Barhom v Randwick City Council - [2024] NSWLEC 1357 - NSWLEC 2024 case summary — Zoe

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Barhom v Randwick City Council

[2024] NSWLEC 1357

Land and Environment Court (NSW)|2024-04-17

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2024-04-17

Catchwords

[2010] NSWLEC 231 Wehbe v Pittwater Council (2007) 156 LRERA 446

Source

Original judgment source is linked above.

Catchwords

[2010] NSWLEC 231 Wehbe v Pittwater Council (2007) 156 LRERA 446

Judgment (84 paragraphs)

[1]

Judgment

COMMISSIONER: At 12 Nurla Avenue, Little Bay, there is an existing attached dual occupancy. The applicants, Mr and Mrs Barhom, seek development consent for the subdivision of the dual occupancy into two strata lots, with the subdivision to occur along the line of the dividing wall and fence between the two dwellings that form the attached dual occupancy. The subdivision would therefore result in a dwelling on each strata lot. The size of the two strata lots on the proposed plan of subdivision is 298m2 and 376m2, and they have a ground floor land area including common property walls of 223.6m2 and 296.2m2 respectively. The applicants lodged a development application with Randwick Council (the Council) on 3 April 2023, which was refused on 10 August 2023. These proceedings are an appeal against that determination.
The Court arranged a conciliation conference between the parties, pursuant to s 34AA(2)(a) of the Land and Environment Court Act 1979 (LEC Act). The conciliation conference commenced on 17 April 2024. The parties did not reach an agreement and the appeal proceeded to a hearing forthwith pursuant to s 34AA(2)(b)(i).
The Council opposes the grant of development consent on the basis that the proposed strata lot sizes are less than the minimum subdivision lot size development standard, and that the written request concerning the breach of the development standard is inadequate. The Council also contends that the proposed subdivision is contrary to the objectives of the zone in that it does not encourage housing affordability or provide for the housing needs of the community.
For the reasons set out below, I have found that the strata lot size is the area of the strata lot that is depicted on the proposed plan of subdivision. Whilst there is nonetheless a breach of the minimum subdivision lot size development standard, I am satisfied that development consent can be granted notwithstanding the contravention.

[3]

The planning framework

The site is zoned R2 Low Density Residential pursuant to the Randwick Local Environmental Plan 2012 (RLEP).
On 1 September 2023, the Randwick Local Environmental Plan 2012 (Amendment No 9) (LEP Amendment No 9) commenced. The savings provision in cl 1.8A(3) of the RLEP states that amendments made to the RLEP by Amendment No 9 "do not apply to a development application made but not finally determined before the commencement of the plan". Consequently, the provisions of the RLEP as they were prior to the commencement of the LEP Amendment No 9 apply to the development application the subject of these proceedings, and references to the RLEP are references to its provisions prior to the commencement of the LEP Amendment No 9.
The objectives of the R2 zone are as follows: • To provide for the housing needs of the community within a low density residential environment. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. • To recognise the desirable elements of the existing streetscape and built form or, in precincts undergoing transition, that contribute to the desired future character of the area. • To protect the amenity of residents. • To encourage housing affordability. • To enable small-scale business uses in existing commercial buildings.
The proposed development is for subdivision simpliciter, which is permissible pursuant to cl 2.6 of the RLEP, which provides that "land to which this Plan applies may be subdivided, but only with development consent".
Clause 4.1A imposes a minimum subdivision lot size for strata plan schemes, with an exception for subdivision of dual occupancies, which at cl 4.1A(4)(a) requires that "the size of each lot resulting from the subdivision is not to be less than 400 square metres". The words "the subdivision" relates to "a subdivision of land", found in cl 4.1A(3). Clause 4.1A is as follows: 4.1A Minimum subdivision lot size for strata plan schemes in Zone R2 (1) The objective of this clause is to ensure that land to which this clause applies is not fragmented by subdivisions that would create additional dwelling entitlements. (2) This clause applies to land in Zone R2 Low Density Residential. (3) The size of any lot resulting from a subdivision of land to which this clause applies for a strata plan scheme (other than any lot comprising common property within the meaning of the Strata Schemes (Freehold Development) Act 1973 or Strata Schemes (Leasehold Development) Act 1986) is not to be less than the minimum size shown on the Lot Size Map in relation to that land. Note - Part 6 of State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 provides that strata subdivision of a building in certain circumstances is specified complying development. (4) Despite subclause (3), if the subdivision is of a lot on which there is a dual occupancy (attached) - (a) the size of each lot resulting from the subdivision is not to be less than 400 square metres, and (b) 1 dwelling must be situated on each lot resulting from the subdivision.
Section 11 of the Interpretation Act 1987 makes it clear that words and expressions in an instrument have the same meanings as they have in the Act under which the instrument is made. The phrase "subdivision of land", referred to in cl 4.1A(3) of the RLEP, is defined in s 6.2 of the Environmental Planning and Assessment Act 1979 (EPA Act), and includes the subdivision of land by the registration of a strata plan or a strata plan of subdivision within the meaning of the Strata Schemes Development Act 2015 (SSD Act). Section 6.2 of the EPA Act provides, relevantly: 6.2 Meaning of "subdivision" of land (cf previous s 4B) (1) For the purposes of this Act, subdivision of land means the division of land into 2 or more parts that, after the division, would be obviously adapted for separate occupation, use or disposition. The division may (but need not) be effected - (a) by conveyance, transfer or partition, or (b) by any agreement, dealing, plan or instrument rendering different parts of the land available for separate occupation, use or disposition. (2) Without limiting subsection (1), subdivision of land includes the procuring of the registration in the office of the Registrar-General of - (a) a plan of subdivision within the meaning of section 195 of the Conveyancing Act 1919, or (b) a strata plan or a strata plan of subdivision within the meaning of the Strata Schemes Development Act 2015.
It is clear, therefore, that reference to the subdivision of land in cl 4.1A of the RLEP is to the subdivision of land by the registration of a strata plan or a strata plan of subdivision within the meaning of the SSD Act. This is considered in further detail below.
Clause 4.1C, although not relevant to the present development application, concerns the minimum lot size for dual occupancy development, and provides: 4.1C Minimum lot size for dual occupancies (attached) (1) The objective of this clause is to provide for housing diversity and affordability in residential zones. (2) Development consent may be granted for development on a lot in Zone R2 Low Density Residential for the purpose of a dual occupancy (attached), if the area of the lot is at least 450 square metres.
The size of the strata lots resulting from the proposed development, however calculated, will not comply with the minimum strata lot size of 400m2. As such, the applicants rely on cl 4.6 of the RLEP, which allows development consent to be granted notwithstanding a contravention of a development standard.
The terms of cl 4.6 were amended by the Standard Instrument (Local Environmental Plans) Amendment (Exceptions to Development Standards) Order 2023. However, cl 8 of the Standard Instrument (Local Environmental Plans) Order 2006 applies such that the amendments made by the amending order do not apply to a development application lodged prior to its commencement on 1 November 2023. The applicable relevant wording of cl 4.6 of the RLEP with respect to this development application is therefore 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 Planning Secretary has been obtained. (5) In deciding whether to grant concurrence, the Planning Secretary must consider - (a) whether contravention of the development standard raises any matter of significance for State or regional environmental planning, and (b) the public benefit of maintaining the development standard, and (c) any other matters required to be taken into consideration by the Planning Secretary before granting concurrence. (6) …
Although the LEP Amendment No 9 does not apply to the development application the subject of the proceedings, it is nonetheless a planning instrument within the meaning of s 4.15(1)(a)(i) of the EPA Act. It amended cl 4.1A of the RLEP such that the minimum subdivision lot size for a strata lot created by the registration of a strata plan is now 275m2. No other changes were made to cl 4.1A.
As set out above, the savings provision in cl 1.8A(3) of the RLEP (as amended) operates such that that amendments by the LEP Amendment No 9 "do not apply" to the proposed development. In accordance with the decision in Omid Mohebati-Arani v Ku-ring-gai Council [2017] NSWLEC 143, the clear language "does not apply" means that consideration of the amendment is precluded in the assessment under s 4.15 of the EPA Act.

[5]

The calculation of a strata lot size

The question before the Court is how to calculate "the size of each lot resulting from the subdivision" in order to determine, in accordance with cl 4.1A(4)(a), whether that size is not "less than 400 square metres".
Clause 4.1A(4) refers to subcl (3), and states in the chapeau "if the subdivision is of a lot on which there is a dual occupancy (attached)". I consider that the words "the subdivision" is a reference to a "subdivision of land" in cl 4.1A(3), and the reference to "a lot" in the chapeau of subcl (4) relates to the lot prior to the subdivision.
As set out above, the words "subdivision of land" in cl 4.1A(2) are a defined term that includes the subdivision of land by the registration of a strata plan or a strata plan of subdivision within the meaning of the SSD Act (EPA Act, s 6.2(2)(b)). The words "a subdivision of land to which this clause applies for a strata plan scheme" in cl 4.1A(3) restricts the type of subdivision referred to in this clause to the subdivision of land by the registration of a strata plan or a strata plan of subdivision.
A strata plan and a strata plan of subdivision are defined in s 4 of the SSD Act as follows: strata plan means a plan that is registered as a strata plan, and includes any information, certificate or other document required by this Act or the regulations to be included with the plan before it may be registered. … strata plan of subdivision means a plan that is registered as a strata plan of subdivision, and includes any information, certificate or other document required by this Act or the regulations to be included with the plan before it may be registered.
Section 9 of the SSD Act concerns the registration of a plan as a strata plan, and provides as follows: 9 Subdivision of land by strata plan (1) The following land may be subdivided into lots, or lots and common property, by the registration of a plan as a strata plan - (a) land including the whole of a building and consisting of one current plan lot or 2 or more contiguous current plan lots, (b) land including part only of a building and consisting of one current plan lot or 2 or more current plan lots (whether contiguous or not). (2) For the purpose of creating a leasehold strata scheme, land that is subject to a lease or leases may be subdivided under this section. (3) Land that is a development lot in a strata plan cannot be subdivided under this section. Note - See section 14 for subdivision of land that is a development lot. (4) In this section - current plan lot means an existing lot within the meaning of the Conveyancing Act 1919, other than a lot as defined in this Act. land means land under the Real Property Act 1900 that is held in fee simple, other than land comprised in a limited folio or qualified folio.
Therefore, "the size of each lot resulting from the subdivision" in cl 4.1A(4)(a) of the RLEP is the size of each lot created by the registration of a plan as a strata plan pursuant to s 9(1) of the SSD Act.
The SSD Act defines "lot" in s 4 as one or more cubic spaces shown on as a lot on a floor plan, as follows: lot, in relation to a strata scheme, means one or more cubic spaces shown as a lot on a floor plan relating to the scheme, but does not include any common infrastructure, unless the common infrastructure is described on the plan, in the way prescribed by the regulations, as a part of the lot.
The boundaries of a lot are separately defined in s 6, and define the lines within which the cubic spaces are formed that comprise a lot, as follows: 6 Boundaries of lot (1) For the purposes of this Act, the boundaries of a lot shown on a floor plan are - (a) except as provided by paragraph (b) - (i) for a vertical boundary in which the base of a wall corresponds substantially with a base line - the inner surface of the wall, and (ii) for a horizontal boundary in which a floor or ceiling joins a vertical boundary of the lot - the upper surface of the floor and the under surface of the ceiling, or (b) the boundaries described on the floor plan relating to the lot, in the way prescribed by the regulations, by reference to a wall, floor or ceiling in a building to which the plan relates or to common infrastructure within the building. (2) In this section - base line - see paragraph (a) of the definition of floor plan in section 4 (1).
Both the definition of lot and boundaries of a lot rely on what is shown on a floor plan. A floor plan is separately defined in s 4, as follows: floor plan means a plan that - (a) defines by lines (each a base line) the base of the vertical boundaries of each cubic space forming the whole of a proposed lot, or the whole of a part of a proposed lot, to which the plan relates, and (b) shows - (i) the floor area of each proposed lot, and (ii) if a proposed lot has more than one part - the floor area of each part together with the aggregate of the floor areas of the parts, and (c) if a proposed lot or part of a proposed lot is superimposed on another proposed lot or part - shows the separate base lines of the proposed lots or parts, by reference to floors or levels, in the order in which the superimposition occurs.
Finally, to understand what is meant by "floor area", floor area is defined in s 4 as follows: floor area of a lot means the area occupied on a horizontal plane by the base of the cubic space of the lot
Therefore, in accordance with the SSD Act, a "lot" in a strata plan is one or more cubic spaces defined by their boundaries as depicted on a floor plan, and the floor plan shows the floor area of the lot by reference to the horizontal plane of each cubic space. If there is more than one cubic space in a lot, the floor plan shows the aggregate of those floor areas.
Accordingly, the "size of each lot resulting from the subdivision" in cl 4.1A(4)(a) of the RLEP is the size of each lot created by the registration of a plan as a strata plan, determined by the sum of the floor areas depicted in the floor plan for each lot, which is calculated from the areas occupied by the horizontal plane of each cubic space that forms the lot.
Applying this to the subdivision proposed in the present appeal, the size of each lot resulting from the subdivision is 298m2 and 376m2.
This is consistent with the conclusions reached by the Court in the decisions of Commissioner Dickson in Kelly v Randwick City Council [2018] NSWLEC 1322 ("Kelly"), Commissioner Bish in Kingsford Property Developments v Randwick City Council [2019] NSWLEC 1486 ("Kingsford") and Commissioner Espinosa in Albert Square NSW Pty Ltd v Randwick City Council [2021] NSWLEC 1401 ("Albert Square").

[6]

The Council's argument against such an interpretation

The Council submits that the "size of each lot resulting from the subdivision" in cl 4.1A(4)(a) should instead be interpreted as the area of the ground level of the subdivided lot.
In support of its position, the Council relies on the decision of Commissioner Horton in MMP 888 Pty Ltd v Randwick City Council [2019] NSWLEC 1646 ("MMP 888"), in which the Commissioner found that the "size of each lot" is the "land on the site" which "must have a minimum area of 400m2 for each dwelling" (at [45]). The Council relies on the submissions it made to Commissioner Horton, summarised at [29] to [38] of that decision, and says that the size of a lot must be measured by reference to one plane, which is the flat plane shown in the lot size map referred to in cl 4.1A(3). The Council relies on s 33 of the Interpretation Act 1987, which requires a construction of a provision of an Act or statutory rule that promotes the object underlying the provision to be preferred over a construction that does not. I note that s 33 does not apply to the interpretation of a local planning instrument, including the RLEP.
The Council submits that its position is supported by the planning proposal that amended cl 4.1A, which included a proposal to change the wording of cl 4.1A(4)(a) to "the area of the strata lot, measured at ground level, must be no less than 275 square metres". However, this wording was not accepted by the Department of Planning and Environment, and the amendment made to cl 4.1A(4) by the RLEP Amendment No 9 was confined to the size of the lot. The Council says that its planning proposal was an attempt to clarify the wording of this clause in a manner consistent with the intention of the clause.
In addition, the Council relies on the evidence of Mr Joannides, that the area of the lot should be calculated in the manner set out in s 6.2 of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (SEPP ECDC), which provides for strata subdivision where the "strata area" is referred to as "the area of the ground floor of all dwellings". The accompanying diagram for the calculation of the strata area shows that both the common area and the first floor strata area is excluded in the calculation.

[7]

The Council's position cannot be maintained

I cannot accept the Council's position that the strata lot must be calculated by the area of the ground level, for the following reasons.
Firstly, the task of interpretation of the words of the RLEP involves determining what the words mean by reference to "the objective intention as manifested by the words" rather than by "the subjective intention of parliamentarians or ministers" (Parks and Playgrounds Movement Inc v Newcastle City Council (2010) 179 LGERA 346; [2010] NSWLEC 231 at [71]). These principles apply equally to delegated legislation (DM & Longbow v Willoughby City Council (2017) 228 LGERA 342; [2017] NSWLEC 173 at [19]). As such, the attempt in the planning proposal to amend the words of cl 4.1A(4)(a) is irrelevant to the interpretation of the existing wording, as the subjective intention of council officers is not relevant to how those words should be interpreted. Instead, to interpret those words and consider how one ought understand the size of "the lot resulting from the subdivision" in cl 4.1A(4)(a), the focus must be on the words of that clause and the instrument itself. Given that the words of the clause are "a subdivision of land… for a strata plan scheme", and the words "subdivision of land" include, pursuant to s 6.2(2)(b) of the EPA Act, the subdivision of land by the registration of a strata plan, the "lot resulting from the subdivision" in cl 4.1A(4)(a) should be interpreted by reference to the strata lot that is created by the registration of the strata plan. The size of the strata lot, in square metres, should therefore be measured in a manner consistent with how it is measured on that registration, as outlined above at [27] to [35].
Secondly, the arguments made by the Council and the competing decisions of the Court in Kelly, Kingsford and MMP 888 were considered by Commissioner Espinosa in her decision in Albert Square. In Albert Square, Commissioner Espinosa dispenses with the Council's arguments at [15]-[17], does not agree with the reasoning in MMP 888, and carries out the interpretative task in [46]-[53] to reach a position that: "the control in cl 4.1A relates to the lot resulting from the strata scheme subdivision and therefore applies to the size of the strata lot. To apply any other interpretation creates an artificial application of the words on a clause where the whole subject matter is strata scheme subdivision."
The decision of the Court in Albert Square clearly considers the earlier competing decisions and determines the correct approach to the interpretation of cl 4.1A. Having done so, as a matter of comity it is a decision that I should follow unless it is plainly wrong. For the reasons set out above at [23]-[34], I reach the same conclusion as that which was reached in Albert Square and there is no basis upon which I could conclude it to be wrong.
Thirdly, the manner of calculation of the size of a strata lot pursuant to s 6.2 of the SEPP ECDC is irrelevant, as it relates to the development standards for complying development, which does not apply to the proposed development. Section 6.2 uses a distinct term "strata area" and sets out a requirement that "no part of a dwelling is located above any part of another dwelling". This term "strata area" is distinct from "the size of each lot" referred to in cl 4.1A of the RLEP, and the requirement for no part of the dwelling to be located above any part of another dwelling in s 6.2 of the SEPP ECDC is not a requirement for the registration of a strata plan pursuant to the SSD Act.
For those reasons, none of the arguments advanced by the Council warrant a departure from the manner of calculation of the size of a strata lot in accordance with what I describe above at [27] to [35]. The size of each lot resulting from the subdivision is 298m2 and 376m2.
Of course, a contrary provision for the calculation of the size of the strata lot may be introduced in cl 4.1A of the RLEP in future, but whilst the present wording remains, there can be no doubt that the calculation of the size of the strata lot in square metres should be consistent with how it is measured on the registration of the strata plan pursuant to s 9 of the SSD Act.

[10]

The Council's position on whether the requisite elements in cl 4.6(4) are satisfied

The Council's position is that the written request is fundamentally flawed, and that the Court could not be satisfied that the proposed development is consistent with the objectives of the clause and of the zone.
Firstly, the Council submits that the written request is fundamentally flawed insofar as it relies on the current minimum strata lot size that is in place following LEP Amendment No 9. The Council says that to do so is inconsistent with the decision of the Court in Omid Mohebati-Arani v Ku-ring-gai Council, in which Robson J found that the clear language of a savings provision, by the use of the words "does not apply", precluded consideration of the relevant instrument. The same words are used in the applicable savings provision for LEP Amendment No 9. The Council therefore says that there can be no consideration of the decrease in the minimum strata lot size brought about by LEP Amendment No 9.
Secondly, the Council says that the Court cannot reach a positive opinion that the subdivision is consistent with the objective of the standard "to ensure that land to which this clause applies is not fragmented by subdivisions that would create additional dwelling entitlements". Achieving the objective of the standard is one way in which compliance with the standard can be seen to be unreasonable or unnecessary, consistent with Wehbe v Pittwater Council (2007) 156 LRERA 446; [2007] NSWLEC 827. Further, consistency with the objective of the standard is an element of the public interest about which the consent authority must be satisfied in cl 4.6(4)(a)(ii) of the RLEP.
Consistent with its submission, the Council says that the proposed subdivision will be contrary to the objective of the standard because an additional dwelling entitlement will be created on each subdivided strata lot. The Council asserts that the operation of Pt 1 of Ch 3 of the State Environmental Planning Policy (Housing) 2021 allows a secondary dwelling to be permitted within the principal dwelling on the strata subdivided lot, with development consent, despite any provision to the contrary in a local environmental plan. As such, the Council says that the strata subdivision will create an additional dwelling entitlement that is contrary to the objective of the standard.
Thirdly, the Council submits that there is no evidence to support the assertion made in the written request that the proposed development is consistent with the objectives of the zone to "provide for the housing needs of the community within a low-density residential environment" and to "encourage housing affordability". This point is also raised as a separate contention, Contention 2, in which the Council contends that the proposed development is inconsistent with these two objectives. Specifically, the Council submits that there is no evidence that undersized lots will encourage housing affordability, and says that they may increase land values. The Council submits that the applicants have a persuasive burden to establish that the proposed development encourages housing affordability, and there is no evidence to that effect. The Council also says that the proposed development does not increase housing supply, as there is no change to the number of dwellings. In support of its position on housing affordability and meeting housing needs, the Council relies on the evidence of Mr Joannides that the unsubdivided dual occupancy is suited to large families and "provide[s] them a greater chance of affordable housing", and his assertion that "no market analysis has been provided to address the contentions raised in Contention 2 regarding the impact the strata subdivision will have for the attached dual occupancies [sic] dwellings will have on the purchasing and rental property markets".
Finally, the Council says that the grounds advanced as environmental planning grounds are either not planning grounds, or they are not sufficient to justify the departure from the development standard.

[11]

The applicants' position in response

In response, the applicants submit that whilst the LEP Amendment No 9 cannot be considered for the purpose of the assessment pursuant to s 4.15 of the EPA Act, the fact of its existence can nonetheless be considered, and its existence can still be taken into account for the purpose of the matters required of the written request pursuant to cl 4.6 of the RLEP. The applicants therefore say that the fact that the minimum strata lot size is now 275m2 is clearly relevant to the cl 4.6 request concerning the departure from the applicable minimum strata lot size of 400m2, and the savings provision does not preclude consideration for that purpose. They submit that an environmental planning ground can include a change to the planning instrument.
In relation to the objective of the clause, the applicants submit that a "dwelling entitlement" is an entitlement to erect a dwelling on the relevant land, and the strata subdivision does not create any additional dwelling entitlement as no additional dwellings can be erected on the land other than those already existing in the dual occupancy. The applicants dispute that Pt 1 of Ch 3 of the State Environmental Planning Policy (Housing) 2021 allows a secondary dwelling to be permitted within the principal dwelling on each subdivided lot, as it could not meet the requirement that it "will not result in a dwelling on the land, other than the principal dwelling and the secondary dwelling" given that the use of the word "land" relates to the real property lot, rather than the strata lot.
Further, the applicants submit that there is no evidence to support the Council's position that the proposed development is inconsistent with the objectives of the zone to "encourage housing affordability" and to "provide for the housing needs of the community within a low density residential environment". With respect to the housing needs of the community, the applicants point to the assessment report prepared by the council officer for the development application for the dual occupancy (DA/284/2020), which states that the proposed development "will provide for the housing needs of the community whilst enhancing the aesthetic character and protecting the amenity of the local residents" (Ex 2, Tab 1). The applicants point out that there is no change to the number of dwellings as a result of the subdivision.
With respect to the objective to "encourage housing affordability", the applicants point out that, as conceded by Mr Joannides in cross-examination, separate titles for each of the two dwellings will enable people to purchase one or two of the dwellings, rather than being limited to purchasing only both as a pair, and the value of either one of the dwellings is less than the value of the pair. The applicants submit that it is therefore clear that the ability to purchase only one of the dwellings provides for increased affordability. The applicants also submit that it is difficult to see how there would be any change to affordability in the rental market by the strata subdivision, as both dwellings can be rented either separately or together in the current arrangement, in the same way they can be once subdivided.
The applicants therefore submit that the requisite elements in cl 4.6(4) are satisfied, and that contention 2 concerning the zone objectives is not a reason to refuse the development application.

[13]

The written request demonstrates that compliance is unreasonable or unnecessary in the circumstances of the case

Consistent with cl 4.6(3)(a) and cl 4.6(4)(a)(i) of the RLEP, I am satisfied that the written request adequately addresses that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case. It does so by stating that the proposed development complies with the current minimum subdivision strata lot size for strata subdivision of a dual occupancy in cl 4.1A(4), which is 275m2, brought about by LEP Amendment No 9.
In this respect I accept the submission made by the applicants that, although the savings provision in cl 1.8A(3) of the RLEP precludes consideration of the amendment brought about by LEP Amendment No 9 for the purpose of the assessment of the development application pursuant to s 4.15 of the EPA Act, the existence of LEP Amendment No 9 can nonetheless can be relied upon in the written request and considered in the Court's assessment of the adequacy of the request. The existence of a change to a planning instrument is a matter that forms part of "the circumstances of the case" if the change is relevant to the particular case. The fact that there is a different development standard that would apply if the development application was lodged today can be relied upon in a written request to vary the applicable development standard, and can be considered in the Court's assessment of the matters in cl 4.6(4)(a). As set out in the written request, in circumstances where the proposed development complies with the development standard for the minimum strata subdivision lot size for the strata subdivision of a dual occupancy in cl 4.1A(4) of the current instrument, which would apply to any development application lodged following the commencement of LEP Amendment No 9, it is unreasonable and unnecessary for it to comply with the larger minimum strata subdivision lot size that applies only by virtue of the savings provision.

[15]

The proposal is in the public interest

Further, consistent with cl 4.6(4)(a)(ii) of the RLEP, I am satisfied that the proposed development is in the public interest because it is consistent with the objectives of the standard and the objectives for development within the zone.
Firstly, the proposed development, for a two-lot strata subdivision of a dual occupancy, is consistent with the single objective of the standard, to ensure that land "is not fragmented by subdivisions that would create additional dwelling entitlements", in the same way that a two-lot strata subdivision development that complies with the numerical requirements of cl 4.1A(4) would be consistent with that objective. Given that the proposed development is for a two-lot strata subdivision, any 'dwelling entitlements' that it creates are identical to the 'dwelling entitlements' created for a two-lot strata subdivision with strata lots that comply with the 400m2 minimum strata lot size. In either scenario, there will be only one dwelling on each strata lot, and there will be two strata lots.
Even if I was satisfied that Pt 1 of Ch 3 of the State Environmental Planning Policy (Housing) 2021 allows a complying development certificate to be sought for an additional dwelling in the form of a secondary dwelling within the built form of the subdivided strata lot, this scenario also arises with a strata subdivision that complies with cl 4.1A(4). It makes no difference to my finding that the proposed development is consistent with the objective of cl 4.1A in the same way a subdivision that complies with cl 4.1A(4) would be consistent with that objective.
The main operative provision in cl 4.1A of the RLEP is in subcl (3), to apply the minimum subdivision lot size that applies to land, from cl 4.1 of the RLEP, to a lot created by a strata subdivision. An exception is then created by subcl (4), which applies to a dual occupancy. The objective to the clause, in cl 4.1A(1), must be read in that context. It is concerned with the fragmentation of land caused by additional dwelling entitlements, which could arise if there was no control on the strata lot size, as this would mean that a parcel of land could be fragmented by division into larger numbers of smaller strata lots. The two-lot strata subdivision of the dual occupancy, as proposed by the present development application, is consistent with the objective of the clause as it is a two-lot subdivision consistent with the exception in cl 4.1A(4) and creates the same number of dwelling entitlements as a two-lot strata subdivision that complies with the numerical requirement of cl 4.1A(4) as it applies to the development application.
Secondly, the proposed development is consistent with the objectives of the R2 Low Density Residential Zone in the RLEP. It is consistent with the following objectives on the basis that there is no change to the built form: • To recognise the desirable elements of the existing streetscape and built form or, in precincts undergoing transition, that contribute to the desired future character of the area. • To protect the amenity of residents.
The following objectives are not relevant: • To enable other land uses that provide facilities or services to meet the day to day needs of residents. … • To enable small-scale business uses in existing commercial buildings.
Contrary to the Council's position, the proposed development is also consistent with these remaining objectives: • To provide for the housing needs of the community within a low density residential environment. … • To encourage housing affordability.
The proposed development is consistent with the objective to encourage housing affordability as it results in two strata lots that can each be made available for either sale or rent, consistent with the evidence of Mr Betros and the concessions made by Mr Joannides.
I do not accept the Council's position that the Court cannot be satisfied that the proposed development is consistent with the zone objectives by virtue of there being "no evidence" that the strata subdivision would not have an adverse impact on housing affordability in the local area or in the zone. To be satisfied of consistency with the objective to "encourage housing affordability", there is no obligation for the applicants to prepare a market analysis to establish that there is no impact on the property or rental market. Whilst there exists a persuasive burden of proof on an applicant for development consent to establish that an impact is acceptable (see Australian Protein Recyclers Pty Limited v Goulburn Mulwaree Shire Council [2006] NSWLEC 641 at [2]), this does not give a consent authority a carte blanche to identify so-called impacts without a proper substantive foundation. An applicant for development consent ought only be 'put to proof' on genuine impacts.
There is no substantive foundation to the Council's assertion, made in the particulars of Contention 2, of an adverse housing affordability impact of a strata subdivision of a dual occupancy. To the contrary, it is axiomatic that it increases housing supply to the market for purchase, with each strata lot at a price point lower than the unsubdivided whole, consistent with the evidence given by Mr Joannides in cross-examination. Therefore, in the market for purchase, there will be increase in supply (there being two lots rather than one) at a lower price point, which is likely to encourage housing affordability for those in that market. In the rental market, I accept the submission made by on behalf of the applicants that it is difficult to see how there would be any change, since both dwellings could be rented separately even without strata subdivision.
Further, the opinion of Mr Joannides concerning the housing needs of the community being met through an unsubdivided dual occupancy is not supported by the Council's Housing Strategy (Ex 2, Tab 14). Whereas Mr Joannides' evidence is that the large dual occupancy needs to be retained as it is an "ownership model that may be suited to some larger families" (Ex 3, [45]), the Housing Strategy instead identifies the need to increase housing diversity by the provision of "smaller lot housing" in the R2 Low Density Residential Zone, and highlights that the "bulk of the City's housing is apartments, with most of the rest being detached dwellings" (Ex 2, p. 479). The Housing Strategy is the only evidence before the Court that sets out the facts concerning the housing needs of the community. Mr Joannides' opinion evidence is not supported by any factual evidence concerning the housing needs of the community, and can be disregarded.
The proposed strata subdivision does not change the number of dwellings available for the housing of the community. It makes each of them available on a smaller lot, which, whilst in the form of a strata lot, meets a specific housing need identified in the Housing Strategy. It is therefore consistent with the objective to provide for the housing needs of the community.
I am therefore satisfied that the proposed development is consistent with the objective of the zone, as required by cl 4.6(4)(a)(ii) of the RLEP. I also find that there is no evidence to support the assertions made by the Council in the particulars to Contention 2 concerning occupancy restrictions, housing affordability, renting potential, and the requirement to keep the dual occupancy on one title. Mr Joannides gives only five paragraphs of evidence in support, and they contain little substance. The development application ought not, therefore, be refused on the basis of the matters raised in Contention 2.

[58]

The Council submits that the "size of each lot resulting from the subdivision" in cl 4.1A(4)(a) should instead be interpreted as the area of the ground level of the subdivided lot.
In support of its position, the Council relies on the decision of Commissioner Horton in MMP 888 Pty Ltd v Randwick City Council [2019] NSWLEC 1646 ("MMP 888"), in which the Commissioner found that the "size of each lot" is the "land on the site" which "must have a minimum area of 400m2 for each dwelling" (at [45]). The Council relies on the submissions it made to Commissioner Horton, summarised at [29] to [38] of that decision, and says that the size of a lot must be measured by reference to one plane, which is the flat plane shown in the lot size map referred to in cl 4.1A(3). The Council relies on s 33 of the Interpretation Act 1987, which requires a construction of a provision of an Act or statutory rule that promotes the object underlying the provision to be preferred over a construction that does not. I note that s 33 does not apply to the interpretation of a local planning instrument, including the RLEP.
The Council submits that its position is supported by the planning proposal that amended cl 4.1A, which included a proposal to change the wording of cl 4.1A(4)(a) to "the area of the strata lot, measured at ground level, must be no less than 275 square metres". However, this wording was not accepted by the Department of Planning and Environment, and the amendment made to cl 4.1A(4) by the RLEP Amendment No 9 was confined to the size of the lot. The Council says that its planning proposal was an attempt to clarify the wording of this clause in a manner consistent with the intention of the clause.
In addition, the Council relies on the evidence of Mr Joannides, that the area of the lot should be calculated in the manner set out in s 6.2 of the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (SEPP ECDC), which provides for strata subdivision where the "strata area" is referred to as "the area of the ground floor of all dwellings". The accompanying diagram for the calculation of the strata area shows that both the common area and the first floor strata area is excluded in the calculation.

[59]

I cannot accept the Council's position that the strata lot must be calculated by the area of the ground level, for the following reasons.
Firstly, the task of interpretation of the words of the RLEP involves determining what the words mean by reference to "the objective intention as manifested by the words" rather than by "the subjective intention of parliamentarians or ministers" (Parks and Playgrounds Movement Inc v Newcastle City Council (2010) 179 LGERA 346; [2010] NSWLEC 231 at [71]). These principles apply equally to delegated legislation (DM & Longbow v Willoughby City Council (2017) 228 LGERA 342; [2017] NSWLEC 173 at [19]). As such, the attempt in the planning proposal to amend the words of cl 4.1A(4)(a) is irrelevant to the interpretation of the existing wording, as the subjective intention of council officers is not relevant to how those words should be interpreted. Instead, to interpret those words and consider how one ought understand the size of "the lot resulting from the subdivision" in cl 4.1A(4)(a), the focus must be on the words of that clause and the instrument itself. Given that the words of the clause are "a subdivision of land... for a strata plan scheme", and the words "subdivision of land" include, pursuant to s 6.2(2)(b) of the EPA Act, the subdivision of land by the registration of a strata plan, the "lot resulting from the subdivision" in cl 4.1A(4)(a) should be interpreted by reference to the strata lot that is created by the registration of the strata plan. The size of the strata lot, in square metres, should therefore be measured in a manner consistent with how it is measured on that registration, as outlined above at [27 ] to [35 ].
Secondly, the arguments made by the Council and the competing decisions of the Court in Kelly, Kingsford and MMP 888 were considered by Commissioner Espinosa in her decision in Albert Square. In Albert Square, Commissioner Espinosa dispenses with the Council's arguments at [15]-[17], does not agree with the reasoning in MMP 888, and carries out the interpretative task in [46]-[53] to reach a position that:

[65]

The Council's position is that the written request is fundamentally flawed, and that the Court could not be satisfied that the proposed development is consistent with the objectives of the clause and of the zone.
Firstly, the Council submits that the written request is fundamentally flawed insofar as it relies on the current minimum strata lot size that is in place following LEP Amendment No 9. The Council says that to do so is inconsistent with the decision of the Court in Omid Mohebati-Arani v Ku-ring-gai Council, in which Robson J found that the clear language of a savings provision, by the use of the words "does not apply", precluded consideration of the relevant instrument. The same words are used in the applicable savings provision for LEP Amendment No 9. The Council therefore says that there can be no consideration of the decrease in the minimum strata lot size brought about by LEP Amendment No 9.
Secondly, the Council says that the Court cannot reach a positive opinion that the subdivision is consistent with the objective of the standard "to ensure that land to which this clause applies is not fragmented by subdivisions that would create additional dwelling entitlements". Achieving the objective of the standard is one way in which compliance with the standard can be seen to be unreasonable or unnecessary, consistent with Wehbe v Pittwater Council (2007) 156 LRERA 446; [2007] NSWLEC 827. Further, consistency with the objective of the standard is an element of the public interest about which the consent authority must be satisfied in cl 4.6(4)(a)(ii) of the RLEP.
Consistent with its submission, the Council says that the proposed subdivision will be contrary to the objective of the standard because an additional dwelling entitlement will be created on each subdivided strata lot. The Council asserts that the operation of Pt 1 of Ch 3 of the State Environmental Planning Policy (Housing) 2021 allows a secondary dwelling to be permitted within the principal dwelling on the strata subdivided lot, with development consent, despite any provision to the contrary in a local environmental plan. As such, the Council says that the strata subdivision will create an additional dwelling entitlement that is contrary to the objective of the standard.
Thirdly, the Council submits that there is no evidence to support the assertion made in the written request that the proposed development is consistent with the objectives of the zone to "provide for the housing needs of the community within a low-density residential environment" and to "encourage housing affordability". This point is also raised as a separate contention, Contention 2, in which the Council contends that the proposed development is inconsistent with these two objectives. Specifically, the Council submits that there is no evidence that undersized lots will encourage housing affordability, and says that they may increase land values. The Council submits that the applicants have a persuasive burden to establish that the proposed development encourages housing affordability, and there is no evidence to that effect. The Council also says that the proposed development does not increase housing supply, as there is no change to the number of dwellings. In support of its position on housing affordability and meeting housing needs, the Council relies on the evidence of Mr Joannides that the unsubdivided dual occupancy is suited to large families and "provide[s] them a greater chance of affordable housing", and his assertion that "no market analysis has been provided to address the contentions raised in Contention 2 regarding the impact the strata subdivision will have for the attached dual occupancies [sic] dwellings will have on the purchasing and rental property markets".
Finally, the Council says that the grounds advanced as environmental planning grounds are either not planning grounds, or they are not sufficient to justify the departure from the development standard.

[66]

In response, the applicants submit that whilst the LEP Amendment No 9 cannot be considered for the purpose of the assessment pursuant to s 4.15 of the EPA Act, the fact of its existence can nonetheless be considered, and its existence can still be taken into account for the purpose of the matters required of the written request pursuant to cl 4.6 of the RLEP. The applicants therefore say that the fact that the minimum strata lot size is now 275m2 is clearly relevant to the cl 4.6 request concerning the departure from the applicable minimum strata lot size of 400m2, and the savings provision does not preclude consideration for that purpose. They submit that an environmental planning ground can include a change to the planning instrument.
In relation to the objective of the clause, the applicants submit that a "dwelling entitlement" is an entitlement to erect a dwelling on the relevant land, and the strata subdivision does not create any additional dwelling entitlement as no additional dwellings can be erected on the land other than those already existing in the dual occupancy. The applicants dispute that Pt 1 of Ch 3 of the State Environmental Planning Policy (Housing) 2021 allows a secondary dwelling to be permitted within the principal dwelling on each subdivided lot, as it could not meet the requirement that it "will not result in a dwelling on the land, other than the principal dwelling and the secondary dwelling" given that the use of the word "land" relates to the real property lot, rather than the strata lot.
Further, the applicants submit that there is no evidence to support the Council's position that the proposed development is inconsistent with the objectives of the zone to "encourage housing affordability" and to "provide for the housing needs of the community within a low density residential environment". With respect to the housing needs of the community, the applicants point to the assessment report prepared by the council officer for the development application for the dual occupancy (DA/284/2020), which states that the proposed development "will provide for the housing needs of the community whilst enhancing the aesthetic character and protecting the amenity of the local residents" (Ex 2, Tab 1). The applicants point out that there is no change to the number of dwellings as a result of the subdivision.
With respect to the objective to "encourage housing affordability", the applicants point out that, as conceded by Mr Joannides in cross-examination, separate titles for each of the two dwellings will enable people to purchase one or two of the dwellings, rather than being limited to purchasing only both as a pair, and the value of either one of the dwellings is less than the value of the pair. The applicants submit that it is therefore clear that the ability to purchase only one of the dwellings provides for increased affordability. The applicants also submit that it is difficult to see how there would be any change to affordability in the rental market by the strata subdivision, as both dwellings can be rented either separately or together in the current arrangement, in the same way they can be once subdivided.
The applicants therefore submit that the requisite elements in cl 4.6(4) are satisfied, and that contention 2 concerning the zone objectives is not a reason to refuse the development application.

[73]

Further, consistent with cl 4.6(4)(a)(ii) of the RLEP, I am satisfied that the proposed development is in the public interest because it is consistent with the objectives of the standard and the objectives for development within the zone.
Firstly, the proposed development, for a two-lot strata subdivision of a dual occupancy, is consistent with the single objective of the standard, to ensure that land "is not fragmented by subdivisions that would create additional dwelling entitlements", in the same way that a two-lot strata subdivision development that complies with the numerical requirements of cl 4.1A(4) would be consistent with that objective. Given that the proposed development is for a two-lot strata subdivision, any 'dwelling entitlements' that it creates are identical to the 'dwelling entitlements' created for a two-lot strata subdivision with strata lots that comply with the 400m2 minimum strata lot size. In either scenario, there will be only one dwelling on each strata lot, and there will be two strata lots.
Even if I was satisfied that Pt 1 of Ch 3 of the State Environmental Planning Policy (Housing) 2021 allows a complying development certificate to be sought for an additional dwelling in the form of a secondary dwelling within the built form of the subdivided strata lot, this scenario also arises with a strata subdivision that complies with cl 4.1A(4). It makes no difference to my finding that the proposed development is consistent with the objective of cl 4.1A in the same way a subdivision that complies with cl 4.1A(4) would be consistent with that objective.
The main operative provision in cl 4.1A of the RLEP is in subcl (3), to apply the minimum subdivision lot size that applies to land, from cl 4.1 of the RLEP, to a lot created by a strata subdivision. An exception is then created by subcl (4), which applies to a dual occupancy. The objective to the clause, in cl 4.1A(1), must be read in that context. It is concerned with the fragmentation of land caused by additional dwelling entitlements, which could arise if there was no control on the strata lot size, as this would mean that a parcel of land could be fragmented by division into larger numbers of smaller strata lots. The two-lot strata subdivision of the dual occupancy, as proposed by the present development application, is consistent with the objective of the clause as it is a two-lot subdivision consistent with the exception in cl 4.1A(4) and creates the same number of dwelling entitlements as a two-lot strata subdivision that complies with the numerical requirement of cl 4.1A(4) as it applies to the development application.
Secondly, the proposed development is consistent with the objectives of the R2 Low Density Residential Zone in the RLEP. It is consistent with the following objectives on the basis that there is no change to the built form:

[78]

The proposed development is consistent with the objective to encourage housing affordability as it results in two strata lots that can each be made available for either sale or rent, consistent with the evidence of Mr Betros and the concessions made by Mr Joannides.
I do not accept the Council's position that the Court cannot be satisfied that the proposed development is consistent with the zone objectives by virtue of there being "no evidence" that the strata subdivision would not have an adverse impact on housing affordability in the local area or in the zone. To be satisfied of consistency with the objective to "encourage housing affordability", there is no obligation for the applicants to prepare a market analysis to establish that there is no impact on the property or rental market. Whilst there exists a persuasive burden of proof on an applicant for development consent to establish that an impact is acceptable (see Australian Protein Recyclers Pty Limited v Goulburn Mulwaree Shire Council [2006] NSWLEC 641 at [2]), this does not give a consent authority a carte blanche to identify so-called impacts without a proper substantive foundation. An applicant for development consent ought only be 'put to proof' on genuine impacts.
There is no substantive foundation to the Council's assertion, made in the particulars of Contention 2, of an adverse housing affordability impact of a strata subdivision of a dual occupancy. To the contrary, it is axiomatic that it increases housing supply to the market for purchase, with each strata lot at a price point lower than the unsubdivided whole, consistent with the evidence given by Mr Joannides in cross-examination. Therefore, in the market for purchase, there will be increase in supply (there being two lots rather than one) at a lower price point, which is likely to encourage housing affordability for those in that market. In the rental market, I accept the submission made by on behalf of the applicants that it is difficult to see how there would be any change, since both dwellings could be rented separately even without strata subdivision.
Further, the opinion of Mr Joannides concerning the housing needs of the community being met through an unsubdivided dual occupancy is not supported by the Council's Housing Strategy (Ex 2, Tab 14). Whereas Mr Joannides' evidence is that the large dual occupancy needs to be retained as it is an "ownership model that may be suited to some larger families" (Ex 3, [45]), the Housing Strategy instead identifies the need to increase housing diversity by the provision of "smaller lot housing" in the R2 Low Density Residential Zone, and highlights that the "bulk of the City's housing is apartments, with most of the rest being detached dwellings" (Ex 2, p. 479). The Housing Strategy is the only evidence before the Court that sets out the facts concerning the housing needs of the community. Mr Joannides' opinion evidence is not supported by any factual evidence concerning the housing needs of the community, and can be disregarded.
The proposed strata subdivision does not change the number of dwellings available for the housing of the community. It makes each of them available on a smaller lot, which, whilst in the form of a strata lot, meets a specific housing need identified in the Housing Strategy. It is therefore consistent with the objective to provide for the housing needs of the community.
I am therefore satisfied that the proposed development is consistent with the objective of the zone, as required by cl 4.6(4)(a)(ii) of the RLEP. I also find that there is no evidence to support the assertions made by the Council in the particulars to Contention 2 concerning occupancy restrictions, housing affordability, renting potential, and the requirement to keep the dual occupancy on one title. Mr Joannides gives only five paragraphs of evidence in support, and they contain little substance. The development application ought not, therefore, be refused on the basis of the matters raised in Contention 2.

Barhom v Randwick City Council

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