Canterbury Bankstown Council v Dib

Land and Environment Court (NSW)|2022-04-11|Before: Preston CJ

Nature of appeal and outcome

Mr William Dib applied for development consent to construct a boarding house with 21 rooms at 82 and 84 Lancaster Avenue, Punchbowl (the land). The land was zoned R2 Low Density Residential under Bankstown Local Environmental Plan 2015 (BLEP). Development for the purposes of boarding houses is permissible with consent in the R2 Zone.
BLEP establishes certain development standards for boarding houses in the R2 Zone. The proposed development met these development standards in BLEP. Development for the purposes of boarding houses was also regulated by State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP (ARH)). Clause 30AA of SEPP (ARH) precluded a consent authority granting development consent to a boarding house on land within the R2 Zone "unless it is satisfied that the boarding house has no more than 12 boarding rooms". The proposed development with 21 boarding rooms did not comply with the limit of 12 boarding rooms in cl 30AA.

The text and context of cl 30AA of SEPP (ARH)

SEPP (ARH) was in force when Mr Dib made his development application for a 21-room boarding house and when the Commissioner determined the appeal to grant consent to a 20-room boarding house. SEPP (ARH) has since been repealed and replaced by State Environmental Planning Policy (Housing) 2021 (the Housing SEPP), which commenced on 26 November 2021. The Housing SEPP does not apply, however, to development applications made, but not yet determined, on or before the commencement date of 26 November 2021: Schedule 7A, cl 2(1)(a) of the Housing SEPP. Mr Dib's development application was made and determined by the Commissioner before the commencement date of 26 November 2021. SEPP (ARH) therefore continues to apply to Mr Dib's development application.
Part 2 of SEPP (ARH) concerns different types of new affordable rental housing. Division 3 of Part 2 deals with boarding houses. Clause 27(1) provides that: "This Division applies to development, on land to which this Division applies, for the purposes of boarding houses." Clause 26 identifies the land to which Division 3 applies as including land within the R2 Zone.
The term "boarding house" is not defined in cl 25 within Division 3 of SEPP (ARH) or in the interpretation provision of cl 4 of SEPP (ARH). Clause 4(1) does define "boarding room" to mean "a room or suite of rooms within a boarding house occupied or so constructed or adapted as to be capable of being occupied by one or more lodgers." Clause 4(2) does, however, provide that a word or expression used in SEPP (ARH) has the same meaning as in the Standard Instrument unless it is otherwise defined in SEPP (ARH). The Standard Instrument defines "boarding house" to mean "a building that - (a) is wholly or partly let in lodgings, and (b) provides lodgers with a principal place of residence for 3 months or more, and (c) may have shared facilities, such as a communal living room, bathroom, kitchen or laundry, and (d) has rooms, some or all of which may have private kitchen and bathroom facilities, that accommodate one or more lodgers, but does not include backpackers' accommodation, a group home, hotel or motel accommodation, seniors housing or a serviced apartment."
Two provisions of Division 3 of Part 2 of SEPP (ARH) regulate the permissibility to grant development consent to boarding houses, cl 28 and cl 30AA. Clause 28 provides: "Development to which this Division applies may be carried out with consent."
Clause 30AA, the provision of concern in this appeal, provides: "A consent authority must not grant development consent to a boarding house on land within Zone R2 Low Density Residential or within a land use zone that is equivalent to that zone unless it is satisfied that the boarding house has no more than 12 boarding rooms."
Two provisions of Division 3 are expressly stated to be standards for boarding houses, cl 29 and cl 30. Clause 29 fixes standards that cannot be used to refuse consent. Clause 29(1) provides that a consent authority must not refuse consent to development to which Division 3 applies on the grounds of density or scale if the density or scale of the building to be used for the purposes of boarding houses meets specified floor space ratios. Clause 29(2) provides that a consent authority must not refuse consent to development to which Division 3 applies on the specified grounds of building height, landscaped area, solar access, private open space, parking or accommodation size if the development meets the specified standards for those grounds.
Clause 30(1) fixes standards for boarding houses. Clause 30 provides that a consent authority must not grant consent to development to which Division 3 applies unless it is satisfied of each of the standards specified in paragraphs (a) to (h): "(a) if a boarding house has 5 or more boarding rooms, at least one communal living room will be provided, (b) no boarding room will have a gross floor area (excluding any area used for the purposes of private kitchen or bathroom facilities) of more than 25 square metres, (c) no boarding room will be occupied by more than 2 adult lodgers, (d) adequate bathroom and kitchen facilities will be available within the boarding house for the use of each lodger, (e) if the boarding house has capacity to accommodate 20 or more lodgers, a boarding room or on site dwelling will be provided for a boarding house manager, (f) (Repealed) (g) if the boarding house is on land zoned primarily for commercial purposes, no part of the ground floor of the boarding house that fronts a street will be used for residential purposes unless another environmental planning instrument permits such a use, (h) at least one parking space will be provided for a bicycle, and one will be provided for a motorcycle, for every 5 boarding rooms."
The final provision in Division 3 to which reference should be made is clause 30A. This clause sets a relevant matter of the character of the local area to be considered in determining whether to grant or refuse development consent to development to which Division 3 applies. Clause 30A provides that: "A consent authority must not consent to development to which this Division applies unless it has taken into consideration whether the design of the development is compatible with the character of the local area."
The standards specified in cl 29 that cannot be used to refuse consent, the standards specified in cl 30 for boarding houses and the relevant consideration specified in cl 30A do not apply to development on land within the R2 Zone in certain circumstances. Clause 27(2) provides that cll 29, 30 and 30A do not apply to development on land within the R2 Zone in the Greater Sydney region "unless the land is within an accessibility area". Clause 27(3) provides that cll 29, 30 and 30A do not apply to development on land within the R2 Zone that is not in the Greater Sydney region "unless all or part of the development is within 400 metres walking distance of land within Zone B2 Local Centre or Zone B4 Mixed Use or within a land use zone that is equivalent to any of these zones".

The concept of a development standard

Certain provisions of environmental planning instruments can be development standards. Section 1.4(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) defines "development standards" to mean: "provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, including, but without limiting the generality of the foregoing, requirements or standards in respect of - (a) the area, shape or frontage of any land, the dimensions of any land, buildings or works, or the distance of any land, building or work from any specified point, (b) the proportion or percentage of the area of a site which a building or work may occupy, (c) the character, location, siting, bulk, scale, shape, size, height, density, design or external appearance of a building or work, (d) the cubic content or floor space of a building, (e) the intensity or density of the use of any land, building or work, (f) the provision of public access, open space, landscaped space, tree planting or other treatment for the conservation, protection or enhancement of the environment, (g) the provision of facilities for the standing, movement, parking, servicing, manoeuvring, loading or unloading of vehicles, (h) the volume, nature and type of traffic generated by the development, (i) road patterns, (j) drainage, (k) the carrying out of earthworks, (l) the effects of development on patterns of wind, sunlight, daylight or shadows, (m) the provision of services, facilities and amenities demanded by development, (n) the emission of pollution and means for its prevention or control or mitigation, and (o) such other matters as may be prescribed."
The significance of a provision of an environmental planning instrument being a development standard is that under cl 4.6(2) of BLEP, a provision required by the Standard Instrument: "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."
SEPP (ARH) is an environmental planning instrument. If cl 30AA of SEPP (ARH) were to impose a development standard, cl 4.6(2) of BLEP would permit the grant of development consent to a boarding house on land within the R2 Zone that has more than 12 boarding rooms even though the development would contravene the development standard imposed by cl 30AA.
The critical question that must be answered in this case is whether cl 30AA of SEPP (ARH) comes within the definition of "development standards" in s 1.4(1) of the EPA Act.

The Council's construction of cl 30AA of SEPP (ARH)

The Council submitted that cl 30AA of SEPP (ARH) does not fall within the definition of development standard for three reasons.
First, before one can apply the definition of "development standards", it is necessary to define the development that may be carried out with consent. This is because the definition of "development standards" is referrable only to provisions of an environmental planning instrument "in relation to the carrying out of development". The development that may be carried out must be one that is permissible with consent: Agostino v Penrith City Council (2010) 172 LGERA 380; [2010] NSWCA 20 at [49]-[50].
It is therefore always necessary to define the development which is permissible before ascertaining whether the provision specifies a requirement or fixes a standard in respect of any aspect of that development. The reason is that it is an "essential condition" of the definition of development standards "that the requirements specified or standards fixed in respect of any aspect of the development must be requirements or developments which, ex hypothesi, are external to the aspects of that development. A provision is not a specified requirement or fixed standard 'in respect of' an aspect of a development until the development and its aspects are defined": Woollahra Municipal Council v Carr (1985) 62 LGRA 263 at 269-270.
In the present case, the Council submitted, cl 30AA of SEPP (ARH) defines the development to which the consent authority can and cannot grant development consent by reference to the number of boarding rooms that the boarding house has. The requirement that the consent authority is satisfied that the boarding house has no more than 12 boarding rooms defines the development that is permissible with consent and hence that may be carried out. By reference to the definition of development standards, the "development" and "that development" which may be carried out by cl 30AA is a boarding house with no more than 12 boarding rooms.
Clause 30AA does not specify a requirement or fix a standard "in respect of any aspect of" that development. That is to say, there are no specified requirements or fixed standards which are external to any aspect of that development of a boarding house with no more than 12 boarding rooms. The characteristic of having no more than 12 boarding rooms is part of the definition of the development, not an aspect of it. As Basten JA said in Blue Mountains City Council v Laurence Browning Pty Ltd (2006) 150 LGERA 130; [2006] NSWCA 331 at [77]: "Thus a prohibition on a particular kind of development will not be a development standard if the characteristic or criterion engaging its operation is an essential element of the particular development, rather than a standard or requirement in respect of an aspect of the proposed development".
Secondly, the Council submitted it matters not that this definition of development which is permissible with consent occurs in cl 30AA of SEPP (ARH) rather than in an interpretation provision or in the zoning table. Form cannot govern substance. An environmental planning instrument can define the essential elements of a permissible development in an interpretation provision or the zoning table, but can also do so in other provisions of the instrument: Blue Mountains City Council v Laurence Browning Pty Ltd at [81]; Agostino v Penrith City Council at [30], [55].
Whilst in Woollahra Municipal Council v Carr the requirement of the number of dentists and employees working in the professional consulting rooms was part of the definition of "professional consulting rooms", in other cases a requirement in a provision of the environmental planning instrument other than in the definition of the development in question has still been held to define the development. In Agostino v Penrith City Council, the definition of the development of a "fruit and vegetable store" in the environmental planning instrument did not refer to the maximum floor area of the store, but the relevant provision of the environmental planning instrument, cl 41(3), defined the development that was permissible with consent as being "a fruit and vegetable store with a maximum floor area of 150sqm". A majority of the Court of Appeal held that cl 41(3) was a form of zoning provision that defined the development of a fruit and vegetable store that was permissible with consent: at [56].
SEPP (ARH) adopts the same approach as was adopted in the environmental planning instrument considered in Agostino v Penrith City Council of functionally defining the development generally, in Agostino v Penrith City Council by defining a fruit and vegetable store generally and in the present case by defining boarding houses generally, but then introducing in a separate provision a requirement that defines the permissible development more particularly, in Agostino v Penrith City Council by specifying the maximum floor area of the fruit and vegetable store and in the present case by specifying the maximum number of boarding rooms of the boarding house.
Thirdly, the Council submitted that the inclusion in cl 30AA of SEPP (ARH) of a jurisdictional fact causes the provision not to meet the definition of "development standards". A jurisdictional fact is a "criterion, satisfaction of which enlivens the power of a decision-maker to exercise a discretion": Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; [2000] HCA 5 at [28]; Woolworths Limited v Pallas Newco Pty Ltd (2004) 61 NSWLR 707; [2004] NSWCA 422 at [5].
In cl 30AA of SEPP (ARH), the criterion is the consent authority's opinion of satisfaction that the boarding house has no more than 12 boarding rooms. The consent authority's formation of that opinion of satisfaction enlivens the power of the consent authority to grant development consent to a boarding house on land in the R2 Zone.
The inclusion of this jurisdictional fact in cl 30AA causes it not to answer the description in the definition of "development standards" of being a provision in relation to the carrying out of development. The development for the purposes of boarding houses cannot be carried out in the R2 Zone unless and until the consent authority forms the opinion of satisfaction that the boarding house has no more than 12 boarding rooms. The definition of "development standards" does not include provisions which establish jurisdictional facts, such as the consent authority's state of satisfaction about certain matters.

Mr Dib's construction of cl 30AA of SEPP (ARH)

Mr Dib contended that cl 30AA of SEPP (ARH) does come within the definition of "development standards" for five reasons.
First, Mr Dib re-iterated the argument he made in the court below, which the Commissioner had accepted, that application of the two step test in Strathfield Municipal Council v Poynting (2001) 116 LGERA 319; [2001] NSWCA 270 at [96]-[99] demonstrates that cl 30AA is a development standard. Applying the first step, cl 30AA is not a provision prohibiting the development in question (boarding houses) under any circumstances. The development to which a consent authority must not grant development consent is a "boarding house". A "boarding house" for the purposes of cl 30AA of SEPP (ARH) has the same meaning as it has in the Standard Instrument (cl 4(2) of SEPP (ARH)). The definition of "boarding houses" in the Standard Instrument does not limit the number of boarding rooms in the boarding house.
Clause 27(1) of SEPP (ARH) provides that Division 3 applies to development for the purposes of boarding houses. Clause 28 provides that development to which Division 3 applies, being development for the purposes of boarding houses, may be carried out with consent. Clause 30AA permits the consent authority to grant development consent to boarding houses that the consent authority is satisfied have no more than 12 boarding rooms. Accordingly, cl 30AA cannot be said to prohibit boarding houses under any circumstances. The first step in Strathfield Municipal Council v Poynting is satisfied.
Applying the second step, Mr Dib submitted that cl 30AA does specify a requirement or fix a standard in respect of an aspect of development for the purposes of boarding houses. The number of boarding rooms in the boarding house is the aspect of that development. Whilst this is not an aspect of development expressly identified in the list of aspects in paragraphs (a) to (n) of the definition of "development standards", the number of boarding rooms in the boarding house will influence the size and density of the boarding house, so as to fall indirectly within paragraph (c). The definition of "development standards" does not circumscribe the manner in which the size or density of a development may be determined. The fact that in cl 30AA the size or density of a boarding house is described by reference to the number of boarding rooms is not material.
Having identified the aspect of the development of a boarding house as being the number of boarding rooms, cl 30AA specifies a requirement or fixes a standard in respect of that aspect, which is that the boarding house have no more than 12 boarding rooms.
Mr Dib submitted that cl 30AA, therefore, answers the description of being a provision "by or under which requirements are specified or standards are fixed in respect of any aspect of that development" within the chapeau of the definition of "development standards".
Secondly, Mr Dib disputed the Council's argument that cl 30AA is definitional of the development that may be carried out. Clause 30AA does not qualify the definition of "boarding houses". The development to which Division 3 generally applies is development for the purposes of "boarding houses" (cl 27(1)). The development to which cl 30AA particularly applies is also a "boarding house", as first referred to in the clause. The requirement later expressed in the clause that the consent authority be satisfied that the boarding house has no more than 12 boarding rooms does not change the definition of what is a boarding house, but only specifies a requirement or fixes a standard in respect of an aspect of that development of a boarding house. The number of boarding rooms specified in cl 30AA is a requirement external to the development of a boarding house as defined.
Thirdly, Mr Dib distinguished the decisions in Woollahra Municipal Council v Carr and Agostino v Penrith City Council as turning on the particular provisions of the environmental planning instruments there considered. In Woollahra Municipal Council v Carr, the definition of professional consulting rooms contained the limit on the number of dentists and employees. In Agostino v Penrith City Council, the provision in question defined the permissible development as being a fruit and vegetable store with a maximum floor area. In both cases, the number of professionals or the size of the store was not a requirement specified or a standard fixed in relation to an aspect of the development, but rather an aspect of the development itself as defined. That is not the case with cl 30AA of SEPP (ARH).
Fourthly, Mr Dib submitted that this construction of cl 30AA as a development standard is supported by reference to the Explanation of Intended Effect of the amendment to SEPP (ARH) that introduced cl 30AA, being State Environmental Planning Policy (Affordable Rental Housing) Amendment (Boarding House Development) 2019. Under the unamended SEPP (ARH), the whole of Division 3, which included the standards in cll 29 and 30 and the relevant consideration in cl 30A, did not apply to boarding houses on land within the R2 Zone, except in the circumstances specified in cl 27(2) and (3) (see the unamended cl 27(2) and (3)). These circumstances are where the boarding house is on land within the R2 Zone in the Sydney region that is within an accessible area (cl 27(2)) or where the boarding house on land not in the Sydney region is within 400 metres walking distance of land within two specified commercial zones (cl 27(3)).
The Explanation of Intended Effect noted that some councils and communities had expressed concern that "the built form of larger building house proposals can be fundamentally incompatible with the typical and expected built form in a R2 Low Density Residential Zone (R2 zone), regardless of whether a proposal complies with other controls such as height of building limits and floor space ratios" (p 4).
In response to this concern, the Department of Planning and Environment proposed amending SEPP (ARH) to introduce a new provision, cl 30AA, dealing particularly with boarding houses in the R2 Zone. The Explanation of Intended Effect summarised this amendment in the executive summary: "To facilitate the development of boarding houses in the R2 zone that are compatible with the character of residential density that is typically expected in that zone, it is proposed to amend the boarding house provisions in the Affordable Rental Housing SEPP so that a boarding house in the R2 zone can consist of no more than 12 boarding rooms." (p 4).
The Explanation of Intended Effect more fully described the proposed change in the following terms: "Limit on number of boarding house rooms for development in the R2 Low Density Residential zone The proposed amendment to the Affordable Rental Housing SEPP will provide for a new provision that limits the number of boarding rooms in a boarding house development in the R2 zone to a maximum of 12 boarding rooms. The intention of the proposed amendment is to ensure that the built form of boarding house development in the R2 zone is compatible with the built form of other development in the local area. The proposed introduction of a maximum room number for boarding houses is considered to assist in ensuring that amenity impacts of boarding house development on adjoining and nearby properties, such as overlooking, overshadowing and carparking impacts, are able to be better managed. The EIE does not propose to amend any other provisions of the Affordable Rental Housing SEPP." (p 8).
The amendments to SEPP (ARH) involved the introduction of cl 30AA and the amendment of cl 27(2) and (3) so as to omit the reference to "this Division" and insert instead reference to "clauses 29, 30 and 30A". The amendment of cl 27(2) and (3) thereby limited the clauses of Division 3 that do not apply from the whole of the Division to only cll 29, 30 and 30A, but left untouched the application of those clauses to boarding houses on land in the R2 Zone in the circumstances specified in cl 27(2) and (3).
Mr Dib submitted that these amendments revealed that cl 30AA was intended to be a development standard. The amendments had introduced a new provision, cl 30AA, limiting the number of rooms in a boarding house to ensure that the built form of boarding houses in the R2 Zone is compatible with the built form of other development in the local area, whilst also making the standards in cll 29, 30 and 30A that would otherwise operate to ensure compatibility with the character and built form of development in the local area, not applicable to boarding houses on land in the R2 Zone. Mr Dib submitted that the effect was to replace the existing standards in cll 29, 30 and 30A with a new standard in cl 30AA.
Fifthly, Mr Dib submitted that the inclusion of the jurisdictional precondition in cl 30AA, that the consent authority "is satisfied that the boarding house has no more than 12 boarding rooms", did not cause the clause not to be a development standard as that term is defined. The definition of "development standards" is sufficiently wide to encompass a consent authority's satisfaction of certain matters. A provision can specify a requirement or fix a standard in respect of an aspect of development not only in objective terms but also in subjective terms. Mr Dib noted that the standards fixed for boarding houses in cl 30 of SEPP (ARH) are expressed in subjective terms: "A consent authority must not consent to development to which this Division applies unless it is satisfied of each of the following" and the standards are then listed in paragraphs (a) to (h). There is no question that cl 30 does specify requirements or fix standards in respect of aspects of development and hence is a provision that comes with the definition of "development standards".
Mr Dib submitted that the answer to the question of whether cl 30AA is a development standard does not, therefore, depend on whether the precondition in cl 30AA to the grant of development consent to a boarding house on land within the R2 Zone is expressed in objective terms, "unless the boarding house has no more than 12 boarding rooms", or in the subjective terms in which it is expressed, "unless it is satisfied that the boarding house has no more than 12 boarding rooms".
Mr Dib submitted that the whole of cl 30AA is a development standard, including the requirement that the consent authority be satisfied that the boarding house has no more than 12 boarding rooms.

Clause 30AA of SEPP (ARH) is a development standard

I find that cl 30AA of SEPP (ARH) does fall within the definition of "development standards".
The starting point in determining whether a provision is a development standard within the definition is to identify the development that may be carried out with consent. A provision of an environmental planning instrument can only be a development standard within the definition of "development standards" if the provision is "in relation to the carrying out of development". Under the EPA Act, the only development that may be carried out is development that an environmental planning instrument permits to be carried out either without consent or only with consent. As Tobias JA observed in Agostino v Penrith City Council at [49]: "But such a contention overlooks the fact that the definition of 'development standards' is referrable only to provisions of an environmental planning instrument 'in relation to the carrying out of development'. Thus the development in respect of which it is asserted that the relevant provision is a development standard must be one which may be carried out; that is, one which is permitted or permissible. One can only determine that question by reference to the terms of the planning instrument."
The necessary inquiry, therefore, is to identify the development, in respect of which it is asserted that the relevant provision is a development standard, that is permitted to be carried out with consent.
The relevant provision in this case is cl 30AA. This clause is in Division 3 of Part 2 of SEPP (ARH). The development to which Division 3 applies is "development…for the purposes of boarding houses" (cl 27(1)). Clause 28 provides that development to which Division 3 applies, being development for the purposes of boarding houses, may be carried out with consent. Clause 30AA qualifies cl 28 to preclude a consent authority from granting development consent to a boarding house on land within the R2 Zone unless the consent authority is satisfied that the boarding house has no more than 12 boarding rooms. The critical question in this case is what is the effect of this clause? Does it operate to restrict the development which may be carried out from being the development to which Division 3 applies of development for the purposes of boarding houses to being a boarding house with no more than 12 rooms?
In its terms, cl 30AA sets a precondition to the engagement of the statutory power to grant development consent to the permissible development of a boarding house. It is a form of jurisdictional fact notwithstanding that it is framed in terms of requiring a subjective state of mind rather than the objective existence of a fact: see Trives v Hornsby Shire Council (2015) 89 NSWLR 268; [2015] NSWCA 158 at [52]; Muswellbrook Shire Council v Hunter Valley Energy Pty Ltd (2019) 238 LGERA 295; [2019] NSWCA 216 at [188].
Does the fact that the exercise of the power to grant development consent to a boarding house is conditional on the consent authority having this state of satisfaction make this aspect of development of not having more than 12 boarding rooms "an essential element" of the permissible development of boarding houses? Earlier cases have suggested that if an aspect of development is an essential element of the development that is permitted to be carried out with consent, a provision requiring the development to have that aspect is not a development standard. In Woollahra Municipal Council v Carr, the permissible development of "professional consulting rooms" was defined to mean a number of rooms "used or intended for use…by not more than three dentists…and who employ not more than three employees." The number of dentists and the number of employees were an "essential condition" of the development of "professional consulting rooms"; they were internal, not external aspects of that development: at 269.
In contrast, in Strathfield Municipal Council v Poynting, the relevant provision precluded erection of a building for residential purposes on land within certain residential zones which had an area less than 560 square metres. The Court of Appeal interpreted this provision as not prohibiting the erection of a building for the stated purposes on residential land in any circumstances, only in the stated circumstance that the area of the land is less than the minimum size: at [102], [103]. Unlike in Woollahra Municipal Council v Carr, the minimum area of land on which a building may be erected for the stated purposes was not "an essential element of permitted use": at [36].
In Blue Mountains City Council v Laurence Browning Pty Ltd at [77], Basten JA summarised this "essential element" approach to determining whether a provision is a development standard or not: "Thus a prohibition on a particular kind of development will not be a development standard if the characteristic or criterion engaging its operation is an essential element of the particular development, rather than a standard or requirement in respect of an aspect of the proposed development."
This "essential element" approach to determining whether a provision is a development standard is not without its difficulties. As Ipp JA observed in Blue Mountains City Council v Laurence Browning Pty Ltd at [14], it may be difficult to decide whether a requirement is inside (internal to) or outside (external to) a development; it may not infrequently be on the borderline. So too McClellan CJ at CL in Agostino v Penrith City Council at [74] observed that "every numerical control on development proposed under a LEP is capable of being described as 'an essential element'." He gave as an example a height control in an LEP, which indisputably is a development standard: "A height control which confines the maximum height of a building on a particular parcel of land to three stories is an essential element but without question a development standard."
The perceived difficulties with the essential element approach may be lessened if the inquiry involved is understood to be ascertaining whether the aspect of development is definitional of the development that may be carried out with consent. That was the case in Woollahra Municipal Council v Carr. The number of dentists and employees was part of the definition of the permissible development of "professional consulting rooms". In that way, the number of dentists and employees was an essential element of that development.
In Blue Mountains City Council v Laurence Browning Pty Ltd, development for any purpose (except an existing use and bushfire hazard reduction) was prohibited on land where a consolidation requirement was shown on a map unless all adjoining lots within that area on the map had been consolidated into one lot. This provision precluded any development being carried out on such land, rather than allowing development to be carried out on such land in a particular way or to a particular extent. The Court of Appeal accordingly held it was not a development standard.
That provision was similar in its effect to the provision considered in North Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222. There, the provision precluded the erection of a residential flat building on land in residential zone 2(c) if "any principal building on adjoining land is less than three storeys measured vertically above any point at natural ground level". The majority of the Court of Appeal interpreted this provision as prohibiting the erection of a residential flat building on land within the zone that has the characteristics specified in the provision: at 234 and 236. The provision was therefore not one "in relation to the carrying out of development". As Mahoney JA noted at 234, there is a distinction between a provision in the form of: "On land of characteristic X no development may be carried out" and a provision in the form of: "On such land development may be carried out in a particular way or to a particular extent": see also Clarke JA at 236. The provision in that case was of the former kind, not the latter kind, and hence not a development standard.
I return to the provision in the present case, cl 30AA. The structure of cl 30AA is first to set a prohibition on the grant of development consent to specified development, "a boarding house", on land within the R2 Zone or an equivalent zone, and second to relax that prohibition if the consent authority forms the specified state of satisfaction, "that the boarding house has no more than 12 boarding rooms". This structure reveals that the development in respect of which it is asserted cl 30AA is a development standard, is "a boarding house" as first referred to in the clause. This is a reference to the development to which Division 3, within which cl 30AA sits, applies, namely development for the purposes of boarding houses. Equally, the second reference in cl 30AA to "the boarding house" is also a reference to the development to which Division 3 applies of development for the purposes of boarding houses. The matter about which the consent authority must be satisfied, "that the boarding house has no more than 12 boarding rooms", is an aspect of that development for the purposes of boarding houses to which Division 3 applies.
Clause 30AA does not operate to define the development that is permitted to be carried out with consent in the R2 Zone. Clauses 27 and 28 serve that function, cl 27 by specifying the development to which Division 3 applies, being development for the purposes of boarding houses, and cl 28 by specifying that such development to which Division 3 applies may be carried out with consent. Clause 30AA serves the different function of specifying the circumstances in which a consent authority can and cannot grant development consent to "a boarding house", a shorthand reference to development for the purposes of boarding houses, being the development to which Division 3 applies. This circumstance is whether the consent authority is satisfied that the boarding house has no more than 12 boarding rooms. This aspect of development is not an essential element of the development to which Division 3 applies, but rather conditions the exercise of the power to grant consent to that development.
Clause 30AA, therefore, is not a provision prohibiting the carrying out on land in the R2 Zone or an equivalent zone of the only development to which Division 3 applies, being development for the purposes of boarding houses, but instead a provision in relation to the carrying out on that land of that development for the purposes of boarding houses by regulating the circumstance in which development consent can be granted to that development.
On this construction, cl 30AA does answer the description in the chapeau of the definition of "development standards" of being a provision "in relation to the carrying out of development" and a provision "by or under which requirements are specified or standards are fixed in respect of any aspect of that development". The words "development" and "that development" in the definition of "development standards" refer, in the case of cl 30AA, to the development of "a boarding house", first referred to in the clause and "the boarding house", secondly referred to in the clause. Both are references to the development to which Division 3 applies, being development for the purposes of boarding houses. Clause 30AA is a provision "in relation to the carrying out of" such development by specifying a requirement or fixing a standard in respect of the aspect of that development of the number of boarding rooms.
Whilst this aspect of the number of boarding rooms is not expressly identified in the list of aspects of development in paragraphs (a) to (n) of the definition of "development standards", the number of boarding rooms will influence the size or density of the boarding house, so as to fall indirectly within paragraph (c). In this way, cl 30AA can be seen to be a provision under which a requirement is specified or a standard is fixed in respect of the size or density of a boarding house, within paragraph (c) of the definition of "development standards".
The Council argued that a textual contraindicator is that cl 30AA establishes a jurisdictional fact. It may be accepted that cl 30AA does establish a precondition that must be satisfied in order to enliven the power of a consent authority to grant development consent to a boarding house on land within the R2 Zone: the consent authority must be satisfied that the boarding house has no more than 12 boarding rooms before it can grant development consent to that boarding house. Nevertheless, the inclusion in a provision of an environmental planning instrument of a jurisdictional fact or criterion upon which the exercise of the power to grant development consent is conditioned does not necessarily cause the provision not to come within the definition of "development standards". The test of whether provisions of an environmental planning instrument are development standards or not is simply whether they are "provisions in relation to the carrying out of development" and "provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development". If the provisions answer those descriptions, they will be development standards regardless of whether or not the provisions do so by including a jurisdictional fact.
Development standards can be drafted in different ways. A provision may be drafted with language that appears regulatory or prohibitory, but the substance, however drafted, may be the same. As Giles JA observed in Strathfield Municipal Council v Poynting at [93]: "Care must be taken lest form govern rather than substance."
Provisions that are development standards can specify requirements or fix standards in respect of any aspect of development in either objective terms or subjective terms. An example of a provision specifying a requirement or fixing a standard in objective terms is cl 4.3(2) of the Standard Instrument (cl 4.3(2) of BLEP in this case) that: "The height of a building on any land is not to exceed the maximum height shown for the land on the Height of Buildings Map." That is a recognised development standard. An example of a provision specifying requirements or fixing standards in subjective terms is cl 30(1) of SEPP (ARH), which requires the consent authority to be satisfied that the boarding house, or an aspect of the boarding house, meets the various standards specified in paragraphs (a) to (h). Clause 30(1) is stated in the heading to fix "standards" for boarding houses. The subjective terms in which the development standards are fixed in cl 30(1) also establish jurisdictional facts or preconditions upon which the power to grant development consent is conditioned. But that does not cause the provision not to fix development standards.
I reject, therefore, the Council's broad submission that a provision that requires a state of satisfaction about a specified matter can never be a development standard as defined as well as the Council's particular submission that cl 30AA, by requiring the consent authority to form the state of satisfaction that the boarding house has no more than 12 boarding rooms, cannot be a development standard.
For these reasons, a textual analysis of cl 30AA reveals that it is a development standard within the meaning of that term as defined.
This construction of the text of cl 30AA is supported by its context within Division 3 of Part 2 of SEPP (ARH). I have earlier explained that Division 3 identifies the development to which the Division applies in general terms as development for the purposes of boarding houses (cl 27(1)) and provides that such development may be carried out with consent (cl 28). That general description of development to which the Division applies and the permissibility of that development with consent is qualified by cl 30AA for boarding houses on land within the R2 Zone. Under cl 30AA, development consent can only be granted to a boarding house that has no more than 12 boarding rooms. This structure of Division 3 of dealing generally with boarding houses on land in all zones including the R2 Zone, and dealing more particularly with boarding houses on land in the R2 Zone, is reflected in other provisions of Division 3.
Clauses 29 and 30 expressly identify "standards" for boarding houses. Clause 29 identifies standards that cannot be used to refuse consent, while cl 30 identifies standards that can be used to refuse consent. These clauses fixing standards apply in all circumstances to boarding houses on land in all zones other than the R2 Zone and apply only in certain circumstances to boarding houses on land in the R2 Zone. Clause 27(2) and (3) provide that these clauses fixing standards for boarding houses generally do not apply to boarding houses on land within the R2 Zone, except in certain circumstances. For boarding houses on land in the Greater Sydney region, the exception to the non-application of cll 29 and 30 is that the land is within an accessible area (cl 27(2)). The concept of an "accessible area" is defined in cl 4(1) of SEPP (ARH) to be land within specified walking distances of different forms of public transport, being rail and ferry (paragraph (a)), light rail (paragraph (b)), and bus (paragraph (c)). For boarding houses on land outside the Greater Sydney region, the exception to the non-application of cll 29 and 30 is that all or part of the boarding house is within 400 metres walking distance of certain commercial zones (cl 27(3)). Put another way, cll 29 and 30 will apply to control boarding houses on land within the R2 Zone if the land in the Greater Sydney Region is within an accessible area or all or part of the development on land outside the Greater Sydney Region is within 400 metres walking distance of land within certain commercial zones.
These exceptions to the non-application of cll 29 and 30 may in fact be commonplace, so that in practice cll 29 and 30 might control most boarding houses on land within the R2 Zone. I reject, therefore, Mr Dib's submission that the standards in cll 29 and 30 never apply to boarding houses on land in the R2 Zone. Mr Dib made this submission in support of his argument that cl 30AA was intended to be a development standard to replace the standards in cl 30. I agree that cl 30AA is a development standard, but that is because it falls within the definition of development standards, not because it was intended to be a substitute for the standards in cl 30.
One aspect of the context of Division 3 is that cll 29 and 30 have been designated as provisions fixing standards, but cl 30AA has not been designated as a provision fixing a standard. Clauses 29 and 30 are original provisions of SEPP (ARH). The legislative drafter expressly included the word "standards" in the headings to both cll 29 and 30 and also referred in cl 29(4) to the provisions of cl 29(1) and (2) as being "standards". Similarly in the Explanation of Intended Effect of the amendments to SEPP (ARH) that introduced cl 30AA, the provisions of cll 29 and 30 were referred to as "standards for boarding houses" (p 6).
The legislative drafter did not, however, refer to the new provision of cl 30AA as a provision fixing a "standard", either in the heading to the clause or in the text of cl 30AA. Similarly, the Explanation of Intended Effect did not anywhere describe cl 30AA as fixing a standard.
The question that arises is: does this designation of cll 29 and 30 as fixing standards, but silence as to whether cl 30AA fixes a standard assist in ascertaining whether cl 30AA is a development standard?
I do not consider it does. Whilst the designation of cll 29 and 30 as fixing standards, both in the headings to the clauses and in the text of cl 29(4), is indicative of a legislative intention that the clauses do fix development standards, the absence of a reference to development standards in cl 30AA is equivocal. A provision is a development standard if it meets the description of a development standard in the definition of "development standards", not whether the provision proclaims itself as a development standard.
In the case of cl 30AA, I find that the clause does specify a requirement or fix a standard in respect of an aspect of development for the purposes of boarding houses and thus meets the description in the definition of development standards. The fact that the heading to the clause and the clause itself do not use the words "standards" or "development standards" does not matter. Similarly, the text of cl 30 does not refer to the words "development standards" or "standards", yet the clause is a provision specifying requirements or fixing standards in respect of various aspects of development for the purposes of boarding houses such that the clause does meet the description in the definition of development standards.
The conclusion that cl 30AA does fix a development standard is corroborated by subsequent legislative reform. The Housing SEPP repealed and replaced SEPP (ARH). Clause 30AA was moved to be part of the new cl 25 of the Housing SEPP. Clause 25 mirrors the former cl 30 of SEPP (ARH). Clause 30AA of SEPP (ARH) is now cl 25(1)(d) of the Housing SEPP. The structure and substance of the wording of cl 25(1)(d) are the same as the structure and substance of cl 30AA. Clause 25 of the Housing SEPP, just like cl 30 of SEPP (ARH), bears the same heading "Standards for boarding houses". Evidently, the legislative drafter of the Housing SEPP considered that the former cl 30AA of SEPP (ARH) fixed a development standard in the same way as cl 30 of SEPP (ARH) fixed development standards, so that it was appropriate to include the provision that was formerly cl 30AA together with the development standards fixed by the former cl 30 in the new cl 25 of the Housing SEPP.
Put another way, as the structure and substance of the provision that was cl 30AA of SEPP (ARH) did not change when it was included in cl 25 of the Housing SEPP, its characterisation as being within or without the description in the definition of development standards also could not change. In its current form as cl 25(1)(d) of the Housing SEPP, the provision is a development standard. In its previous form as cl 30AA of SEPP (ARH), the provision was also a development standard.
For these reasons, both the text and context of cl 30AA of SEPP (ARH) demonstrate that the clause does come within the definition of "development standards".
Accordingly, the Commissioner did not err in law in finding that cl 30AA is a development standard. The reasoning by which the Commissioner reached this conclusion may differ from the reasoning I have advanced, but this matters not. The Commissioner reached the correct conclusion that cl 30AA is a development standard. Ground 1, the development standard ground, is rejected.

The jurisdictional precondition ground

The Council's second ground of appeal contended that even if cl 30AA could be said to contain a development standard, it also contained a jurisdictional precondition that needed to be satisfied before development consent could be granted to a boarding house on land within the R2 Zone. The Council submitted that cl 30AA has a dual function. If the words of cl 30AA fall within the definition of "development standards", then that is one function they perform. The other function of the words is to establish a jurisdictional fact, satisfaction of which is necessary to enliven the power to grant development consent. That a provision of an environmental planning instrument can serve a dual function was recognised by Priestley JA in Woollahra Municipal Council v Carr at 267.
The Council submitted that the consequence of cl 30AA having a dual function is that, whilst exercise of the power under cl 4.6(2) of BLEP could allow the grant of development consent to a boarding house that contravenes the development standard in cl 30AA, that would not result in the jurisdictional precondition being satisfied. Clause 4.6 would allow the grant of development consent to a boarding house that has more than 12 boarding rooms (assuming this criterion is a development standard), but it would not change the fact that the boarding house has more than 12 boarding rooms. Hence, the consent authority could never form the required opinion of satisfaction that the boarding house has no more than 12 boarding rooms, which is the jurisdictional fact.
The Council submitted that this was the finding in Wilson Parking Australia 1992 Pty Ltd v Council of the City of Sydney (2014) 201 LGERA 232; [2014] NSWLEC 12. The provision of the environmental planning instrument in that case, cl 66(2), allowed the grant of development consent to development for the purpose of public carparking on land where no public carparking exists only where the consent authority was satisfied about specified matters. Pepper J found that cl 66(2) was a precondition to the exercise of the power to grant consent: at [25]. This precondition constrained the grant of consent to a development for the purpose of a new public carpark irrespective of whether cl 66(2) also was a development standard: at [25]. As there was non-compliance with cl 66(2) in that the consent authority did not form the requisite opinion of satisfaction about the specified matters, it followed that consent could not be granted irrespective of whether or not the clause was a development standard. The discretionary power to dispense with compliance with the development standard, in then State Environmental Planning Policy 1 - Development Standards (SEPP1), which is now cl 4.6, was not available: at [27].
The Council submitted that likewise in the present case, the Commissioner had no power to grant development consent to the boarding house as he did not and could not form the required opinion of satisfaction that the boarding house has no more than 12 boarding rooms. The proposed boarding house, as amended, has 20 boarding rooms. As there was non-compliance with the jurisdictional precondition in cl 30AA, the Commissioner had no power to grant development consent irrespective of whether the clause was a development standard.
Mr Dib contested that cl 30AA has a dual function, but even if it does, cl 4.6 of BLEP enables the grant of development consent to a boarding house that contravenes the development standard in cl 30AA.
Starting with the dual function argument, Mr Dib contested that cl 30AA has the dual functions referred to by Priestley JA in Woollahra Municipal Council v Carr. In that case, the dual functions of the provision were said to be a definitional function and a development standard function. The dispensation power in SEPP1 might operate to allow the grant of development consent to a development that contravened a development standard, but it could not operate to allow the grant of development consent to a development that was prohibited, that is to say to overcome the definitional problem.
Mr Dib submitted that this is not the case with cl 30AA of SEPP (ARH). On the assumption that cl 30AA does not define the boarding houses that are permissible with consent (that is to say, the Council were not to succeed on its first ground), the only function that cl 30AA has is to fix a development standard. The clause does this in subjective terms, that the consent authority is satisfied that the boarding house has no more than 12 boarding rooms. In this way, the jurisdictional fact is part of the development standard.
Clause 4.6(2) of BLEP allows development consent to be granted to development even though the development would contravene a development standard. In the present case, Mr Dib submitted, cl 4.6(2) allows the consent authority to grant consent to a boarding house that has more than 12 boarding rooms even though that development contravenes the development standard in the clause, which is that the consent authority is not satisfied that the boarding house has no more than 12 boarding rooms.
Mr Dib distinguished the decision in Wilson Parking Australia 1992 Pty Ltd v Council of the City of Sydney. The clause there considered was materially different to cl 30AA of SEPP (ARH). There, the clause might have served two functions. Here, the clause has only one function, as the jurisdictional fact and the development standard are the one and the same.
I reject the Council's jurisdictional precondition ground. Clause 30AA of SEPP (ARH) does not have the dual function referred to by Priestley JA in Woollahra Municipal Council v Carr or by Pepper J in Wilson Parking Australia 1992 Pty Ltd v Council of the City of Sydney. Rather, the clause has only the single function of fixing a standard. The clause fixes the standard in subjective terms, requiring the consent authority's satisfaction that the boarding house has no more than 12 boarding rooms. The development standard and the jurisdictional fact are coterminous.
Clause 4.6(2) of BLEP empowers the consent authority to grant development consent to a boarding house even though the boarding house would contravene the development standard imposed by cl 30AA that the consent authority is not satisfied that the boarding house has no more than 12 boarding rooms. This is to say, cl 4.6(2) of BLEP empowers the consent authority to grant development consent to such a boarding house even though the consent authority has not formed the opinion of satisfaction that the boarding house has no more than 12 boarding rooms. The exercise of the dispensation power under cl 4.6(2) of BLEP overcomes both the development standard and the jurisdictional fact, which are one and the same.
I reject ground 2, the jurisdictional precondition ground.

Conclusion and orders

Having rejected both grounds of appeal, the Council's appeal should be dismissed.
The usual order for costs of an appeal under s 56A of the Court Act is that costs follow the event. The Council has been unsuccessful in its appeal and should pay Mr Dib's costs of the appeal.
The Court orders: 1. The appeal is dismissed. 2. The appellant is to pay the respondent's costs of the appeal.

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: 29 June 2022

(2010) 172 LGERA 380

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