CK Design Pty Ltd v Penrith City Council

The Legislative Framework

1. As at the date of lodgement of the DA the ARH SEPP was in force. As a consequence, pursuant to cll 26(c) and 27(1) of the ARH SEPP Div 3 of Pt 2 of that SEPP applied to the development.
2. On 26 November 2021, however, the Housing SEPP came into force and repealed the ARH SEPP (see cl 10(1)(a) of the Housing SEPP).
3. That same day, the Standard Instrument (Local Environmental Plans) Amendment (Miscellaneous) Order 2021 ("the LEP Amendment Order") also came into effect. The LEP Amendment Order amended, among other things, the Penrith LEP, including by inserting new definitions for "boarding house" and "co-living housing" into the Penrith LEP.
4. The Housing SEPP relevantly contains savings and transitional provisions in Sch 7A (as amended on 18 March 2022).
5. Clause 2 of Sch 7A of the Housing SEPP provides: 2 General savings provision (1) This Policy does not apply to the following matters - (a) a development application made, but not yet determined, on or before the commencement date. … (2) The provisions of a repealed instrument, as in force immediately before the repeal of the repealed instrument, continue to apply to a matter referred to in subsection (1).
6. For the purposes of Sch 7A the following definitions apply (cl 1 of Sch 7A of the Housing SEPP): commencement date means 26 November 2021. repealed instrument means an instrument repealed under Chapter 1, section 10.
7. The ARH SEPP is an instrument repealed under cl 10(1) of Ch 1 of the Housing SEPP, and therefore, is a repealed instrument as defined in Sch 7A.
8. Relevantly for the purpose of this application, CK Design sought approval for the DA, which was refused by the Planning Panel prior to 26 November 2021.
9. Accordingly, there exists a question as to the application of cl 2(1)(a) of Sch 7A of the Housing SEPP. If that provision is engaged, then the ARH SEPP applies to the determination of the DA. Alternatively, if that section is not engaged, then the Housing SEPP applies.

The Significance of the Separate Question

1. The gravamen of the legal issue sought to be agitated by the separate question is whether the savings provision in Sch 7A, Pt 2, cll 1 and 2 apply to the DA. That is, was the DA made, but not yet "determined", on or before the commencement date of the Housing SEPP.
2. The question is one of statutory construction. In short, the Court must resolve whether the refusal of the DA by the Planning Panel on 21 July 2021 was a "determination" for the purpose of the relevant savings provisions.
3. If the DA takes the benefit of the savings provisions, the Housing SEPP does not apply and the DA falls to be assessed under the now repealed ARH SEPP.
4. According to CK Design, there are a number of textual and contextual indicators that suggests that the Court would find that the reference to "determined" in Sch 7A, Pt 2, cl 2 of the Housing SEPP means a final determination of the DA by the Court and not the Planning Panel. Those indicators, include, but are not limited to: 1. the plain and ordinary meaning of the word "determined" is that of a final decision; 2. when read in the context of the instrument as a whole, the interpretation of "determined" to mean finally determined is the preferable construction given the development controls that would apply to the DA (noting that the development is not prohibited under the Housing SEPP); 3. s 39(1) and (5) of the Land and Environment Court Act 1979 ("LEC Act"), provide that the decision of the Court in a Class 1 appeal is taken to be the final decision of the body whose decision is the subject of the appeal and is given effect to; 4. when regard is had to s 1.3 of the EPAA (by reason of s 33 of the Interpretation Act 1987), the interpretation above is to be preferred because it promotes the orderly and economic development of land and relies upon a construction that avoids conflicting outcomes and potentially absurd results; and 5. the textual indicators of s 8.13 of the EPAA further reinforce this construction when read together with s 39(1) and (5) of the LEC Act.
5. In addition, CK Design noted conflicting judicial decisions on the interpretation of a similar savings provision in Jokona Pty Ltd v Liverpool City Council [1997] NSWLEC 17 (per Bignold J) and Bardetta v Baulkham Hills Shire Council (2001) 120 LGERA 17; [2001] NSWLEC 164 (per Talbot J at [18]-[24] in obiter comments).
6. It is not necessary to assess the merit of CK Design's arguments for the purpose of this application other than to note that the separate question raises an arguable (that is, not fanciful) issue of construction (as evidenced by the conflicting judicial opinion).
7. The resolution of the proper construction of the savings provisions, and therefore, the determination of which SEPP applies to the DA, is crucial to the conduct of the proceedings because there are significant differences between the requirements for boarding houses under the ARH SEPP versus co-living housing pursuant to the Housing SEPP. For example, there are differences with respect to: 1. the communal living areas (cl 68(2)(c) of the Housing SEPP and cl 30(1)(a) of the ARH SEPP); 2. the communal open spaces (cl 68(2)(d) of the Housing SEPP and cl 29(2)(d) of the ARH SEPP); 3. the landscaping requirements (cl 68(2)(f) of the Housing SEPP and cl 29(2)(b) of the ARH SEPP); 4. the requirement for a workplace for the manager, either within the communal living area or in a separate space (cl 69(1)(d) of the Housing SEPP, whereas there is no equivalent clause in the ARH SEPP); 5. there is no equivalent clause concerning laundry facilities (cl 69(1)(f) of the Housing SEPP) in the ARH SEPP; 6. there is no equivalent clause concerning the front, side and rear setbacks (cl 69(2)(a) of the Housing SEPP) in the ARH SEPP; 7. there is no equivalent clause in the ARH SEPP of the minimum building separation distances (cl 69(2)(a) of the Housing SEPP); 8. the bicycle parking spaces (cl 69(2)(d) of the Housing SEPP and cl 30(1)(h) of the ARH SEPP); and 9. the maintenance of the character of the local area (cl 69(2)(f) of the Housing SEPP and cl 30A of the ARH SEPP).
8. Five specific illustrations of the materiality of some of the differences referred to above will suffice: 1. first, regarding communal living areas, the ARH SEPP provides that one communal living room must be included for every five private rooms but does not specify the size of that common room (see cl 30(1)(a)). By contrast, the Housing SEPP requires one communal living area of at least 30 m2, and in the case of developments with more than six private rooms, that a further 2 m2 of space be included for every private room (see cl 68(2)(c)). The DA proposes 64 private rooms, and therefore, would need to provide 148 m2 of communal living areas if the Housing SEPP applies; 2. second, with respect to communal open spaces, the ARH SEPP requires 20 m2 of the land be set aside for that purpose (see cl 29(2)(a)). However, the Housing SEPP requires 20% of the area be reserved for communal open spaces (see cl 68(2)(d)), which represents 336 m2 of the land. The DA only proposes a communal open space of 48 m2; 3. third, in relation to landscaping, the ARH SEPP does not impose a minimum area requirement (see cl 29(2)(b)), whereas the Housing SEPP provides that 40% of the land must be set aside for this purpose (see cl 68(2)(f)). The DA currently proposes a landscaped area comprising 20% of the land; 4. fourth, regarding site setbacks, the ARH SEPP generally provides no specific controls for setbacks, whereas the Housing SEPP mandates that setbacks that are in conformity with the relevant development control plan must be considered (cl 69(2)(a)(i)); and 5. fifth, with respect to bicycle parking spaces, the ARH SEPP requires one bicycle parking space for every five private rooms (cl 30(1)(h)), however, the Housing SEPP provides that a bicycle parking space must be required for each private room (cl 69(2)(d)).

Applicable Legal Principles

1. The power to order a question to be decided separately is contained in r 28.2 of the Uniform Civil Procedure Rules 2005 ("UCPR"), which provides that: 28.2 Order for decision The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings.
2. The relevant considerations that apply in approaching the exercise of the discretion conferred by r 28.2 of the UCPR have been summarised in many decisions of this and other courts (see Cavanagh v Wollondilly Shire Council [2019] NSWLEC 105 at [22], Royal Motor Yacht Club (Broken Bay) New South Wales Pty Ltd v Northern Beaches Council [2016] NSWLEC 87 at [10], 820 Cawdor Road Pty Ltd v Wollondilly Shire Council (2013) 195 LGERA 170; [2013] NSWLEC 8 at [10] and Allandale Blue Metal Pty Ltd v Roads and Maritime Services (2013) 195 LGERA 182; [2013] NSWCA 103 at [87]-[99]).
3. In the recent case of Lawson v Minister for Environment and Water (South Australia) and the State of New South Wales [2022] NSWLEC 50 Robson J helpfully described the relevant principles as follows, which I respectfully repeat and adopt (at [14]-[15]): 14 A number of recent cases have summarised the considerations that apply in approaching the exercise of the discretion conferred by r 28.2 of the UCPR: Cruden v Sae-ung [2021] NSWSC 1070 ('Cruden') at [41] (Hallen J); 820 Cawdor Road Pty Ltd v Wollondilly Shire Council (2013) 195 LGERA 170 ('820 Cawdor') at [10] (Biscoe J); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (2013) 195 LGERA 182 ('Allandale') at [87]-[97] (Ward JA). For the purposes of the present application the following propositions are of relevance: (1) It is ordinarily appropriate that all issues in proceedings should be disposed of at one time: Commonwealth Bank of Australia v Clune [2008] NSWSC 1125 ('Clune') at [5] (Johnson J); Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 ('Tallglen') at 141-142 (Giles CJ in Comm Div); Street v Luna Park Sydney Pty Ltd [2007] NSWSC 697 at [5] (Brereton J). (2) The exercise of the discretion to make an order for the determination of a separate question should be approached with an appropriate degree of care or caution, as "[i]t sometimes happens that they may turn out to be productive of the disadvantages of delay, extra expense, appeals and uncertainty of outcome which they are intended to avoid": Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36 at [436] (Callinan J); Tallglen at 141-142. (3) Since the passage of the Civil Procedure Act 2005 (NSW) ('CP Act), it has also been observed that "the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously": Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd [2006] NSWSC 1464 at [6] (Brereton J); Clune at [6]. (4) It is for the party seeking the order to show to the Court that separate decision of a question is appropriate: 820 Cawdor at [10(b)]. (5) An order is likely to be appropriate where it can clearly be seen that it will facilitate the just, quick and cheap resolution of the proceedings or the central issues in the proceedings, so as to give effect to s 56 of the CP Act: 820 Cawdor at [10(c)]; Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1215 at [7] (Einstein J). (6) The factors that have previously been found to support the making of an order for the resolution of a separate question include where such an order may contribute to first, the prompt disposal of crucial issues in the litigation (or the whole action); second, the saving of time and cost by narrowing the issues in dispute; and third, the potential settlement of the litigation. (7) By contrast, an order for a separate question is unlikely to be appropriate in circumstances where first, there are intertwined issues of fact or law, and the separate question is likely to result in fragmentation of the proceedings; second, there is likely to be significant overlap between the evidence adduced on the separate question and any residual questions; and third, the determination of a separate question is likely to involve issues as to the credibility of witnesses, whose evidence is likely to be material to the remaining issues in dispute. (8) Where the facts upon which the decision depends are contentious, confidence in the utility of the separate question process may be less likely. (9) One instance where it may be appropriate to determine a separate question even if it will not resolve all the issues in dispute is where there is a strong prospect that the parties will agree upon the result when the core of the dispute has been decided or if the decision will obviate unnecessary and expensive hearings of other questions: City of Swan v Lehman Brothers Australia Ltd (2009) 73 ACSR 86; [2009] FCA 784 at [27] (Rares J). 15 While the decision to order separate questions is ultimately one for the Court, the attitudes of the parties are relevant to the exercise of the discretion to make an order: Cruden at [41(p)]; TVW Enterprises Ltd v Duffy, M.J. [1985] FCA 109 at [8] (Toohey J).
4. The cautionary comments of Bathurst CJ (with whom Meagher and Ward JJA agreed) in Jackson Lalic Lawyers Pty Ltd v Attwells [2014] NSWCA 335 should, however, be noted (at [18]): 18 The separate question was ordered under r 28.2 of the UCPR. The circumstances in which such an order should be made are well established. It is appropriate to exercise the power under the rule where there is a preliminary question of fact or law critical to the disposition of the proceedings, in the sense that if it is decided in one way it will necessarily dispose of them: Carl Zeiss Stiftung v Herbert Smith & Co [1969] 1 Ch 93 at 98. In CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 601, it was stated by Kirby P at 606 that the procedure should not be adopted in respect of matters not ripe for determination. In that case it was stated by Kirby P at 606, that a matter is ripe for determination were it is a central issue between the parties and the resolution of the issue will either obviate the necessity for litigation altogether, or substantially narrow the field of controversy.
5. And in Allandale Blue Metal, Ward JA opined as follows (at [91]): 91 In various authorities, caution has been advocated in the exercise of such a power (such as Perre v Appand Pty Ltd (1999) 198 CLR 180 at [436] per Callinan J; Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832 at [24] per Santow J, as his Honour then was; Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at [168] per Kirby and Callinan JJ; Strathfield Municipal Council v Poynting (2001) 116 LGERA 319 at [112] - [113] per Young CJ in Eq, as his Honour then was). In Idoport, Einstein J noted the reason for such caution in the following passage: The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings [his Honour there citing Tallglen v Pay TV Holdings Pty Limited; Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J) and Century Medical v THLD [2000] NSWSC 5 (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J)]. (my emphasis)

The Separate Question Should Be Ordered

1. Applying the principles above, and having regard to the submissions and evidence put before the Court, it is appropriate to make an order for the separate question. This is so notwithstanding that the determination of the separate question will not, irrespective of the answer, result in the disposal of the proceedings.
2. First, the determination of the separate question will not require further evidence beyond that contained in an agreed statement of facts (Johnson Property Group Pty Limited v Lake Macquarie City Council [2020] NSWLEC 4 at [47]).
3. Second, the separate question is arguable and the statutory construction issue it gives rise to raises a real contest that requires determination as a question anterior to the resolution of the evidential and factual issues in dispute in the Class 1 appeal.
4. Third, the determination of the separate question will substantially narrow the evidential and factual fields of controversy between the parties, and ultimately, before the Court (Allandale Blue Metal at [89]). The statutory schemes enacted under the Housing SEPP and the ARH SEPP are, as can be seen above, materially divergent insofar as they impose different standards upon the development that will require the parties to adduce differing evidence, especially expert evidence, in respect of urban design, town planning, traffic impacts, civil engineering, and landscaping, depending on which environmental planning instrument applies to the development. The resolution of the separate question will allow the parties to prepare the appeal on the basis that only one, and not potentially two, SEPP applies, saving the parties substantial costs and time as the affidavit of Le Breton indicates.
5. Fourth, if the separate question is not determined prior to the s 34 conciliation conference, the utility of that conference will be greatly eroded. The ability of the parties to productively engage in conciliation will be limited because the legislative framework to be used for the merit assessment of the appeal will not be settled, making a successful resolution of the matter all but impossible.
6. The Council further submitted that any dispute concerning the applicable statutory regime could cast doubt on the enforceability of any agreement reached at conciliation, further diminishing the efficacy of the s 34 conference process. There is some force to this submission.
7. Fifth, the determination of the separate question will avoid potential confusion by objectors who might otherwise be uncertain as to the applicable planning framework, and therefore, may not be in a position to give relevant evidence. The resolution of which SEPP applies to the DA will therefore facilitate public participation in the merit appeal process.
8. Sixth, the hearing of a separate question promotes the just, quick and cheap resolution of the proceedings (s 56 of the Civil Procedure Act 2005) by resolving a central legal issue in the proceedings that is preliminary to the merit assessment of the DA, thereby avoiding the expense and time of the parties (and the Court) that would otherwise be required to address both the Housing SEPP and the ARH SEPP during the substantive appeal.
9. For these reasons, I am satisfied that the order for a separate question should be made.

Orders

1. The Court therefore makes the following orders: (1) pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005, leave is granted for the following separate question of law to be determined by the Court ("the separate question"): (a) whether development application DA21/0225 was made, but not yet determined, on or before the commencement date of State Environmental Planning Policy (Housing) 2021; and (b) if the answer to (a) is 'yes', does State Environmental Planning Policy (Affordable Rental Housing) 2009, as in force on 25 November 2021, apply? (2) the matter is listed for hearing for the determination of the separate question on 26 July 2022; (3) the parties are to confer and prepare an agreed statement of facts and a bundle of relevant legislative provisions on which the parties seek to rely for the hearing of the separate question. The bundle is to include a table of contents and be paginated. The agreed statement of facts and the bundle are to be filed by 11 July 2022; (4) the respondent is to file and serve an outline of submissions (not exceeding 10 pp) by 14 July 2022; (5) the applicant is to file and serve an outline of submissions (not exceeding 10 pp) by 21 July 2022; (6) the respondent is to file and serve its Statement of Facts and Contentions by 18 August 2022; (7) the matter is set down for a s 34 conciliation conference on 15 September 2022; (8) the parties have liberty to restore the matter to the list on 2 working days' notice; (9) orders 1, 3 and 4 of the short minutes of order made on 10 May 2022 are vacated; and (10) the exhibits are to be returned.

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: 07 July 2022