DM & Longbow Pty Ltd v Willoughby City Council

Background

1. Before anything else it is appropriate to set out the facts as far as is relevant to the current proceedings.
2. The site is within the zone E4 Environmental Living under the WLEP. Development for the purpose of a dual occupancy is permissible subject to development consent.
3. Clause 6.10 of the WLEP prescribes a minimum land area of 700m2 for dual occupancy development in the E4 Environment Living zone. It is agreed that the site has a land area (excluding the access handle) of 799m2 and is compliant in that regard.
4. That said, cl 4.1 of the WLEP prescribes a different minimum lot size for subdivision. Clause 4.1 (2) provides that the minimum subdivision lot size as shown on the Lot size map for the site is 650m2.
5. The Council contends that the proposal is caught by that clause because a subdivision includes a strata subdivision for the purposes of cl4.1. The Council relies on the definition of "Subdivision of land" within s4B (2) (b) of the EPA Act to assist in the interpretation of the text in cl4.1 of the WLEP.
6. The parties agree that two of the proposed strata lots are undersized. They each have a land area of approximately 300m2. For completeness I note that the access handle of the site is not counted as part of the land area for calculating the minimum subdivision lot size under cl4.1: see cl4.1 (3A) of the WLEP.
7. Needless to say the Applicant does not agree that the definition in s4 of the EPA Act assists in the interpretation of cl4.1 when considered in context and as a whole.
8. The parties' respective views about the proper interpretation of cl4.1 of WLEP in this case are summarised below.

Applicant's interpretation of cl4.1

1. The Applicant's primary position is that the minimum subdivision lot size requirement in cl 4.1 is not directed to strata subdivision but rather to the subdivision of land.
2. It contends that the words in the clause when read in the context of the whole as evidenced by the objectives in subclause (1) make this plain. All of the objectives relate to land. In short, they seek to: retain the pattern of subdivision in low density residential and environmental living zones: cl4.1 (1) (a); ensure lots have sufficient area for effective siting of development in order to achieve a good relationship with adjoining dwellings and to provide adequate landscaped open space, drainage, parking , residential amenity and other services: cl4.1(1)(b); require larger lots along the foreshore or where topography or other natural features of the land limits its subdivision potential : cl4.1(1) (c); and ensure subdivision does not cause fragmentation of sites that limits potential uses or redevelopment in accordance with the zone objectives: cl4.1 (1) (d).
3. The Applicant invites the Court to read and construe the clause as a whole to give effect to harmonious goals: Project Blue Sky Inc and Ors v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 (at [70]), per McHugh, Gummow Kirby and Hayne JJ. When construction of the clause is approached in that way the Applicant submits that subclause (4) would be interpreted to "turn off" subclause (2) for present purposes. To that end, the Court would need to read subclause (4) to mean any lots in any existing or proposed strata plan. It is submitted that such an interpretation accords with the objective intention of the legislature as demonstrated by the objectives of the clause.
4. In making this submission the Applicant concedes that the words in the clause are ambiguous when read in isolation. And, while there is presently a Planning Proposal with the Department concerning the review of cl 4.1 Minimum subdivision lot size to clarify what is meant by "subdivision of individual lots in a strata plan or community title schemes" the Applicant accepts that this fact should be given no particular weight in my assessment of this application. The exhibited Planning Proposal (presently on hold) is in essence extrinsic information that cannot legally displace the meaning of the text, when read as a whole in context. However, it is submitted that the practical implications of the Council's interpretation of the clause belie common-sense. The Applicant submits that such a planning outcome cannot have been the intent of the legislature. It does not accept that the definition of "Subdivision of land" in s4B (2) (b) of the EPA Act which includes strata subdivision can be applied to the use of that word in cl4.1 when read in the context of the whole instrument. Relying on s6 of the Interpretation Act 1987 it submits that definitions applied to the construction of a clause need to be read except in so far as the context or subject matter otherwise indicates or requires. Despite that if the definition is applied to the text then when read in context the Applicant submits that the exemption in subclause (4) must include this strata subdivision.

The Council's interpretation of cl4.1

1. The Council maintains that resolution of the legal question requires a step by step analysis of cl 4.1. It invites me to approach the analysis of cl 4.1 as the Court did in Council of the City of Shoalhaven v Elachi [2015] NSWLEC 85 at [61]-[65] - like a "light switch": 1. Sub-clause (2) 'switches the clause on' ; 2. sub-clauses (3) and 3A are the operative provisions, and both the relevant here; 3. sub-clause (4) switches the clause off.
2. From a structure point-of-view, subclause (4) should appear after sub-clause (2), because if the sub-clause (4) switch is "turned off", no occasion arises from a consideration of subclauses 3 and 3A.
3. Therefore, the only question remaining in these proceedings is whether the subclause (4) 'switches off ' subclause (2), so as to produce the result that there is no minimum subdivision lot size control applicable to the Applicant's application for the dual occupancy development, or for any similar application on other land in the local government area.
4. The Council submits that the Applicant's construction of the clause means that any applicant of a development could effectively overcome the minimum subdivision lot size control applicable to a dual occupancy development by proposing strata subdivision if the applicant's argument is accepted.
5. That said, the Council accepts that policy consideration cannot replace the clear words of the instrument. In advocating its position the Council relies on the definition of subdivision contained in s4B (2) (b) of the EPA Act which includes strata subdivision. When that definition is applied to the words "subdivision of any land" in cl4.1 (2) of WLEP it means that cl4.1 applies to the proposed strata subdivision.
6. Accepting that cl4.1 applies then subclause (3) prescribes that the size of lots resulting from "a subdivision of land" is not less than the minimum size shown on the Lot Size Map in relation to that land.
7. The minimum lot size as shown on the Lot Size Map in relation to the subject land (which is zoned E4 Environmental Living) is 650m2. The parties agree that at least two of the proposed lots resulting from "a subdivision of land" in this application are in the order 300m2. They are less than the minimum lot size prescribed by cl4.1 (3) of WLEP. For that reason, the Council submits that the proposed strata subdivision is prohibited development.
8. The Council rejects the Applicant's reliance on subclause (4) to opt out of or "turn off" the operation of subclauses (2) and (3).
9. It submits that the words in subclause (4) clearly state that the subclause only relates to the "subdivision of individual lots in an existing strata plan". In this case the proposal is not in respect of the subdivision of individual lots in an existing strata plan. Rather, the Applicant seeks approval to create a new 3 lot strata subdivision. Only after registration can the proposed strata subdivision constitute a strata plan.
10. The Council submits that a natural reading and application of subclause (4) is such that in the circumstances of this case, it does not switch off subclause (2).
11. Nor can the Applicant seek a variation of the development standard in cl 4.1 under cl4.6 because subclause (6) precludes consent for a subdivision under this clause on this site which is zoned E2 Environmental Living.
12. The Council contends that the Court must apply the words of the clause and not import extra words to achieve the meaning contended for by the Applicant. The policy rationale for subclause (4) is not a matter for interpretation or comment by the Court in this case.
13. Accordingly, the Council invites the court to approve the dual occupancy development, but under section 80(4) of the EPA Act declined to approve the strata subdivision component of the application.

Consideration

1. The research undertaken by the parties, notes there is little authority on the interpretation of the development standard in cl4.1, apart from the recent decision Flower v Lane Cove Council [2017] NSWLEC 1135. And, while the Council endorses the outcome of Flower it does not embrace all of the Court's reasoning. Having considered that decision and the significantly earlier cases referred to therein and whilst achieving a similar outcome my reasoning on the particular facts of this case is as follows.
2. It is appropriate to summarise briefly the approach that the Court takes to the interpretation of subordinate legislation. The WLEP is a species of delegated legislation: King GEE Clothing Company Pty Ltd v Commonwealth (1945) 71CLR 184; [1945] HCA 23 at CLR 195). When interpreting delegated legislation the same principles of statutory construction apply as apply to legislation: Collector of Customs v Agfa- Gevaert Limited (1996) 186 CLR 389; [1996] HCA 36 (at CLR 398).
3. First, the ordinary and grammatical meaning of the provisions to be construed will usually correspond with the legislative intention and will be the meaning adopted in the construction of a statute: Project Blue Sky at [78]. That said, it is well established that a statute must be construed as a whole and so as to provide that each of its terms are intended to give effect to harmonious goals. The Applicant quite properly advocates this approach when interpreting cl4.1 in this case.
4. It is also accepted that a definition is no more than an aid to the construction of the statute: Gibb v Federal Commissioner of Taxation (1996) 118 CLR 628; [1966] HCA 74 at CLR 635. Moreover, the meaning of a definition turns on the context in which it appears considered as a whole: Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379; [2006] NSWCA 155 at [39]. Such an approach has been reaffirmed by the Court of Appeal in Bay Simmer Investments Pty Ltd v State of New South Wales [2017] NSWCA 135 at [74] per Leeming J. "Recognising that the rule of construction in the Interpretation Act (like the others in the Act) only applies "except in so far as the contrary intention appears in this Act or in the Act or instrument concerned" (s 5(2), a safer guide to construction is to have regard to the sense of the provision as a whole".
5. Accepting the fact that subordinate legislation is perhaps less carefully drafted and less keenly scrutinised than primary legislation: Heatscape Pty Ltd V Mahoney [2017] NSWCCA 135 at [39] the words in subclause (4) relied upon by the Applicant when read in the context of the whole are clear and their ordinary meaning makes plain the fact that the exemption does not relate to a proposed strata subdivision. As Mr Nash of Counsel submits the exemption to compliance with cl4.1 is explicit. Subclause (4) provides that cl4.1 does not apply in relation to the subdivision of individual lots in a strata plan. The case at hand does not involve an application for the subdivision of individual lots in a strata plan. A strata plan comes into existence when the requirements of the Strata Schemes Development Act 2015 have been satisfied. In my considered opinion there is no doubt that the reference in subclause (4) is to an existing strata plan.
6. Regrettably, I must agree with the Council's interpretation of the clause as it does not import words into the subclause but reflect the clear and ordinary meaning of the text. I accept that s11 of the Interpretation Act requires me in this case to rely on the definition of "Subdivision of land" in the EPA Act in the absence of a definition in the instrument. Applying that definition to the use of the word "subdivision" in cl4.1 I must find that the clause includes a proposed strata subdivision and the exemption in subclause (4) only applies to subdivision of individual lots in an existing strata plan.
7. The Applicant's interpretation of subclause (4) requires a redraft of the subclause to import the additional words "…any lots resulting from a subdivision under a proposed strata plan" in order to overcome the minimum subdivision lot size control prior to the creation of the strata plan which creates the strata lots. The Court cannot delete, add to or rephrase the words in subclause (4) but must apply the clause based on its naturel reading in context. If that is done I agree with the Council that the proper construction of the instrument is that subclause (4) does not switch off subclause (2) in the circumstances of this application.
8. Accordingly, I have decided to approve of the dual occupancy development, but under s80 (4) of the EPA Act decline to approve the strata subdivision component of the application. In coming to this decision I appreciate that adopting a subdivision minimum lot size referrable to land for each lot for this strata subdivision - at 650m2 - would require the lot in the strata plan to have the same area of an allotment of land intended to accommodate both the building and its curtilage. The Applicant submits that such a planning outcome cannot have been the intent of the legislature however; a different outcome in my opinion is not available on the current draft of the clause. This is not a case where two meanings are open in statutory interpretation and it is proper to adopt a meaning that avoids consequences that appear irrational and unjust and produces a fairer and more convenient operation so long as it conforms to the legislating intent: Cooper Brookes (Wollongong) v Federal Commissioner of Taxation (1981) 147 CLR 297 at [320]. To me the words are intractable and lead to the result indicated. They are not ambiguous and the provision must be given its ordinary and grammatical meaning in the present circumstances. In the ultimate I must accept that the policy rationale for clause is not a matter for interpretation or comment by the Court in this case.

Directions

1. The parties are directed to provide to the Court the final conditions of consent and the amended plans within 7 days of the date of these reasons for judgment, and if those matters are agreed, I will make final orders in chambers.

Addendum

1. The Court Orders 1. Appeal is upheld so far as it approves the development of a dual occupancy on land at 15A Hart Street, Lane Cove in accordance with the plans and conditions in Annexure A. 2. Otherwise the appeal directed to the subdivision of the land is dismissed. 3. Exhibits returned ………………………... Commissioner Dixon 41951.17 Dixon (C) (214 KB, pdf)

Amendments 26 July 2017 - Addendum enters. Orders made. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 July 2017