Endo Technik-Nord Pty Ltd v Kiama Municipal Council

Land and Environment Court (NSW)|2012-08-27|Before: Pain J

Judgment 1This is an appeal under s 56A of the Land and Environment Court Act 1979 on a question of law from the decision of the Commissioner in relation to three appeals the subject of Endo Techik-Nord Pty Ltd v Kiama Municipal Council [2012] NSWLEC 1096. The nature of the appeals is explained at [1] as follows:

Appeal No 10953 of 2011 is an appeal against the refusal of a development application by Kiama Municipal Council (the council) for a cottage industry.
Appeal No 10516 of 2011 is an appeal against a s 121B Order issued by the council on 16 May 2011, requiring the demolition of the existing timber stairs and viewing platform.
Appeal No 11138 of 2011 is an appeal against the refusal by the council to issue a building certificate in relation to the existing timber stairs and viewing platform. 2The ground identified in the summons commencing the appeal filed on 15 May 2012 states: The Court erred in determining that the proposed use was not a cottage industry within the meaning of the Kiama Local Environmental Plan 1996 (the LEP) in that the Court: (a) Failed to consider the applicant's unchallenged expert town planning evidence that the use was properly characterised as a cottage industry. (b) Wrongly determined that the proposed use, or part of the proposed use, did not involve a 'manufacturing process' within the meaning of the Factories, Shops and Industries Act 1962 and thereby was not an 'industry' and therefore could not be a 'cottage industry' within the meaning of the LEP. (c) Wrongly construed part (a) of the definition of cottage industry in finding that the proposed use would not be conducted, in part, on "land adjoining the land owned by that person". (d) Wrongly construed part (b)(iv) of the definition of cottage industry in finding that the proposed use involved the "employment" of two or more persons other than residents of the dwelling. 3Endo Technik-Nord Pty Ltd, the Appellant, accepted that it must succeed on all parts of the ground of appeal in order to obtain a finding that the activity proposed is a cottage industry and therefore permissible with development consent. Particulars (a) and (c) are linked and should be considered together. The ultimate issue is the characterisation of the Appellant's development and whether this is a cottage industry under the terms of the Kiama Local Environmental Plan 1996 (the LEP). The parties agreed that the determination of that issue determines all three appeals. 4The Appellant tendered a bundle of all documents relevant to the appeal. 5The Commissioner identified the relevant parts of the LEP at [13] - [14]. Cottage industry and industry are defined relevantly in cl 6(1) as: 13 Clause 6 of LEP 1996 provides the following relevant definitions: cottage industry means an activity carried out under the following circumstances: (a) the activity is carried out within a dwelling or the curtilage of a dwelling occupied by the person carrying on the activity or on land adjoining the land owned by that person, (b) the activity does not: (i) interfere with the amenity of the locality by reason of the emission of noise, traffic, vibration, smell, fumes, smoke, vapour, steam, soot, ash, dust, waste water, waste products, grit, oil or otherwise, or (ii) involve exposure to view from any public place of any unsightly matter, or (iii) require the provision of any essential service main of a greater capacity than that available in the locality, or (iv) involve the employment of more than two persons (whether as apprentices, employees, students of arts and crafts activities, or trainees) other than residents of the dwelling, or (v) involve the exhibition of any notice, advertisement or sign (other than a notice or sign not exceeding 1 metre by 0.6 metre exhibited on that dwelling to indicate the name and occupation of the resident thereof), (c) the activity is in character with the scale and ambience of other activities within the immediate area, (d) any goods offered for sale have been produced on the site of the activity,... industry means: (a) any manufacturing process within the meaning of the Factories, Shops and Industries Act 1962, or ... 14 The Factories, Shops and Industries Act 1962 defines the term "manufacturing process" as: any handicraft or process in or incidental to the making, assembling, altering, repairing, renovating, preparing, ornamenting, finishing, cleaning, washing, breaking up, or adapting of any goods or any articles or any part of an article for trade or sale or gain, or as ancillary to any business.... 6Such development is permissible with consent on the Appellant's land, over which there are two zones of 1(a) rural and 7(e) rural environmental protection (hinterland), the latter is accepted by the parties to be an area of high conservation value. Permissible purposes in areas of high conservation value, including cottage industries, are very limited under cl 37 of the LEP. The dwelling from which the activity will be conducted is on land zoned rural. No particular issue arises in relation to its use in this appeal. If not part of a cottage industry, the timber stairs and viewing platform constructed without development consent on another part of the Appellant's land are prohibited as that is in an area of high conservation value.

Statement of Environmental Effects 7The Commissioner sets out parts of the Statement of Environmental Effects (SEE) prepared in support of the development application at [6] as follows: 4.1 Cottage Industry The Rose Valley Retreat cottage industry is proposed to operate from the site in tandem with the existing agricultural use of the land to graze Wagyu cattle. The cottage industry will be a low intensity small scale business which will focus on nature, meditation, well-being and spirituality. It will be carried out by the Applicant from the existing dwelling house. As part of the program, participants will also experience the natural attributes of the site from various outdoor locations. By way of example, the Applicant proposes to create a landscaped labyrinth (not involving any construction) for walking-centering meditation behind the existing dwelling house on the way to the steps and viewing platform which will form part of the meditative journey. An example of what the landscaped labyrinth could ultimately look like is depicted in Photograph 1. The purpose of the cottage industry is to: ·Offer an experience of relaxation, meditation, spirituality and well-being from a location rich in natural attributes and beauty. ·Assist participants to develop skills in relaxation, meditation, spirituality and well-being so that they can carry these skills into their own lives. ·Enable participants to express themselves creatively in the form of art, poetry, storytelling etc through the inspiration provided by the natural beauty of the site. ·Educate participants about the Gerringong area's history and culture including Aboriginal stories, art and spirituality. The proposed program includes day courses from concentrated two hour experiences to whole day experiences. Courses are proposed to be operated on demand on weekdays and weekends as required by participants. The nature of the cottage industry is such that the courses will be infrequent and irregular. Indeed it is expected that only one course per month will be conducted. The proposed cottage industry will involve small groups of participants (no more than 10 - 15 in any one session), many of and are expected to travel to and from the site in shared cars. 4.2 Stairs and Viewing Platform The stairs and viewing platform have been constructed in the north western corner of Lot 103 DP 561082 to provide access to part of the site which is steeply sloping terrain near the naturally occurring waterfall. It is noted that a beneficial consequence of the improved access arrangements is that they will facilitate weed monitoring and removal in the vicinity of the waterfall. In this regard, it is noted that since purchasing the site several years ago, the current owner has already conducted extensive weed management activities elsewhere on the site. The staircase has been constructed in an elevated timber boardwalk style with open tread steps typical of access-ways provided in National Parks. The structure has been built on piers using galvanised steel footings secured in concrete which has been poured into spaces between the rock boulders. The structure has been built using radiata pine treated with Tanahth E and wax emulsion. The stairs and platform which provide access to enable the tranquillity of the waterfall to be enjoyed are proposed to be used by participants in the Rose Valley Retreat Cottage Industry as part of the relaxation, meditation, spirituality and well-being program. The platform is intended to be used by participants for peaceful reflection and creative expression (painting, drawing and writing) in a setting rich in natural attributes. Use of the stairs and platform in the manner proposed is considered to be ancillary to the cottage industry land use. 8There is no criticism of the Commissioner's summary of the principles applicable to characterisation of a development as follows: 32 The general approach to characterisation for planning purposes is best set out by Preston CJ in Chamwell Pty Limited v Strathfield Council (2007) 151 LGERA 114, for a supermarket, where His Honour includes the relevant cases and relevantly states (at 27 and 28): 27 In planning law, use must be for a purpose: Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534-535 and Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council (1993) 80 LGRA 173 at 188. The purpose is the end to which land is seen to serve. It describes the character which is imparted to the land at which the use is pursued: Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534. 28 In determining whether land is used for a particular purpose, an enquiry into how that purpose can be achieved is necessary: Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493 at 499-500. The use of land involves no more than the "physical acts by which the land is made to serve some purpose": at 508. 33 His Honour further relevantly states (at 33 to 36 and 45): 33 The fact that the nature of the uses of different components or parts of the development may vary is not necessarily of importance. Obviously, the only part of the proposed development that will have a use of the specific nature of supermarket is that part of the building which incorporates the supermarket. The nature of the uses of other parts of the building, such as the car park, driveways, access ways, and landscaped forecourt, is different. 34 However, the nature of the use needs to be distinguished from the purpose of the use. Uses of different natures can still be seen to serve the same purpose: see Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534, 535 and Warringah Shire Council v Raffles (1978) 38 LGRA 306 at 308. 35 In this case, the use of the car park, driveways, access ways and landscaped forecourt are each designed to serve the end of enabling the supermarket to be carried on. That is their purpose and that purpose imparts to the land on which those uses are pursued the character of shop, including the supermarket. The end to which the parts of the land in Lot D is to serve is not roads. 36 The characterisation of the purpose of a use of land should be done at a level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on, not in terms of the detailed activities, transactions or processes: Royal Agricultural Society of NSW v Sydney City Council (1987) 61 LGRA 305 at 310. ... 45 The characterisation of the purpose of development must also be done in a common sense and practical way... 34 The general thrust of the findings in Chamwell is that the characterisation must focus on the purpose of the land. This must be done at a level of generality and in a commonsense and practical way that is sufficient to include the individual uses that make up the purpose. While there may be a number of different uses, these different uses may still serve the same purpose. 9The Commissioner principally found as follows: 39 In considering the competing submissions, I am satisfied that the submissions of Mr Moggach that the proposed use is not a cottage industry should be accepted for a number of reasons. 40 First, I do [not] proposed [sic] to rely on the evidence of the town planners for the characterisation of the proposed development as greater weight should be given to the legal submissions from the parties given the legal nature of the task of characterisation. As pointed out in the cross examination of Mr Biondich, characterisation needs to be undertaken at a level of generality and in a commonsense and practical way that is sufficient to include the individual uses that make up the purpose. As set out in Chamwell (at 34), the nature of the use needs to be distinguished from the purpose of the use. Uses of different natures can still be seen to serve the same purpose. The exercise of characterisation carried out by Mr Biondich did not reflect this approach and as such his evidence, on characterisation should be disregarded. 41 Second, I agree that a cottage industry must be an industry. There can be no other conclusion, given that the definition of industry specifically excludes only one form of industry from the definition of industry, that being an extractive industry. It follows that as a cottage industry is not excluded from the definition of industry then it must also satisfy the definition of industry, particularly the definition of "manufacturing process". While it was stated in the Baden affidavit that some products may be produced and may be sold as part of the process of developing skills in relaxation, meditation, spirituality and well-being, no specific details were provided on the type or number of goods likely to be sold. This submission of Mr Moggach that this part of the development application appeared to be afterthought as it was not included in the original SEE should not be ignored. [challenged in particular (b)]. 42 Third, I do not accept that the proposed development satisfies part (a) of the definition in that 'the activity is carried out within.... the curtilage of a dwelling" for that part of the application relating to the stairs and viewing platform. [not challenged] 43 Mr Biondich and Ms Sheppard identified the areas they considered to be the curtilage of the dwelling. The area identified Mr Biondich included the area around the dwelling whereas Ms Sheppard identified a larger area around of the dwelling but also included an extension in an easterly direction to include the 200 m walkway and the stair and viewing platform structure. In a planning context, the term curtilage can have different meanings. For example, similar heritage buildings may require different curtilages depending on their relative significance or relationship with other buildings. In this case, I am satisfied that the term curtilage should be given a more restrictive meaning. If a cottage industry is to be carried out within a dwelling, it could reasonably inferred that if the activity was to be conducted outside the dwelling then it should be within a reasonable distance from the dwelling, in much the same way as the landscaped labyrinth is located near the dwelling. Considering the different areas identified by Mr Biondich and Ms Sheppard, I agree with Mr Biondich as the start of the stairs is some 200 m from the dwelling on the site. This area also generally accords with the Macquarie Dictionary definition relied on by Mr Moggach. 44 As I understand there was no dispute that the proposed development satisfied the requirements in part (a), with the exception of the existing stairs and viewing platform. 45 While there was some discussion on that section of part (a) relating to "on land adjoining the land owned by that person", I would agree that its meaning is not overly clear however as the stairs and viewing platform are located on the same allotment of land as the dwelling, it has limited, if any relevance in this case. [challenged in particulars (a) and (c)] 46 Fourth, I do not accept that the proposed development satisfies part (b)(iv) of the definition in that it involves the employment of more than two persons (whether as apprentices, employees, students of arts and crafts activities, or trainees) other than residents of the dwelling. I agree with Mr Moggach that the word "employment" within part (b)(iv) of the definition must be given a broader meaning than simply the engagement of a person for payment in a working environment, given that part (b)(iv) includes students and trainees within the meaning of employed persons. In this context, it is difficult to disagree with the submission of Mr Moggach that the proposed 10 - 15 participants are appropriately included as "students or trainees" for the purposes of the definition. I accept that the definition envisages no more than two additional persons (other than residents of the dwelling) being involved in the cottage industry. [challenged in particular (d)] 10Before the Commissioner, the Appellant relied on the affidavit of Ms Baden, director and secretary of the Appellant, dated 10 February 2012. Ms Baden is the proponent of the proposed activity, which is separate from the farm stay business currently conducted from the separate residence located approximately 500m from the main dwelling. 11Ms Baden said the activity proposed which she described as a cottage industry will operate in the following manner: (a)there will be day courses held on a demand basis on week days and weekends and there will be on average one course per month. (b)participants will travel to and from the site by private transport but participants can be transported to and from the local railway station. (c)participants will convene in the allocated room within the main dwelling house where there will be a brief introduction followed by relaxation and group meditation. (d)participants will then undertake personal meditation in the allocated room or the curtilage of the dwelling or on adjoining land. These areas will include the landscaped labyrinth, the stairs and viewing platform where the participants will be encouraged to express themselves creatively, such as composing poetry, creative writing, photograph, painting and sketching. (e)facilitators will instruct participants in the Aboriginal arts of weaving and painting. All courses will be tailored to specific interest groups. (f)Ms Baden will produce for sale written instructional guidance manuals on meditation techniques and its history, creative writing, composing poetry and relaxation techniques. (g)facilitators will produce for sale instructive material relative to their expertise such as sketching, photography and painting. Items produced by the participants and facilitators will be made available for sale. 12It is Ms Baden's intention that the course will help participants learn, meditate, and assist them with feeling good about themselves creatively.

Manufacturing process (particular (b)) 13The Appellant argued that the Commissioner wrongly held at [41] that the proposed activity did not involve a manufacturing process as defined in the definition of industry in cl 6 of the LEP. It relies on the SEE and the affidavit of Ms Baden summarised above, where these refer to the production of various goods for sale. The Appellant submitted that if the activity meets the definition of a manufacturing process as defined in the LEP, as the production of goods for sale does, it is a cottage industry. That definition is the sole determinant of whether the activity is a cottage industry in this case. The Council argued more broadly that in order to be a "cottage industry" the activity must first be an industry as the term inherently requires. As the purpose of the activity is the provision of classes to facilitate relaxation, meditation and spiritual awareness, which is clearly not an industry, the definition of cottage industry cannot be met. 14As the Council submitted, and the Commissioner identified at [32] - [34], a use or uses must be for a purpose, and it is necessary to characterise the purpose. The purpose is the end to which the land is seen to serve. The Appellant submitted that the purpose of the activities of relaxation and the production of goods for sale was to conduct a cottage industry. That is a circular and self-serving argument given that the only way the existing stairs and viewing platform can remain is if I find they are to be utilised as part of a cottage industry. No other form of industry is allowed in an area zoned for rural environmental protection, as provided in cl 37 of the LEP. To describe the purpose as being a cottage industry is to apply a description at too general a level to be helpful in identifying the purpose per Chamwell Pty Limited v Strathfield Council [2007] NSWLEC 114; (2007) 151 LGERA 400 at [36] citing Royal Agricultural Society of NSW v Sydney City Council (1987) 61 LGRA 305 at 310. Nor does that submission grapple with the nature of the uses proposed by the Appellant. 15Characterisation should be done in a commonsense and practical way, per Chamwell at [45]. The Appellant's submissions focus exclusively on one use which satisfies an aspect of the definition of manufacturing process being any handicraft or process of making any goods for trade, sale or gain as definitive of the purpose of the activity. The evidence of the multiple uses does not sustain that submission as being the purpose of the land served. 16I agree with the Council's submissions that it is necessary to look at the proposed uses and ask what is the purpose which they are intended to serve, and then ask is that purpose an industry as defined in the LEP. There are a number of uses identified by the Appellant. The purpose served by these is not the production of goods, which activity appears in the definition of manufacturing process relevant to cottage industry, but the purpose of facilitating meditation and relaxation exercises and spiritual development of course participants. That is clear from the SEE and the affidavit of Ms Baden. That is not an industrial purpose. I agree with the Council that the purpose is not properly characterised as an industry and therefore cannot be a cottage industry. 17Nor can the Appellant rely on the part of the definition of manufacturing process stating "...or ancillary to a business" in relation to the area of high conservation value for the reasons given by the Council. Only limited, defined purposes are specified as permissible in cl 37 and business is not one of these. If the industry is said to be ancillary to a business which is not permissible within the zone, then the activity is prohibited, per Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 328 per Mahoney JA (Cripps JA agreeing in a separate judgment, Meagher JA dissenting). The Appellant responded that business does not have a technical meaning and only means an activity for commercial gain, which is not a nominate use. I disagree with the Appellant given the context of this definition in the LEP. 18No legal error in the reasoning of the Commissioner at [4] has been established. The Appellant is unsuccessful in relation to this particular.

Employment of two persons (particular (d)) 19The definition of cottage industry specifies in par (b)(iv) that it must not employ more than two people in addition to the residents of the dwelling where the cottage industry is to be conducted. The Appellant said that the common usage of employment means engaged in the conduct of, here facilitating, an activity. It does not include the course participants. The Appellant criticised the Commissioner's conclusion at [46] that it does employ more than two people because he incorrectly construed employment as not meaning paid employment. The example in the definition of students of arts and crafts should not be elevated, as it is by the Council's approach, to override the defining characteristic of employment. All the relationships between the examples of persons named and the person conducting the activity is from the perspective of the user not the customer. Employment must have more work to do than if construed so that it means no more than involved in. Support for such an ordinary and natural interpretation is to be found in Conde v Brisbane City Council (1979) 39 LGRA 9 (china painting classes held to be a permissible home occupation) and Duggan v Blacktown City Council (1993) [1993] NSWLEC 211; 81 LGERA 446 (a ballet school in an extension separate from the dwelling house held to be a "home activity"). The Council submitted that employment in the definition should not be so narrowly construed but clearly applies to all persons whether facilitators (maximum two in addition to Ms Baden) or the 10 to 15 students who are involved in the activity. 20The Appellant's submission as to the usual meaning of employed essentially relies on such a construction being the self-evidently common usage meaning of employment in this context. Without further support for such a contention it is not clear why that is the case. Employment can have a range of meanings depending on its context. As the Council submitted the definition of cottage industry is reflective of an activity whereby any persons referred to in the definition are engaged in the activity and not participants in a process, here a course on relaxation and meditation conducted by someone else. The end to be served is the purpose, here activities of meditation and relaxation exercises and spiritual development conducted through courses. Participation of paying customers is employment or the conduct of that activity, in the context of the definition of a cottage industry. That means the limit on the numbers of persons permitted to be employed in the activity is exceeded by the proposed activity. 21The construction of words in an LEP are usually highly dependent on their context in that instrument. Consequently the decisions of Conde and Duggan relied on by the Appellant as supporting a finding that participants in the classes of china painting and ballet respectively are not employed in that activity provide no assistance as those cases were considering different definitions in different instruments. 22No legal error in the reasoning of the Commissioner in [46] has been established. The Appellant is unsuccessful in relation to this particular.

Land adjoining the land owned by that person (particular (c)) 23The Appellant criticised the Commissioner's short finding in [45] on the basis that he appears to have adopted the Council's argument that "land adjoining the land owned by that person" in the definition of cottage industry in par (b)(iv) of cl 6(1) must mean a separate cadastral allotment. Further criticism is made that there is no reference in the judgment to the evidence of Ms Sheppard that adjoining does not mean a different allotment but should be interpreted as meaning adjoining the land of the dwelling and curtilage. 24It is strictly unnecessary to determine this ground as I have already found against the Appellant in relation to two other particulars, which means this appeal cannot succeed. The construction of the words "on land adjoining the land owned by that person" in the definition of cottage industry in cl 6(1) of the LEP is not immediately clear. It was considered by the Commissioner only because he found at [42] - [43] that the stairs and viewing platform were not within the curtilage of the dwelling. The parties proposed conflicting constructions at the original hearing. The Council's counsel proposed a third construction in this appeal, linking the meaning of adjoining land to the preceding reference to curtilage so that the curtilage extends beyond the land owned by the person into land adjoining the land owned by that person. I will not resolve this aspect of the Appellant's particulars.

Conclusion 25If not engaged in a cottage industry, the stairs and viewing platform are prohibited in the area of high conservation value. As the Appellant is unsuccessful in establishing legal error in the Commissioner's reasoning to that effect, this appeal is dismissed. Costs are reserved.

Orders 26The Court makes the following orders:

The appeal, matter no 10458 of 2012, is dismissed.
Costs are reserved. 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: 04 September 2012

(2007) 151 LGERA 400

(2007) 151 LGERA 114

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