscript" or "zoning criterion" as in Blue Mountains City Council v Laurence Browning, as cl 7.12 doesn't integrate with the zoning or require a step to be taken in the same way that consolidation was required by the clause considered in that decision, which was considered by the Court of Appeal to be a pre-condition to the permissibility of the development. AS Investment also submits that, distinct from the clause considered in Blue Mountains City Council v Laurence Browning, cl 7.12 of the LLEP 2008 does not apply "indiscriminately to every permissible development within the area covered" by the subject clause, but only applies to those subdivisions that would create a number of lots greater than the number of lots identified in the Dwelling Density Map as "Restricted Lot Yield".
Second, AS Investment submits that the present clause can be distinguished from clauses that impose a definitional requirement, as in Agostino v Penrith City Council, where the provision defined the permissible development by reference to a minimum area where that development was otherwise a prohibited use in the zone.
Third, AS Investment submits that the present clause can be distinguished from clauses that impose some form of locational requirement by reference to what is on adjoining land (such as that considered in North Sydney Municipal Council v PD Mayoh) or requires some state of satisfaction to be met based on the location of the land the subject of the application (such as that considered in Karimbla Constructions Services v Pittwater Council). In contrast, AS Investment submits that cl 7.12 is completely independent of any zoning requirement and contains no state of satisfaction that renders it a pre-condition to development in line with Karimbla Constructions Services v Pittwater Council.
Finally, AS Investment submits that the history of the provision is not relevant and refers to s 34 of the Interpretation Act 1984, which provides at (1): 34 Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable.
AS Investment submits that the ordinary meaning conveyed by the text is clear and there is no ambiguity, and therefore the history of cl 7.12 including the wording of its previous iteration in cl 38A is not capable of assisting in ascertaining whether cl 7.12 is a prohibition or a development standard. AS Investment also submits that a question arises as to whether the material relied upon by the Council, namely the LEP Amendment Application, the Pre-Exhibition report, the Adoption Report and the LEP Amendment No. 84, falls within the extrinsic material that can be considered, given that none of those items fall within s 34(2) as "material that may be considered in the interpretation of a provision of an Act, or a statutory rule made under the Act."

There is another area where the restricted lot yield has not been adhered to

Both AS Investment, and the Council, brought to my attention the fact that development consent (DA 180/2015) was granted for the subdivision of one of the lots in another specified area the subject of a restricted lot yield of 4. That consent resulted in the creation of a fifth lot in that area, in breach of cl 7.12. The Council says that the grant of that development consent was in error, and submits that the Court ought not give the existence of five lots in that other area any great consideration or weight. That development consent remains unless it is challenged. Nonetheless, I accept the submission of the Council that its existence (and the breach of cl 7.12 by the creation of more than 4 lots in another area specified as having a restricted lot yield of 4) is not relevant to the exercise of considering cl 7.12 in the course of determining the present development application.

Clause 7.12 is a prohibition

The task of determining whether cl 7.12 is a prohibition or a development standard is principally one of statutory construction, where the clause must be considered in the context of the instrument as a whole. Care must be taken in adopting the two step approach, and in avoiding a characterisation or identification of the development that has insufficient regard to the terms of the instrument. As stated by Basten JA (Ipp and Tobias JJA agreeing) in Blue Mountains City Council v Laurence Browning, at [100]-[102] (emphasis added): "to describe "the arrangement of land" on which the development is to be carried out as an aspect of the development, whatever the development may be, is to invite the conclusion that every aspect of a valid planning instrument will be a development standard. The distinction between controls which constitute development standards and those which do not, which has been accepted as inherent in the definition in the EP&A Act, is in danger of being lost. That may be because the division of the reasoning process into two steps can distract attention from the exercise required by the statute. 101 However, the critical error arose before the 'two step' approach was addressed. Her Honour commenced by identifying the development. She described the proposed development as "the erection of dwelling houses on land zoned Bushland Conservation under the LEP". That description was provided without reference to the terms of the LEP and without discussion as to why that description was adopted. What followed in the reasoning, at least in part, flowed from that identification of the development. 102 Part of that identification should have included reference to the zoning criteria for the land on which the proposed development is to take place. That is because the particular zoning criteria are essential considerations in determining whether the development is permissible. It is clear that, had the erection of dwelling houses been proposed with respect to land on which such a development was not permitted, the decision would have been different. If the consolidation requirement were understood to be a part of the zoning of the land, on the same logic the result would have been different. The lacuna in her Honour's reasoning is the failure to consider whether the consolidation requirement, identified as a "zoning subscript", should properly have been incorporated into the identification of the development."
Therefore, contrary to the submission of AS Investment, it would be erroneous to commence by identifying the proposed development as "subdivision" without reference to the terms of the LLEP 2008. As stated by Basten JA, at [85] of Blue Mountains City Council v Laurence Browning, "[i]dentification of the development does not help with the construction of the planning instrument: it merely allows identification of the relevant provision in the planning instrument. Whether or not that provision constitutes a development standard must be determined as a matter of construction of the definition in the EP&A Act, and its application to the particular provision."
My analysis of cl 7.12 therefore starts with understanding the text of the provision. Consistent with the decision of Giles JA in Strathfield Municipal Council v Poynting, who found that the provision must be "seen as part of the environmental planning instrument as a whole" (at [94]), I also consider how the provision sits within the context of the LLEP 2008. In doing so, I address the two step approach and whether the provision falls within the definition of a development standard.
I find that the language of cl 7.12 suggests that permissibility depends on a precondition being met. As such, it has the character of a prohibition. It states that "[t]he total number of lots created by the subdivision of land in an area of land identified as "Restricted Lot Yield" on the Dwelling Density Map must not exceed the number shown on that map for that area." The words "must not" have the character of prohibiting a subdivision if the subdivision results in a breach of the maximum lot yield for that area. Conversely, the text of the clause allows subdivision in the identified area only if it does not result in a breach of the maximum lot yield for that area. However, as discussed in Strathfield Municipal Council v Poynting and by Robson J in Principal Healthcare Finance Pty Ltd v Council of the City of Ryde, that the language is phrased in the negative is not, of itself, determinative of it being a prohibition.
Nonetheless, the second aspect of the text of cl 7.12 that favours its interpretation as a prohibition is that it applies indiscriminately to any proposed subdivision within the areas defined in the Dwelling Density Map. This is similar to the provision considered by Pain J in Karimbla Constructions Services v Pittwater Council, which applied indiscriminately to impose a limit of the number of dwellings within specified areas of land (at [31]), and to that considered by the Court of Appeal in Blue Mountains City Council v Laurence Browning, which applied indiscriminately to every permissible development within the area covered (at [93]). In both cases, the particular provision was found to be a prohibition by way of a pre-condition to permissibility. I do not accept that those cases can be distinguished from the present proceedings as easily as what is submitted by AS Investment. Instead, in a similar manner to those provisions, I find that cl 7.12 of the LLEP 2008 applies indiscriminately to the areas defined in the Dwelling Density Map and applies a pre-condition to permissibility of subdivision within those areas. It applies indiscriminately to the identified areas to allow subdivision only if it does not result in a breach of the maximum lot yield for that area, and therefore operates to prohibit any further subdivision in those areas where the restricted lot yield has been achieved.
Thirdly, I do not accept the submission made on behalf of AS Investment that with subdivision made permissible pursuant to cl 2.6 of the LLEP 2008, any requirement of the subdivision must be a development standard. Such a submission is contrary to the reasoning in Karimbla Constructions Services v Pittwater Council and Blue Mountains City Council v Laurence Browning. In Karimbla Constructions Services v Pittwater Council, Pain J found that notwithstanding development for the purpose of dwelling houses was permissible in the zone, cl 6.1(3) of the relevant instrument created a prohibition that "can only be lifted if the Council is satisfied that no more than the total specified number of dwellings in column 2 is proposed to be built on that land" (at [31]). Contrary to the submission of AS Investment, there is nothing in the reasoning of Pain J that suggests that the prohibition only applied due to the relevant provision specifying "no dwellings". In Blue Mountains City Council v Laurence Browning, the relevant provision imposed a precondition "to every permissible development within the area covered" (at [93]) and was determined by the Court of Appeal to be a prohibition if the precondition was not met. Similar to those provisions, cl 7.12 adopts prohibitory language that provides a precondition to development that is otherwise permissible. As such, I consider that cl 7.12 imposes a condition precedent on permissible development, such that subdivision is only permissible if the result of the subdivision is a total number of lots within the area that is no more than the total permitted by the restricted lot yield. Conversely, it prohibits any further subdivision in the area identified, where the cap on the restricted lot yield has been achieved.
Fourthly, I find that the structure of the LLEP 2008 and the context of cl 7.12 support this interpretation. Clause 2.6 of the LLEP 2008, which makes the subdivision of land permissible with development consent, is a compulsory clause within the standard environmental planning instrument. Pursuant to cl 4(1)(a) of the Standard Instrument (Local Environmental Plans) Order 2006, it is therefore a mandatory clause in the LLEP 2008. The consequence of this is that the clause in the local instrument remains in precisely the same terms as that in the standard instrument. If an amendment is made to the clause in the standard instrument, the environmental planning instrument is taken (without further amendment) to adopt the amended provisions (see s 3.20(4) of the EPA Act). This leaves a local council with the only option to create a prohibition on subdivision, in certain areas or circumstances, through an entirely separate clause. I accept the submission of the Council in that regard. In the LLEP 2008, that prohibition is imposed through a separate clause, cl 7.12, which forms part of Part 7 Additional Local Provisions. Consistent with the submissions of the Council, the clause is not contained within Part 4 Principal development standards, which further supports its interpretation as a provision that is separate to, and distinct from, development standards. In this manner, cl 7.12 can be distinguished from the provision considered by Dixon SC in Oneten Properties Pty Ltd v Hawkesbury City Council, which was included within Part 4 Principal Development Standards of the relevant instrument. In forming this view on the interpretation of cl 7.12, I ascribe no weight to the absence of objectives from the clause.
Fifthly, in applying this interpretation of cl 7.12 to the proposed development, which I consider to be best identified as the two lot subdivision of Lot 74, the development is prohibited in any circumstances. As the land the subject of the development application is one of four lots that comprise an area the subject of a restricted lot yield of 4, cl 7.12 prohibits further subdivision in any circumstances. This conclusion means that the proposed development fails at the first of the two steps in Strathfield Municipal Council v Poynting.
Sixthly, cl 7.12 does not meet the definition of a development standard as it does not specify a requirement or fix a standard in relation to an aspect of the development. Unlike provisions with respect to lot size or lot dimensions, which specify requirements in relation to an aspect of subdivision, cl 7.12 instead controls the carrying out of subdivision on the specified areas of land within the Dwelling Density Map. As distinct from the provision considered by Dixon SC in Oneten Properties Pty Ltd v Hawkesbury City Council, which she interpreted to specifically relate to the number of lots created by the subdivision the subject of a development application (without reference to previously created lots: see [76]-[77]), and therefore specified the way in which subdivision is to be carried out, cl 7.12 instead controls the circumstances in which the carrying out of subdivision can occur in specified areas. This distinction is drawn out by Pain J in Karimbla Constructions Services v Pittwater Council, in which Her Honour stated (at [45]) that the clause in question "does not operate by reference to the number of dwellings to be erected as part of a particular development" but instead "imposes… the existence of an attribute of the whole of the land comprising the relevant sector or buffer area within which a proposed development is to be carried out". In the same way, cl 7.12 does not operate by reference to the subdivision of the lot the subject of the development application, but instead requires the existence of an attribute of the entire area the subject of the maximum lot yield. Clause 7.12 therefore does not pass the second step in Strathfield Municipal Council v Poynting, and does not meet the definition of "development standards" in the EPA Act. I note also that the omission of cl 7.12 from cl 4.6(8) is explained by my view that cl 7.12 is not a development standard.
Finally, I do not accept the submission of AS Investment that a 'maximum lot yield' across a defined area such as that in cl 7.12 fits within the description as something that regulates "the intensity or density of the use of any land, building or work…", consistent with category (e) of the definition of "development standards". Category (e) is concerned with the use of land. As can be seen from the definition of "development" in s 1.5 of the EPA Act, the use of land is a distinct type of development to the subdivision of land. I accept the submission, made by the Council, that "intensity or density" of land use is not generally regulated through a restricted lot yield alone.
For these reasons, I reach the conclusion that cl 7.12 imposes a condition precedent to permissible development in the areas identified in the Dwelling Density map, and is therefore a prohibition if the condition precedent is not met. The proposed subdivision of Lot 74 is prohibited, as Lot 74 is one of four lots that comprise an area the subject of a restricted lot yield of 4, and therefore any subdivision would result in exceeding the maximum lot yield for the specified area and as such the condition precedent is not met. The development application should be refused on that basis.

The relevance of the genesis of cl 7.12

I note that I reach the above conclusion based on the text of cl 7.12 and considering the clause within the context of the instrument, without taking into account the genesis of cl 7.12.
Whilst, prima facie, the Adoption Report and the LEP Amendment No 84 tend to support the above conclusion, I am concerned that there is no basis upon which I could take them into account. Section 34 of the Interpretation Act, identified by the parties as being the potential basis upon which I could consider material of that nature, applies only to "the interpretation of a provision of an Act or statutory rule". The LLEP 2008 is an environmental planning instrument, which falls within the definition of an "instrument" under the Interpretation Act (see s 3). Therefore, provisions within the Interpretation Act that apply to an "instrument" apply to the LLEP 2008. Section 34(1) does not refer to the interpretation of an "instrument", but instead refers to "an Act or statutory rule".
Further, in s 5(6) of the Interpretation Act, a number of sections are specified as ones that apply to an environmental planning instrument. Section 34 is noticeably absent. Section 5(6) provides: (6) The provisions of sections 24, 28, 29, 30, 30B, 33, 42, 43, 69A, 75 and 80 that apply to a statutory rule also apply to an environmental planning instrument.
The issue of whether s 34 of the Interpretation Act applies to the interpretation of the LLEP 2008 was not raised at the hearing. Both parties assumed that it applies to the interpretation of environmental planning instruments. Given that I have reached the conclusion that cl 7.12 imposes a condition precedent to permissible development based on the text of cl 7.12 and its context, it is not necessary to consider the question of whether s 34 of the Interpretation Act applies to the interpretation of cl 7.12.

Submissions on the cl 4.6 request

Notwithstanding that the contentions raised by the Council did not put in issue any matter arising from the cl 4.6 request, I expressed concern with respect to the adequacy of the written request and submissions were made in writing by the parties accordingly. The submissions made on behalf of AS Investment also raised questions of procedural fairness, namely, whether AS Investment had been given a sufficient opportunity to address the issue of adequacy of the cl 4.6 request.
However, given that I have found that cl 7.12 is not a development standard that can be the subject of a cl 4.6 request, there is no utility in considering those submissions.

Final orders

For the reasons expressed above, the proposed subdivision of Lot 74 is prohibited, as it doesn't meet the condition precedent for permissibility, namely that the number of lots within the area of the restricted lot yield within which Lot 74 is located must not exceed 4. Pursuant to s 4.16(2) of the EPA Act, the Court, in exercising the functions of the consent authority, "must refuse an application for development, being the subdivision of land, that would, if carried out, result in a contravention of… an environmental planning instrument… whether arising in relation to that or any other development." The development application must therefore be refused.
The Court orders that: 1. The appeal is dismissed. 2. The development application for the two lot subdivision of Lot 74 in DP 1134477, known as 76 Pleasure Point Road, Pleasure Point, is refused. 3. Exhibits 1, 2, 5, 6, B and C and the Applicant's List of Authorities are returned. ………………………. Commissioner Gray

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 February 2019

(2010) 172 LGERA 380

(2006) 150 LGERA 130

(2016) 222 LGERA 212

(2001) 116 LGERA 319

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