Cromane Pty Ltd v Shoalhaven City Council

CASES CITED: Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65, (2010) 173 LGERA

APPLICANT Mr P Moggach [solicitor] SOLICITOR RMB Lawyers LEGAL REPRESENTATIVES:

RESPONDENT Mr P Jayne [solicitor] SOLICITOR Sparke Helmore Lawyers

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10615 of 2010 Cromane Pty Ltd v Shoalhaven City Council

JUDGMENT 1 COMMISSIONER: This is an appeal made under s 97 of the Environmental Planning and Assessment Act 1979 (the EPA Act) against the imposition of conditions 3(b)-(o), by Shoalhaven City Council (the council) in development consent to SF10130 for a boundary adjustment/subdivision of Lot 449 DP848766 (No. 800A) and Lot 3 DP1096071 (No. 840) Wattamolla Road, Wattamolla (the site). 2 The conditions in contention are conditions imposed by the Sydney Catchment Authority (SCA) that has issued concurrence for the proposal subject to compliance with these conditions. 3 Condition 3b requires the removal of an existing dairy shed from proposed Lot 5. Conditions 3c - 3k relate to wastewater management on proposed Lot 5. Conditions 3l - 3m relate to remnant native vegetation and regrowth on proposed Lot 4. Conditions 3nand 3o go to the previous conditions. 4 The applicant seeks to delete these conditions as they contend that they generally fail the 'Newbury test' in that they do not fairly and reasonably relate to the development approved by the subdivision consent and they are so unreasonable that no consent authority would have imposed them. 5 The council contends that these conditions are for a planning purpose and are reasonable in meeting the requirements of the considerations to be made under s 79(C)(1) of the EPA Act, particularly given the objects of the Drinking Water Catchments Regional Environmental Plan No 1 (DWCREP). 6 The hearing commenced as a conciliation conference in accordance with s 34 of the Land and Environment Court Act 1979 (the Court Act). The conciliation conference was terminated and the parties agreed to me hearing and disposing of the matter in accordance with s 34(4)(b) of the Court Act. There was no site inspection. The hearing was attended by representatives of Shoalhaven City Council, Sydney Catchment Authority and the applicant. The site and locality 7 The site consists of 2 lots - Lot 3 DP1096071 and Lot 449 DP848766. Lot 3 is bounded by Wattamolla Road to the south-east and Brogers Creek to the north. Lot 449 is on the northern side of Brogers Creek with no direct access from Wattamolla Road. Both lots have exiting dwellings. Access to Lot 449 is via a Right of Carriageway through the northern portion of Lot 3. It is this portion of land on which the boundary adjustment is proposed. 8 The whole of Lot 3 is zoned 1(a) (Rural "A" (Agricultural Production) Zone) in the Shoalhaven Local Environmental Plan 1985 (SLEP). Parts of Lot 449 are zoned 1(a), 7(d1) (Environment protection "D1" (Scenic) Zone) and 7(e) (Environment Protection "E" (Escarpment) Zone).

The proposal and background 9 The development application made by the applicant is a rural boundary adjustment subdivision of Lot 3 DP1096071 and Lot 449 DP848766 at Wattamolla Road Wattamolla. The main purpose appears to be to facilitate a more practical solution for access to Lot 449 being an all-weather road and bridge that are subject to a separate development application. 10 Lot 3 was 16.46 ha and Lot 449 was 45.73 ha. The boundary adjustment moves 5.2 ha from Lot 3 to Lot 449. After the adjustment Lot 3 becomes Lot 5, now 11.3 ha and Lot 449 becomes Lot 4 and 50.9 ha in area. 11 Clause 11(2)(a) of the SLEP imposes a 40 ha development standard for the subdivision of land in the zones applying to the site. Clause 11C may have permitted a boundary adjustment but for the fact that the site is adjacent to a watercourse. As a result of the non-compliant lot size, the applicant lodged a State Environmental Planning Policy No 1 - Development Standards (SEPP 1) objection regarding the development standard in cl 11(2)(a). 12 The Director-General of the Department of Planning approved the SEPP 1 objection and granted concurrence to the application for the proposed subdivision. 13 The site has been assessed as bushfire prone. The NSW Rural Fire Service (RFS) has issued a bush fire safety authority under s 100B of the Rural Fires Act 1997 subject to two conditions that are not in contention. 14 The notice of the determination dated 9 March 2010 describes the approved development as " Rural Boundary Adjustment under State Environmental Planning Policy No. 1 subdivision pursuant to the Shoalhaven Local Environmental Plan, 1985." The planning controls and the actions and position of the council 15 In determining the application, the council considered the applicant's SEPP 1 objection and noted one of the conclusions in cl 22: There is every likelihood that the prime crop and pasture land to be added to Lot 449 to form Lot 4 will be used more productively as part of the larger landholding.

Elsewhere in the document at [14] the applicant states: The additional 5.2 hectares of prime crop and pasture land added to a larger landholding will assist in the agricultural viability of that larger rural lot.

16 The council flagged this as a potential intensification of the use of the land, and given the location of the site within a water catchment area, took the view that there were potential impacts of the development that may impact on water quality. 17 Clause 24 of the SLEP refers to 'water catchment areas'. The site is in the Kangaroo Valley catchment area that forms part of the Sydney water catchment. (2) The objective of this clause is to protect the quality of stored water that is to be used for drinking. (3) In determining an application for consent to development on or of land to which this clause applies, the Council must take into account the objective of this clause and the adequacy of measures proposed by the applicant to avoid or mitigate any adverse effects of the proposed development on the quality of the stored water that is to be used for drinking.

18 The council also considered Development Control Plan 100 - Subdivision Code - Amendment No 1 (DCP100) and Local Approvals Policy - On-site sewage Management (Development Control Plan No. 78) (DCP78). 19 DCP100 Rural Subdivision objective 03 states: 03 To ensure that development of the land will not lead to a decline in ground and surface water quality….

The reference to subdivision boundaries is the last dot point in a list of "Acceptable Solutions" for "Performance Criteria" P1: P1 The arrangement of future buildings will have an important influence upon the quality of the rural environment. The relevant 'acceptable solution' is that "subdivision boundaries are then located as a result of the above design process". The design process includes slope analysis, site features, watercourses, trees, landscape buffer areas, bushfire risk and significant views.

20 DCP78 is picked up in DCP100 in "Other Considerations" - "Effluent Disposal": Effluent disposal for each application needs to be considered on its merit, but must comply with Onsite Sewage management DCP No. 78.

21 DCP78 cl 2.5 "Special Requirements for Kangaroo Valley" states: Land located within the hydrological catchment of Sydney's Water supply is subject to Drinking Water Catchments Regional Environmental Plan No 1 (REP No 1 (Deemed SEPP).

22 In consideration of clause 24 of the SLEP and the relevant clauses in the DCPs, the council referred the development application to the Sydney Catchment Authority (SCA) for concurrence of the Chief Executive under cl 28 of the DWCREP. 23 The relevant clauses of the DWCREP are in part 3 Aims of plan (a) to create healthy water catchments that will deliver high quality water while sustaining diverse and prosperous communities, and (b) to provide the statutory components….to achieve the aim set out in paragraph (a), and (c) to achieve the water management goals of: (i) improving water quality in degraded areas and critical locations where water quality is not suitable for the relevant environmental values, and (ii) maintaining or improving water quality where it is currently suitable for the relevant environmental values.

24 DWCREP Part 5 - Assessment and approval of development and activities cl 25 - Recommended practices and standards of the Sydney Catchment Authority states that; (1) Any development or activity proposed to be carried out on land to which this plan applies should incorporate any current recommended practices and performance standards endorsed or published by the Sydney Catchment Authority that relate to the protection of water quality… (2) If any development or activity does not incorporate the Authority's current recommended practices and standards, the development or activity should demonstrate to the satisfaction of the consent authority or determining authority how the practices and performance standards proposed to be adopted will achieve outcomes not less than the Authority's current recommended practices and standards.

25 I was informed at the hearing that the current recommended standards and practices are AS/NZS 1547:2000 On-site domestic-wastewater management and the Environment & Health Protection Guidelines: On-site Sewage Management for Single Households 1998 (The Silver Book). 26 SCA staff who inspected the site found the existing on-site wastewater management system on proposed Lot 5 to be undersized and the absorption trench not suitably located and therefore non-compliant with current standards. 27 The letter of concurrence from SCA to council (exhibit c) notes the outcome of the inspection with respect to the wastewater management system on proposed Lot 5 and details the conditions of consent. It does not contain any findings on the state of the native vegetation and regrowth on proposed Lot 4 that led to the imposition of conditions 12 and 13 in that letter. At the hearing it was contended by council, and supported by representatives from SCA, that retention of native vegetation provides one of the best ways of achieving a neutral or beneficial effect on water quality. 28 There was some mention by a representative of the SCA that some land clearing appeared to have occurred on current Lot 449 however, the applicant stated that vegetation had been conserved and supplemented with additional plantings. The applicant also stated that the land was too steep to use for agricultural purposes. As there was no site visit or specific evidence supplied to support either position, these statements cannot be verified. 29 Clause 26 of the DWCREP states: 26 Development consent cannot be granted unless neutral or beneficial effect on water quality A consent authority must not grant consent to the carrying out of development under Part 4 of the Act on land in the hydrological catchment unless: (a) it has considered whether the proposed development will have a neutral or beneficial effect on water quality, and (b) it is satisfied that the carrying out of the proposed development would have a neutral or beneficial effect on water quality.

30 Clause 28 of the DWCREP concerns development that needs concurrence of the Chief Executive of the SCA. In deciding whether to grant concurrence, in part, the Chief Executive must take into account the considerations in cl 25. 31 As a result of this referral, the SCA stated that they would concur with council in granting consent to the application subject to a number of conditions being imposed. It is these conditions that are opposed by the applicant. 32 Mr Jayne for the council contends that the council took the view that the proposed development was more than the movement of a line on a map and that the SEPP 1 objection suggested an intensification of the use of the land for agricultural purposes. 33 In the light of the potential impacts that may impact on water quality as a result of such intensification Mr Jayne asserts the council rightly considered the relevant clauses in the DWCREP, cl 24 of the SLEP and the provisions in DCPs100 and 78 as required under s 79C(1) of the EPA Act. 34 The council considers that the conditions imposed are fair and reasonable and validly imposed under s 80A of the EPA Act in that they consider the broader aspects of the health of the catchment and are therefore in the public interest and give certainty to the council and to the SCA. Mr Jayne contends that the conditions with respect to clearing of vegetation give certainty to the owner of the land with respect to what land is protected from clearing. Planning controls and the applicant's position 35 The proposal described in the supporting documentation prepared by Johnson Proctor Surveyors Pty Limited attached to the development application made to the council is for a proposed rural boundary adjustment subdivision. 36 The reasons given in support of the proposal are summarised as: + Allowing legal and constructed road and bridge access to an exiting dwelling on Lot 449 that will provide direct access off Wattamolla Road and reduce the bushfire hazard risk to that existing dwelling; + To more practically locate stock-proof fencing along the boundary to facilitate stock control and management including restricting stock from entering the access way and providing better stock watering access to Brogers Creek. + The retention of the contiguity of areas of 'prime crop and pasture land' located on either side of Brogers Creek within the proposed Lot 4 and thus the enhancement of the continued agricultural use of the land in a more functional way that satisfies the objectives of land zoned 1(a) in the SLEP.

37 The objectives of zone 1(a) are: (a) to conserve and maintain the productive potential of prime crop and pasture land, (b) to ensure that existing or potential agricultural land is not jeopardised by non-agricultural land uses, and (c) to conserve cultural landscapes. 38 The applicant contends that: There will be no environmental effects activated by this boundary adjustment proposal as the proposed common boundary between the existing lot parcels will be relocated to an area of open grassland where no vegetation disturbance will be necessary in order to construct appropriate boundary fencing.

39 As stated in paras 11 and 12, a SEPP 1 objection was required and was approved by the Director-General of the Department of Planning. 40 Mr Moggach for the applicant contends that the council has focussed on the 'land' to which the development relates rather than the 'development' the subject of the development application. He says the development is a simple boundary adjustment/ subdivision that transfers 5.2 ha of land from one lot to another that involves no clearing of vegetation and no works to any existing dwelling or structure on either lot. 41 Mr Moggach accepts that the council sought concurrence from the SCA but contends that the relevant clauses 25, 26 and 28 of the DWCREP relate specifically to the 'development' and the potential impacts of the 'development' on water quality. He stated that if the council and the SCA were concerned about a potential intensification of the use of the 5.2 ha of land to be transferred to Lot 449 then any conditions imposed by them should relate to that portion of the land. 42 He maintains that there is no nexus between the conditions imposed and the proposed development. He stated at the hearing that there is operational approval for the existing wastewater system on Lot 3 (new Lot 5) and that if council has concerns with that system it has other powers to address those concerns. 43 Similarly, he stated that the most of the vegetation on both lots is protected in some way by the current zonings and by the Native Vegetation Act 2003 and as such, conditions 3l and 3m are unnecessary and unreasonable. 44 The applicant's contention is that the conditions imposed by the SCA and the council do not fairly and reasonably relate to the development approved by the subdivision consent. The applicant also contends that they are so unreasonable that no consent authority would have imposed them. That is, the applicant contends that these conditions generally fail the Newbury Test.

The conditions in contention 45 It was agreed at the hearing that condition 3(b) be deleted from the consent. Therefore no finding is necessary with respect to the existing dairy shed on proposed Lot 5. 46 Conditions 3c-3k concern 'Wastewater Management on Proposed Lot 5' and relate specifically to the existing septic tank and associated absorption trenches serving the existing dwelling on Lot 3 (new Lot 5). The conditions require the septic tank to be increased in size and new absorption trenches to be constructed. The parameters are detailed in the conditions.

47 Conditions 3l - 3m concern 'Remnant Native Vegetation and Regrowth' on proposed Lot 4. l) There is to be no clearing of any native vegetation including regrowth on proposed Lot 4. All native vegetation, including any regrowth forming contiguous area of 1 hectare or greater is to be delineated on the approved Plan of Subdivision as "native vegetation". m) There is to be a public positive covenant under Section 88E of the Conveyancing Act 1919 , the prescribed authority being the Sydney Catchment Authority, placed over Lot 4 in relation to areas of "native vegetation" as referred to in Condition 3(l) above requiring that: i) The "native vegetation" areas are to be retained, protected and maintained; ii) No livestock grazing is permitted in these "native vegetation" areas at any time; iii) There be no clearing or harvesting of the vegetation in areas identified as "native vegetation" other than weed management without the written approval of the Sydney Catchment Authority; iv) There is to be no clearing of "native vegetation" associated with boundary fencing.

48 Exhibit C, the letter from SCA to council, gives the reasons for these conditions as: To ensure that the water quality impacts of the proposed development are minimised and to ensure that appropriate measures are taken to offset the water quality impact of the proposed development so as to have a sustainable neutral or beneficial effect on water quality over the long term.

No specific reasons were given for the conditions in the Subdivision Consent.

49 Condition 3n refers to the implementation of the above subdivision conditions in that they are to be complied with before the issuance of a subdivision certificate. 50 Condition 3o requires effective erosion and sediment control measures to be installed prior to any construction activity including the upgrading of the existing on-site wastewater management system. Findings 51 There is no dispute between the parties that as the land on which the development is proposed is within a water catchment area it was reasonable for the council to seek concurrence from the SCA. However, the parties disagree on whether the conditions of consent in contention imposed by the council and the SCA fairly and reasonably relate to the development approved by the subdivision consent. 52 In determining a development application, s 79C(1) of the EPA Act requires the consent authority to take into account prescribed matters "as are of relevance to the development the subject of the development application". These include the provisions of environmental planning instruments, DCPs and so on that apply to the land to which the application relates (s 97(1)(a), the likely impacts of the development (1)(b), the suitability of the site (1)(c), any submissions (1)(d) and the public interest (1)(e). Again, these must be relevant to the development. 53 The development the subject of the development application is a boundary adjustment subdivision.

54 It is clear from the development application, and from Mr Moggach's submissions that there are no works proposed in regard to the dwelling on existing Lot 3 nor is any clearing of vegetation proposed. 55 In my reading of the documentation accompanying the development application, the only 'works' that might be contemplated any may be directly related to the boundary adjustment is "the ability to establish stock proof fencing along the proposed boundary". A boundary fence is not specifically part of the development application and the consent refers to the 'Proposed Boundary Adjustment Plan' that does not show or specify fencing. The only mention of fencing is in condition 3m(iv) with respect to the clearing of "native vegetation". As the land on which the boundary adjustment is located is zoned 1(a) (Rural "A" (Agricultural production) Zone I can only assume that as agriculture is generally permitted without development consent, and that fencing as part of that activity, similarly may not require consent. However, notwithstanding any of these assumptions as to what might be contemplated, no works are sought in the development application and no specific works are approved.

56 Clause 11 of the SLEP permits subdivision with consent on the land subject to the development application. However, non-compliance with cl 11(2)(a), that is one lot is less than the 40 ha minimum, necessitated a SEPP 1 objection that was subsequently granted. 57 Clause 24 of the SLEP applies to the land as it is located in a water catchment area, however insofar as the development is concerned, the council must consider the adequacy of the measures proposed by the applicant to avoid or mitigate any adverse effects of the proposed development on the water quality. As already covered in this judgment, this clause in the SLEP and clauses in DCPs 100 and 78 also engaged the DWCREP.

58 From the material before the Court it would appear that there is no evidence that the site is degraded or the water quality is not suitable and therefore cl 3(c)(ii) of the DWCREP appears to be the reason for the SCA's conditions. 59 Therefore while the council relies on certain clauses of the SLEP, the DWCREP, DCPs 100 and 78 and the public interest, being relevant considerations under s 79C(1), the question of the validity of the conditions imposed by them pursuant to s 80A of the EPA Act remains to be considered.

60 Craig J in Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65, (2010) 173 LGERA at 457 held: (1) When determining the validity of a condition, the primary consideration must be the source of the power to impose the condition, which is the statutory provision, and secondly, the judicial principles set out in the Newbury tests. (3) For a condition to be validly imposed, it must be shown to be both: (a) "fair and reasonable as it relates" to a matter identified in s 79C(1) of the EPA Act; and (b) It must be "of relevance" to the development, the subject of the consent. (4) A nexus between the development and the condition imposed can ordinarily be established where a benefit can be demonstrated. Once a nexus is established, only then is it appropriate for the decision-maker to weigh up the advantages and disadvantages of the condition under consideration.

61 The source of the power to impose conditions of consent is s 80(1)(a) and s 80A of the EPA Act. The relevant sub-clauses in this matter appear to be S80A(1) Conditions-generally A condition of development consent may be imposed if: (a) it relates to any matter referred to in section 79C (1) of relevance to the development the subject of the consent, or (f) it requires the carrying out of works (whether or not being works on land to which the application relates) relating to any matter referred to in section 79C (1) applicable to the development the subject of the consent, * 62 The Newbury test is the general test for determining the validity of consent conditions. In order to be valid under the Newbury test, a condition must: + be imposed for a planning purpose; + fairly and reasonably relate to the development for which permission is given; and + be reasonable in the sense that it must be a condition which a reasonable decision-maker properly advised might impose. http://www.lexisnexis.com/au/legal/ accessed 06.10.10

63 The critical words in s 80A(1)(a) are "of relevance to the development the subject of the consent" and in 80A(1)(f) " applicable to the development the subject of the consent". I can see no nexus between a boundary adjustment subdivision (the development) and detailed conditions that require a substantial upgrade of the on-site wastewater management system on the existing dwelling on original Lot 3 (new Lot 5) when no change in use is envisaged for that property and the only change is a reduction in lot size by 5.2 ha. In these circumstances, s 80A seems an inappropriate vehicle for ordering the upgrading of these facilities when other powers under the Local Government Act 1993 or the Protection of the Environment Operations Act 1997 may be more appropriate. 64 While the parties accept that the conditions can be construed as being for a planning purpose and very broadly in the public interest, I do not consider conditions 3c-3k to fairly and reasonably relate to the development for which permission has been granted and there is no benefit to the approved development derived from those conditions. As a result, the conditions do not satisfy the second Newbury test and should not have been imposed. 65 With respect to conditions 3l and 3m and the clearing of native vegetation on proposed Lot 4 I note the following. The supporting material accompanying the development application states, " the proposed common boundary will be relocated to an area of open grassland where no vegetation disturbance will be necessary in order to construct appropriate boundary fencing." The council provided no evidence to contradict this statement. The discussion of vegetation during the hearing revolved around that on original Lot 449.

66 It was agreed by the parties that the retention of native vegetation is important however again I see no nexus between the conditions imposed on the clearing of vegetation on proposed Lot 4 and the development the subject of the consent. 67 In addition to the fact that the evidence suggests an absence of native vegetation in the vicinity of the boundary adjustment, I consider the imposition of these conditions to be unreasonable and unnecessary as native vegetation on the site is protected in other ways including the Native Vegetation Act 2003 and through the zonings (see below). 68 Page 7 of the Subdivision Consent - SF10130 includes a note on the NSW Native Vegetation Act 2003. The note states: The Native Vegetation Act 2003 requires consent for the clearing of remnant native vegetation or protected regrowth from the Southern Rivers Catchment Management Authority. In the Shoalhaven City Council area, this requirement generally applies to land that is zone Rural (Zone 1), Special Use (Zone 5), Open Space (Zone 6), Environment Protection (Zone 7) and Natural Hazards (Zone 9). If your development consent relates to land in such a zone then you may need to get a further separate approval from the Southern Rivers Catchment Management Authority for the clearing of remnant native vegetation or "protected regrowth".

69 Lot 4 is variously zoned Rural 1(a), Environment Protection 7(d1) and 7(e). In zone 7(d1) - Environment Protection (Scenic) Zone, agriculture and clearing of trees may only be carried out with development consent. In 7(e) - Environment Protection (Escarpment) Zone, agriculture may only be carried out with development consent and it appears that clearing of vegetation is generally prohibited. 70 As a result, I consider conditions 3l and 3m do not satisfy the second Newbury test and should not be imposed. 71 Given the findings made with respect to conditions 3c-3k and 3l-3m and the agreement between the parties to delete condition 3b, conditions 3n and 3o have no purpose and should be deleted.

Conclusions 72 While the council assessed the development application for a proposed boundary adjustment subdivision in accordance with s 79C of the EPA Act, its conclusions, reflected in the setting of conditions of consent, were based on an assumption that the proposed development was more than an adjustment of a boundary but a potential intensification of use of the land that may have a detrimental impact on water quality in the Sydney catchment. 73 In seeking concurrence with SCA in compliance with the SLEP and the DWCREP, conditions were imposed regarding an upgrade of an on-site wastewater management system on an existing dwelling and prohibitions on clearing of native vegetation and regrowth. 74 I agree with Mr Moggach that the relevant clauses 25, 26 and 28 of the DWCREP relate to the 'development' and if the council and the SCA were concerned about a potential intensification of the use of the 5.2 ha of land to be transferred to Lot 449 then any conditions imposed by them should relate to that portion of the land. 75 On the evidence before me I find that the conditions in contention do not comply with s 80(A)(1) of the EPA Act and offend the second Newbury test in that they are not of relevance to the development the subject of the consent and do not fairly and reasonably relate to the development for which permission is given. 76 On the basis of the forgoing, the Orders of the Court are: 1. The appeal is upheld. 2. Development Application SF10130 for Rural Boundary Adjustment under State Environmental Planning Policy No.1 subdivision pursuant to the Shoalhaven Local Environmental Plan 1985 for Lot 449 DP848766 (no. 800A) and Lot 3 DP 1096071 (no. 840) Wattamolla Road, Wattamolla is approved subject to the conditions of consent which are to be modified by deletion of conditions 3b-3o inclusive. 3. The council is to prepare the amended conditions and forward them electronically to the Court by close of business 18 October 2010 for incorporation into the Orders. 4. The exhibits are returned except exhibits B, C and D.

J Fakes Commissioner of the Court

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