Calarco and Anor v Liverpool City Council [2018] NSWSC 217 | Case summary

Supreme Court of NSW|2017-06-20|Before: Johnson J, Mr P, Mr J

Judgment

JOHNSON J: By Amended Summons filed 20 January 2017, the Plaintiffs, Giuseppe Calarco and Antonetta Calarco, seek declaratory relief and relief in the nature of mandamus with respect to a decision of the Defendant, Liverpool City Council, under the Land Acquisition (Just Terms Compensation) Act 1991 ("Land Acquisition Act").
The question for determination in these proceedings is whether the Defendant, having accepted a hardship application made on behalf of the Plaintiffs, can be required to acquire the whole of the Plaintiffs' land contained in Lot 2 in Deposited Plan xxx at xxx Gurner Avenue, Austral ("the Austral property") or whether the acquisition by the Defendant of the Austral property can be confined to that part of the Austral property which is zoned "RE1 Public Recreation" and not that part zoned "SP2 Infrastructure".

The Hearing of the Amended Summons

At the hearing on 20 June 2017, the Plaintiffs were represented by Mr Tomasetti SC and Mr James Johnson of counsel. The Defendant was represented by Mr Lancaster SC and Dr James Smith of counsel.
The evidence adduced at the hearing was documentary. There was no oral evidence.

Factual Background

The relevant facts were not in dispute. What follows is drawn from the Defendant's Statement of Reasons dated 17 February 2017 (Exhibit A, Tab 5).
The Plaintiffs are the registered proprietors of the Austral property. The Austral property is comprised of two portions of land, one zoned "RE1 Public Recreation" and the other zoned "SP2 Infrastructure" in the form of "Local Drainage".
In February 2016, the Plaintiffs made a hardship application for the Defendant to acquire the Austral property under the provisions of s.23 Land Acquisition Act. In support of that application, the solicitors for the Plaintiffs furnished a range of documentary material which was supplemented with further material in October 2016.
The Plaintiffs' application came before the Full Council of the Defendant on 23 November 2016. It was accepted that the Plaintiffs' application established that: 1. Mr Calarco had suffered a significant reduction in his income as a result of leaving his former employment; 2. the Plaintiffs proposed to avoid a substantial reduction in their income by the sale of the Austral property; and 3. it had become necessary as a result of these events to sell the Austral property without delay.
Based on the application of the Plaintiffs, the Defendant was satisfied that: 1. the Plaintiffs were unable to sell the Austral property because of the designation of part of Lot 2 for acquisition for a public purpose on the basis of a valuation report dated 30 September 2016 so that s.24(2)(a) Land Acquisition Act was satisfied; and 2. it had become necessary for the Plaintiffs to sell Lot 2 without delay in order to avoid a substantial reduction in their income, with this having arisen as a result of the change in circumstances of Mr Calarco as confirmed in the material provided in October 2016, with this material satisfying the requirement in s.24(2)(b)(ii) Land Acquisition Act.
Accordingly, the Defendant accepted that the Plaintiffs had suffered hardship under s.24 Land Acquisition Act.
The Defendant noted that part of Lot 2 is zoned "RE1 Public Recreation" and part is zoned "SP2 Infrastructure" and marked "Local Drainage" under the State Environmental Planning Policy (Sydney Region Growth Centres) 2006 ("the 2006 SEPP"), to which further reference will be made.
The Defendant's Statement of Reasons refers to statutory provisions in the Land Acquisition Act together with s.26 Environmental Planning and Assessment Act 1979 ("EPA Act"). Following reference to s.26(1)(c) EPA Act, the Defendant's Statement of Reasons expressed the following conclusion (Exhibit A, page 48): "The objectives of land zoned 'RE1 Public Recreation' in the SEPP are to enable the land to be used for public open space and recreational purposes, to provide a range of recreational settings and activities and to enhance the natural environment for recreational purposes. This is within the description of open space and public reserve in Section 26(1 )(c). The land zoned SP2 Infrastructure is included in the South West Growth Centre Land Reservation Acquisition Map in the SEPP and has the annotation 'local drainage'. Accordingly that part of the land zoned SP2 Infrastructure is not reserved by an Environmental Planning Instrument for use exclusively for a purpose referred to in section 26(1)(c) of the EP&A Act. Therefore the part of the land zoned 'SP2 Infrastructure' is not designated for acquisition for public purposes under Division 3 of the Land Acquisition Act. Requirement to acquire the land On the basis of the facts and circumstances set out above, pursuant to Section 23 of the Land Acquisition Act, Liverpool City Council is required to acquire that portion of Lot 2 zoned 'RE1 Public Recreation'. Liverpool City Council is not required to acquire the remaining portion of Lot 2."
The Statement of Reasons contains the foundation for the Defendant's decision on 23 November 2016 with that decision being confirmed by the Defendant on 14 December 2016.

Relief Sought by the Plaintiffs

By their Amended Summons, the Plaintiffs seek the following orders: 1. a declaration that the Defendant is bound to acquire the whole of the Austral property under s.24 Land Acquisition Act; 2. a declaration that, in the circumstances and events which have happened, the Defendant has failed to comply with its statutory duty referred to in (1) above; 3. an order in the nature of mandamus compelling the Defendant to acquire the whole of the Austral property; 4. costs; 1. (5) interest on costs.

Relevant Statutory Provisions and Environmental Planning Instruments

The Court was taken to a large numbers of statutory provisions and Environmental Planning Instruments ("EPIs") during the course of submissions. I will set out below the principal provisions and instruments which call for consideration. EPA Act Provisions
Sections 26 and 27 EPA Act are of critical importance in the resolution of these proceedings. Section 26(1) provides: "26 Contents of environmental planning instruments (1) Without affecting the generality of section 24 or any other provision of this Act, an environmental planning instrument may make provision for or with respect to any of the following: (a) protecting, improving or utilising, to the best advantage, the environment, (b) controlling (whether by the imposing of development standards or otherwise) development, (c) reserving land for use for the purposes of open space, a public place or public reserve within the meaning of the Local Government Act 1993, a national park or other land reserved or dedicated under the National Parks and Wildlife Act 1974, a public cemetery, a public hospital, a public railway, a public school or any other purpose that is prescribed as a public purpose for the purposes of this section, (d) providing, maintaining and retaining, and regulating any matter relating to, affordable housing, (e) protecting or preserving trees or vegetation, (e1) protecting and conserving native animals and plants, including threatened species, populations and ecological communities, and their habitats, (f) controlling any act, matter or thing for or with respect to which provision may be made under paragraph (a) or (e), (g) controlling advertising, (h) such other matters as are authorised or required to be included in the environmental planning instrument by this or any other Act."
Section 27 EPA Act states: "27 Owner-initiated acquisition of land reserved for public purposes (1) An environmental planning instrument that reserves land for use exclusively for a purpose referred to in section 26 (1) (c) must specify an authority of the State that will be the relevant authority to acquire the land if the land is required to be acquired under Division 3 of Part 2 of the Land Acquisition (Just Terms Compensation) Act 1991. (2) Section 21 of the Land Acquisition (Just Terms Compensation) Act 1991 applies for the purposes of determining whether an environmental planning instrument reserves land for use exclusively for a purpose referred to in section 26 (1) (c). (3) An environmental planning instrument (whenever made) is not to be construed as requiring an authority of the State to acquire land, except as required by Division 3 of Part 2 of the Land Acquisition (Just Terms Compensation) Act 1991. (4) Subsection (3) applies despite: (a) any provision of an environmental planning instrument (whenever made) to the contrary, or (b) the service of a notice to acquire the land on an authority of the State on or after the day on which notice was given in Parliament for leave to introduce the Bill for the Environmental Planning and Assessment Amendment (Reserved Land Acquisition) Act 2006."
Section 7 EPA Act provides for the responsibility of the Minister: "7 Responsibility of Minister Without affecting the functions that the Minister has apart from this section, the Minister is charged with the responsibility of promoting and co-ordinating environmental planning and assessment for the purpose of carrying out the objects of this Act and, in discharging that responsibility, shall have and may exercise the following functions: (a) to carry out research into problems of environmental planning and assessment and disseminate information including the issue of memoranda, reports, bulletins, maps or plans relating to environmental planning and assessment, (b) to advise councils upon all matters concerning the principles of environmental planning and assessment and the implementation thereof in environmental planning instruments, (c) to promote the co-ordination of the provision of public utility and community services and facilities within the State, (d) to promote planning of the distribution of population and economic activity within the State, (e) to investigate the social aspects of economic activity and population distribution in relation to the distribution of utility services and facilities, and (f) to monitor progress and performance in environmental planning and assessment, and to initiate the taking of remedial action where necessary."
Section 24 EPA Act provides for the making of EPIs: "24 Making of environmental planning instruments (1) Without affecting the generality of any other provisions of this Act, an environmental planning instrument may be made in accordance with this Part for the purposes of achieving any of the objects of this Act. (2) Environmental planning instruments may be made: (a) by the Governor under Division 2 (called a State environmental planning policy or SEPP), or (b) by the Minister (or delegate), or by the Greater Sydney Commission in the case of the Greater Sydney Region, under Division 4 (called a local environmental plan or LEP). Note. Under transitional arrangements made by Schedule 6, some former instruments (such as regional environmental plans, planning scheme ordinances and interim development orders) continue in force."
The Plaintiffs placed reliance on s.33A EPA Act which provides for the issue of standard instruments: "33A Standardisation of environmental planning instruments (1) The Governor may, by order published on the NSW legislation website, prescribe the standard form and content of local environmental plans or other environmental planning instruments (a standard instrument). (2) An environmental planning instrument may be made in the form of: (a) a declaration that the applicable mandatory provisions of a standard instrument are adopted, and (b) the prescription of the matters required to be prescribed for the purposes of the application of the mandatory provisions of the standard instrument (such as the adoption of land zoning or other maps), and (c) the prescription of any other matters permitted to be prescribed by an environmental planning instrument, including non-mandatory provisions of the standard instrument (with or without modification) or additional provisions. (3) When an environmental planning instrument is made with such a declaration, the instrument has the form and content of the applicable mandatory provisions of the standard instrument and the matters so prescribed. (4) If the mandatory provisions of a standard instrument so adopted are amended by a further order under subsection (1) or by an Act after they are adopted, the environmental planning instrument is taken (without further amendment) to adopt the amended provisions of the standard instrument on and from the date the amendment to the standard instrument takes effect. (5) The order that amends a standard instrument may make provision of a savings or transitional nature consequent on the amendment of the standard instrument. (6) Where a standard instrument has been adopted, the provisions of the environmental planning instrument (other than the mandatory provisions of the adopted standard instrument) may be amended from time to time by another environmental planning instrument or in accordance with any Act. (7) A standard instrument may: (a) provide that a provision is a mandatory provision only in the circumstances specified in the instrument, and (b) contain requirements or guidance as to the form or content of a non-mandatory provision. (8) The adoption of the provisions of a standard instrument in an environmental planning instrument is taken to be a matter of State environmental planning significance for the purposes of this Act. (8A) An environmental planning instrument may be made under this Part without compliance with the provisions of this Part relating to the conditions precedent to the making of the instrument if: (a) the instrument adopts the provisions of a standard instrument for the purposes of replacing instruments that apply to the land concerned (being existing instruments that do not adopt the provisions of a standard instrument), and (b) the Minister is of the opinion that the replacement instrument does not make any substantial changes to the general effect of the existing instrument or instruments. (9) Subject to this Act and the regulations, the form and subject-matter of an environmental planning instrument is (if there is no applicable standard instrument) to be as determined by the Minister. (10) In this section: amend includes alter or vary. form includes structure."
The Plaintiffs relied upon ss.37 and 53 EPA Act which provide for the Governor to make State Environmental Planning Policies ("SEPPs") and the Minister to make Local Environmental Plans ("LEPs"). Sections 37 and 53 provide as follows: "37 Governor may make environmental planning instruments (SEPPs) (1) The Governor may make environmental planning instruments for the purpose of environmental planning by the State. Any such instrument may be called a State environmental planning policy (or SEPP). (2) Without limiting subsection (1), an environmental planning instrument may be made by the Governor to make provision with respect to any matter that, in the opinion of the Minister, is of State or regional environmental planning significance or of environmental planning significance to a district within the meaning of Part 3B." "53 Minister may make environmental planning instruments for local areas (LEPs) (1) The Minister may make environmental planning instruments for the purpose of environmental planning: (a) in each local government area, and (b) in such other areas of the State (including the coastal waters of the State) as the Minister determines. (2) Any such instrument may be called a local environmental plan (or LEP). (3) Despite subsection (1), the Minister may not make a local environmental plan in respect of any local government area in the Greater Sydney Region. However, this subsection does not prevent the Minister from giving directions under section 117 to a council or other public authority on any matter relating to the Greater Sydney Region." Provisions in Land Acquisition Act
Division 3 of the Land Acquisition Act is entitled "Owner-initiated acquisition in cases of hardship". Section 21(1) - (3) Land Acquisition Act states: "21 Definition of 'land designated for acquisition for a public purpose' (1) For the purposes of this Division, land is designated for acquisition by an authority of the State for a public purpose if: (a) an authority of the State has, in connection with an application for development consent or building approval, given the local authority or other person dealing with the application written notice that the land has been designated by the authority of the State for future acquisition by it for a public purpose, or (b) the land is reserved by an environmental planning instrument for use exclusively for a purpose referred to in section 26 (1) (c) of the Environmental Planning and Assessment Act 1979 and the instrument (or some other environmental planning instrument) specifies that authority as the authority required to acquire the land. (2) For the purposes of subsection (1) (a), a notice given by an authority of the State constitutes notice that the land has been designated for future acquisition by that authority only if the notice states that the authority will acquire the land at some future time or that the land is affected by a proposal of that authority that requires the acquisition of the land at some future time. (3) For the purposes of subsection (1) (b), land is reserved by an environmental planning instrument for use exclusively for a purpose referred to in section 26 (1) (c) of the Environmental Planning and Assessment Act 1979 only if: (a) the land is expressly set apart by that instrument for use exclusively for such a purpose, or (b) the land is expressly set apart by that instrument for use for such a purpose and also for other purposes, but those other purposes do not constitute a reasonable use of the land. The aims, objectives, policies and strategies of that instrument are to be taken into account in determining whether those other purposes constitute a reasonable use of the land."
Sections 23-24 Land Acquisition Act relate to hardship and state: "23 Owner who suffers hardship may require authority of the State to acquire land designated for acquisition (1) The owner of land to whom this Division applies may require an authority of the State, by notice in writing given to that authority, to acquire that land under this Act if: (a) the land is designated for acquisition by that authority for a public purpose, and (b) the owner considers that he or she will suffer hardship if there is any delay in the acquisition of the land under this Act. (2) The authority of the State must (subject to this Division) acquire the land within 90 days after the owner gives that authority notice under this section (or such longer period as that authority and the owner may agree on in writing). (3) If there is more than one owner of the land concerned, the notice under this section must be given by all the owners. It is sufficient if any one of those owners will suffer hardship. (4) An authority of the State is not required to acquire (under this Division) more land than it requires for the public purpose for which the land was designated or more interests in the land than it requires for that purpose. (5) A notice under this section must be in the form prescribed by the regulations or (if no such form is prescribed) in the form approved by the Minister. 24 Hardship (1) An authority of the State is not required to acquire land under this Division unless it is of the opinion that the owner will suffer hardship (within the meaning of this section) if there is any delay in the acquisition of the land under this Act. (2) An owner of land suffers hardship if: (a) the owner is unable to sell the land, or is unable to sell the land at its market value, because of the designation of the land for acquisition for a public purpose, and (b) it has become necessary for the owner to sell all or any part of the land without delay: (i) for pressing personal, domestic or social reasons, or (ii) in order to avoid the loss of (or a substantial reduction in) the owner's income. (3) However, if the owner of the land is a corporation to which this Division applies, the corporation does not suffer hardship unless it has become necessary for the corporation to sell all or any part of the land without delay: (a) for pressing personal, domestic or social reasons of an individual who holds at least 20 per cent of the shares in the corporation, or (b) in order to avoid the loss of (or a substantial reduction in) the income of such an individual."
Sections 25 and 26 Land Acquisition Act provide for the method of acquisition and compensation for acquisition under Division 3. Sections 25 and 26 provide: "25 Method of acquisition under this Division (1) Land required to be acquired under this Division is to be acquired by compulsory process. (2) However, nothing in this Division prevents the land concerned from being acquired by agreement instead of compulsory process within the period required by this Division. (3) Division 1 (Pre-acquisition procedures) does not apply to an acquisition of land under this Division. 26 Compensation for acquisition under this Division The special value of land, any loss attributable to severance or disturbance and disadvantage resulting from relocation (as referred to in Part 3) need not be taken into account in connection with an acquisition of land under this Division, despite anything to the contrary in that Part." Provisions in the 2006 SEPP
Reference was made at [11] above to the 2006 SEPP.
Clause 2 of that SEPP provides: "2 Aims of Policy The aims of this policy are (in conjunction with amendments to the regulations under the Act relating to precinct planning) as follows: (a) to co-ordinate the release of land for residential, employment and other urban development in the North West Growth Centre, the South West Growth Centre and the Wilton Priority Growth Area, (b) to enable the Minister from time to time to designate land in growth centres as ready for release for development, (c) to provide for comprehensive planning for growth centres, (d) to enable the establishment of vibrant, sustainable and liveable neighbourhoods that provide for community well-being and high quality local amenity, (e) to provide controls for the sustainability of land in growth centres that has conservation value, (f) to provide for the orderly and economic provision of infrastructure in and to growth centres, (g) to provide development controls in order to protect the health of the waterways in growth centres, (h) to protect and enhance land with natural and cultural heritage value, (i) to provide land use and development controls that will contribute to the conservation of biodiversity."
It was common ground that the Austral property lay within the South West Growth Centre: clause 3(1)(b).
Clause 6 states: "6 Relationship with other environmental planning instruments (1) Subject to section 74(1) of the Act, in the event of an inconsistency between this Policy and another environmental planning instrument whether made before or after the commencement of this Policy, this Policy prevails to the extent of the inconsistency."
Clause 7 provides: "7 Controls applying to precincts after finalisation of precent planning process The provisions applying to the carrying out of development in a precinct are those specified in the Appendix listed in Column 2 of the Table to this clause opposite the precinct listed in Column 1 of that Table. Table Column 1 Column 2 Precinct and Growth Centre Appendix … Austral Precinct, South West Growth Centre Appendix 8" Provisions in Appendix 8 to the 2006 SEPP - the Liverpool Growth Centres Precinct Plan 2013
It is appropriate to set out parts of Appendix 8 to the 2006 SEPP. Detailed submissions were made with respect to these provisions. It was common ground that the Austral property fell within the area covered by the Liverpool Growth Centres Precinct Plan 2013. Several provisions in the Liverpool Growth Centres Precinct Plan 2013 are pertinent: "Part 1 Preliminary Note. The Standard Instrument (Local Environmental Plans) Order 2006 sets out matters to be included in standard local environmental plans. While this Precinct Plan is not a standard local environmental plan, it is generally consistent with standard plans. A number of clauses from the Standard Instrument (Local Environmental Plans) Order 2006 have been included in this Precinct Plan and the clause numbering from that Order has been retained. This means that the numbering in this Precinct Plan may contain some gaps. Additional provisions have been inserted and are numbered accordingly. 1.1 Name of Precinct Plan This Precinct Plan is the Liverpool Growth Centres Precinct Plan 2013. 1.2 Aims of Precinct Plan The aims of this Precinct Plan are as follows: (a) to make development controls that will ensure the creation of quality environments and good design outcomes, (b) to protect and enhance environmentally sensitive natural areas and cultural heritage, (c) to provide for recreational opportunities, (d) to provide for multifunctional and innovative development that encourages employment and economic growth, (e) to promote housing choice and affordability, (f) to provide for sustainable development, (g) to promote pedestrian and vehicle connectivity. 1.3 Land to which Precinct Plan applies This Precinct Plan applies to land within the Austral Precinct, East Leppington Precinct and Leppington North Precinct as shown on the Land Application Map. Note. The Land Application Map differs from the Precinct Boundary Map and, as such, this Precinct Plan does not apply to all the land within the Leppington North Precinct or East Leppington Precinct (as shown on the Precinct Boundary Map). 1.4 Definition In this Precinct Plan, Council means Liverpool City Council. Note. The Dictionary at the end of this State environmental planning policy defines words and expressions for the purposes of this Precinct Plan, including the relevant maps. 1.5 Notes Notes in this Precinct Plan are provided for guidance and do not form part of this Plan. … 1.9 Application of SEPPs (1) This Precinct Plan is subject to the provisions of any State environmental planning policy that prevails over this Precinct Plan as provided by section 36 of the Act. (2) State Environmental Planning Policy No 1 - Development Standards does not apply to the land to which this Precinct Plan applies. … Part 2 Permitted or prohibited development 2.1 Land use zones The land use zones under this Precinct Plan are as follows: … Special Purpose Zones SP2 Infrastructure Recreation Zones RE1 Public Recreation … 2.2 Zoning of land to which Precinct Plan applies For the purposes of this Precinct Plan, land is within the zones shown on the Land Zoning Map. 2.3 Zone objectives and Land Use Table (1) The Land Use Table at the end of this Part specifies for each zone: (a) the objectives for development, and (b) development that may be carried out without consent, and (c) development that may be carried out only with consent, and (d) development that is prohibited. (2) The consent authority must have regard to the objectives for development in a zone when determining a development application in respect of land within the zone. (3) In the Land Use Table at the end of this Part: (a) a reference to a type of building or other thing is a reference to development for the purposes of that type of building or other thing, and (b) a reference to a type of building or other thing does not include (despite any definition in this Policy) a reference to a type of building or other thing referred to separately in the Table in relation to the same zone. (4) This clause is subject to the other provisions of this Precinct Plan. Notes. 1 Schedule 1 sets out additional permitted uses for particular land. 2 Clause 2.6 requires consent for subdivision of land. 3 Part 5 contains other provisions that require consent for particular development. 4 Part 6 sets out additional permitted uses for particular land. … Land Use Table … Zone SP2 Infrastructure 1 Objectives of zone * To provide for infrastructure and related uses. * To prevent development that is not compatible with or that may detract from the provision of infrastructure. 2 Permitted without consent Roads 3 Permitted with consent The purpose shown on the Land Zoning Map, including any development that is ordinarily incidental or ancillary to development for that purpose 4 Prohibited Any development not specified in item 2 or 3. Zone RE1 Public Recreation 1 Objectives of zone * To enable land to be used for public open space or recreational purposes. * To provide a range of recreational settings and activities and compatible land uses. * To protect and enhance the natural environment for recreational purposes. 2 Permitted without consent Environmental protection works 3 Permitted with consent Building identification signs; Business identification signs; Child care centres; Community facilities; Drainage; Environmental facilities; Flood mitigation works; Information and education facilities; Kiosks; Markets; Recreation areas; Recreation facilities (indoor); Recreation facilities (major); Recreation facilities (outdoor); Restaurants; Roads; Take away food and drink premises; Water recreation structures; Waterbodies (artificial). 4 Prohibited Any development not specified in item 2 or 3. …"
The Plaintiffs placed particular reliance upon Clause 5.1 of Appendix 8 to the 2006 SEPP. Clause 5.1 provides (emphasis added): "5.1 Relevant acquisition authority (1) The objective of this clause is to identify, for the purposes of section 27 of the Act, the authority of the State that will be the relevant authority to acquire land reserved for certain public purposes if the land is required to be acquired under Division 3 of Part 2 of the Land Acquisition (Just Terms Compensation) Act 1991 (the owner-initiated acquisition provisions). Note. If the landholder will suffer hardship if there is any delay in the land being acquired by the relevant authority, section 23 of the Land Acquisition (Just Terms Compensation) Act 1991 requires the authority to acquire the land. (2) The authority of the State that will be the relevant authority to acquire land, if the land is required to be acquired under the owner-initiated acquisition provisions, is the authority of the State specified below in relation to the land shown on the Land Reservation Acquisition Map (or, if an authority of the State is not specified in relation to land required to be so acquired, the authority designated or determined under those provisions). Type of land shown on Map Authority of the State Zone RE1 Public Recreation and Council marked "Local open space" Zone SP2 Infrastructure and marked Roads and Maritime "Classified road" Services Zone SP2 Infrastructure and marked Council "Local drainage" Zone SP2 Infrastructure and marked The Corporation Railway" constituted under section 8 of the Act Zone SP2 Infrastructure and marked Council "Local road" Zone SP2 Infrastructure and marked NSW Department of "Educational establishment" Education and Communities Zone SP2 Infrastructure and marked Roads and Maritime "Unclassified regional road-Denham Services Court Road" Zone B1 Neighbourhood Centre and Council marked "Community facility" Zone B2 Local Centre and marked Council Community facility" (3) Development on land acquired by an authority of the State under the owner-initiated acquisition provisions may, before it is used for the purpose for which it is reserved, be carried out, with development consent, for any purpose. Note. If land, other than land specified in the Table to subclause (2), is required to be acquired under the owner-initiated acquisition provisions, the Minister for Planning and Infrastructure is required to take action to enable the designation of the acquiring authority under this Part. Pending the designation of the acquiring authority for that land, the acquiring authority is to be the authority determined by order of the Minister for Planning and Infrastructure (see section 21 of the Land Acquisition (Just Terms Compensation) Act 1991)." Provisions in Interpretation Act 1987
The parties referred to a number of provisions in the Interpretation Act 1987. Section 3 Interpretation Act 1987 provides: "3 Definitions (1) In this Act: instrument means an instrument (including a statutory rule or an environmental planning instrument) made under an Act, and includes an instrument made under any such instrument. (2) In this Act: (a) a reference to a function includes a reference to a power, authority and duty, and (b) a reference to the exercise of a function includes, in relation to a duty, a reference to the performance of the duty."
Section 5 of that Act provides: "5 Application of Act (1) This Act applies to all Acts and instruments (including this Act) whether enacted or made before or after the commencement of this Act. (2) This Act applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned. (3) Wherever appropriate, this Act applies to a portion of an Act or instrument in the same way as it applies to the whole of an Act or instrument. (4) Nothing in this Act excludes the application to an Act or instrument of a rule of construction applicable to it and not inconsistent with this Act. (5) This section does not authorise a statutory rule to exclude or modify the operation of Part 6 (statutory rules and certain other instruments). (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 word "prescribed" is defined in s.20 Interpretation Act 1987 so that, in any Act, "prescribed" means "prescribed by, or by a statutory rule made under the Act in which that word occurs."
Section 21(1) Interpretation Act 1987 provides that, in any Act or instrument: "statutory rule means: (a) a regulation, by-law, rule or ordinance: (i) that is made by the Governor, or (ii) that is made by a person or body other than the Governor, but is required by law to be approved or confirmed by the Governor, or (b) a rule of court."
The parties addressed with respect to the purposive construction principle in s.33 and the extrinsic material provision in s.34 Interpretation Act 1987.
Submissions were made, as well, by reference to s.35 Interpretation Act 1987 and the use of headings and notes in the construction of statutory provisions.

Submissions of the Plaintiffs

The Plaintiffs submitted that the Austral property fell within the Liverpool Growth Centre Precinct Plan so that the provisions in Appendix 8 applied to it.
The Plaintiffs had made a hardship application to the Defendant under ss.23 and 24 Land Acquisition Act which was accepted by the Defendant. The Plaintiffs noted that the land in Lot 2 of the Austral property was zoned "RE1 Public Recreation" and "SP2 (Local Drainage)" (to be understood as "SP2 Infrastructure"). It was submitted that the "RE1 Public Recreation" part of Lot 2 fell within the concepts of an open space, public space or public reserve for the purpose of s.26(1)(c) EPA Act, this being a proposition accepted by the Defendant.
The Plaintiffs submitted, in addition, however, that the land zoned "SP2 (Local Drainage)" also fell within s.26(1)(c) EPA Act as it was reserved for "any other purpose that is prescribed as a public purpose for the purposes of this section".
The Plaintiffs argued that the whole of Lot 2 in the Austral property was "land designated for acquisition for a public purpose" so that the Defendant was bound to acquire the whole of Lot 2 of the Austral property from the Plaintiffs having accepted their hardship application under ss.23 and 24 Land Acquisition Act.
It was contended that the "SP2 (Local Drainage)" zoned land was caught by s.26(1)(c) in that it had a purpose which was "prescribed as a public purpose" as a result of the creation of the 2006 SEPP, and the inclusion in that SEPP of Appendix 8 (Clause 5.1) (see [31] above). It was submitted that the proper construction of Clause 5.1 of Appendix 8 manifested a prescription under s.33A(2) EPA Act having regard, as well, to the terms of s.33A(9) EPA Act concerning the form and subject matter of an EPI (see [20] above).
The Plaintiffs submitted that the definition of "prescribed" in s.20 Interpretation Act 1987 is not applicable in this case as a contrary intention appears in the Act or instrument concerned so as to attract the operation of s.5(2) Interpretation Act 1987. It was submitted that this contrary intention appears in s.33A(2)(b) EPA Act (by use of the word "prescription") so that s.33A allows the 2006 SEPP to prescribe the matters required to be prescribed for the purposes of the application of the mandatory provisions of the standard instrument.
The Plaintiffs submitted that the Defendant's construction which confined the application of the hardship provision to part only of Lot 2 of the Austral property would not serve the objects of the hardship provisions in the Land Acquisition Act. In this regard, reliance was placed upon the decision of McClellan CJ (as his Honour then was) in Smith v Roads and Traffic Authority of NSW [2005] NSWLEC 438 at [86]-[87] where his Honour referred to the purposes to be served by ss.26 and 27 EPA Act which "provided a fair outcome for affected owners but reflected the practical reality of the modernised planning system" with a fundamental objective of the EPA Act being "the orderly and economic use of land".
It was submitted that the reservation of land for "local drainage" purposes was a reservation or holding back of land for a public purpose with the orderly development of the land requiring the provision of pre-planned trunk and local drainage schemes which maximised both capital expenditure on urban infrastructure and the proper economic exploitation of land resources.
The Plaintiffs argued that the reservation of land for the purposes of "local drainage" was a use which benefits other land users in the locality and severely restricts the use to which the owner of the reserved land can put the land, thus interfering significantly with vested proprietary interests. It was submitted that the land owner can only use the land for local drainage or roads (Land Use Table for Zone SP2 Infrastructure, Appendix 8 to 2006 SEPP).
It was submitted that the Defendant's approach meant that private land can be reserved by the State for public purposes (and effectively sterilised from private development) and even where the owner is suffering hardship, no obligation arises for the State to acquire the land. It was submitted that such a construction of the legislation (if available) is to be avoided: s.33 Interpretation Act 1987.
If the Court was in any doubt as to the construction of the 2006 SEPP, the Plaintiffs submitted that a construction should be chosen which interferes least with private property rights. In this regard, the Plaintiffs relied upon the judgment of French CJ in R&R Fazzolari Pty Limited v Parramatta City Council (2009) 237 CLR 603; [2009] HCA 12 at 618-620 [40]-[44].
The Plaintiffs submitted that the fact that the legislative scheme in the Land Acquisition Act provides for compensation to be paid to an owner suffering hardship mitigates the presumption referred to by French CJ in cases where the land is to be acquired because the legislature has turned its mind to and recognised the need for compensation: Pearce and Geddes, "Statutory Interpretation in Australia", 8th edn, LexisNexis Butterworths, 2014, paragraph [5.22].
It was contended that it is the 2006 SEPP that prescribes use of land for the purpose of infrastructure for local drainage as a public purpose as referred to in s.26 EPA Act, and that ss.26 and 27 of that Act are to be read with Clause 5.1 of Appendix 8 of the 2006 SEPP.
The Plaintiffs submit that the 2006 SEPP specifies the Defendant as the authority of the State and as the relevant authority required to acquire land zoned "SP2 Infrastructure" and marked "Local Drainage" as the 2006 SEPP prescribes that purpose as a public purpose.
It was argued that, on 23 November 2016, the Defendant resolved that it was satisfied that the Plaintiffs would suffer hardship if there was any delay in the acquisition of the Austral property. Having formed that opinion, it was said that the Defendant came under an enforceable obligation to acquire the Austral property in its entirety, being the land zoned "RE1" and "SP2".
The Plaintiffs submitted that Clause 5.1 of Appendix 8 of the 2006 SEPP identifies, for the purpose of s.27 EPA Act, the authority of the State that will be the relevant authority to acquire land reserved for certain public purposes. It does so in a table which identifies the type of land and the relevant authority. The Defendant is identified as the authority of the State to acquire the land.
It was submitted that it is the 2006 SEPP that prescribes the use of the land for local drainage, as a use of land for a public purpose, and identifies the Defendant as the authority of the State required to acquire the land.
It was contended that it would be contrary to established principles of statutory construction, and an absurd result, if the Plaintiffs' land was reserved for acquisition by the Defendant, but the Defendant was never under an obligation to acquire it.
The Plaintiffs submitted that they are entitled to the relief sought in the Amended Summons.

Submissions for the Defendant

The Defendant submitted that, in order for the "SP2 Infrastructure" zoned land to be "designated for acquisition for a public purpose" under s.21 Land Acquisition Act, it was required: 1. that it be reserved by an EPI; 2. for an exclusive use; 3. for a purpose referred to in s.26(1)(c) EPA Act; and 4. that an EPI specify the authority required to acquire the land.
It was accepted that the "SP2 Infrastructure" zoned land is included in the South West Growth Centre Land Reservation Acquisition Map in the 2006 SEPP and has the annotation "Local Drainage". The Defendant did not dispute that: 1. the 2006 SEPP is an EPI which reserves the relevant land for the purpose of local drainage; and 2. Clause 5.1 of Appendix 8 of the 2006 SEPP specifies the Defendant as the authority required to acquire the land.
The Defendant contended that the "SP2 Infrastructure" zoned land reserved for "Local Drainage" does not fall within a "public purpose" referred to in s.26(1)(c) EPA Act so as to enliven s.21(1)(b) Land Acquisition Act.
Senior Counsel for the Defendant took the Court to other terms used in s.26(1)(c) EPA Act. The definitions of "public place" and "public reserve" in the Dictionary to the Local Government Act 1993 were noted. It was noted that the term "open space" is not defined in the Dictionary to the Local Government Act 1993 and the term "public place" is not otherwise further defined in the Local Government (General) Regulations 2005. The terms "public cemetery, a public hospital, a public railway, a public school" are not relevant to the present proceedings.
In light of these terms, the Defendant submitted that "SP2 Infrastructure" zoned land reserved for "Local Drainage", as a matter of statutory construction, simply does not constitute a purpose "referred to" in s.26(1)(c) EPA Act.
The Defendant contrasted this with land zoned "RE1 Public Recreation" under the 2006 SEPP, which includes as an objective "to enable land to be used for public open space" and permits with consent "recreation areas" (defined in the 2006 SEPP to include a "public park" which is a "public reserve" under the Local Government Act 1993) (see, for example, Maloney v Minister Administering the Environment Planning and Assessment Act 1979 (2011) 184 LGERA 386; [2011] NSWLEC 121 at 388-389 [6]-[8]).
The Defendant submitted that, where only the "RE1 Recreation" zoned part of the Austral property was reserved by the 2006 SEPP for a purpose referred to in s.26(1)(c) EPA Act, then ss.21(1)(b) and 23(4) Land Acquisition Act would not require the Defendant to acquire more than that land.
The Defendant accepted that the Plaintiffs have suffered hardship within the meaning of s.24 Land Acquisition Act for a portion of their land zoned "RE1 Recreation" under the 2006 SEPP and had offered to acquire such portion, but not the remainder of the Plaintiffs' land zoned "SP2 Infrastructure".
The Defendant submitted that, in order for the "SP2 Infrastructure" land to be reserved for the purpose of s.26(1)(c), it would need to fall within the words "any other purpose that is prescribed as a public purpose for the purposes of this section". It was noted that s.26(1)(c) EPA Act does not specify the means of prescription. Reliance was placed upon the definition of the word "prescribed" in s.20 Interpretation Act 1987.
It was submitted that the 2006 SEPP does not constitute a "statutory rule" and is not capable of prescribing a new class of "public purpose" for the purpose of s.26(1)(c) EPA Act.
It was submitted that the 2006 SEPP was silent in relation to specifically prescribing the "SP2 Infrastructure" zone - "Local Drainage" as a public purpose for the purposes of s.26(1)(c) EPA Act (assuming an EPI can prescribe such purposes, which the Defendant submits it cannot).
It was accepted that the "SP2 Infrastructure" land is included in the South West Growth Centre Land Reservation Acquisition Map and has the annotation "Local Drainage". It was submitted, however, that the zone and/or map is not sufficient to constitute a prescription for the purposes of s.26(1)(c) EPA Act so as to enliven s.26(1)(b) Land Acquisition Act.
It was submitted that the principles of statutory interpretation and s.33 Interpretation Act 1987 supported the Defendant's argument. The 2006 SEPP should be interpreted in accordance with general principles of statutory interpretation: Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379; [2006] NSWCA 155 at 388 [36]. That required the text of the provisions being interpreted (Clause 5.1 of Appendix 8 of the map) to be the focus of consideration: Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at 143 [6]. However, the manifest intention of the statute must not be defeated by too little adherence to its precise language: Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642; [2009] HCA 40 at 655-666 [20].
It was submitted that the meaning of a provision in an EPI is to be determined having regard to its context and purpose, with the context to be understood in its widest sense: Matic v Mid-Western Regional Council [2008] NSWLEC 113 at [7]-[9]; Wilson v State Rail Authority of NSW (2010) 78 NSWLR 704; [2010] NSWCA 198 at 707-708 [12]-[13]. A construction that would promote the purpose or object underlying the instrument is to be preferred to a construction that would not promote that purpose or object: s.33 Interpretation Act 1987.
The Defendant submitted that the Land Use Table of Part 2 of Appendix 8 of the 2006 SEPP noted that the subject "SP2 Infrastructure" land was reserved for the "purpose shown on the Land Zoning Map". Read in context, it was submitted that an interpretation which promotes the objects of both the "SP2 Infrastructure" zone and the operation of the map to provide infrastructure uses (in this case "Local Drainage") in areas so designated ought be preferred.
The Defendant noted the Plaintiffs' argument that the correct approach is one where the map is construed as prescribing the public purposes under s.26(1)(c) EPA Act and as reserving the relevant land for use for those purposes. The Defendant submitted, however, that the term "reservation" as used in s.26(1)(c) EPA Act requires that land be "imprinted with a particular [and exclusive, future public] purpose", relying upon Carson v Department of Environment and Planning (1985) 3 NSWLR 99 at 103-104, 108.
Considering the text of s.26(1)(c) in the way referred to in Carson v Department of Environment and Planning, the Defendant submitted that "SP2 Infrastructure" - "Local Drainage" is simply not a species of the genus of public purpose identified in s.26(1)(c) EPA Act.
With respect to the Plaintiffs' reliance upon s.33 Interpretation Act 1987, the Defendant pointed to the objects of the Land Acquisition Act as contained in s.3 which included: "(d) to require an authority of the State to acquire land designated for acquisition for a public purpose where hardship is demonstrated,"
The term "public purpose" is defined in s.4 Land Acquisition Act as: "public purpose means any purpose for which land may by law be acquired by compulsory process under this Act."
The Defendant contrasted this provision with the heading to s.21 Land Acquisition Act - definition of "land designated for acquisition for a public purpose".
The Defendant submitted that ss.34 and 35 Interpretation Act 1987 permit the "heading" of the statutory provision to be used to assist in ascertaining the meaning of that provision if there is an ambiguity. The Defendant submitted that there is no ambiguity. Nevertheless, it was submitted that having regard to the heading reinforces its approach to the task of interpretation.
The Defendant submitted that the proper interpretation of s.21(1)(b) Land Acquisition Act and s.26(1)( c) EPA Act is such that the use of the land zoned "SP2 Infrastructure" reserved for "Local Drainage" is not "a purpose referred to" in s.26(1)(c) such as to enliven the operation of Division 3 of Part 2 of the Land Acquisition Act.
Accordingly, it was submitted that the Defendant is not required to acquire that part of the land zoned "SP2 Infrastructure" and no error had been shown in the Defendant's refusal to acquire that part of the Austral property.

Decision

The determination of these proceedings requires consideration of a range of statutory provisions and clauses in EPIs in what appears, at times, to be a labyrinthine complex.
To succeed in these proceedings, it is necessary for the Plaintiffs to establish that the Defendant was bound to acquire the whole of Lot 2 of the Austral property under the hardship provisions in ss.23 and 24 Land Acquisition Act.
The Plaintiffs had a straight-forward problem. Lot 2 was fettered by different forms of limitation so that the Plaintiffs suffered hardship with respect to it. The hardship did not arise solely from the "RE1 Public Recreation" zoning. It arose, as well, from the "SP2 Infrastructure (Local Drainage)" zoning.
The Defendant was satisfied that the Plaintiffs had made out their hardship case in accordance with the statutory formula in ss.23 and 24 Land Acquisition Act. The Defendant accepted that, in these circumstances, the Plaintiffs found it necessary to sell the whole of Lot 2 of the Austral property without delay in order to avoid a substantial reduction in the Plaintiffs' income.
Lot 2 of the Austral property was subject to two different forms of restriction - one being the "RE1 Public Recreation" zoning and the other being the "SP2 Infrastructure (Local Drainage)" zoning. The Plaintiffs were not at liberty to sell Lot 2 in whole or in part. Insofar as the hardship provisions in the Land Acquisition Act were intended to allow a landowner to overcome hardship, the response of the Defendant did not serve this purpose. Lot 2 could not be sold (in whole or in part) to another person. The acquisition of that part of Lot 2 zoned "RE1 Public Recreation" would leave the Plaintiffs with a part of Lot 2 which could not be meaningfully used, let alone sold, by them.
The observations of French CJ in R&R Fazzolari v Parramatta City Council at 618 [40]-[43] have traction in this case. In construing the provisions under consideration, a construction should be adopted which allows the compulsory acquisition provisions to operate meaningfully and effectively with respect to private property rights. The hardship provisions are intended to operate in a practical and realistic fashion. The Defendant's construction, which provides no meaningful response to the Plaintiffs' hardship application, does not promote the purpose or object of the hardship provisions and the "public purpose" provision to which they are directed.
It is necessary for the Plaintiffs to demonstrate that the zoning of the "SP2 Infrastructure" land marked "Local Drainage" fell within the description "any other purpose that is prescribed as a public purpose for the purposes of this section" in s.26(1)(c) EPA Act. I approach the matter upon the basis that the Court should so find unless there is an intractable construction to the contrary.
The EPA Act does not contain its own express formula for prescription for the purpose of the Act.
It is not necessary that prescription for the purpose of s.26(1)(c) EPA Act must be carried out solely by an express provision within the EPA Act itself. To the extent that reliance needs to be placed upon it, there is a measure of flexibility available by operation of s.5(2) Interpretation Act 1987 in this respect.
The Court is entitled to have regard to the full statutory definition of "prescribed" in s.20 Interpretation Act 1987. The term "statutory rule" is defined relatively broadly in s.21 Interpretation Act 1987. I note that that definition does not refer to an EPI, but that express reference is made to an EPI in s.5(6) Interpretation Act 1987. I do not approach the process of construction upon the basis that prescription by an EPI is necessarily excluded because of these provisions.
The statutory scheme under the EPA Act provides for the Governor to make certain instruments (SEPPs) and the Minister to make other instruments (LEPs). The 2006 SEPP itself has legislative attributes so that the rules of statutory construction apply to its interpretation. In this case, the 2006 SEPP includes Appendix 8, the Liverpool Growth Centre Precinct Plan which has application to the Austral property.
The zoning of land as "SP2 Infrastructure" with a marking "Local Drainage" is capable of being accommodated within the ordinary meaning of the words "public purpose". This approach is fortified by the terms of Clause 5.1 of Appendix 8 to the 2006 SEPP which operate to this effect. This document forms part of a legislative instrument created under the umbrella of the EPA Act. It contains provisions which apply specifically to the region which includes the Plaintiffs' Austral property.
In my view, this document cannot be put to one side (as the Defendant seeks to do) in undertaking the necessary process of statutory construction. On the Defendant's argument, land zoned "SP2 Infrastructure" and marked "Local Drainage" could never fall within the non-exclusive definition of public purpose in s.26(1)(c) EPA Act. If that was so, one wonders why Clause 5.1 of Appendix 8 to the 2006 SEPP includes a classification extending to land which is zoned in this way.
It was submitted for the Defendant that Clause 5.1 is to be understood only as identification of the relevant authority of the State which is to become involved once the owner-initiated acquisition provisions in s.27 Land Acquisition Act have become engaged. In my view, this is an unduly narrow construction of this instrument. A fair reading of this instrument indicates that reserved land which is zoned "SP2 Infrastructure" and marked "Local Drainage", which is the subject of a successful hardship application under the Land Acquisition Act, is to be acquired by the relevant council and not some other State instrumentality. This part of Appendix 8 should be construed as being part of a coherent overall scheme which sheds light upon property which is to be the subject of s.26(1)(c) EPA Act and ss.23 and 24 Land Acquisition Act.
I am satisfied that this construction, which favours the Plaintiffs, is open upon a fair reading of the relevant provisions of the EPA Act, Land Acquisition Act and Appendix 8 to the 2006 SEPP. This conclusion is not undermined by any provision in the Interpretation Act 1987.
To the extent that there is a competing construction based upon a strict reading of s.26(1)(c) EPA Act, I would, in any event, prefer the construction advanced on behalf of the Plaintiffs. This construction promotes the purpose or object of ss.23 and 24 Land Acquisition Act and does not undermine the terms of s.26(1)(c) EPA Act. It permits the remedial hardship provision to operate in the practical context of a case such as this one, where there is demonstrated hardship. The Defendant's approach would confine their operation to only one of the two clear public purposes involved.
The outcome in the present proceedings provides an illustration of the adage of Lord Diplock referred to by McHugh JA (as his Honour then was) in Kingston v Keprose Pty Limited (1987) 11 NSWLR 404 at 424 that, if the Courts can identify the target of legislation, "their proper function is to see that it is hit; not merely to record that it has been missed".
Although it has played no part in my determination in this matter, which involves a process of statutory construction, one cannot help but observe that the Defendant itself accepted (on its own website) that land may be needed for a public purpose such as drainage (at least until a recent amendment) (Exhibit A, page 30).
The Plaintiffs have satisfied the Defendant on hardship grounds that it had become necessary for them, as landowners, to sell the whole of Lot 2 in the Austral property without delay. For practical purposes, that hardship cannot be alleviated by the decision made by the Defendant.
I am satisfied that the two zoned components of Lot 2 of the Austral property had both been designated for acquisition for a public purpose. This designation affected the whole of Lot 2 so that the sensible operation of ss.23 and 24 Land Acquisition Act should apply to the whole of the Austral property.
I am satisfied that this construction accords with a fair reading of the relevant legislation and instruments as well as giving effect to the purpose underlying s.26(1)(c) EPA Act and the Land Acquisition Act.
The conclusion which I have reached does not involve any distortion of the relevant statutory language. Nor does it undermine the purpose of these provisions which are intended to provide a remedial pathway for landowners whose property is tied up as a result of a designation for use for a public purpose.

Conclusion

The Plaintiffs have made good their claim for relief in this case. I am satisfied that the Plaintiffs are entitled to declaratory relief and relief in the nature of mandamus as sought in the Amended Summons.
It is appropriate that costs follow the event so that the Defendant will be ordered to pay the costs of the Plaintiffs.
Insofar as the Amended Summons sought an order for payment of interest on costs, I will allow the parties an opportunity to address that issue in writing if the Plaintiffs press the claim.
I make the following declarations and orders: 1. The Court declares that the Defendant is bound to acquire the whole of Lot 2 in Deposited Plan xxx at xxx Gurner Avenue, Austral under s.24 of the Land Acquisition (Just Terms Compensation) Act 1991. 2. The Court declares that in the circumstances and events which have happened, the Defendant has failed to comply with its statutory duty as referred to in paragraph (a) above. 3. Pursuant to s.69 Supreme Court Act 1970, the Court makes an order in the nature of mandamus compelling the Defendant to acquire the whole of Lot 2 in Deposited Plan xxx at xxx Gurner Avenue, Austral under the Land Acquisition (Just Terms Compensation) Act 1991. 4. The Defendant is to pay the Plaintiffs' costs of the proceedings. 5. If the Plaintiffs seek an order that the Defendant pay interest on costs, then a written submission in support of that application should be provided to my Associate and to the Defendant within seven days.

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: 28 February 2018

(2011) 184 LGERA 386

Calarco and Anor v Liverpool City Council

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Judgment (10 paragraphs)

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Cases Cited (16)