BOB BLAKEMORE PTY LID v THE ANSON BAY COMPANY

Held: The extraction of gravel was a use which was ancillary to coal mining and was not an existing use under the Environmental Planning and Assessment Act (1980) (s107).

Clarke JA The first respondent, The Anson Bay Company (Australia) Pty Ltd ("Anson Bay') is the owner of 1800 acres of land situated at Caves Beach near Swansea and the second respondent Lake Macquarie City Council ("the Council") is the local government authority concerned with the implementation of planning in the area which includes the subject land.

On 25 February 1986 Anson Bay entered into a licence agreement with the first and second respondents, Bob Blakemore Pty Ltd and Doug Blakemore Excavations Pty Ltd ("Blakemore") (which were then known as Vestrix Pty Ltd and Vestrit Pty Ltd) pursuant to which Blakemore was permitted to use areas of land specified in the licence as a quarry for the removal of gravel rock and overburden for five years. The licence contained an option of renewal for a further period of five years. The specified areas were identified by hatching in a plan annexed to the licence agreement and have been broadly described during the hearing of this appeal as areas A, B, C and D Area A is situated on the north-western part of Anson Bay's land immediately south of a quarry operated by the Council. Area B is to the east, and slightly to the north, of area A and is in the vicinity of Caves Beach High School. Area C is separated from the other two areas by the Pacific Highway and is relatively close to an old rock quarry known as area D which is on the eastern boundary of the land where it abuts the Pacific Ocean.

In 1987 control of Anson Bay passed to Gordon Pacific Limited. This company has plans to develop the land for residential and tourist purposes. In the implementation of these proposals Anson Bay took steps to have the land rezoned and on 10 February 1989 the Lake Macquarie Local Environmental Plan 1984 was amended, relevantly, to prohibit the use of the whole of the subject land for the purpose of quarrying gravel and to enable its use for the purpose of residential, hotel and tourist facilities.

The consequence of this change in the planning laws was that the quarry operated by Blakemore under the licence agreement could only lawfully be continued if the use of the land for the purposes of gravel extraction was an

existing use under s107 of the Environmental Planning and Assessment Act 1980 (the Act) at the time of the commencement of planning control. The date of the commencement of planning control was 10 March 1949 when Ordinance 105 Town and Country Planning General Interim Development, which was notified on 9 November 1945, was applied to the subject land.

Even before the amendment in 1989 to the Lake Macquarie Local Environmental Plan Anson Bay instituted the present proceedings seeking, inter alia, to restrain the use by Blakemore of the quarry on the basis that such was a prohibited use. Initially the Council was joined as a respondent but during the course of interlocutory procedures it became the second applicant seeking relief which was, relevantly, substantially identical with that sought by Anson Bay.

The proceedings were heard by Hemmings J in the Land and Environment Court of New South Wales and he made the declarations and granted the injunctions, subject to one matter, sought by Anson Bay and the Council. The only qualification to the relief granted to the applicants concerned a small and identified portion of area A in respect of which his Honour suspended the injunction, on terms, until 29 September 1993.

The principal findings challenged in this appeal are the findings:

1. That as at 10 March 1949 the extraction of gravel was not a use of the subject land for a separate purpose from that of coal mining; and

2. That the only part of the land intended to be used for any extraction of gravel prior to 10 March 1949 was part of area A.

The manner of expression of the first finding makes it clear that the extraction of gravel from part of area A on the subject land was a relevant use at the critical date but that nonetheless it did not constitute an existing use. The reason for this was Hemming J's conclusion that the use of part of area A for the extraction of gravel was ancillary to the use of that part of the land for open cut coal mining. Mr Tamberlin, Senior Counsel for Blakemore, has submitted that this finding was not soundly based on the evidence and failed to reflect the proper extent of the gravel extraction activities on the land. The submission requires a careful analysis of the trial judge's findings and of other evidence which was not adverted to by him.

Before considering this question it is convenient to deal with an alternative argument that in 1949 the land was being used for the extraction of materials by mining and quarrying and this use constituted an "existing use".

The phrase "existing use", where used in s107 of the Act, is defined in s106 to mean the use of, inter alia, land for a lawful purpose at the relevant date. The obvious object of a provision such as107 is to preserve the right of the owner of land to continue to use it for the purpose for which it was used before the introduction of planning controls which would otherwise prohibit, or qualify, the continuance of that use.

Being designed to protect existing rights such provisions should be as liberally construed as the language in its context allows. (Dorrestyn v South Australian Planning Commission, (1984) 59 ALJR 105 at 108; Parramatta City Council v Brickworks Ltd (172) 128 CLR 1, at 25; Woollahra Municipal Council v Banool Developments Ltd (1973) 129 CLR 138, at 144.) For the same reason courts have been astute not to interpret the purpose for which the land is used unduly narrowly. (Bonus Pty Ltd v Leichhardt Municipal Council, 19 LGR 375, at 378; Shire of Perth v O'Keefe, (1964) 110 CLR 529, at 535, 537; North Sydnev Municipal Council v Boyts Radio and Electrical Pty Ltd and Ors (1989) 16 NSWLR 50, at 59.)

UBB BLAKEMORE PTY LTD v THE ANSON BAY COMPANY (AUSTRALIA) PTY LTB (Clarke JA)

The approach which has been followed was expressed by Kitto J in O'Keefe at 535 in these terms:

"...It is necessary to observe that the 'existing use' by-laws take two steps which should be kept distinct from one another. First it is required that a purpose be identified as the end for which it can be seen that the premises are being used at the date of gazettal of the by-laws. Then the provision is made that the land may continue to be used for that purpose: Not that the precise manner of use for that purpose may alone continue but that use generally for that purpose may continue. The application of the by-law in a particular case has therefore not to be approached through a meticulous examination of the details of processes or activities or through a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use of the premises at the material date."

Obviously a question arises as to the level of generality to be applied but the answer to that question will depend, in my view, upon an appreciation of the appropriateness of a particular designation for town planning purposes.

In instances in which town planning considerations dictate the need for a narrow description then that will be reflected in the designation of the purpose. No doubt minds may differ as to whether, for instance, in the case of a shop the purpose designated would simply be that of a shop or should reflect the type of shop under consideration (cf O' Keefe per Menzies J at 536.7). In each instance, however, the question will be determined upon the relevance for town planning purposes of the need for finer detail.

In this case the two activities of open cut coal mining and gravel extraction would not usually be considered as of the one genus described as material extraction. Coal mining, whether open cut or underground, is, and is understood to be, a use of the land which is different in kind from gravel quarrying. In Royal Agricultural Society of New South Wales v Sydney City Council, (1987) 61 LGRA 305, McHugh JA at 311 said:

"Accordingly a test has been devised which requires the purpose of the use of land to be described only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on at the relevant date. Thus the test is not so narrow that it requires characterisation of purpose in terms of the detailed activities, transactions or processes which have taken place. But it is not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities, etc as a class have made of the land... If the activities, processes or transactions are capable of being treated as all or the majority of the species of a genus, then that genus may properly be regarded as describing the purpose of the use of the land. If they are not, then it may be that the only conclusion is that the land has been used for more than one purpose."

Applying ordinary terminology "open cut coal mining" and "gravel quarrying" would not, in my view, be regarded as part of the same genus. Although both involve the extraction of material from the surface or subsurface of land each is well understood as an activity separate and distinct from the other and would be so regarded by those concerned with town planning. Accordingly, in my view, the description of the purpose as the use of the land for extractive activities is too general.

The major submission for Blakemore accepted that this was so and proceeded on the basis that the land was being used for two purposes, coal mining and gravel extraction, at the relevant date, which made lawful the continued use of the land for the extraction of gravel.

It is, of course, possible for land to be used for more than one distinct purpose at the same time. In the present case the learned trial judge concluded that such use of the land for gravel extraction as had taken place was a use which was purely ancillary or incidental to the coal mining operations in 1949. Blakemore submits that this finding reflected a failure to appreciate the significance of the gravel extraction and the reality that it was in fact a distinct and separate use of the land.

His Honour's factual findings, which were based on the evidence of Mr and Mrs Mawson and Mr Murphy can be shortly summarised. In 1945 Mr and Mrs Mawson were granted a sub-lease of 339 acres, which was that part of the land which is now under discussion which was on the northern and eastern side of the Pacific Highway, for the purpose of mining coal. There was a coal mine on the land which had not been operated efficiently by the Mawsons predecessors. Shortly after the grant of the sub-lease Mr and Mrs Mawson undertook a drilling programme to determine the quantity of coal, and number of seams on the property. The drilling established the existence of an extensive tonnage of coal on the land, a significant quantity of which could be won by the open cut method. It also disclosed that there were large reserves of gravel and clays on the property.

I should add that Mr Mawson had noticed, prior to entering into occupation, a stockpile of gravel near the coal mine and observed that his predecessor had used gravel for mine stoppings, that is, concrete walls which are used to block defunct areas of an underground mine. Then, having inspected the land, he found areas from which gravel had been extracted. He formed the opinion that these areas were suitable for the economic extraction of gravel for use in the mine. These areas were all to be found just south of the Council quarry in that area which was described in the proceedings as Area A.

At some stage after Mawson entered the land he decided to extract gravel for use on the land in association with his coal mining. Following this decision Mawson sought, and obtained, permission from the owner of the land, Parbury Estates Ltd, to extract gravel from the land and he thereafter paid royalties to that company. The amount of the royalties was not disclosed in the evidence.

The Mawsons used the gravel which they extracted mainly for the construction of haulage roads and tracks within the land and access roads leading to it. They also placed gravel on boggy land at the entrance to the coal mine, which was known as the Normaine Mine and was situated on the north-eastern portion of the land. This mine was of a conventional type and had been operated inefficiently for some years before the Mawsons took the sub-lease. In addition they transported some of the extracted gravel to Austral Main Coal Mines, which were operated by the Mawsons and were situated some distance from the subject land, for use in the construction of bath houses. This occurred in 1945. Hemmings J said that four loads of 20 tons each were taken to Austral Main. This was disputed by Mr Tamberlin who submitted that Murphy's evidence demonstrated that 1500-1600 cubic yards had been taken there.

In my view it does not matter which is correct. On either view a relatively large quantity of gravel was extracted and taken to Austral Main. There was also some inconclusive evidence to the effect that about 80 tons of gravel was taken from the land to Leconfield Coal Mines, another Mawson operation situated near

UBB BLAKEMORE PTY LTD v THE ANSON BAY COMPANY (AUSTRALIA) PTY LTB (Clarke JA)

Greta. His Honour thought that probably occurred after 1949 and I must say that the evidence shows no more than that the loads were taken to Leconfield in the 1949/1950 period. Notwithstanding I am prepared to assume, for present purposes, that the gravel was extracted and carried to Leconfield shortly prior to the critical date, viz 10 March 1949.

His Honour held that gravel was extracted before 1949 from only two areas of the land. One was the site near the Council quarry and the other was near the opening of the Normaine Mine. Throughout this period coal mining was the dominant activity on the land. The Mawsons effected significant repairs to, and installed new plant and equipment in, the Normaine Mine. Murphy was employed in, he said, 1944 and 1945 to assemble and install the new plant in the mine. It was for this reason, he said, that he travelled from Sydney to the mine on approximately 12 occasions during this period.

In addition Mr Mawson contracted with McCarthy, an English firm, in 1947 to work an open cut coal mine in the vicinity of the area just south of the Council quarry from which gravel had been extracted. This mine was known as the McCarthy Cut. That firm remained there for 18 months during which time it stockpiled gravel which it extracted in its coal mining operation and Mr Mawson used it. Later Mawson worked this open cut mine himself and, he said, continued to extract gravel from near the mine.

The only other use of gravel to which the trial judge referred was revealed by evidence of a rather general nature that members of the public took some of the gravel and some persons, at least, paid for it. Hemmings J was satisfied that such events occurred on rare or infrequent occasions and involved only small quantities of gravel. In view of the lack of specificity in the evidence I do not find this conclusion surprising and I see no reason to differ from it.

Two other pieces of evidence which were not specifically mentioned in the judgment deserve mention. The first was given by Murphy when he said he loaded his truck up with gravel and took it back to Sydney. Mawson did not mention this and it is impossible to discern the number of occasions on which this occurred. At its highest this occurred on a few occasions in 1945 and did not continue after Murphy left.

The other was the aerial photographs of the land taken in 1950. The lack of any specificity in the evidence of the witnesses makes it very difficult to glean the scale of the gravel extraction activities. These photographs, while of limited assistance, do show that the area of quarrying must have been relatively limited and that there were few roads on the land.

To complete the picture I should mention that the Mawsons entered into a contract to purchase the whole 1800 acres, which included the 339 acres the subject of the sub-lease in 1948. This purchase was completed in 1952.

In summary gravel was extracted from two locations in Area A prior to March 1949 and used for mine stoppings and surfacing for roads on the land; a quantity was taken to Austral Main in 1945 and, possibly, another quantity to Leconfield in 1949; some was taken and/or purchased by residents of Caves Beach during the four years leading to March 1949 and some was taken to Sydney in 1945.

Upon this evidence Mr Tamberlin submits his Honour should have found that gravel extraction was an existing use in 1949.

His Honour held that that the extraction of gravel from the area of the McCarthy Cut was an inevitable by-product of the coal mining operation. Furthermore, the use of most of that gravel and the small amounts which were extracted from other portions of area A for mine stoppings, road construction and

fill, all served to categorise the extraction activity as ancillary to the coal mining operation. The sale of small quantities of gravel to members of the public and the transportation of some to the Austral Main and Leconfield Mines did not, in his honour's view, detract from this conclusion.

In ultimately deciding against Blakemore on the issue of existing use his Honour applied the approach expressed by Glass JA in Food Barn Pty Ltd v Solicitor General, (1975) 32 LGRA 157, at 161:

"Tt may be deduced that where a part of the premises is used for a purpose which is subordinate to the purpose which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used. Doubtless the same principle would apply where the dominant and servient purposes both relate to the whole and not to separate parts. But the trial judge specifically found that sales by retail were not ancillary to other purposes of the defendants and no attempt has been made to subvert that conclusion. Where the whole of the premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged. The ordinance is nonetheless being disobeyed."

Although there can be no doubt that coal mining was the dominant use of the 339 acres of land in the years immediately preceding 1949 that does not mean that gravel extraction could not have been a distinct and separate use. Where there are two uses of property the question whether there are one or two existing uses is resolved upon a consideration whether both are independent uses, in which case they are both treated as existing uses, or whether one is ancillary to, or subserves, the other in which case the latter constitutes the sole existing use.

In may be a nice question in a given case whether one use subserves the other. The question will always be one of fact and degree (Lizzio v Ryde Municipal Council, 155 CLR 211, at 217). The primary consideration will be the relationship between the two uses although in some circumstances the regularity and extent of the activities involved in the minor use may assume significance.

Blakemore relied on Norman v Gosford Shire Council, 132 CLR 83 in support of a submission that the limited extent of the gravel extraction activities did not detract from the conclusion that they nevertheless represented a separate use of the land. In that case the land had been used to a limited extent for only one purpose, the removal of top soil and filling, prior to the relevant date. The trial judge held that because of a marked increase in the scale of the removal activities after that date there had been a change in the nature of the use. On appeal it was held that the expansion of production did not alter the nature of the use. It remained, as it had been for years before the relevant date, the use of the land for the removal of topsoil.

Mr Tamberlin argued that the limited use of the land for gravel extraction before 1949, which use was continued after that year and greatly expanded during the 1950's, when coal mining became uneconomic and was discontinued by the Mawsons, did not lead to the conclusion that the early use was subservient. According to this argument it had always been a separate and independent use and the later expansion only served to emphasise its independent existence.

UBB BLAKEMORE PTY LTD v THE ANSON BAY COMPANY (AUSTRALIA) PTY LT (Clarke JA)

Norman was not concerned with dual uses and, in my opinion, provides little assistance in the resolution of the present problem. Here the trial judge accepted that gravel extraction one of the uses to which the land was put but determined that it was a subservient use. I do not believe that he was in error in reaching that conclusion.

The Mawsons initially acquired the right to enter the land under a sub-lease of "the mines, beds, veins and seams of coal lying and being in and under" the land. Upon entry into the land they set about revitalising the Normaine Mine and winning coal from it in a more efficient manner than their predecessors had done. They also engaged McCarthy to set up an open cut mining operation in the area which became known as the McCarthy Cut. During the whole of the period 1945-1950 the Mawsons worked the coal mines, either personally or through McCarthy. In short they entered into a coal mining venture on the land.

It is true that before entering into the sub-lease Mawson saw a stockpile of gravel near the Normaine Mine and noted that gravel had been used in stoppings and that, following the drilling programme, he found that there were reserves of gravel on the land and decided to utilise the gravel in the improvement of the coal mining operations. To that end he obtained permission to extract the gravel, he then extracted it, or had McCarthy stockpile it for him, and used it in the surfacing of roads, the stabilising of boggy areas and the erection of mine stoppings. The evidence does not reveal with clarity the extent of that usage but even if it was relatively significant, which I doubt, it was undertaken for the improvement of the coal mining venture. If that had been the full extent of the evidence I would have had little doubt that the correct conclusion was that the gravel extraction subserved the coal mining operation.

The evidence did, however, reveal some further utilisation of gravel outside the mine areas. In 1945 some gravel was taken to Austral Main. At about the same time some may have been taken to Sydney for unknown purposes. During the five year period local residents took and, possibly, paid for some and about the end of the 1945-1949 period some gravel was taken to Leconfield. The picture is one of limited and intermittent use of gravel for non-coal mine purposes.

Although it was appropriate for the trial judge to approach the evidence of the Mawsons and Murphy, all of whom were elderly, liberally I think Hemmings J did so and I believe that his findings reflect his appreciation of the difficulties of recall that must have affected the witnesses who gave that evidence without the benefit of contemporary written notes. There was only one document which, although not contemporary, may have been useful as an aide memoire. It was a "History of the Mawson Project at Swansea" which was written by Mawson and depicted their entry onto the land, their mining of coal until 1958 when, because of the collapse of the coal market, they decided to embark upon the development of the real estate and the history of that venture. This document makes it clear that gravel extraction become a major activity in the late 1950's. On the other hand the only mention of gravel before then is a reference to the early drilling investigation.

Giving full weight to his Honour's findings, and to the evidence which was not mentioned in the judgment, I see no reason to differ from the conclusion at first instance that the evidence of extraction and use of gravel by the Mawsons did not demonstrate that gravel extraction was a separate and independent use of the land in early 1949.

Blakemore also asserted that certain statements in his Honour's reasons for judgment reflected an inaccurate appreciation of the evidence and raised 27 different grounds of complaint. I do not find it necessary to deal with each of them for the reason that in the light of my conclusion that, on an independent assessment of the evidence, his Honour's determination was correct. Accordingly even if I thought that his Honour had misstated a particular aspect of the evidence (which I don't) this would be of little moment.

The final challenge concerned his Honour's order that Blakemore pay the costs of the Council. It was submitted that the finding that Anson Bay had sought to litigate issues concerning the licence agreement which were more appropriately dealt with elsewhere, and which led his Honour to allow Anson Bay only half its costs, should logically have led to an order that Anson Bay pay the Council's costs.

No particular error was shown for setting aside his Honour's discretionary order (House v The King, 55CLR 499, at 504/5) but the court was invited to infer that in some way there had been a failure properly to exercise the discretion. The inference arose, it was submitted, because the order was plainly unreasonable insofar as it did not take full account of the additional time taken during the hearing as a consequence the attempt by Anson Bay to ventilate the inappropriate licence issues.

The balancing exercise required when a party which has succeeded in the litigation has conducted itself in such a way as to attract the exercise of the court's discretion to refuse to award it all its costs is a delicate one and the judge who has conducted the trial is in a particularly advantaged situation in assessing how best to reflect the diminution in costs entitlement flowing from the impinged conduct. Hence the reluctance on the part of appeal courts to interfere with the exercise of that discretion.

In this case Hemmings J took the view that an appropriate reflection of Anson Bay's endeavours inappropriately to widen the scope of the litigation was an order that Blakemore pay only one half of its costs. He could possibly have taken another view viz that Anson Bay should get no order for costs or should be obliged to pay half the Council's costs but I am unable to discern any basis for inferring that his determination that it was appropriate in the circumstances to deprive Anson Bay of half its costs was tainted with error.

I have now dealt with the matters that were argued in the appeal but there is a further aspect of the case which I wish to mention. I earlier noted that the trial judge suspended the operation of the injunction that he granted in regard to a small portion of area A, on terms, until 29 September 1993 saying that it was appropriate to suspend the operation of the injunction in regard to this small area of land "to enable continued extraction... for a limited period and subject to appropriate conditions". In the court's formal order the suspension was expressed to be on terms that the small area of land "only be used for the purpose of a gravel quarry and strictly in accordance with the conditions set forth in the document annexed... marked 'C'." Annexure "C" consisted of twenty conditions, reading very much like the conditions imposed by councils when granting development consents. The conditions were obviously designed to ensure that during the period of suspension of the injunction continued quarrying in the small area would be strictly controlled; the control would be supervised by the Council.

There was some discussion during the hearing of the appeal concerning this suspension but no party raised any question as to its appropriateness in the circumstances. Accordingly the Court has not been called upon to consider

UBB BLAKEMORE PTY LTD v THE ANSON BAY COMPANY (AUSTRALIA) PTY LTB (Meagher JA)

whether the injunction should have been suspended or whether the terms upon which it was were appropriate. There appear to me to be some difficulties in seeking that the Council control an unlawful use of the land but as no point was taken on the suspension in the hearing I have thought it proper not to express an 5 opinion on these matters.

I would emphasise, however, that what I have said should not be taken as an indication that I think it is appropriate for a court to suspend the operation of an injunction against the unlawful use of land on terms which require a local council

to regulate that use. 10 'In my opinion the appeal should be dismissed with costs.

Appeal dismissed with costs. 15 Counsel for Appellant: B TAMBERLIN QC and P THOMASETTI Solicitors for Appellant: RB KANDY AND CO

Counsel for First Respondent: P McCLELLAN QC, C STEVENS and B 20 PRESTON

Solicitors for First Respondent: MALLESONS STEPHEN JAQUES Counsel for Second Respondent: W DAVIDSON 25 Solicitors for Second Respondent: P REES