ADELAIDE, 15 August 1997 (hearing), 28 August 1997 (decision)

This appeal from a decision of a Commissioner of the Environment Resources & Development Court (the "ERD Court") concerns the proper classification of the manner in which the respondents intend to use their land.

The respondents, Mr and Mrs J J Bishop, own a parcel of land on the outskirts of Two Wells, some 1.5 kilometres east of the town. They reside on the land. The land is within the area of the District Council of Mallala and is within a Rural Living (2) Zone as prescribed by the Council's Development Plan. It has an area of a little over 4 hectares. It adjoins allotments of similar size, although allotments to the east are larger, varying between 15 and 20 hectares. The locality has developed primarily as an area for rural living. In the immediate locality, the predominant usage of land is for agistment of horses and general farming. These uses of land in this area often involve substantial sheds and outbuildings.

The respondents have erected a large shed on the land. The shed measures 15 metres x 14 metres and is some 4 metres high to the eaves. The respondents had applied for development consent to erect this shed on 10 February 1992. On 16 March 1992 the Council granted development consent. The nature of the proposed development was described as "Erection of shed as domestic workshop and for storage of vehicles". The consent was granted subject to two conditions, the first of which only is relevant for purposes. It was expressed in these terms:

"The shed is to be used only for purposes associated with: (a) the residential use of the dwelling, and (b) the pursuit of rural living activities on the land.

Most particularly the shed shall not be used for the storage of materials associated with an industry, trade or business."

Following complaints as to the use of the respondents' land, two Council inspectors inspected the land on 4 October 1996. On 9 October 1996 the Council's planning officer wrote to the respondents stating that there had been an unlawful change in the use of the land from "rural living" to "dwelling and industry". The letter asked the respondents to cease all illegal use of the land "by ceasing to use the existing shed and any part of the site for the purposes of an industry, being the operation of a crane business including the maintenance and repair of cranes." The respondents did not reply to the letter. On 16 January 1997 the Council issued an enforcement notice pursuant to s84(2)(b) of the Development Act 1993 with the intention of enforcing compliance with the development consent. The notice alleged that the land was being used for the purposes of an industry which is a non-complying use in that Rural Living (2) Zone. The notice required the respondents to cease all industrial and business activities on the land and to remove equipment used for business purposes from the shed and from any other areas on the property. There was a crane on the land. The notice required the removal of that crane.

On being served with the notice, the respondents took two steps. First, they appealed to the ERD Court against the issue of the enforcement notice. Secondly, on 13 February 1997 they lodged with the Council an application for development consent in respect of the shed. The proposed use was described as "store and domestic workshop". In the application for development consent they described the existing use as "shed for domestic workshop and storage". Given that there was only one shed on the land, it is not readily apparent that the intended use was to be different from the existing use as described in the development application. It is to be noted that the description of the existing use did not accord with the grant of development consent which had permitted a domestic workshop and the storage of vehicles. It is apparent that the respondents sought approval to store more than vehicles in the shed. The application for development consent was accompanied by a letter dated 13 February from the solicitors acting for the respondents, which explained the application in these terms:

"Our clients wish to continue the approved use and, in addition, to use the shed for the storage and materials relating to their business of steel erection and site welding."

The letter enclosed a schedule of equipment placed in the shed at that time. The letter then explained the use made of the items of equipment in the schedule:

"1. Most of the numbered items of equipment listed in the enclosed Schedule are used in connection with our clients' business from time to time.

2. All of the listed items are also used, to a greater or lesser extent, for domestic and hobby purposes. Our clients and their family are involved in the speedway community and they carry out work on their speedway bikes and associated equipment in the shed.

3. Our clients' business primarily involves site welding. Most of the listed equipment is portable and is transported to each worksite as necessary. The only items of equipment fixed to the floor are those numbered 3, 5, 6, 7 and 12 in the Schedule. (Item 14A is intended to be fixed to the floor in the near future.) Most of these items are confined to a small area in the south east corner of the shed.

4. Our clients wish to continue to carry out some work in the shed in conjunction with their business, in addition to the approved domestic workshop use. This work will be minor and incidental only. It will be confined to a small area of approximately 25 square metres in the south east corner of the shed in the vicinity of the existing fixed items of equipment. We stress that the scale of such work will be confined to the scope of a "home activity" as defined in the Development Regulations 1993. Accordingly, no approval is sought for this work.

5. We are also instructed that our clients intend to remove the existing crane from the subject land."

By letter dated 21 February 1997, the Council gave notice to the respondents that it believed that the proposed development was a non-complying development under its Development Plan. (A non-complying development is a use of land which is prohibited in a particular zone). The letter asked the respondents to provide a brief statement to the Council setting out the reasons supporting the development, notwithstanding that it was listed in the Development Plan as a non-complying use. The solicitors for the respondents responded to that letter on 14 March 1997. The letter included the following:

"We stress the following points - * the only activity for which our clients' application seeks approval is the storage of items of equipment in the shed in connection with their business, in addition to the existing approved use of storage for hobby and domestic purposes. * The current application does not seek approval to carry out any work in the shed in conjunction with our clients' business. There is no basis whatsoever for the Council to conclude that the Application includes any kind of Industry."

At its meeting on 17 March 1997 the Council resolved pursuant to s39(4)(d) of the Development Act not to proceed with the assessment of the application. The resolution was expressed in these terms:

"that Council resolves not to proceed with the assessment of the application by J.J. & J.M. Bishop to convert an Existing Shed for Domestic Purpose to be Used as a Store and Industry (Non-complying) at Lot 1 of Part Section 440, Hundred of Port Gawler, 49 Williams Road, Two Wells pursuant to Section 39(4d) of the Development Act, 1993."

The resolution is curiously expressed. For the reasons which follow, the resolution was intended to be a decision refusing development consent.

I pause briefly to explain the procedure by which councils deal with applications for non-complying development under the Development Act and the Development Regulations. The Development Plan prescribes zones and the planning objectives for those zones. For most zones it states uses of land which are prohibited in that zone. A use which is prohibited in a particular zone is a non-complying development in that zone. Section 35(3) of the Development Act provides that the Council cannot approve an application for a non-complying development unless the Development Assessment Commission concurs in the grant of consent. Section 35(4) provides that an appeal does not lie from a refusal of consent or a refusal of concurrence under s35 except in circumstances which are not relevant in this appeal. Regulations 16 and 17 of the Development Regulations prescribe more detailed provisions as to the procedure. Regulation 16 provides that if an application will require a council to assess a development against the provisions of the Development Plan, the council must determine the nature of the development and proceed with the application according to that determination. If the council considers the development to be a non-complying development and the applicant has not notified the development as such, the council must, by notice in writing, inform the applicant of that fact: Reg 16(2). Thus, the Council sent its letter of 21 February 1997 advising that the application was for development which was a non-complying development and asked the respondents for a brief statement setting out the reasons supporting the development.

Regulation 17(3) authorises a Council, on receipt of an application for a non-complying development, either to refuse the application pursuant to s39(4)(d) of the Act or to resolve to proceed with the assessment of the application. That procedure is consistent with the terms of s39(4)(d) of the Act, which authorises a Council, on receipt of an application, to

"refuse an application that relates to a development of a kind that is described as a non-complying development under the relevant Development Plan without proceeding to make an assessment of the application."

It would appear, therefore, that the Council's decision not to proceed with the assessment of the application was intended to be a refusal of the application. It would have been better had the resolution stated that the Council refused the application. However, nothing turns on the terms of the resolution. The Council did in fact inform the respondents that it had refused the application.

The respondents appealed to the ERD Court against the decision of the Council refusing their application. That appeal was heard together with the respondents' appeal against the enforcement notice.

The ERD Court dismissed the appeal by the respondents against the enforcement notice. However, the Court varied the directions with which the respondents had to comply. There is no appeal from the decision of the Court relating to the enforcement notice. The Commissioner's decision upholding the enforcement notice means that the respondents had unlawfully been using their land contrary to the terms of the development consent. However, that is not a relevant factor when determining whether development consent should be granted. Instead, the decision will be made upon the planning considerations expressed in the Development Act and Development Regulations irrespective of the past or continuing conduct of the respondents: Kouflidis v Corporation of the City of Salisbury (1982) 29 SASR 321, 323.

The ERD Court allowed the appeal against the refusal of the development application. The Commissioner hearing the appeal first decided that the Council had erred in its assessment of the nature of the development the subject of the application. He concluded that the respondents sought to change the use of the existing shed from "domestic workshop and storage" to "store and domestic workshop". As a store was neither a complying nor a non-complying form of development within the zone, he concluded that it was then open to him to consider whether the proposal merited approval. He held that it did. The Council appeals to this Court from the Commissioner's decision allowing the appeal. The Council submits that the Commissioner has erred in his assessment of the nature of the proposed development.

The prohibition in s35(4) of an appeal against a refusal of consent to a non-complying development does not prevent this appeal. Section 86(1)(a)(iii) of the Act authorises a person who has applied for a development authorisation to appeal to the ERD Court against any assessment or decision made under the Act in relation to the authorisation. By this means an applicant for development consent may appeal against the assessment of the proposed development but, if that assessment is correct, he will not be able to appeal against the refusal of consent.

The respondents' Notice of Appeal to the ERD Court stated that they were appealing against the decision of the Council made on 17 March 1997 to grant development consent. In their Notice of Appeal they complained that the Council had wrongly classified the proposed development as a non-complying development and they asserted that it should have granted development consent. As the respondents were entitled to appeal only against the assessment of the proposal as a non-complying development, that should have been the only issue before the ERD Court. If the appeal was dismissed, that was an end of the matter, subject only to an appeal to this Court. If the appeal was allowed, again, subject to an appeal to this Court, the matter should have been remitted to the Council to deal with in accordance with the Development Act and Regulations. The Commissioner did not, however, limit the hearing in this way. As already noted, he not only decided that the Council had erred in its assessment of the nature of the development, but went on to examine whether the appeal should be allowed. In this respect, the Commissioner erred.

I recognise that it is highly desirable that applications for development consent should be expeditiously determined and I have no desire unnecessarily to increase the time involved in or the cost of processing planning applications. But it is important that, when dealing with an appeal against an assessment that a proposed development is a non-complying development, the ERD Court proceed no further than deciding the question whether the proposed development is a non-complying development. If that issue is resolved in an appellant's favour, the application should be remitted to the relevant planning authority to deal with it in accordance with the procedures prescribed in the Development Act and Regulations. The reason lies in the fact that, notwithstanding that the development is not a non-complying use, it might, nevertheless, be a development of a kind which requires that notice should be given in accordance with s38 of the Act. Those to whom notice is given may wish to make representations objecting to the proposal. Depending on the result, they may be entitled to appeal or to be joined as parties in any appeal: see s38 of the Act and Pitt v Environment Resources & Development Court (1995) 66 SASR 274. In this case neighbours had complained to the Council about the nature of the activities being conducted on the land by the respondents. Even if the proposed development was to be classified as a store for the purposes of the business, the Council was required to give notice of the proposal as a Category 3 development under s38 of the Act because the shed was not to be used as a farm building and, it would seem, was not regarded by the Council as a development of a minor nature: see paras 2(1)(d) and (f) of Schedule 9 of the Development Regulations. In addition, as the Commissioner found, the use of the land for storage purposes was not incidental to the domestic use of the land. On receipt of that notice, the neighbours might wish to lodge representations objecting to the proposal. Thus, by proceeding in this way, the ERD Court has denied those neighbours the right to object and the right to be heard on any appeal. The terms of s33 of the Environment Resources & Development Court Act, 1993 do not authorise the procedure which the Commissioner adopted. That section is intended to deal with irregularities which have occurred in dealing with the subject matter of the appeal. It does not authorise the Court to depart from the required procedures in determining appeals of this kind and so deny persons affected by the proposal the right to object to the proposed development. Thus, the proceedings before the Commissioner mis-carried in a serious way. I will return to that issue.

The issue before this Court is whether the Commissioner has correctly classified the proposed use of the land. The nature of the proposed development should be assessed in a practical and commonsense way: Tarca v Hambrook (1995) 86 LGERA 56, 59. The enquiry in this case requires an examination of the shed, the plant and equipment in that shed, and the intended use of that shed. I refer to the comments as to the nature and scope of the enquiries into the nature of a proposed development in Adelaide City Mission v South Australian Planning Commission [1993] SASC 3942; (1993) 60 SASR 178, 181.

Before examining the nature of the proposed development, it is convenient to note the relevant definitions contained in the Development Regulations. The Council submits that the work conducted by the respondents constitutes an industry which is defined by the Development Regulations as follows:

"`industry' means the carrying on, in the course of a trade or business, of any process (other than a process in the course of farming or mining) for, or incidental to -

(a) the making of any article, ship or vessel, or of part of any article, ship or vessel; or

(b) the altering, repairing, ornamenting, finishing, assembling, cleaning, washing, packing, bottling, canning or adapting for sale, or the breaking up or demolition, of any article, ship or vessel; or

(c) the getting, dressing or treatment of materials (and `industrial' will be construed accordingly)".

The respondents contend that the proposed development is for a store as defined. The Regulations define `store' in these terms:

"`store' means a building or enclosed land used for the storage of goods, and within or upon which no trade (whether wholesale or retail) or industry is carried on, but does not include a junk yard, timber yard or public service depot".

The question whether the use which the respondents propose is an industry or store turns on whether they intended to do any more than store plant and equipment associated with their business.

The shed is a large one. It is equipped with work benches, a bench grinder, industrial drills, welding equipment, a lathe, a friction saw, a substantial hacksaw, an angle grinder and other equipment used for manufacturing purposes. There is also the usual paraphernalia associated with manufacturing, such as steel cupboards, an oil pump, fire extinguishers, a chain block, and storage rack. The respondents carry on the business of repairing heavy earth-moving and mining equipment. There is only one other employee in the business. He is a brother of Mr Bishop. Most of the work is done in situ, but the business is conducted from the subject land. In the course of carrying out this business, it is occasionally necessary to bring machinery components to the shed for repair, as sometimes the welding work requires a controlled environment which is not always available on site. Work for the purposes of the business which has been done in the shed has included welding for the purpose of repairing machinery components, fabrication of components for earthmoving equipment and repair of components for earthmoving equipment. The respondents have fabricated components for a Caterpillar scraper which the respondents are presently attempting to sell. Some of the work I have described involves the use of an angle grinder or friction cutter, both of which are very noisy, the use of a profile cutter or the use of lathes.

The respondents also use the shed to house items which are not used in their business. These include a lawnmower, garden tools and other kinds of equipment often used for domestic purposes. The items in the shed also include recreational items such as a trampoline and table tennis table. In addition, two speedway bikes and a sidecar are stored. The respondents' son and Mr Bishop's brother race speedway bikes. Occasionally repairs to the bikes are carried out in the shed. The respondents also use the shed to manufacture posts and rails for fencing and other equipment to use on their land.

The paragraph numbered 4 in the letter from the solicitors to the Council dated 13 February 1997 unequivocally stated that the respondents intended to continue to carry out some work in the shed in conjunction with their business, which is described in the letter as "the business of steel erection and site welding". The work was said to be of a minor nature and to constitute a home activity. Given what had been ascertained by the Council's inspectors in October 1996, it was reasonable for the Council to infer, as it did, that the work to which the letter referred was of an industrial nature. The correctness of that inference was confirmed by the evidence given by Mr Bishop in the ERD Court.

It is apparent that the use of the land by the respondents includes activities which involve the manufacture of articles and more frequently involves the repair of articles as part of their business. Those activities fall within paragraphs (a) and (b) of the definition of `industry'. The Commissioner also found, and it is not challenged on this appeal, that the use of the land for storage purposes was not reasonably incidental to the residential use of the land: see para 5 and Schedule 3 of the Development Regulations. The evidence as to the use of the shed for these industrial activities shows, and I find, that they are of a kind which are not ordinarily regarded as, or are in fact reasonably incidental to the use of the shed as a domestic workshop or as a store for vehicles. It is, of course, a question of fact and degree: Lizzio v Ryde Municipal Council (1983) 155 CLR 211, 217, but the frequency and nature of the industrial activities requires the conclusion that the respondents propose to use the shed for industrial purposes. In addition, the Commissioner found, and it is common ground on this appeal, that the work carried out by the respondents did not constitute a home activity as defined by the Development Regulations.

Although the shed is used for purposes other than industrial, it is not possible to determine whether one is subservient to the other. In any event, it apparent that the industrial purposes are independent and not merely incidental to those other purposes and, as that industrial purpose is prohibited, it follows that the use of the land is prohibited: see Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157, 161; Southern Cross Homes Inc. v City of Enfield (1992) 76 LGRA 94 at 99 and the cases there cited.

For these reasons the Council was correct in deciding on the information before it on 17 March 1997 that the proposed development was for industrial purposes.

The letter sent by the respondents' solicitors to the Council on 14 March 1997 stated that the only activity which would be conducted in the shed which was related to the business was the storage of plant and equipment. That assertion was not consistent with paragraph 4 of the letter of 13 February which had said that the respondents wished to carry out some minor work, which they sought to classify as a home activity, in the conduct of their business. It is to be noted that the letter of 14 March did not purport to repudiate anything said in the letter of 13 February. It would appear that the respondents were seeking to keep both options open. That was confirmed by the respondent's conduct of the appeal in the ERD Court. In opening the case for the respondents in the ERD Court, their counsel, Mr Doherty, said:

"Both appeals relate, in essence, to the rights of the appellants to continue to use the shed for storage and workshop purposes relating to the business, as distinct from relating to their residential and rural living activities on the site."

He then went on the say that, if the Court were to find that the development consent granted in 1992 did not permit the shed to be used for the purpose of manufacturing or repairing equipment in the course of the respondents' business, the respondents sought to limit their application so that they could at least store plant and equipment related to the business in the shed. This position was maintained by Mr Doherty in his closing address at the conclusion of the appeal.

When determining the appeal, the Commissioner permitted the respondents to argue their case in the alternative as Mr Doherty had contended. In his reasons, the Commissioner has implicitly acknowledged that, if the proposed use was to be a complying use, the respondents would have to restrict the use of machinery in their shed to exclude uses in connection with the business. It is also apparent from the Commissioner's reasons that he has overlooked the letter from the respondents' solicitors dated 13 February 1997. In deciding that the Council had wrongly treated the respondents' application was an application intended to encompass all of the activities the subject of the enforcement notice, he said:

"Nevertheless, it was at all times open to the appellants to seek development consent for part only of those activities, on the basis that their intention was to restrict themselves to those activities for which they either had consent or did not require consent."

Reference to paragraph 4 of the letter from the respondents' solicitors amply demonstrates that the respondents made the application in order that they might from time to time carry out work in the workshop for their business. The Commissioner, therefore, erred in holding that the Council had wrongly treated the application as one intended to regularise the activities the subject of the enforcement notice.

The Commissioner also erred in permitting Mr Doherty to argue the case for the respondents in the alternative. For the reasons which follow, it is contrary to the scheme and purpose of the Development Act and Regulations to permit an applicant for development consent to submit an application for alternative developments. Section 32 of the Development Act provides that no development may be undertaken unless the development is an approved development. Sections 84 and 85 of the Act provide a scheme by which to prevent the use of land for a purpose for which development consent has not been obtained. The scheme of the Act and Regulations is that the application is the means by which the applicant informs not only the relevant planning authority of the nature of the proposed development, but also informs any person who may be affected by the development and who might be entitled to object if the proposal is for a development for which notice must be given under s38. To that end, s39 of the Act requires the applicant to lodge an application in the prescribed form and to provide all other information required by the Regulations. If a planning authority has to assess a proposed development against a Development Plan, it must determine the nature of the development: Reg 16. For example, a planning authority might have to determine whether what is proposed is a complying or non-complying development. Thus, an applicant for development consent should clearly state the nature of the intended development. The prescribed form requires a description of the proposed development. It is for these reasons that an applicant cannot make the application in the alternative. This conclusion is reinforced by the fact that potential objectors have the right to inspect an application. If an application is made in the alternative, a person who might be affected by the proposal will not know what is intended. He will not be sure whether or not to make representations objecting to the proposal. Similarly, a planning authority will not know whether the proposal is for a complying or non-complying development. I adopt the observations of Tadgell J in Marock Pty Ltd v Billjoy Pty Ltd [1981] VicRp 41; [1981] VR 413 at 419 which, although expressed in a slightly different context, are nevertheless apposite:

"The scheme of [the Act] is, I think, such as to discourage and speculation and inference about the purpose for which a planning permit is sought and to encourage a plain statement of purpose."

The appeal to the ERD Court was an appeal against the Council's decision which was reached on the basis of the information then before the Council as to the nature of the development. That is a further reason why the respondents were not entitled to advance an alternative application on the hearing of the appeal. Although an appeal in the ERD Court involves a hearing de novo, it is not open to the applicant to advance alternative proposals at the hearing. I acknowledge that, if the respondents had applied to amend their application, the Commissioner could have exercised the powers invested in him by s33(2) of the Environment Resources & Development Court Act and considered whether he should permit the respondents to amend the application to delete the use of the shed for industrial purposes. There might have been good reasons to reject the application. But it is unnecessary to decide that question as the respondents did not make such an application. They deliberately kept both options open. For these reasons, the Commissioner should have required the respondents to argue the appeal on the basis of the application made to the Council.

The Commissioner's reasons show that he has grounded his decision that the intended use of the land is for a store on the fact that it was open to the respondents to seek development consent to use the land only for that part of the activities associated with their business as did not constitute an industry. He has determined the appeal on the footing that the respondents amended their application to restrict the proposed use to those activities. As the respondents did not apply to amend their application, the Commissioner should have heard and determined this appeal on the basis of the application made to the Council on 13 February 1997. It follows that he should have held that the respondents intended to use the land for an industry and should have dismissed the appeal.

For these reasons I would allow the appeal. I set aside the Commissioner's decision published on 9 July 1997 and substitute for that order an order dismissing the respondents' appeal against the Council's decision that the proposed development was for a non-complying use. It is, of course, open to the respondents, if so advised, to make a fresh application to the Council which does not seek approval for the industrial activity.

I add that, even if I had concluded that the Commissioner had made a correct decision as to the nature of the proposed development, I would, nevertheless, have remitted the application to the Council to determine in accordance with the Development Act and Regulations. I would have done so because, for the reasons given earlier, the Commissioner's task was simply to decide the nature of the proposed development. Thus, the result for the parties differs little, however this appeal is decided.