47 HANDLEY AJA: In this appeal I have had the benefit of reading the reasons for judgment of Tobias JA in draft. He has carefully set out the relevant facts, the applicable legislation, and the history of the proceedings. I have the misfortune to differ from my colleagues but his analysis enables me to express my reasons with some economy.
48 The appeal involves a construction and operation of clause 68 (2) of the Ku-ring-gai Planning Scheme Ordinance (KPSO), s 28(2) of the Environmental Planning & Assessment Act (the Act) and the provisions of the Ku-ring-gai Local Environmental Plan No 194 (LEP 194) which took effect on 28 May 2004.
49 Clause 68(2) in the KPSO, which came into force on 1 October 1971, quoted by Tobias JA [10], suspended the operation of existing restrictive covenants (described as "any covenant agreement or instrument imposing restrictions as to the erection or use of buildings … or as to the use of land") (herein restrictive covenant) within any zone covered by the KPSO other than those specifically excluded. It is not necessary to consider the effect of cl 68(2) on covenants created after it came into force.
50 Clause 68(1), suspended residential proclamations within the Council's area which were inconsistent with the Ordinance or any consent thereunder.
51 LEP 194 transferred the land burdened by the restrictive covenant in suit from zone 2(b), an excluded zone, to zone 2(d3) which was not excluded. As a result cl 68(2) suspended the covenant the appellant seeks to enforce, provided the LEP is valid.
52 Section 28(1) defined "regulatory instrument" as including "any … agreement, covenant or, instrument."
53 The question is whether the provisions of LEP 194 summarised by Tobias JA [15] fall within s 28(2) which relevantly provides:
"For the purposes of enabling development to be carried out in accordance with an environmental planning Instrument, or in accordance with a consent … an environmental planning instrument may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development."
54 The first question is whether the covenant is a regulatory instrument "specified" in LEP 194 which did not, in terms, "specify" any such instrument. The Interpretation Act 1987 or its predecessor allows the words "a regulatory instrument" in the singular in s 28, to be read in the plural. Section 28 therefore extends to a class of regulatory instruments such as restrictive covenants.
55 While Lot 103 burdened by the covenant remained zoned 2(b) and cl 68(2) remained unamended, the erection or use of a hospital on the Lot, although permissible with consent, would be a breach of the covenant.
56 The erection or use of the hospital was also permissible with consent in zone 2(d3) but the rezoning, if valid, disapplied or suspended the covenant so that development for a hospital would no longer be a breach.
57 LEP 194 affected a substantial part of the Council's area for the stated purpose (blue 250) of permitting multi-unit housing. It would be fanciful to infer that the Minister had hospitals or Lot 103 in mind. However one of her purposes was to remove legal obstacles to development for multi-unit housing and this required amendments to the KPSO and the disapplication or suspension of restrictive covenants that would inhibit such development.
58 I conclude therefore that LEP 194 was made for the purposes referred to in s 28(2).
59 Section 28(2) did not apply to the KPSO as it existed immediately before that section came into force and it did not operate retrospectively to require the Governor's approval for cl 68(2).
60 Section 28(2) can only apply to LEP 194 if that instrument was an exercise of the power it conferred to "provide", and if that instrument "specified" the regulatory instrument or class of regulatory instrument affected. If the LEP does this that "provision" will only "have effect according to its tenor" if it was approved by the Governor.
61 One issue is whether LEP 194 "specified" restrictive covenants by necessary implication or incorporation by reference. Another is whether an LEP which achieves a particular result can be said to provide for it.
62 The legal and practical effect of LEP 194 on the restrictive covenant in suit, and other restrictive covenants burdening land within zone 2(d3), was not in dispute. As Tobias JA said [38]:
"… when combined with clause 68(2) the effect of the rezoning of Lot 103 from 2(b) to 2(d3) was to engage clause 68(2) of the KPSO in respect of that land. But s 28(2) does not refer to a provision that has that effect."
63 The respondent and the Minister acknowledged that the suspension of restrictive covenants over land in the zone could have been achieved by provisions that would have required the Governor's approval pursuant to s 28(3). Tobias JA accepts that this is so [39], [40], [42].
64 Parliament inserted s 28(2) and (3) to provide, or appear to provide, some protection for persons having the benefit inter alia of restrictive covenants which can be an important and valuable proprietary right. The case concerns the validity of the relevant provisions of LEP 194 which were not approved by the Governor and if this was necessary they are ultra vires and void.
65 An argument that the protection of s 28(3) would be engaged if the suspension of covenants was achieved by an LEP drafted one way, but the same result can be achieved without engaging s 28(3) if the LEP is drafted another way invites the closest scrutiny.
66 Section 28(2) is engaged if an environmental planning instrument "provides" that a "specified" regulatory instrument or class of instruments shall not apply to the relevant development. The qualification "to the extent necessary to serve that purpose", defines the purpose and limits of the power. However where the instrument provides for the complete suspension or disapplication of covenants ("shall not apply") there is no need to further define "the extent ".
67 Courts have held that matters can be specified by implication. In Reid v Allan (1849) 4 Ex 326 [154 ER 1237] the Court of Exchequer held that the requirement in 35 Geo 3 c 63 s 11 for the names of the underwriters to be "expressed or specified in or upon" a marine policy was satisfied, where a partnership underwrote the policy, if it was subscribed in the name of the firm. The decision was distinguished in Re The Arthur Average Association Ex parte Cory (1875) 44 LJ (NS) 569, 574, 576 where the policy was with an unincorporated mutual insurance society with a fluctuating membership.
68 In McMorran v Marrison (Contractors) Ltd [1944] 2 All ER 448 Asquith J (later Lord Asquith of Bishopstone) said at 450:
"What is argued is that before a person can be said to be 'specified', the Order requires the Minister to specify either the person or a class or description of persons; that specifying persons, as distinct from class or description, necessarily imports giving their names; that specifying a class or description necessarily involves specifying a type of worker … and as the list in this notice does neither of these things precisely, there has been no valid specification and the order does not apply.
I dissent from this argument. Persons can, in my view, be specified without being named, provided they are unambiguously identified."
69 It could fairly be said in Reid v Allan (above) that the partners were unambiguously identified by the firm name although there were 504 of them: (1849) 4 Ex at 326 [154 ER at 1237].
70 The next question concerns the meaning of "provide" in s 28(2) and of "provision" in s 28(3). As Tobias JA recognised [34] these words can have different meanings depending on their context.
71 They may for example mean that which provides, or that which is provided.
72 Their width of meaning is illustrated by IRC v Jamieson [1964] AC 1445 which concerned the liability of a settlor to surtax on the income of a settlement. The relevant section, s 399 of the Income Tax Act 1952 provided:
"… a settlement shall not be deemed to be irrevocable if the terms thereof provide … (b) for the determination of the settlement by the act … of any person."
73 The relevant clause gave the trustees a power of appointment. At first glance the case would appear an unpromising source of assistance on the construction of s 28, but in my opinion, on closer examination, it is helpful.
74 Lord Reid referred, at p 1460, to the taxpayers' argument that "the settlement does not 'provide' for its determination - it merely confers power to do something which will in fact bring about its determination."
75 He considered this argument at pp 1462-3:
"The other main argument for the respondent turned on the meaning of the word 'provide'. In this case the settlement provides means whereby the trustees can do an act which in fact determines the settlement. But it is said that that is not providing for the determination of the settlement by that act: the settlement must expressly provide that it shall come to an end if a certain act is done … the ordinary meaning of a word is something which each of us must decide according to our experience of the ordinary use of the English language. I can only say that to my mind a person who contemplates or desires a certain result and gives powers to trustees which enable that result to be achieved could properly be said in ordinary parlance to provide for that result by giving those powers … the terms of [the] settlement … enable the trustees to appoint the whole fund absolutely to any person who might in future come within the class of beneficiaries set out in clause 3. If … an appointment would in law determine the settlement then the settlor made provision for its being determined in that way and the settlement so provided. Any other view would simply open the door wide for evasion. All that would have to be done would be to confer powers in terms sufficiently wide to enable them to be used in several different ways and then to say that a settlement does not provide for the use of those powers in any particular way."
76 Lord Guest and Lord Pearce agreed with Lord Reid (at p 1464). Lord Jenkins at p 1466, and Lord Hodson at pp 1467-8 agreed that the settlement did "provide" for its determination.
77 Section 28(2) states:
"… an environmental planning instrument may provide … that a regulatory instrument specified in that environmental planning instrument shall not apply to any such development …".
78 Fortified by the reasoning of Lord Reid in IRC v Jamieson (above) I construe the words "an … instrument may provide" in s 28(2) to include an instrument which produced the relevant result although it did not spell that out in the text.
79 A construction which focuses on the text to the exclusion of its result elevates form over substance, and, in the words of Lord Reid quoted above [29], would "simply open the door wide for evasion". By giving appropriate drafting instructions the Minister could determine for herself whether her instrument required the Governor's approval or not.
80 In my opinion LEP 194 did "provide" for the suspension of covenants in zone 2(d3) so that they "shall not apply" to development permissible with consent. By creating zone 2(d3), transferring land from excluded zone 2(b) to the new zone, and leaving cl 68(2) unchanged the Minister "provided" for the suspension of restrictive covenants within the new zone. The LEP did so "provide" because that was the result, and a necessary and intended result, of the making of that LEP. It provided for that result.
81 The Minister could have achieved her stated purpose recited in LEP 194 (blue 250) without affecting restrictive covenants if that had been her intention. She could have done this by enlarging the uses permissible with consent in zone 2(b) to include multi-unit housing, or she could have added zone 2(d3) to the excluded list in cl 68(2).
82 I turn next to the question whether LEP 194 "specifies" restrictive covenants by implication or incorporation. Since something may be specified if it is unambiguously identified the question is whether the LEP unambiguously identifies restrictive covenants that would prevent permissible development.
83 Clause 4(a) of the LEP (blue 250) provides:
"This plan amends:
'(a) the Ku-ring-gai Planning Scheme Ordinance as set out in Schedule 1, and
(b) …".
84 Clause [1] of Schedule 1 amended the definition of "Scheme Map" in cl 4(1) of the KPSO in force on 28 May 2004 (blue 106-7) by adding LEP 194 to the list of amending maps.
85 Clause [3] of Schedule 1 created zone 2(d3) and, read with the amended definition of Scheme Map and the Zoning Map for LEP 194, it transferred Lot 103 from zone 2(b) to the new zone.
86 The relevant provisions in LEP 194 were applicable to land in the new zone, but the general provisions of the KPSO which were not inconsistent with LEP 194 continued to be applicable.
87 These general provisions included cl 68(2).
88 Clause 68(1) suspended all residential proclamations within the Council's area to the extent to which they were inconsistent with the KPSO or with any consent under it. The proclamations having been suspended nothing further was required in that regard when LEP 194 was made.
89 Clause 68(1) applied to land in zone 2(d3) following the rezoning but in this respect LEP 194 changed nothing.
90 On the other hand cl 68(2) operated differently in relation to land transferred from zone 2(b) to the new zone because inconsistent restrictive covenants were thereby disapplied or suspended.
91 Restrictive covenants were the only regulatory instruments affected by cl 68(2) and the rezoning of the zone 2(b) land.
92 An amending statute must be construed with the statute it amended. In Commissioner of Stamps (SA) v Telegraph Investment Co to Ltd [1995] HCA 34, 184 CLR 453, 463 Brennan CJ, Dawson and Toohey JJ said:
"The principle is that every Act amending another Act shall, unless the contrary intention appears, be construed with such other Act and as part of it. The Commonwealth Acts Interpretation Act has no application to South Australian legislation and there is no South Australian counterpart to s 15. However, that section is declaratory and represents the modern approach to the construction of an amended statute. The result is that both the Act which is amended and the amending Act are to be read together as a combined statement of the will of the legislature."
93 McHugh and Gummow JJ said at p 479:
"… the better view is that under modern practice it is the intention of the legislature when effecting textual amendment of an Act to produce a revised text which thereafter and as to subsequent events is to be construed as a whole."
94 The same principles must apply to the construction of a statutory instrument which amends another.
95 Section 28 applies to environmental planning instruments which amend existing planning instruments and to new self-contained planning instruments made after the commencement of the Act although its language is more apt in relation to the latter.
96 Restrictive covenants in land transferred from zone 2(b) to zone 2(d3) were suspended because LEP 194 picked up cl 68(2) as part of a combined instrument.
97 The two instruments may be combined by reading LEP 194 into the KPSO or the KPSO into the LEP. On either approach the combined instrument contains cl 68(2) which specifies the restrictive covenants which "shall not apply".
98 I conclude therefore that LEP 194 provided that restrictive covenants shall not apply in the new zone because it brought about that result, and it specified those restrictive covenants by incorporating or being incorporated into the KPSO which it amended.
99 When the two instruments are read together the regulatory instruments, that is the restrictive covenants which are suspended, are unambiguously identified and therefore specified.
100 In these circumstances there is no need to invoke the principle that what cannot be done directly cannot be done indirectly which does not add to the statutory text but draws attention to its true width and legal effect: Container Terminals Aust Ltd v Xeras (1991) 23 NSWLR 214, 217.
101 In my opinion the appeal should be allowed.
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