Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council [2025] NSWLEC 46 | Case summary | Zoe

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Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council

[2025] NSWLEC 46

Land and Environment Court (NSW)|2025-05-13|Before: Pritchard J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2025-05-13

Before

Pritchard J

Catchwords

APPEAL — s 56A Land and Environment Court Act 1979 (NSW) appeal from
decision of a Commissioner — proper characterisation of purpose of
proposed development — whether a
“water reticulation system”

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Catchwords

APPEAL — s 56A Land and Environment Court Act 1979 (NSW) appeal fromdecision of a Commissioner — proper characterisation of purpose ofproposed development — whether a“water reticulation system”within the meaning of the State Environmental Planning Policy (Transport andInfrastructure)2021 (NSW) and/or “water storage facility” withinthe meaning of the Wingecarribee Local Environmental Plan 2010 (NSW)(WLEP)— whether “light industry” within the meaning of WLEP —appeal dismissed

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council [2025] NSWLEC 46

Hearing dates: 6 August 2024

Date of orders: 13 May 2025

Decision date: 13 May 2025

Jurisdiction: Class 1

Before: Pritchard J

On 10 December 2021, Council wrote to the appellants stating that development proposed under the DA was not permissible. On 24 December 2021, the appellants provided Council with legal advice from its solicitors, Holding Redlich, in support of the permissibility of the DA.
On 13 January 2022, NSW Land Registry Services issued a water access licence reference 440054 associated with work approval number 10CA123289 to Paul Edwards under s 87B of the Water Management Act 2000.
On 1 March 2022, WaterNSW provided concurrence to the DA under Chapter 8 of the State Environmental Planning Policy (Biodiversity and Conservation) 2021 (NSW) (since repealed on 20 November 2022) (the water approval).
On 30 March 2022, WaterNSW confirmed to Council that the proposed development did not require a change of use to the water approval for the use of the existing bores on the site.
On 11 October 2022, Council determined the DA by way of refusal.
On 27 March 2023, under Division 8.2 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), the appellants lodged with Council an application for review of Council’s determination to refuse the DA.
On 30 March 2023, the appellants filed a Class 1 application appealing Council’s determination, being proceedings 2023/103591 (the first instance proceedings).
On 31 July 2023, the appellants filed a notice of motion seeking leave to amend the DA to rely on additional and amended plans and documents. On 4 August 2023, Deputy Registrar Orr granted leave to the appellants to amend the DA to rely on additional and amended plans and documents (the amended DA).
On 15 November 2023, WaterNSW confirmed its concurrence to the amended DA.
Between 28 and 30 November 2023, the Commissioner heard the first instance proceedings, and on 12 April 2024, handed down the primary judgment.
At [47] of the primary judgment, the Commissioner made the following finding in relation to the manner in which the development was proposed to be carried out:

The appellants submitted that the relevant question of law related to the proper characterisation of the proposed development for which consent was sought, and that any error which was material to the Commissioner’s finding that the proposed development was prohibited was sufficient to vitiate her ultimate decision.
The Commissioner found that the proposed development was for the purpose of “light industry”, rather than a “water reticulation system” or “water storage facility” (primary judgment at [42]-[62]). The Commissioner erred, the appellants submitted, in characterising the development proposed as “light industry”. The proposed development was submitted to be for the purpose of a “water reticulation system” within the meaning of SEPP (T&I) and/or “water storage facility” within the meaning of the WLEP, and permissible with consent. The appellants submitted that the Commissioner misdirected herself or asked the wrong question in concluding that the purpose of the proposed development was “for the production of extracted groundwater that can be made suitable for consumption” (primary judgment at [58]), despite having correctly found that the actual use that the water would be later put to after transport was irrelevant (primary judgment at [45], [59]).
The evidence before the Commissioner was that:
the water would “pass through a filtration and disinfection system before being stored in the holding tanks”;
the “system is not designed for bottling purposes nor is it intended to be”; and
the “focus is solely on providing a safe and reliable means of exporting water as a raw material”.
The appellants submitted that the proposed development did not involve any “industrial process” because the extracted groundwater remained extracted groundwater, as a raw material. The omission of “extraction” from the list of processes in the definition of “industrial activity” in the WLEP was significant as the WLEP delineates between industry involving raw materials (rural industry, extractive industry and mining), and industry involving the processing of raw materials (industry that involves “industrial activity”).
The proposed use of a filtration system was submitted to be ancillary and subservient to the dominant purpose of water storage. The proposed system is not one that processes raw groundwater into a different product which was submitted to be the essential feature of any industrial activity. The proposed development was not a factory to produce water, to carbonate water, to mix water into soft drink, or “even” to bottle water. Apart from the ancillary filtration system, the proposed development was “simply for the extraction and handling of a non-potable raw product (water)”, [10] which would subsequently be “transported offsite”. It was not an industrial activity, and whatever industrial activities in order to produce and bottle the final product (mineral water) were proposed to be conducted off-site, such activities were off-site, as the Commissioner held at [59] of the primary judgment and irrelevant to the characterisation of the proposed development.
The appellants referred to the Commissioner’s finding (primary judgment at [60]) that the pumping and piping of water from the bores to the existing tank, the filtration of the water, and the pumping and piping of the water to the proposed tank system from which the water was capable of being extracted to fill water tanker trucks were all for the purpose of “production” of the water “product”. While groundwater may be a primary product, [11] that was not to say that the water would undergo any industrial process so as to become a product of that process. Aside from filtration, which is ancillary to storage, the other aspects of the proposed development referred to by the Commissioner were all “squarely” outside the concept of “production”. In BHP Billiton Iron Ore Pty Ltd v National Competition Council [12] (BHP Billiton) the High Court held at [37] that the ordinary meaning of the phrase “production process” is “the creation or manufacture by a series of operations of some marketable commodity”.

In relation to Ground 1, having considered also Grounds 2 to 5 and the parties’ submissions in relation to them, I find, as held by the Commissioner, that as a matter of characterisation the proposed development meets the definition of “light industry” in the WLEP, and was therefore prohibited on land zoned C3 under the WLEP. The appellants have identified no error of law, or question of law within the meaning of s 56A(1) of the LEC Act. In particular:
I am not satisfied that the proposed development ought properly be characterised as a “water reticulation system” permissible with consent on any land pursuant to s 2.161 of SEPP (T&I), or a water storage facility, being a use permissible with consent on land zoned C3 under the WLEP. In any event, I am not satisfied that the appellants have identified any error of law in the Commissioner’s conclusion (at [58]) that the purpose of the proposed development was “for the production of extracted groundwater that can be made suitable for consumption”.
It is true, as the appellants submitted, that the extracted groundwater would remain extracted groundwater. However, I do not consider that the Commissioner erred or asked herself the wrong question in concluding at [58] that the purpose of the proposed development was for the production of extracted groundwater that can be made suitable for consumption, and hence properly characterised as within the definition of “light industry” in the WLEP (and hence within the definition of “industry”, being a prohibited use on the C3 zone).
It is likewise correct, as the appellants submitted, that the system was not designed for bottling purposes. However, it is artificial to suggest that the proposed use of a filtration and disinfection system before the water was to be stored in the holding tanks is ancillary and subservient to the dominant purpose of water storage. The appellants have not suggested how the filtration of the water as it is proposed to be pumped from the existing tanks to the proposed storage tanks system is ancillary and subservient to the storage of the water in the proposed tank system. I am not satisfied that the Commissioner erred in finding at [60] that the pumping and piping of water from the existing approved licensed bores to the existing tank, the filtration of the water, and the proposed tank system from which the water was capable of being extracted to fill water tanker trucks were all for the purpose of the production of extracted groundwater that can be made suitable for consumption. The appellants have not identified how a development in which all the proposed buildings and activities are directed to this purpose is “squarely” outside the concept of “production”, and not to be characterised as light industry.
As the chief judge held in Chamwell at [57], the characterisation of the purpose of a development involves, largely, questions of fact and degree. At [43] of the primary judgment the Commissioner cited Chamwell at [36], and correctly applied the approach set out by the chief judge in characterising the purpose of the development proposed here, namely “light industry” and hence prohibited on land zoned C3 under the WLEP. The appellants have not made out Ground 1 in their seven grounds of appeal.
I find no error of the kind alleged by the appellants in their seven grounds of appeal.

Although “reservoir” is not defined, the appellants said that it was not in dispute that the relevant water storage tanks fell within the ordinary meaning of the term “reservoir”.
Further, the appellants submitted, the Commissioner correctly found, consistent with authority, [13] that “storage” can include temporary storage of water pending its transfer to another place for another purpose (primary judgment at [45]). However, the Commissioner went on to conclude that “the storage is so transient that it forms part of a system that serves a different purpose” (primary judgment at [49]). Nowhere does the Commissioner explain how “transient” storage differs from “temporary” storage, or how that distinction (if there be one) is contemplated by the definition of “water storage facility” in the WLEP.
The appellants submitted that the Commissioner erred in construing the word “storage” in a way that is inconsistent with both the ordinary meaning of the word, and the statutory text and context in which the word is used. They referred to authority for the principle that it is “of fundamental importance that limitations and qualifications are not read into a statutory definition unless clearly required by its terms or its context”. [14] No such requirement, it was submitted, arises in this case to warrant the qualification of storage with a duration for which the storage must occur, namely that storage must not be “transient”.
Further, the appellants submitted, the ordinary meaning of “storage” connotes some future use or application, [15] but does not specify when such a future use has to occur. In Grafil, Preston CJ of LEC said at [191] in relation to the storage of waste that the ordinary meaning of the storage of waste can include the temporary storage of the waste pending transfer to another place to be used for another purpose. To import a requirement that the storage be for any particular period of time, would also be “nonsensical” in the context of the relevant land use definition more broadly. A dam or reservoir does not cease to be a water storage facility simply because it is collecting water that is, at the same time, being drawn out for irrigation of other land. [16]

When read in context, Council submitted, it is clear that the Commissioner was considering the overall question of identifying the purpose, or purposes, served by the various activities comprising the development, as required by Chamwell, Foodbarn and other relevant authorities. Council submitted that the appellants “fixate” on the use of the word “transient” which appears three times in [49]–[50] of the primary judgment, seeking to suggest that the Commissioner imported a requirement that storage, for the purpose of characterisation, not be “transient”. This, Council said, ignored the overall context and fell into “nitpicking, uncontextualised analysis”. In context, the Commissioner was not qualifying the term “storage”, but commenting that to the extent that storage occurs within the system, it is for a short period and is “but a step” in the overall process of extracting and producing water that is then transported off-site. The Commissioner was answering the question posed at [48] of the primary judgment by stating that the storage use is not a primary, independent use which the other activities serve, but that the storage use serves another purpose.
Council submitted that any system which holds or transports a substance “stores” it for some period of time. For example, water running from water mains in the street and into a house is stored temporarily in the pipes until it flows out of the taps. It may be stored for a number of days, depending on the capacity of the system and the volume of use by the house. However, even though the term “storage” is capable of encompassing temporary storage, the temporary storage of water within the pipes of a house is unlikely to be considered a separate purpose of the use of the land on which the pipes are situated. The Commissioner’s description of the storage as “transient” is to be understood in that context; namely that whilst storage occurs, such storage serves a broader purpose. That the term was used in a sense in relation to which persons might reasonably differ as to a matter of fact and degree did not in itself demonstrate an error of law.

In reply to Council’s submissions in relation to “transient” storage raised in Grounds 2 (and 3), the appellants submitted that Council’s assertion that the appellants engage in “nitpicking” and *“*uncontextualized analysis” was incorrect since it is clear from the primary judgment at [49] that the Commissioner’s finding of “transience” of the storage was determinative of the characterisation of the proposed development, the Commissioner finding that:
the activities on the site, including the storage tanks and storage activities, do not serve the purpose of a “water storage facility” because the storage is so transient that it forms part of a system that serves a different purpose and cannot be considered the purpose itself; and
storage is “subordinate to the purpose served by that system as a whole” because “any storage within that system is transient”.
The appellants submitted that the example provided by Council at [72] in relation to the proposition that the presence of “storage” in a system does not prevent the system being for a purpose other than storage, is inapt and misleading since in the example of household water stored temporarily in water mains being other than for a primary storage purpose, there is no independent reservoir for the retention of water beyond the capacity of the mains pipe itself.
It was clear from the primary judgment at [50] that the Commissioner found that for the storage tanks to be “considered as something other than part of a system through which the daily volume of water passes”, their reserve capacity would need to be “sufficient”. In context, the Commissioner found that the “reserve capacity” or “reserve volume” was “minimal”, and therefore fell short of what was “sufficient” for the storage tanks to be “considered as something other than part of a system through which the daily volume of water passes”. The appellants’ reference to “insufficient reserve capacity” therefore did not degenerate into questions of fact and degree, but rather was apposite in light of the Commissioner’s own methodology relating to the characterisation of the nature of the development.

The appellants submitted that notwithstanding that “the time particular molecules of water spend in storage” was “irrelevant”, the Commissioner erred in inferring “transience” from the per day figures cited at [49] and [50] of the primary judgment. The effect of the Commissioner’s conclusion was that the water travelled directly from the pumps to the trucks, passing through the water tanks only transiently. That approach involved making findings without evidence, [17] or alternatively making findings contrary to the only conclusion which was reasonably open based on the facts (see in relation to Ground 6 below).
The evidence was that the existing bores are capable of extracting water at a rate 11,520L per hour, and each truck transporting water from the site would have a maximum capacity of 27,500L to 31,100L. Water would be transported from the site at a rate of 1 truck per hour, between the hours of 7:30 am and 2:30 pm or 3:30 pm, Monday to Friday.
The appellants submitted that this means that:
outside the hours in which trucks attended the site, groundwater would be extracted and stored;
during the operating hours of the trucks, water would be transported from the site at a rate faster than the rate at which groundwater would be extracted; and
accordingly, the storage of water is an essential feature of the proposed development as it allows for extracted water to be collected and stored, pending transportation from the site between the hours of 7:30am and 2:30pm or 3:30pm, Monday to Friday.
Further, the appellants referred to storage capacity of the existing tanks of 0.27ML, and that of the tanks proposed as part of the development of 0.2ML (primary judgment at [49]). While the water would pass through the existing tank to the proposed tanks, this would not reduce the water storage capacity on the site to 0.2ML, contrary to the Commissioner’s finding in the primary judgment at [49]. Rather, there would be a capacity to store more than twice the volume of water proposed to be transported from the site on operational days (that is, the transport of 0.2475ML to 0.2488ML per day from the site, calculated on the basis of truck volume and number of trucks proposed per day). This was not a system with “minimal reserve volume”; rather, the proposed development would have reserve volume, and clearly perform a storage function.

In relation to Ground 3, Council repeated its submissions in relation to Ground 2, and made the following further submissions.
Ground 3 “fixate[d]” on aspects of the language used by the Commissioner, shorn of context, and sought to demonstrate “via mathematics” that there was “some lack of evidentiary base”. This did not identify any clear error, let alone a material one. Rather, the ground “degenerate[d]” into an argument over matters of fact and degree.
The Commissioner’s findings in relation to duration of storage did not concern whether such storage meets a statutory definition. Nor were the Commissioner’s findings directed to whether or not the proposed development would perform a storage function. As the primary judgment at [48] makes clear, the Commissioner accepted that one of the activities occurring on site would be storage. The real purpose of the primary judgment at [49]–[51] was to consider whether that storage activity is, of itself, the independent purpose served by all activities on site.
The same, Council submitted, could be said in relation to the reserve capacity of the tanks. The appellants’ complaint was one of “labelling”, as the Commissioner clearly understood how the system would be configured, and the assertion that there was some error in the Commissioner’s calculations of volume in the primary judgment at [49] was simply incorrect having regard to the primary judgment at [51].
In relation to the issue raised by the appellants concerning the use of the term “minimal” to describe the reserve capacity, given that the Commissioner correctly identified the relevant figures, the description of that capacity was of no moment. In relation to the issue raised by the appellants concerning “insufficient reserve capacity”, the Commissioner did not use that term. At [50], the Commissioner said that the tanks “do not have sufficient reserve capacity to be considered as something other than part of a system through which the daily volume of water passes.” This was not a finding that the capacity was “insufficient”, but that the capacity relative to daily passthrough volume was a factor which leads to the conclusion that the storage tanks serve another purpose.

Essentially, Ground 3 raises the same issue as Ground 2, namely, the Commissioner’s finding in relation to the duration of storage of water on site. In relation to Ground 3, I find that the appellants have failed to identify any error in the Commissioner’s findings in relation to the duration of the storage of water on the site. Rather, as Council submitted, the ground is one about matters of fact and degree. In [49]–[51] of the primary judgment, the Commissioner was concerned with whether the storage activity on the site was the independent purpose served by all activities on site.
Likewise, in relation to the reserve capacity of the tanks, I accept that the Commissioner understood how the system was proposed to be configured, and that having regard to the primary judgment at [51], the appellants have identified no error in the calculations in the primary judgment at [49].
At [49] of the primary judgment, the Commissioner identified that the existing tank (which holds water prior to passing through the filtration system) has a capacity of 0.27ML, and the proposed new tank system (which is to hold water after it passes through the filtration system) a capacity of 0.2 ML. The Commissioner clearly appreciated that this produces a total capacity of 0.47ML (primary judgment at [51]). When [49]–[51] are read together, the Commissioner found that whether one has regard to the tanks as two separate components (at [50]), or as a single facility with a capacity of 0.47ML (at [51]), in each case storage is not such as to constitute an independent purpose, but is subordinate to the overall purpose of the system proposed to be implemented on the site.
Similarly, in relation to the issue raised by the appellants concerning the use of the term “minimal” to describe the reserve capacity, I am satisfied that the Commissioner identified the relevant figures and that her finding that the tanks “do not have sufficient reserve capacity to be considered as something other than part of a system through which the daily volume of water passes “was a finding which, as the respondent submitted, led to the conclusion that the proposed storage tanks serve another purpose.
The appellants have identified no error in relation to the volume of water proposed to be stored on site. Ground 3 distracts from the issue which is the true complaint of the appellants; that is, the characterisation of the purpose of the proposed development. I do not consider anything to turn on the Commissioner’s use of the words “transient”, “brief”, “minimal” or “sufficient” reserve capacity, or there to be any legal error otherwise evinced in the Commissioner’s reasons in this respect.
I find no error of the kind alleged by the appellants in Ground 3 of their seven grounds of appeal.

The appellants submitted that the Commissioner made a finding that the proposed development as a whole was not for the purpose of a “water reticulation system” on the basis that although water reticulation forms part of the proposed activities and system as a whole, it was not “the end purpose of the system” (primary judgment at [52]). The appellants submitted that a “water reticulation system” is a species of “water supply system”, [18] and accordingly that the reference to development for the purpose of “water reticulation systems” in s 2.161(1) of SEPP (T&I) includes any of the development types listed in s 2.159(6) of SEPP (T&I) which include, inter alia, reservoirs (s 2.159(6)(a)) and access ways (s 2.159(6)(d)). The Commissioner erred in not finding that the proposed development is permissible with consent as a “water reticulation system” given that:
extraction and transportation of water including through pumping and pipes are explicitly covered by the concept of “transport of water” in the definition of “water reticulation system”, supported by reference to the definition of “pipes” and “pumping stations” in the Dictionary to the Standard Instrument;
storage of water in the proposed water storage tanks is “explicitly covered” by the concept of “water supply reservoirs” given that the water will be stored for the purpose of “supply” until the trucking of water off-site, the parties being in agreement that the tanks constitute a “reservoir”; [19]
the definition of “water reticulation system” is broad enough to extend to the export of water from the site as the substantive part of the definition involves a use of a building or place for the transport of water (without limitation of any kind), and the export of water from the site “on any view” involves using the site for the transport of water;
the export of water is, in any event, ancillary to the storage of water as “otherwise the water would remain there permanently”;
ultraviolet filtration of water is clearly ancillary to the storage and transportation of water and, to the extent there be any doubt, is clearly permissible where more intrusive “dosing facilities” are permissible; and
the access route contemplated as part of the proposed development, and its use to transport water, is both ancillary to the overall “water reticulation system” use, but also covered by the associated types of development listed in s 2.159(6) of SEPP (T&I).
Thus, the appellants submitted, once it is appreciated that the proposed development falls within the definition of a “water reticulation system”, it was incumbent on the Commissioner to determine the permissibility issue in the appellants’ favour because of the effect of the paramountcy provision in s 2.7(1) of SEPP (T&I).

In relation to Ground 4, Council submitted that the appellants’ “real complaint” was that the Commissioner should have found that the proposed development was a “water reticulation system” within the meaning of SEPP (T&I). This submission was also relevant to Ground 2 of Council’s notice of contention.
As to paragraph (a) of Ground 4, Council submitted that an error of the kind alleged did not appear in the primary judgment. The Commissioner identified s 2.161 of SEPP (T&I) at [11] of the primary judgment, and whilst not referring to s 2.7, it was clear that the Commissioner considered, correctly, that if the development was for the purpose of a “water reticulation system”, it would be permissible with consent. However, the Commissioner found that it was not for that purpose.
As to paragraph (b) of Gound 4, the appellants’ submissions did not identify how any matter in s 2.159(6) of SEPP (T&I) to which the Commissioner should have specifically adverted compelled a different conclusion.
Therefore, Council submitted, Ground 4 reduced to paragraph (c) which was essentially an argument that the proposed development should have been characterised as a “water reticulation system”. As a matter of characterisation, the definition of “water reticulation system” could not be read on its own, but needed to be read together with other definitions in the relevant planning instruments, namely SEPP (T&I) and WLEP. In particular:
both SEPP (T&I) and WLEP identify three types of “water supply system”: water reticulation systems, water storage systems, and water treatment facilities. In SEPP (T&I), the definition of “water reticulation system” is expanded to include water supply reservoirs;
the term “water supply reservoirs” is not defined, but Council did not contend that the tanks that form part of the development were not capable of being “reservoirs”. It was unclear, however, whether the tanks proposed in the development were “water supply reservoirs”;
the Commissioner concluded that the overall development was not for the purpose of a “water storage facility”. This finding would stand if Grounds 2 and 3 were not upheld;
the definitions of “water reticulation system” and “water treatment facility” should be read in tandem, the definition of “water reticulation system” focusing on a building or place used for the transport of water, including built infrastructure which transports water, and also dosing facilities;
therefore, a facility that “doses” water (which connotes the addition of substances, such as fluoride) falls within the definition of “water reticulation system”. However, a facility that “treats” water, including storage facilities, falls within the definition of “water treatment facility”. At the very least, the filtration and disinfection system which forms part of the proposed development is more properly described as a “water treatment facility”, even if the storage tanks could be said to fall within the scope of the term “water reticulation system”; and
whilst the proposed storage tanks themselves and associated connecting pipes might be capable of falling within the definition of “water reticulation system”, the filtration and disinfection component would not. There was no evidence to support the appellants’ assertion that ultraviolet filtration of water is clearly ancillary to storage and transportation of water. Nor was there anything in the definition of “water reticulation system” indicating that ultraviolet filtration was permissible.
In applying SEPP (T&I), Council submitted, whilst that instrument rendered development for the purpose of a water reticulation system permissible, it did not render development permissible for other purposes; in particular, whilst s 2.159 rendered permissible development for the purpose of a water treatment facility in a number of circumstances (whether specifically as a water treatment facility in subsection (4), or as a type of water supply system in other provisions), none of those circumstances were applicable here. Whilst s 2.161 of SEPP (T&I) would be sufficient to overcome the prohibition in the WLEP on development for the purpose of a water reticulation system, it did not render permissible: (a) development for the purpose of industry which is expressly prohibited under the WLEP, or (b) development for the purpose of a water treatment facility which is prohibited as an innominate use under the WLEP.
Council referred to the Commissioner’s finding at [52] of the primary judgment that whilst part of the overall development comprised a water reticulation system, that was not the overall “end purpose” of the proposed activities on the site. The Commissioner ultimately found at primary judgment [53] that the purpose of the development was “industry” on the basis that (a) the purpose of the development was the production of mineral water, being extracted groundwater that can be made safe for consumption (at [54]-[58] of the primary judgment); and (b) the system and activities all met the definition of “industrial activity” under the WLEP (at [60]-[62] of the primary judgment).
Unless the proposed development were not for a prohibited purpose (being “industry”, or even “water treatment facility”), it does not assist the appellants if, in part, it were for the purpose of a “water treatment facility”. Consistent with Pet Carriers and Foodbarn, s 2.7 of SEPP (T&I) does not have the effect of rendering permissible development for purposes prohibited under the WLEP merely because of “an association” with development for a permissible purpose.
Further, Council referred to the appellants’ submission that the definition of “water reticulation system” extends to “export of water from the site”; that is, the off-site trucking movements which were part of the development for which consent was sought. The definition of “water reticulation system” in the Dictionary to the WLEP refers to a “building or place” used for the transport of water, and in the list of what is “included” are various physical structures fixed in place, not activities conducted away from such a building or place. In contrast, Council submitted, trucking movements are activities not confined to a building or place (or to the land), but extending from the land to other places. The Commissioner’s conclusion at [52] of the primary judgment was correct.
Therefore, Council submitted, Ground 4 was not made out, but even if it were, in order to be material, the Court would also need to conclude that the development was not for some other prohibited purpose. In other words, the appellants would also need to succeed on Ground 5 (concerning the Commissioner’s finding in relation to the definition of “industrial activity” in the WLEP).

In relation to Council’s submission that the definitions of “water reticulation system” and “water treatment facility” should be read “in tandem”, the appellants submitted that there was no such requirement in SEPP (T&I) or the Standard Instrument. That is, they submitted, there could be a reticulation system without treatment, and a treatment system without reticulation. It was clear that a water storage system with ancillary ultraviolet light treatment and filtration to remove elements not constitutive of water and to prevent bacterial growth and silt build-up in the storage tanks was not what was contemplated by the definition of “water treatment facility” in the Dictionary to the WLEP which refers to development “such as” a desalination plant or a recycled or reclaimed water plant. The proposed development was not such development either in function or in scale.
Further, the appellants submitted in reply, ultraviolet filtration of water is clearly ancillary to the storage of water, and “could not possibly be said” to be an independent use of land. Such filtration removes elements not constitutive of water, and exportation of that water from the site would not comprise a “water treatment facility”. This was supported by evidence that the “system guarantees the removal of any particles that may be present in the ground, ensuring the water is clean and free from impurities.”
The appellants submitted that Council contended for an approach whereby the proposed use of the site should be characterised through a “meticulous examination” of the details of a process that would occur. Rather, the exercise of characterisation should be undertaken at “a level of generality which is necessary and sufficient to cover the individual activities, transactions and processes carried on” not “in terms of the detailed activities”. [20] In this regard, it was clear from the reference to “a building or place used for the transport of water” in the definition of “water reticulation system” in the Dictionary to the WLEP, that the definition was sufficiently broad to extend to the export of water from a building or place to which pipes reticulate water for eventual use on or off a site. The proposed development was “precisely” such a use, being a “building” which is “used” for the “transport of water” by way of off-site trucking, following storage within a reservoir, being the water storage tanks.
Finally, in relation to Ground 4, the appellants submitted that Council’s submissions subverted the hierarchy of planning instruments dictated by s 2.7 of SEPP (T&I). The authorities relied on by Council (Pet Carriers and Foodbarn) did not concern the interplay between planning instruments where the superior instrument makes certain development permissible, and the inferior instrument makes certain development prohibited. The task for the Court is to ascertain whether the proposed development can be characterised as falling within the use made permissible in the superior instrument, or is a use ancillary to such use. If it can, then any prohibition in the inferior instrument is “set aside”. Accordingly, the appellants submitted, as all aspects of the proposed development are properly characterised as a “water reticulation system” (including reservoirs) or development ancillary to a water reticulation system, whether part of the proposed development might also be characterised as “industry” is irrelevant.

In relation to Ground 4, I find as follows:
An error of the kind alleged by the appellants in paragraph (a) of Ground 4 does not appear in the primary judgment. It is clear that the Commissioner considered that if the development was for the purpose of a “water reticulation system”, it would be permissible with consent. However, the Commissioner found, on the evidence before her, that it was not for such a purpose.
In relation to paragraph (b) of Ground 4, the appellants have not identified how any matter in s 2.159(6) of SEPP (T&I) to which the Commissioner should have adverted suggested, let alone, compelled a different conclusion.
In relation to paragraph (c) of Ground 4, I am satisfied that the Commissioner held correctly (and made no error of law in finding) that whilst one of the activities carried out as part of the overall development was water reticulation, the definition of water reticulation system was not sufficiently broad to extend to the export of water from the site. The Commissioner held correctly (and made no error law in finding) that to otherwise characterise the purpose of the use by reference to only one aspect of the system would fail to be at the level of generality sufficient to cover all of the works and activities on the site: Chamwell at [36]. As the chief judge held at [32] in Pet Carriers, it is insufficient to establish permissibility simply by asking whether development can be characterised as for a purpose identified as being permissible with consent. The inquiry is whether the development can be characterised as being for a purpose that the instrument identifies as being permissible without consent, or as being prohibited. To be permissible, development must be both for a permissible purpose, and not for a prohibited purpose.
Nor do I accept the appellants’ submission in reply that Council departed from an appropriate level of generality in the characterisation of the proposed development, nor that Council seeks to have the Court subvert the hierarchy of planning instruments dictated by s 2.7 of SEPP (T&I). The Commissioner, and Council in its submissions here, correctly identified the task for the Court as being to identify whether the proposed development can be characterised as falling within a use made permissible by the SEPP, relevantly a water reticulation system, or as a use ancillary to such use.
The appellants have not made out Ground 4 of their seven grounds of appeal.

Council said that paragraph (a) of Ground 5 of the notice of appeal (namely, the Commissioner misdirected herself in applying the definition of “industrial activity” in the WLEP by taking into account the purpose of the development, being for the production of mineral water) was also relevant to Council’s notice of contention insofar as Council contends that the use to which the water extracted and transported from the site would be put was relevant to applying the definition of “industrial activity” (contrary to the primary judgment at [45], [59]).
In relation to the purpose of the development, Council submitted that an element of the definition of “industrial activity” is that various things are done in respect of goods, substances, food, products or articles for commercial purposes, and that the purpose for which things are done is “inherently relevant” to the application of that definition, and is also connected to the Chamwell inquiry in relation to the overall end being served by the development. In particular, it would be sufficient to exclude proposed activities from being characterised as an industrial activity if it could be demonstrated that the activities were not for commercial purposes. As the onus is on the applicant for consent to establish permissibility, if the appellants wished to avoid a conclusion that its development is for the purpose of an industrial activity, it could have done so by limiting the use of the water produced and exported to non-commercial purposes. It did not do so.
With reference to the evidence before the Commissioner, Council submitted that there was evidence that: (a) the water was being dispatched to bottling facilities off-site; (b) the extraction, storage and export of water from the site was for production of “mineral water” or “spring water”; and (c) one purpose of the filtration and disinfection system was to produce potable water, safe for consumption straight from the tap.
The appellants’ submission that apart from the ancillary filtration system, the proposed development was “simply for the extraction and handling of a non-potable raw product (water)” reduced to saying that the development was simply for the production of a non-potable product, apart from that aspect which rendered the product potable. It was submitted to be misleading for the appellants to “profess ignorance” as to the activities which might be required off-site to produce and bottle the final product (mineral water) as the Hydroilex report referred to the management of the facility in a way consistent with the production of “high quality” mineral/spring water. The SEE noted that the treated water produced on site was being dispatched to remote bottling, not production facilities.
Further, Council referred to a list of processes which a product may undergo which would satisfy the definition of an industrial activity, relevantly, production, altering, transforming, processing, and adapting of any goods, substances, food or products – any of which is capable of capturing the activities proposed on site. There was no requirement that the good, substance, food or product which leaves the site be in its final form, the definition of industrial activity not excluding an activity merely because the product which leaves the site may undergo further transformation off-site. It was also significant that a processed product that may undergo further processing or transformation may be itself a commercial product; for instance, mineral water might be sold in bulk to a person who bottles the product, maybe adding flavouring or other substances, and on-selling it. That later processing in no way excluded any earlier processing from falling within the scope of the term “industrial activity”.
In relation to Ground 5 of the grounds of appeal and Ground 1 of the notice of contention, Council referred to the Commissioner’s finding at [60] of the primary judgment that “[o]n the evidence, the production of the water is for commercial purposes, because it is capable of turning a profit”. Thus, despite rejecting the relevance of the ultimate off-site use of the exported water, the Commissioner nonetheless found that the activities proposed to be carried out on site were for a commercial purpose. Given that the question of whether the purpose of the activity on site is commercial is an aspect of the definition of “industrial activity”, the Commissioner should have had regard to that matter.
In relation to the Commissioner’s finding that the extracted ground water was a “product” of a “process”, Council submitted that there was no need for the purpose of the definition of “industrial activity” to find that it was a “product” of a “process”. None of the above, Council submitted, meant that the definition of industrial activity is not satisfied unless there is a “product” of a “process”. While Council did not cavil with the Commissioner’s finding that there was “production” of a “product” (potable mineral water), a finding to the contrary would not mean that the proposed development was incapable of meeting the definition of “industrial activity”. On the evidence, the extracted water was to be “altered”, “transformed”, “processed” or “adapted”.

In reply, the appellants submitted that the two authorities cited at [29] of the primary judgment, Liauw v Gosford City Council [21] and Waterland Blue Mountain Natural Water Pty Ltd v Blue Mountains City Council, [22] supported their submission that groundwater is a primary or raw product, and did not assist Council in establishing that the proposed development is an “industrial activity” that leads to “production” of water.
The appellants submitted that consistently with those authorities, water extracted from a bore is a “primary” product, the extraction of which cannot constitute an “industrial activity” as defined in the WLEP. The application of ancillary ultraviolet light treatment and basic filtration to remove elements which are not constitutive of water does not reasonably constitute an “industrial activity”, any more than it would constitute a “water treatment facility” use.
Further, the word “production” in the definition of “industrial activity” must be understood eiusdem generis with the other words in the definition, all of which indicate the application of a process to transform one good, substance, food product or article into a product through application of an “industrial” process. Likewise in relation to the other words in the definition of industrial activity relied on by Council, namely “altering”, “transforming”, “processing” and “adapting”. Contrary to Council’s submission, an “industrial activity” requires more than any alteration of a good or substance. Something more in the nature of an industrial process is required. It is permissible in some circumstances to have regard to the language used in a defined term to construe the definition. Owners of “Shin Kobe Maru” v Empire Shipping Company Inc [23] at 419 does not “lay down some inflexible rule to the contrary”.
The appellants submitted, in reply, that Council’s assertion that there is no requirement in the definition of “industrial activity” for the various activities of production, processing, transforming or similar to occur on site must be wrong. A facility for the storage of raw materials for transport to a factory could not itself be an “industrial activity”, any more than a coal mine could itself be an energy or steel production facility on the basis that it stockpiles coal for thermal or coking purposes.
The appellants submitted that Council sought to approach the task of characterisation by erroneously working backwards from the definition of “industrial process” to construe the use of the site as being for “light industry”, thereby looking beyond the site to identify a “commercial use” occurring on another piece of land to make good its assertion that the proposed development is for the purpose of “light industry”. In characterising the development the subject of the amended DA, it was only relevant to consider the development proposed on the site. Leaving aside SEPP (T&I), even if the proposed development were properly characterised as some form of “industry”, as well as a “water storage facility”, it would not be prohibited because:
having regard to cl 2.3(3)(b) of the WLEP, a reference in the land use table to a “water storage facility” (a building or thing) did not include a reference to a type of building or other thing referred to separately in the land use table in relation to the same zone such as “industries” (including “light industry”); and
in any event, by reference to the maxim g**eneralia s**pecialibus n**on d**erogant, the specific provision (“water storage facilities” which are permissible in the zone) overrides the more general provision (“industries” which are prohibited in the zone).

I have above addressed the appellants’ submissions in relation to Ground 1 which they repeat in relation to Ground 5.
In relation to the additional matter submitted in relation to Ground 5, namely that resolution of the anterior question does not involve any consideration of the ultimate use to which the water is proposed to be put off-site (the anterior question being whether the definition of “industrial activity” in the WLEP first requires there to be “manufacturing, production, assembling, altering, formulating, repairing, renovating, ornamenting, finishing, cleaning, washing, dismantling, transforming, processing, recycling, adapting or servicing of, or the research and development of, any goods, substances, food, products or articles”), I find as follows.
The definition of industrial activity contains the following elements:
the activity must relate to “goods, substances, food or products”;
the activity must involve any of a list of activities which relevantly include production, altering, transforming, processing, or adapting of the item at (1) (not merely production); and
the activity must be for commercial purposes.
In addition, the definition encompasses storage or transportation associated with the activity.
I find, as submitted by Council in relation to Ground 1 of its notice of contention, that the use to which water extracted and subjected to filtration and disinfection on site and transported from the site would be put is relevant to applying the definition of industrial activity: cf the primary judgment at [45], [49].
The use of water produced and exported from the site for commercial purposes is relevant to the characterisation of the proposed activities as an industrial activity, as well as being an element of the definition of industrial activity as to the Chamwell inquiry in relation to the overall end being served by the development. As held by the chief judge in Chamwell at [57], the task of characterising the purpose of a development involves, largely, questions of fact and degree. There was evidence before the Commissioner that the water was being dispatched to bottling (not production) facilities off-site, and that the extraction, storage and export of water was for the production of high quality mineral/spring water and that one purpose of the filtration and disinfection system was to render the extracted ground water potable. The appellants’ submission to the effect that the proposed activities amount to no more than the extraction of water from a bore disregards the filtration and disinfection to occur on site. Likewise, their analogy with the stock piling of coal at a coal mine is inapposite.
I find that there is no requirement in the definition of “industrial activity” in its application to the activities proposed here that the goods, substances, foods or products which leave the site be in their final form, or that there may not be some further altering, transforming, processing or adapting the water off-site. That is implicit in the part of the definition of “industrial activity” which provides “and includes any storage or transportation associated with any such activity”. The appellants’ approach is one which disregards the element of the definition of “industrial activity” which concerns any storage or transportation associated with any such activity which can occur at another location.
Finally, I do not consider the appellants’ reliance on the principle of generalia specialious non derogant to have any present application in circumstances in which the question raised by Ground 5 of the appellants’ grounds of appeal and Ground 1 of the notice of contention is the proper characterisation of the purpose of the overall end being served by the development, not the relationship between provisions within a land use table in an LEP.
I am satisfied that on the evidence before the Commissioner, the proposed activities were readily capable of satisfying the definition of industrial activity in the WLEP. That is another reason for affirming the decision of the Commissioner, but on a ground other than those relied on by the Commissioner in dismissing the appellants’ Class 1 application appealing Council’s refusal of the DA.
The appellants have not made out Ground 5 of their seven grounds of appeal. If it be necessary, I would affirm the decision of the Commissioner for the reasons advanced in connection with Ground 1 of the notice of contention.

In relation to Ground 7, Council submitted that the issue of the scale and rate of water extraction was raised in Council’s written submissions before the Commissioner. In particular, in its written submissions:
at [5], Council set out the holding capacities of the existing tank, and the four proposed tanks (which information came from the DA);
at [16], Council noted in the fifth bullet point that water stored in the new tanks would only be stored “temporarily”;
at [27], Council raised the issue that the entire quantity of water extracted would be removed from the site for bottling; and
at [29], Council raised the issue of the quantity of water being extracted, treated and transported from the site.
Further, in its oral submissions, Council referred to the large quantity of water and stated purpose of the use, albeit in reference to satisfying the definition of “industrial activity”, rather than specifically in relation to “storage”. As to the rate of dispatch of water in tankers, there was evidence in relation to the capacity of the tankers. The appellants did not complain that any of the factual integers in the Commissioner’s consideration was, in fact, incorrect. Nor did the appellants cite any authority for the proposition that a “judicial officer” is required to raise with the parties the specific use to which the “judicial officer” might intend to put certain evidence. The broader issue of the correct characterisation of the development with reference to the relevant planning instruments, and the evidence, was clearly identified.
Further, Council submitted, the appellants had not identified any argument that they were denied the opportunity to raise, save for the arguments put in support of Grounds 2 and 3, both of which were ventilated in this s 56A appeal. Even if the appellants were denied procedural fairness by the Commissioner (which was denied), the ability for the appellants to put its arguments before me would cure any unfairness.

Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council

At a glance

Court

Decision date

Before

Catchwords

Source

Email me a plain-English summary of this case

Catchwords

Judgment

JUDGMENT

Introduction

Grounds of appeal

Council’s notice of contention

Factual background and the Commissioner’s findings

Relevant planning instruments

Standard Instrument (Local Environmental Plans) Order 2006 (NSW)

SEPP (T&I)

WLEP

Relevant legal principles

Section 56A appeals

Proper characterisation

Evidence

Grounds of appeal and notice of contention

Ground 1: proper characterisation of the proposed development

Appellants’ submissions

Council’s submissions in relation to Ground 1

Conclusion in relation to Ground 1

Ground 2: error in the interpretation of “water storage facility”

Appellants’ submissions in relation to Ground 2

Council’s submissions in relation to Ground 2

Appellants’ submissions in reply in relation to Ground 2

Conclusion in relation to Ground 2

Ground 3: error in findings regarding storage of water

Appellants’ submissions in relation to Ground 3

Council’s submissions in relation to Ground 3

Appellants submissions in reply in relation to Ground 3

Conclusion in relation to Ground 3

Ground 4: error in finding that the proper characterisation of the development was not a “water reticulation system”

Appellants’ submissions in relation to Ground 4

Council’s submissions in relation to Ground 4

Appellants’ submissions in reply in relation to Ground 4

Conclusion in relation to Ground 4

Ground 5: error in interpretation of definition of “industrial activity” in the WLEP

Appellants’ submissions in relation to Ground 5

Council’s submissions

Appellants’ submissions in reply in relation to Ground 5

Conclusion in relation to Ground 5

Ground 6: error in finding that the proposed development was prohibited on the site

Appellants’ submissions in relation to Ground 6

Council’s submissions in relation to Ground 6

Conclusion in relation to Ground 6

Ground 7: failure to afford procedural fairness

Appellants’ submissions in relation to Ground 7

Council’s submissions in relation to Ground 7

Appellants’ submissions in reply in relation to Ground 7

Conclusion in relation to Ground 7

Notice of contention

Ground 1 of the notice of contention: “industrial activity” and “commercial purposes”

Council’s submissions in relation to Ground 1 of the notice of contention

Appellants’ submissions in relation to Ground 1 of the notice of contention

Conclusion in relation to Ground 1 of the notice of contention

Ground 2 of the notice of contention: “water treatment facility and/or a water supply system”

Council’s submissions in relation to Ground 2 of the notice of contention

Appellants’ submissions in relation to Ground 2 of the notice of contention

Conclusion in relation to Ground 2 of the notice of contention

Costs

Conclusion and orders

Endnotes

Parties

Legislation Cited (5)

Cases Cited (13)