D'Arcy v Bega Valley Shire Council

As at 7 January 1966 the existing holding relevant to these proceedings was existing holding 10 (Lots 44 - 52 DP 750190, 204 - 207, Lot 3 DP 608678, Lot 1 DP 534619, Lot 5 DP 700458) having an area of 449.9918 hectares. This is the area outlined and numbered 10 on Plan 3, annexed to this judgment. Lot C is located at the southern end of the existing holding 10 and is the cross-hatched area.

All the land in question is Rural Zone (1)(a) under the LEP. Division 2 cl 12 - 22 concerns development in rural zones. Land zoned (1)(a) which is an existing holding can be subdivided for dwellings under cl 15 of the LEP, these subdivisions being known commonly as concessional lots. The total number of allotments that may be created under cl 15(3)(e) where the existing holding has an area of 80 hectares or more is three allotments plus one additional allotment for each 40 hectares in the holding.

The retention of concessional lot capacity in existing holdings and the residue thereof is a potentially complicated matter, particularly where existing holdings are in multiple ownership, with obvious financial implications for those affected by the Council's determinations. The Council adopted a policy in 1992 to guide its deliberations in these matters as follows: Residue Allotments 3.1 In determining residue status for the purposes of subdivision of rural land under Bega Valley Local Environmental Plan, 1987 regard be given to the following matters (in priority order): · Documentary proof (such as conditions of previous approvals, terms of contracts for sale of land, covenants, etc) confirming a decision by Council and/or the original landholder to confer residue status and/or subdivision potential on a particular property. · Continuing ownership of land by the original subdivider or his/her direct descendants · Whether the area of the allotment or portion is larger than the other lots/portions in the holding. 3.2 Where this does not resolve residue status, or where there is a dispute as to residue status for the purposes of Bega Valley Local Environmental Plan, 1987 then Council not acknowledge residue status for the particular existing holding at all.

This will leave an opportunity for the competing interests to seek a declaration by the Land and Environment Court as to residue status. 7. The policy is general in its terms and while it points to the matters the Council will have regard to in determining residue status, it leaves substantial discretion to the Council in how it undertakes this task.

8. On the basis of the size of the existing holding 10 (approximately 450 hectares) and cl 15(3) of the LEP the Applicant submits there were 14 concessional allotments potentially available in existing holding 10. Given the previous subdivisions that have already occurred in existing holding 10 the Applicant argues there are six potential lots currently remaining. DA 01/1022 seeks to create two concessional allotments.

9. The questions of law arise in part because of the treatment of existing holding 10 and Lot C by the Council following previous development consents granted in determining DA 97/1295 and DA 98/1163. The approach taken by the Council to the LEP in determining those development consents affects the legal position of the Applicant under the LEP in relation to this subdivision application, DA 01/1022. While I can consider the effect of the previous development applications on the subdivision application before me I cannot answer any questions which call the validity of the earlier development consents into question as that is not before me in this matter. This is an issue in relation to one of the preliminary questions of law raised. DA 97/1295
10. DA 97/1295 was an application for subdivision across part of two existing holdings, 10 and 34. The latter is shown on Plan 3 attached, in heavy black outline and numbered 34. At the time that development application for subdivision was made by the Applicant for subdivision it identified as a requirement of the subdivision application an area identified as Lot J shown on Plan 5 (also annexed to this judgment, the outlined and cross-hatched area is Lot J), as the residue of the subdivision. The Council approved the subdivision.

11. Following approval of DA 97/1295, Council has considered Lot J was the "residue" of the existing holding 10 for the purposes of the LEP. The consequence of this decision is that the balance of existing holding 10 where Lot C is located is no longer treated as an existing holding by the Council. All the remaining subdivision potential for concessional lots under the LEP for existing holding 10 resides in Lot J in the Council's view. The issues raised by this decision are identified in Questions 1 and 2 below.

DA 98/1163 12. The Applicant lodged a development application (DA 98/1163) to build a house on Portions 50, 51 and 52. Consent to DA 98/1163 was granted by the Council for a house on Portion 50, 51 and 52. By a modification pursuant to s 102 of the Environmental Planning and Assessment Act 1979 issued by the Council on 17 September 1998 this development consent was altered to apply to the building of a house on Portion 50 only. There is a dispute between the parties about the circumstances which gave rise to the modification.

13. There is also a dispute between the parties as to which section of the LEP was the basis for granting development consent to DA 98/1163. The legal issue raised is that outlined in Question (3). The validity of the consent granted to DA 98/1163 is not before me and it is not appropriate that I make any finding which questions the validity of the Council's decision on that development consent as Question 3 requires.

DA 01/1022 14. The subdivision application DA 01/1022 (the subject of these proceedings) relates to Lot C. Lot C is 107.3 hectares in area. The subdivision application aims to create two smaller lots, Lot A and Lot B, effectively two excisions out of Lot C. Plan 6 shows the subject land for DA 01/1022 in relation to the existing holdings and the areas subdivided in relation to DA 97/1295. 15. By letter dated 26 September 2001 the Council advised that it had refused DA 01/1022. The relevant reasons given were: (1) the proposed subdivision is contrary to cl 14(3) and cl 15(2) of the Bega Valley Local Environmental Plan 1987 as the proposed lots within the subdivision would be excised from land within the residue of the existing holding which, by way of a previous development approval (development consent 97/1295), does not enjoy residue lot status. (2) the proposed subdivision is contrary to cl 14A(3) of the Bega Valley Local Environmental Plan 1987 as it creates an agricultural lot (proposed Lot C) of less than 120 hectares on which an existing house is located.

(3) the proposed subdivision is contrary to Council's adopted Policy - Residue Allotments dated 21 January 1992. The Policy establishes proposed Lot J in development consent 97/1295 as a residue lot within the existing holding, not the land the subject of this application and that the concurrence of all landowners within the residue of the existing holding to the proposed subdivision has not been secured by the Applicant.

(4) the proposed subdivision is contrary to cl 18(4), 15(2) and 15(3)(g) of the Bega Valley Local Environmental Plan 1987. These provisions effectively preclude the subdivision of the subject land on the basis that Council, on application (development application 98/1163), has consented to the erection of a dwelling on Portion 50 pursuant to cl 18(3).

(5) Lot C of the proposed subdivision has been requested by the application to be an allotment for the purposes of a dwelling-house. As the proposed allotment has an area of less 120 hectares, the proposal is contrary to cl 18(2)(a). The Applicant appealed against this refusal in these proceedings. Question 4 relates to one of the grounds of refusal, namely whether cl 14A(3) of the LEP applies (ground 2 for refusal).

Questions of Law Question 1 16. Clause 14 of the LEP deals with the subdivision of land zoned 1(a). Clause 14(3) of the LEP provides: where a lot is created from an existing holding by subdivision carried out under this plan or deemed to have been carried out under this plan, the lot ceases to be part of an existing holding and the residue of the holding shall be taken to be an existing holding for the purposes of this Plan. 17. Question: Does the Council have the power to approve the subdivision DA 01/1022, having regard to the express limitation on the land being an existing holding in the land to be subdivided contained in cl 14(3)?

Council's claim : The Council claims that Lot C has ceased to be part of an existing holding because of the impact of the development consent given for the subdivision for concessional lots for DA 97/1295 which resulted in the Council identifying Lot J as the residue of the existing holding 10. Applicant's claim : The Council incorrectly held under cl 14(3) that the residue of the subdivision DA 97/1295 was the residue of the existing holding so that the substantial balance of the existing holding 10 was no longer an existing holding and therefore had no concessional lot capacity under the LEP. The Council should have found that the remainder of the entire existing holding 10 was the residue.

Answer to Question 1 18. Clause 14(3) of the LEP, which provides "the lot ceases to be part of an existing holding and the residue of the holding shall be taken to be an existing holding for the purposes of this plan", has been applied by the Council so that the residue identified from subdivision 97/1295, being Lot J, becomes the existing holding as the residue of existing holding 10. The result of this decision by the Council is that quite a substantial portion of existing holding 10 loses its "existing holding" status and hence the ability to subdivide into concessional lots.

19. The Council's senior subdivision engineer, John Wearne, gave evidence that the Council applied its 1992 Policy on Residue Allotments (set out above) to arrive at that decision. The Council policy does not have statutory force. It would appear from the Council policy outlined above at par 6 that there were a number of discretionary matters taken into account by the Council in arriving at that decision. These were not detailed to the Court in relation to this particular decision. It was the evidence of Mr Wearne that it was essentially the application of the Council policy, rather than the wording of cl 14(3), which resulted in the Council's decision concerning Lot J.

20. I must consider the words of the LEP and construe these rather than apply the Council's policy, which would be very difficult in any event given the general wording of the policy.

21. The words which appear in cl 14(3) are "the lot ceases to be part of an existing holding and the residue of the holding shall be taken to be an existing holding for the purpose of this plan". It does not seem to me that the interpretation of this clause should mean that Lot J (the residue of the subdivision) becomes the only part of the existing holding 10 to be regarded as an existing holding. The Applicant's view that the residue of the subdivision is not the same as the residue of the existing holding must be correct given the wording of cl 14(3), which refers to the residue of the holding not the subdivision. Accordingly, all lands remaining in existing holding 10 are the residue of the holding after the exclusion of the lots created by DA 97/1295. Further concessional allotments under cl 15 of the LEP may be created in relation to this residue land, including Lot C. The answer to Question 1 is therefore, yes, subject to the qualification contained in the next paragraph.

22. I should note that how many concessional lots can be created, and where in the residue of existing holding 10, must involve some discretion on the part of Council. The LEP says the Council "may", not must, grant consent for concessional lots. There may well be a need to balance the desire for concessional lots of other owners of land of the residue of existing holding 10 (which I have found can be considered to be greater than Lot J). It is no doubt to deal with this potentially difficult issue that the Council introduced its Residue Allotments Policy in 1992.

Question 2 23. Clause 15(2) of the LEP provides Subject to this clause, the council may consent to the subdivision of land in an existing holding to create allotments for the purpose of a dwelling house.

24. Question: Does the proposed subdivision DA 01/1022 infringe cl 15(2) of the LEP?

Council's claim : The subject land is not in an existing holding and so the Council may not consent to the subdivision of this land for the purpose of a dwelling-house.

Applicant's claim : The subject land is in an existing holding to which cl 15(2) applies.

Answer to Question 2 25. In view of my decision on Question 1, cl 15(2) can apply to parts of the residue of existing holding 10 beyond Lot J to enable the Council to consent to the subdivision of that land in an existing holding to create allotments for the purpose of a dwelling house. This would include Lot C the subject of DA 01/1022. The answer to Question 2 is therefore, no. Any decision must be subject to the proper exercise of Council's discretion in relation to concessional lots (which may not must be granted under the LEP).

Question 3 26. Clause 18 of the LEP deals with the approval of dwellings on land zoned 1(a). Clause 18(2) of the LEP relevantly states: Subject to this plan, the council shall not grant consent to the erection of a dwelling-house on land to which this clause applies unless the land - (a) has an area of not less that 120 hectares in the case of land within Zone No. 1(a) or 1(g); 27. Clause 18(3) provides: notwithstanding any other provisions of this clause, the council may grant consent to the erection of a dwelling house on an allotment (including a Crown portion) within Zone No. 1(a) or 1(g) that was lawfully created prior to & January 1966 and which is not an existing holding provided that: (a) the erection of a dwelling house will not create any substantial conflict with the objectives of the zone; and (b) the erection of a dwelling house will not create or increase demand for the uneconomic provision of services to the locality; and (c) the effect is substantially the same as if the land was subdivided under clause 15 28. Clause 18(4) of the LEP provides: where consent is granted as referred to in subclause (3) the allotment shall be deemed to be an allotment created under clause 15(2) for the purposes of clause 15(3) 29. Question: Was the consent for the erection of a dwelling house on Portion 50 given pursuant to cl 18(3) via DA 98/1163 and if so whether the effect of the LEP was that Portion 50 was deemed to be an allotment created under cl 15(2) for the purposes of cl 15(3) and so the lot ceased to be part of an existing holding because of the provisions of cl 14(3)? Council's claim : The Lot 50 part of the Applicant's land is not part of an existing holding and the LEP does not permit the subdivision of that lot in these circumstances. Applicant's claim : Portions 50, 51 and 52 are part of an existing holding. Consent for the house on Portion 50 could only be given pursuant to cl 18(2) of the LEP.

Answer to Question 3 30. As stated above at par 13, I am not able in these proceedings to review the basis for the decision of the Council in granting development consent to DA 98/1163. I do not therefore consider it appropriate that I answer the question posed as it requires me to do just that. The fact remains that the Council granted consent to a house on Portion 50 in Lot C. It is the impact of that decision on the current subdivision application that the parties must consider.

Question 4 31. Clause 14(1) of the LEP provides: This clause applies to land within Zone No. 1(a), 1(g), 7(b) or 7(d).

32. Clause 14(2) states: A person who makes an application to subdivide land to which this clause applies shall, on the application form - a) state, in relation to each allotment created by the subdivision, the primary purpose for which that allotment is intended to be used; b) identify any allotment which is intended to be used primarily for the purpose of agriculture; c) identify any allotment which is intended to be used primarily for the purpose of a dwelling; d) identify any allotment on which it is intended to erect a dwelling and state whether or not the dwelling is the primary purpose for which the allotment is being created; e) show the approximate location of any dwelling erected on the land at the date of the application; and f) identify land residual to the subdivision.

33. Clause 14A(3) provides: the council shall not consent to the creation of an allotment for the purposes of agriculture if the allotment has an area of less than 120 hectares and there is a dwelling house on the allotment

34. Question: Does the proposed subdivision infringe cl 14A(3) of the LEP? Council's claim : The Council claims that the subdivision application is not for the purposes of agriculture and even if it were for the purposes of agriculture there is a dwelling-house on the allotment which takes away the power to use this clause. [sic]

Applicant's claim : This application relates to land in an existing holding which he is entitled to further subdivide under cl 15(2). The Applicant states that he did not apply or seek to rely on cl 14A(3) in his subdivision application and it does not arise in any event.

Answer to Question 4 35. Clause 14(2) of the LEP sets out those matters which must be included in an application for subdivision, including the intended purpose of any allotment. The Caddey, Searle and Jarman letter dated 15 December 2000 which accompanied the development application for the proposed subdivision DA 01/1022 refers to house sites, Lot A and Lot B and presumably cl 14(2)(c) applies to these. Clause 14(2)(c) requires that the application identify any allotment which is intended primarily for the purpose of a dwelling. There is an existing cottage on Lot C and a new cottage on the proposed Lot A. Lot C is land which could be in an existing holding given my decision in relation to Question 1. Lot C is currently zoned rural and is used for agricultural purposes.

36. As a result of the subdivision of Lots A and B a "new" Lot C would be created of less than 120 hectares with a dwelling on it. Lot C is currently used for agricultural purposes in accordance with its zone 1(a) status. The subdivision is not for the purpose of agriculture. If it was, it would be prohibited by cl 14A(3).

37. I think cl 14A(3) does not apply for a simply stated reason concerning the construction of the LEP. The application for subdivision DA 01/1022 is for the purpose of creating two allotments for dwellings as provided for under cl 15. The purpose of the subdivision is not to create an allotment for the purpose of agriculture under cl 14A(3). The fact that the balance of Lot C will continue to be used for agriculture as it currently is, in conformity with the Rural Zone 1(a), does not mean that cl 14A(3) must apply.

Summary of findings 38. Accordingly, and to summarise my findings, the answers to the questions of law are: Question 1 : Does the Council have the power to approve the subdivision DA 01/1022, having regard to the express limitation on the land being an existing holding in the land to be subdivided contained in cl 14(3)? Answer : Yes, subject to the Council being able to use its discretion in accordance with its Policy on Residue Allotments.

Question 2 : Does the proposed subdivision DA 01/1022 infringe cl 15(2) of the LEP? Answer : No, but the Council has discretion whether to grant consent. Question 3 : Was the consent for the erection of a dwelling-house on Portion 50 given pursuant to cl 18(3) via DA 98/1163 and if so whether the effect of the LEP was that Portion 50 was deemed to be an allotment created under cl 15(2) for the purposes of cl 15(3) and so the lot ceased to be part of an existing holding because of the provisions of cl 14(3)? Answer : I am unable to answer this question.

Question 4 : Does the proposed subdivision infringe cl 14A(3) of the LEP? Answer : No.

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