Fitzpatrick & Anor v Council of the City of Lithgow & Ors

FIRST RESPONDENT Mr S Griffiths (solicitor) LEGAL REPRESENTATIVES: Pike Pike & Fenwick SECOND and FOURTH RESPONDENTS Mr A O'Sullivan (barrister) SOLICITORS Campbell Paton & Taylor THIRD RESPONDENT N/A

IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 41073 of 2003

20 May 2004 RONALD DAMIAN FITZPATRICK and CATHERINE JUDITH SHEAD Applicants v THE COUNCIL OF THE CITY OF LITHGOW First Respondent BELL RIVER HOMES PTY LIMITED Second Respondent HARTLEY MANAGEMENT PTY LIMITED Third Respondent DAVID ROY ARCHIBALD SANDEMAN and GRACE EMILY SANDEMAN Fourth Respondents Judgment Introduction 1. The Applicants, Mr Fitzpatrick and Ms Shead, are challenging a development consent granted by the Council to the Second Respondent, Bell River Homes Pty Limited, on 24 October 2002 for the erection of a dwelling at 22 Collits Place, Little Hartley ("the development consent").

2. The Applicants reside at a property, known as Kerosene Cottage, which adjoins 22 Collits Place, Little Hartley ("the land"). The Applicants have resided at Kerosene Cottage since 1997.

3. The Second Respondent lodged a combined development application/building construction certificate number 209/02 ("the development application") with the Council for Lot 14 in DP 851241, at 22 Collits Place, Little Hartley. Development consent was granted on 24 October 2002. The Third Respondent, Hartley Management Pty Limited, was the registered proprietor of the land at the time the development application was lodged with the Council and did not appear in these proceedings. I need not refer to it again. The Fourth Respondents, Mr and Mrs Sandeman, are the sole shareholders and directors of the Second Respondent.

4. The Applicants are seeking certain declaratory orders, an order requiring the demolition of the building work already done and an order restraining the Fourth Respondents from building any dwelling house on the land. The proposed development has been partially built by the Second Respondent but construction is halted following the issue of an interlocutory injunction by this Court on 12 September 2003.

5. The Applicants rely on the following four grounds as a basis for the relief sought: (i) that the proposed development constitutes "commercial premises" within the meaning of the Lithgow Local Environment Plan 1994 ("the Lithgow LEP") and, as such, is prohibited under the provisions of the Lithgow LEP ("the prohibited development ground"). (ii) that the Council failed to consider the heritage objectives contained in the Lithgow LEP in determining whether to grant consent to the Development application ("the heritage ground"). (iii) that the Applicants were denied natural justice by the Council as a result of the Council's failure to notify them of the Development application ("the notification ground"). (iv) that the proposed development will impact on the rural amenity, views and privacy enjoyed by the Applicants and will overshadow the Applicant's property ("the amenity ground").

The prohibited development ground 6. The Applicants allege that the development is a prohibited development under the provisions of the Lithgow LEP. The land is zoned Zone 1(c) Rural (Small Holdings) under the Lithgow LEP. The Lithgow LEP prohibits development for the purposes of "commercial premises" within Zone 1(c) Rural (Small Holdings). The Applicants argue that given the intended use of the proposed development is as a display home the proposed development is correctly characterised as "commercial premises" and, accordingly, is prohibited within the zone.

7. The development application states that approval is sought for the erection of a single storey dwelling for use as a display home. The development consent notes on its face that the proposed development is a "Dwelling (Display Home)". The plans which form part of the development consent depict a dwelling. The Applicants relied on the development application, the conditions of the development consent and the approved plan as establishing that the correct characterisation of the proposed development is as "commercial premises", being a display home, rather than the dwelling permissible under the Lithgow LEP.

8. The Lithgow LEP provides that single dwellings are allowed without development consent in Zone 1(c) Rural (Small Holdings) provided that there is a sewer available and the Council is satisfied that domestic waste water can be disposed of within the boundaries of the property. Assuming these requirements are met, it is clear that the proposed development would be permitted without development consent if intended for use as a dwelling rather than for use as a display home. The Lithgow LEP does not contain a separate definition of "commercial premises" but provides in cl 5 that the definitions contained in the Environmental Planning and Assessment Model Provisions 1980 ("the Model Provisions") are, with some exceptions which are not currently relevant, adopted. Clause 4 of the Model Provisions provides that: "commercial premises" means a building or place used as an office or for other business or commercial purposes, but does not include a building or place elsewhere specifically defined in this clause or a building or place used for a purpose elsewhere specifically defined in this clause. 9. Neither the Model Provisions or the Lithgow LEP contain a definition of the term "display home". The Model Provisions define "dwelling" to mean a room or suite or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile.

10. The principal decision relied on by the Applicants as to the characterisation of this type of development is Warringah Shire Council v Jennings Group Ltd (1992) 75 LGRA 402, a decision of the Court of Appeal. Jennings Group concerned a dwelling which, on the evidence, was intended to be used as a display home for a period before being sold for use as a dwelling. In Jennings Group the relevant local environmental plan was the Warringah Local Environmental Plan 1985 which, like the LEP currently under consideration, adopted the definition of "commercial premises" contained in the Model Provisions. Bannon J of this Court determined, at first instance, that the use of the dwelling as a display home was for a commercial purpose. Because the proposed development was also a "dwelling" within the meaning of the Warringah Local Environmental Plan it came within the exclusion contained in the definition of "commercial premises" namely, "does not include a building or place elsewhere specifically defined in this clause". A majority of the Court of Appeal held, adopting the reasoning of Glass JA in Food Barn Pty Ltd v Solicitor-General (1975) 32 LGRA 157, that the definition of "commercial premises" should be construed so as to exclude purposes which would otherwise be a species of that genus. Accordingly, the majority upheld the appeal against the decision of Bannon J and held that "commercial premises" includes all premises used for commercial purposes except those commercial purposes which were specifically defined elsewhere in the Warringah Local Environmental Plan. As "display home" was not specifically defined in the Warringah Local Environmental Plan, a majority of the Court of Appeal held that the proposed development was to be characterised as "commercial premises" under the terms of the Warringah Local Environmental Plan.

11. The Council and the Second and Fourth Respondents (collectively, "the Respondents") argued that the decision of the Court of Appeal in Jennings Group was not directly applicable in this case. The Respondents argued that the Court of Appeal in Jennings Group did not need to consider the finding of Bannon J at first instance that the use of the dwelling for the purposes of a display home was, in that case, for a commercial purpose. Accordingly, the Respondents argued that the decision of the Court of Appeal in Jennings G roup cannot be interpreted, as the Applicants seek to do, as holding that a display home is automatically a type of "commercial premises" but rather, that this must be determined on a case by case basis. The Respondents argued that the evidence presented to the Court in this case does not adequately prove that the proposed development is for "commercial purposes" so that the Applicants have not discharged the onus of proof placed on them.

12. Further, the Respondents argued that the provisions of the Lithgow LEP must be considered closely as these provisions may not be identical with the Warringah Local Environmental Plan considered in Jennings Group . The Respondents argued that the objectives of Zone 1(c) Rural (Small Holdings) as contained in the Lithgow LEP should be considered when examining the nature of the proposed activity to see if it is prohibited. In this regard, the Respondents particularly relied on objective (f) of Zone 1(c) Rural (Small Holdings) which aims: To allow development for a range of purposes which are compatible with the environmental capabilities of the land and which are unlikely to adversely affect land or other development in the vicinity or create unscheduled demand for service infrastructure. 13. The Respondents argued that the zone objectives suggest that it is intensive activities which put pressure on the natural environment or create a need for infrastructure which should be focussed on when deciding whether a development is prohibited within the zone. The Respondents submitted that the proposed development is not such an intensive activity.

14. The Second and Fourth Respondents also argued that the fact that the proposed development, unlike that considered by the Court of Appeal in Jennings Group , contains no "office" component is evidence that the proposed development is not to be characterised as commercial premises. The Respondents submitted that the fact that some commercial activity may take place does not suffice to support a characterisation of the proposed development as "commercial premises" when the dominant use of the proposed development is as a dwelling.

15. The Council also argued, based on the decision of Sugarman J in Scott's Provision Stores Pty Ltd v Sydney City Council (1965) 11 LGRA 380, that the use of the proposed development as a display home is severable from the commercial activity being conducted by the Second Respondent elsewhere. Further, the fact that there may be some commercial purpose associated with the use of the proposed development, in that people will attend the display home to assist them in deciding the type of home they may wish to build does not necessarily make the dwelling commercial premises. Similarly, the Council also argued that the use of the proposed development for "display" purposes is associated with and is ancillary to its use as a dwelling in that the persons who go there will be using it for dwelling purposes because it is being used to assist them to visualise a dwelling they may build elsewhere. Further, the Council argued that, to the extent that the use of the proposed development for the purposes of a display house was an independent use from the use of the proposed development as a dwelling, the use as a display home is permissible as an innominate use.

16. Finally, the Council relied on MLC Properties Pty Ltd v Camden Council (1997) 96 LGERA 52 to support its submission that, even if the use of the proposed development as a display premises was found by me to constitute "commercial premises" and hence, prohibited development, the conditions of the development consent dealing with the display home use could be severed and the development consent could continue to have effect as giving consent to a dwelling house. Finding on prohibited development ground 17. In my view, the Applicants have discharged their onus of proof and there is sufficient evidence for me to conclude that the proposed development should be characterised as commercial premises. While I have no evidence before me as to the nature of the business conducted by the Second Respondent or that the proposed development will incorporate an office, the clear inference which arises from the development application and development consent conditions is that the whole of the proposed development is to be used exclusively as a display home for an undefined period. The development consent is for a Dwelling (Display Home). The most relevant conditions which confirm the use as a display home are: (a) condition 3 of the conditions of the development consent limits the hours of operation of the proposed development to between 9am to 5pm seven days per week; (b) condition 4 requires the Applicants to ensure the amenity of the rural residential area is not affected; (c) condition 5 states that the management of the display home is to be reviewed by the Council within two years and the Council reserves the right to enforce compliance to manage the amenity of the neighbourhood; (d) condition 6 specifies that the use of the premises should be as a dwelling after use as a display home has ceased; and (e) condition 27 requires that there be a minimum of 12 car parking spaces for client parking.

While the Applicants have not adduced any direct evidence as to what a display home is it is well known, as confirmed by the contents of a document entitled "Department of Urban Affairs and Planning Circular No 24" which was tendered by the Council, that display homes are erected by companies engaged in the business of building houses to enable viewing by members of the public to determine if they wish to erect a similar house elsewhere.

I do not accept the Council's argument that its use as a display home is associated with its use as a dwelling because I consider that the purpose of the display home is to display a product, being a dwelling, to assist customers and potential customers in determining whether they wish to purchase a similar product from the Second Respondent. Accordingly, in my view, the Second Respondent will be using the proposed development for a commercial purpose.

There does not appear to be any basis for distinguishing this case from Jennings Group . As previously noted, the definition of "commercial premises" at issue in Jennings Group is the same as that in issue before me.

The Council's argument that the use of the proposed development for the purposes of a display home is severable from the dominant use as a dwelling is not applicable here where the whole of the proposed development will be used as a display home for an indefinite period, possibly two years. The Council submitted in the course of argument that there was nothing in the conditions attaching to the development consent which prevented the proposed development from being simultaneously used as a dwelling and as a display home. I do not regard it as likely that any person would choose to dwell in a house which was open for display purposes from 9am to 5pm daily, seven days per week. The Council referred to the use as a dwelling house as being for two years only but that is not apparent from the conditions of consent which contain no time limit on the use as a display home. I infer from the conditions of development consent that the building will not be used as a dwelling during the period in which it is being used as a display home. MLC Properties Pty Ltd v Camden Council does not apply in these circumstances.

I do not accept the Respondents' argument that the decision as to whether or not the proposed development is a prohibited activity must be determined in the light of the zone objectives. The issue is whether the definition of "commercial premises" is met by the proposed development. The definition of "commercial premises" contained in the Model Provisions is adopted by the Lithgow LEP and must be applied. The zone objectives can only be of assistance where there is ambiguity in the application of the definition to the proposed development. There is no such ambiguity here. Where the definition is clear, zone objectives should not be used to "read down" the scope of that definition.

I find that the use of the proposed development for the purposes of a display home is prohibited under the Lithgow LEP. The declaration sought by the Applicants in par 2 of their Class 4 application is that: … the development at 22 Collits Place, Little Hartley, is a prohibited development of commercial premises within Rural Residential Zone 1c under the provisions of the Council of the City of Lithgow Local Environment Plan 1944 [sic] For reasons I will deal with later in this judgment I do not think a declaration in precisely these terms is appropriate. A declaration that use of the dwelling for the purposes of a display home is prohibited is appropriate. Should the consequential relief sought by the Applicants be granted? 24. The relief sought by the Applicants is an order that the Second Respondent demolish the construction work already carried out on the land pursuant to the development consent and be restrained from carrying out further work. An order that the Fourth Respondent be restrained from proceeding with the building of a "dwelling house" on the same site is also sought. 25. The Second and Fourth Respondents argue that the Court should exercise its discretion to decline to grant such relief. Before determining that issue I will review the other grounds raised by the Applicants as my findings in relation to the other grounds are relevant to the exercise of the Court's discretion to grant relief. The heritage ground 26. The Applicants also allege that the First Respondent failed to: (a) consider the heritage objectives contained in cl 39 of the Lithgow LEP; (b) have regard to cl 40(5) of the Lithgow LEP; or (c) consult its appointed heritage adviser as to the impact of the development application in relation to cl 39(b) and (d) of the Lithgow LEP; in determining whether to grant the development consent. 27. The evidence relied on by the Applicants in support of these arguments was contained in two affidavits of Professor Jack, a heritage consultant. Professor Jack gave evidence in his affidavits to the effect that the village of Little Hartley, in which the land is located, is a rare example of a historic linear village and its heritage value is of state significance. Further, Professor Jack was of the view that the buildings known as Ambermere, the Harp of Erin, Meads Farm and Kerosene Cottage, which are located within Little Hartley, also each have a heritage value of state significance independent of that of the village itself. (a) and (b) failure of the Council to consider the matters required by cl 39 and 40 of the LEP 28. Clause 39 of the Lithgow LEP provides as follows: The heritage objectives of this Plan are: (a) to conserve the environmental heritage of the City of Greater Lithgow, (b) to better integrate heritage conservation into the planning and development control processes, (c) to provide for public involvement in matters relating to the conservation of the area's environmental heritage, and (d) to ensure that new development is undertaken in a manner that is sympathetic to, and does not detract from, the heritage significance of heritage items and their settings, as well as streetscapes and landscapes and the distinctive character that they impart to the City of Greater Lithgow. 29. Clause 40 of the Lithgow LEP relevantly provides that: (1) In respect of a building, work, place, tree, relic or land that is a heritage item, a person must not, except with the consent of the Council: (a) demolish or alter the building or work, (b) damage, despoil or destroy the place, tree, or relic, (c) erect a building on, or subdivide, the land. … (5) The Council may decline to determine a development application required by this clause unless it has considered a conservation plan explaining the heritage significance of the item and the impact of the proposed development on the significance of the item and its setting. 30. "Heritage item" is defined in cl 6 of the Lithgow LEP to mean "a building, work, relic, tree or place described in schedule 1" . It was not disputed by the parties that the Lithgow LEP, which contains a list of heritage items in Sch 1, does not list either Kerosene Cottage or any item on the land as heritage items. The essential argument of the Applicants was that the First Respondent had failed to carry out a duty imposed by s 73 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"), to update the schedule of heritage items in the Lithgow LEP following the preparation of the heritage study by Professor Jack which identified Kerosene Cottage as an item of rare state and aesthetic significance. Section 73 of the EP&A Act provides that: The Director-General shall keep State environmental planning policies and regional environmental plans, and councils shall keep their local environmental plans and development control plans under regular and periodic review for the purpose of ensuring that the objects of this Act are, having regard to such changing circumstances as may be relevant, achieved to the maximum extent possible. This failure to update the heritage schedule, it was said, resulted in a breach of cl 39 and cl 40. 31. The Applicants also argued that the Council had misled the Applicants into believing that their home was a heritage item and would have the protection afforded to heritage items under the Lithgow LEP. This argument is beyond the scope of these proceedings. No other argument was advanced in support of this ground by the Applicants.

Finding in relation to heritage grounds (a) and (b) 32. As Kerosene Cottage has not been included by the Council as a heritage item in Sch 1 of the Lithgow LEP, the provisions of cl 39 - 41 of the Lithgow LEP did not have any relevance to the determination by the Council of the development application. The argument which the Applicants seek to raise in relation to s 73 of the EP&A Act is beyond the scope of these proceedings, which are concerned with the validity of a development consent and not the general duties, if any, imposed on Councils pursuant to s 73. Accordingly, the Applicants must fail on their argument that cl 39 and cl 40(5) of the Lithgow LEP were not complied with by reason of any alleged failure on the part of the Council to consider the impacts which the proposed development will have on the heritage values of Kerosene Cottage. (c) the alleged failure of the Council to consult its heritage adviser 33. As to the argument that the Council failed to consult its heritage adviser, the Applicants sought to prove their argument by tendering a report prepared by Professor Jack in relation to the heritage significance of Little Hartley village and Kerosene Cottage. The opinion of Professor Jack that Kerosene Cottage and the village of Little Hartley have substantial heritage significance is not relevant to the legal issues this Court can consider in proceedings of this nature and cannot alone support this argument.

34. The Council relied on the evidence of Mr Rufus, the Council's Planning and Development Manager. The uncontested evidence of Mr Rufus was that the Second Respondent's property had never been a heritage item under the Lithgow LEP, nor has the village of Little Hartley been identified in the Lithgow LEP or on the State Heritage Inventory as being of heritage significance as a "linear village". 35. I note that some of the submissions made by the Applicants seemed to relate to cl 41 of the Lithgow LEP which prohibits the Council from granting consent to development in the vicinity of a heritage item. In this regard, I note that Meads Farm, the Harp of Erin Hotel and the Ambermere Hotel are heritage items under the Lithgow LEP and that Mr Fitzpatrick's statement claims that these are in the vicinity of the proposed development. However, this ground was not specifically pleaded by the Applicants and, accordingly, I make no findings in relation to cl 41 of the Lithgow LEP.

Finding in relation to heritage ground (c) 36. In my view the Lithgow LEP imposes no obligations on the Council to consult a heritage adviser as to the impact of the proposed development on the heritage values of Kerosene Cottage or the village of Little Hartley in the absence of their listing under Sch 1 of the LEP as a heritage item. Accordingly, the Applicants have failed to make out their case on this ground so far as this ground relies on the heritage values attributed by the Applicant to Kerosene Cottage or the village of Little Hartley.

The notification ground 37. The Applicants also challenged the grant of development consent by the Council on the basis that they had been denied natural justice by the Council because they were not notified of the Second Respondent's development application. The Applicants allege that the First Respondent had a policy or practice of notification in relation to development applications and that this was not complied with. No evidence of such a policy or practice was provided by the Applicant to support this submission. In the absence of a specific policy or practice the EP&A Act was said to grant the Applicant a general entitlement to natural justice. For example, a right to inspect development applications was said to arise under s 12 of the EP&A Act as part of a statutory regime which underpinned the Applicants' claim to natural justice which I take to mean a legitimate expectation that the Applicants would be notified of the development application.

38. Mr Fitzpatrick gave evidence that the Applicants were not notified of the development application for the proposed display home. The Applicants relied on the evidence of Mr Lemcke, the Council officer who dealt with the Second Respondent's development application. Mr Lemcke gave evidence that he had identified by circling relevant properties on a plan the properties to be notified. The properties which he identified included the property owned by the Applicants. In his oral evidence he stated that he did not know why the Applicants had not been notified given that it was his intention that they be notified.

39. The Council argued that there is no statutory obligation to notify the Applicants. Nor had the Council adopted a practice of notification which the Applicants could rely on as giving rise to a "reasonable expectation" of notification. The Council relied on the decision of Justice Talbot in Hawksbury City Council and Anor v Sammut (2000) 111 LGERA 208 at 212 as authority for the proposition that an inference should not be lightly drawn that a practice of notification existed in the absence of any explicit policy. The Council's evidence, adduced through Mr Lemcke, was that from time to time on a case by case basis the Council's planners could exercise their discretion and notify the owners of premises which they thought may be adversely affected by a proposal. On this occasion Mr Lemcke had exercised his discretion and notified some properties he considered might be affected by traffic impacts in particular. Finding in relation to the notification ground 40. The submission of the Applicants relied on natural justice and legitimate expectation and the way the Applicants' arguments were presented suggested these are interchangeable concepts. They are not. I have considered the Applicants' arguments that they had a legitimate expectation that they would be notified of the development application. I do not consider there is a separate ground of a breach of natural justice available to the Applicants. I agree with the Council that there is no statutory obligation to notify the Applicants under the EP&A Act in the circumstances of this case.

41. The Applicants relied on Cripps J in B & J Porter and Anor v Hornsby Shire Council (1989) 69 LGRA 101, which was followed by Justice Pearlman in Valentina Parkes & Anor v Prem Narain Rastogi [1992] NSWLEC 108, as supporting the argument that a legitimate expectation of notification could arise independently of the existence of any expectation arising as a result of a Council's notification practice or policy. Cripps J held, at first instance, that the provisions and purpose of s 313(1)(o) and s 312A of the Local Government Act 1919 lead him to the conclusion that: the expectation of a reasonably minded member of the public could be scarcely other than that adjoining owners would be notified of building applications in order that they could inspect plans and make submissions to the Council before a decision was made. Section 313(1)(o) of the Local Government Act 1919 required a council to consider the " likely effect of a building on adjoining land and buildings" in determining an application for building approval. S ection 312A of the Local Government Act 1919 gave the owners of land adjoining land on which it was proposed to erect a building a right to inspect the plans. On appeal the Court of Appeal held in Hornsby Shire Council v Porter & Ors (1990) 70 LGRA 175 at 185 that the proper construction of s 312A implied a duty upon the council to "inform adjoining landowners of the fact that an application likely to affect them detrimentally has been made." The Applicants submit that, whilst s 313(1)(o) and s 312A of the Local Government Act 1919 have been repealed, s 79 and 79A of the EP&A Act and s 12 of the Local Government Act 1993 have the effect that any person, including adjoining land owners, has the right to inspect development applications. Accordingly, adopting the reasoning in Porter , this gives rise to a legitimate expectation by adjoining land owners that they will be notified by the Council of any development applications made in respect of adjoining land. No case law in support of this argument in relation to the EP&A Act was presented to the Court and I consider it is contrary to the current legal position in relation to notification required by the EP&A Act. 42. I do not agree that the reasoning in Porter applies to the EP&A Act in the way argued by the Applicants' counsel. Sections 79 and 79A of the EP&A Act requires certain types of development namely, designated development, advertised development and other development required to be notified or advertised by the provisions of a development control plan, to be exhibited and notified as specified. Sections 79 and 79A of the EP&A have no application to the development at issue here. Section 12 of the of the Local Government Act 1993 is a broad provision which grants members of the public a right to inspect various documents, including development applications, free of charge. I do not accept the Applicant's submission that s 79 and 79A of the EP&A Act and s 12 of the Local Government Act 1993 combine to impose any duty on the Council to inform land owners of development applications made in respect of adjoining land or to give such land owners a legitimate expectation that they would be so informed.

43. In the absence of a notification policy, any obligation on the Council to notify must depend on whether there is a practice of notification. The practice of this Council is that on a case by case basis the Council's town planners notify property owners they think might be adversely affected by a particular development.

44. Although the Council argued that Mr Lemcke's evidence is uncertain as to whether or not he had intended in this case to notify the Applicants, I consider his evidence suggests he did intend to notify the Applicants of the proposed development but, for an unexplained reason, no notice was received by the Applicants. The Council argues that even if Mr Lemcke did so intend, there can be no "legitimate expectation" on the Applicant's part in the absence of any Council practice of notification. According to the Council the forming of an intention by a Council officer to notify in a particular case, which intention miscarries, is not a breach of procedural fairness. 45. I was not referred by the Applicants to any other cases concerning legitimate expectation and the notification of development applications. There are numerous other decisions of this Court dealing with this issue apart from Sammut which the Council relied on. In Hillpalm Pty Ltd v Tweed Shire Council & Anor [2002] NSWLEC 17 the applicant submitted that it was denied procedural fairness in that it was not notified of the lodgement of a development application for rural subdivision and given an opportunity to make representations to the Council. Lloyd J found that the Council had a practice of notifying neighbouring landowners only if, in the Council's view, there was a potential impact on those landowners which was not of a minor nature. Lloyd J held at [101] that: I cannot see how a practice of notification, which depended upon the council's perception of the likely impact on other properties, and which had resulted in so few notifications, could realistically have given rise to an expectation on the part of any particular property owner to be notified of any particular development application. In Hillpalm , there was no notification of the relevant development application at all.

46. Whilst I have not had the benefit of any evidence from any of the parties as to the type and number of notifications made by the Council in relation to other similar development applications, the Council's evidence, as discussed above, was that the Council's planners were given a broad discretion as to whom they notified based on the properties they thought may be adversely affected by a proposal. The reasoning adopted by Lloyd J in Hillpalm , with which I agree, suggests that such a practice could not have realistically given rise to an expectation by the Applicants that they would be notified. This case differs from the facts in Hillpalm . I consider the Council officer, Mr Lemcke, had intended to notify the Applicants. Further it is his evidence that he had notified a number of surrounding properties about the proposed development. Nevertheless, applying Hillpalm , there can be no legitimate expectation based on any existing Council practice that the Applicants could expect to be notified of the development application in question. The Applicants are not successful on this ground.

The amenity ground 47. The fourth ground relied on by the Applicants is unclear. In written submissions the impact of the proposed development on the Applicants' amenity at their property in terms of privacy, views and overshadowing were raised. The Applicants submitted that the impacts of the proposed development on Kerosene Cottage were such that the development application ought to have been refused. This ground is not available in Class 4 proceedings but rather is a Class 1 merit appeal matter. I am not able to determine this application on its merits in these proceedings.

48. The Points of Claim filed by the Applicants state that: In respect of the rural amenity of the applicants property, the first respondent should have taken into consideration the rural living, views, heritage aspects, overshadowing and residential rural amenities of the applicants' property. I understand this to mean that the Applicants also claim that the impacts of the proposed development on the amenity of the occupants of Kerosene Cottage was a relevant consideration which the Council should have, but did not, consider in determining the development application. No specific aspects of the Council's decision-making process was referred to by the Applicants to support this argument. Rather reliance was placed on the evidence of Mr Fitzpatrick, one of the Applicants, that their amenity would be affected by the proposed development. That evidence does not address this argument, however. 49. The Council did address this argument in their written submissions, noting that it was not put to Mr Lemcke that he had failed to consider the position of the proposed development relative to Kerosene Cottage, but rather, that he had failed to give any such amenity considerations the weight which the Applicants gave to them. Given this, the Council submits that the Applicants have not discharged their onus of proof in relation to this ground.

Finding in relation to the amenity ground 50. If the argument raised by the Applicants is that there was a failure to consider a relevant consideration, namely, the impact of the proposed development on the Applicants' amenity, it is the oral evidence of the Council officer Mr Lemcke that he assessed the impacts which the proposed development would have on the amenity enjoyed by the Applicants. The assessment report prepared by Mr Lemcke shows that next to the question "is there any impact on neighbouring land uses?" Mr Lemcke had written the word "no" . As the Council's written submissions note, it was not put to Mr Lemcke in cross-examination that he had failed to have regard to heritage issues or amenity issues of the kind complained of by the Applicants. In my view the Applicants have failed to establish to the requisite standard of proof that the Council did not consider the impacts of the proposed development on the amenity of Kerosene Cottage. Accordingly, the Applicants are unsuccessful on this ground. Exercise of the Court's discretion to grant relief 51. The relief sought by the Applicant is as follows: … (c) An order that the Second Respondent is restrained from carrying out development and construction work in accordance with the development consent. (d) An order requiring the Second Respondent to demolish the construction work already carried out on the land pursuant to the development consent. (e) An order that the Fourth Respondents be restrained from proceeding with the building of a "dwelling house" on the same site as that specified in the development application. 52. Order (e) seeks to restrain the Fourth Respondents, the sole shareholders and directors of the Second Respondent, which owns the land, from ever building a dwelling house on the site selected for the proposed development. I do not think it is open to the Court to constrain future activity on the site as this open-ended order seeks. Even if the Court could make such an order it would not be appropriate to so do as the current proceedings relate to the proposed development only. There is also no legal or evidentiary basis for making such an order. While there was some evidence from the Second Respondent about the siting of the dwelling and the Applicants' counsel undertook some cross-examination of Mr Splithof, the Second Respondent's builder, as to the site selected, the Court does not draw any conclusions on the appropriateness of the site for a dwelling house nor is it necessary that it do so. It is not an issue which arises under the Applicants' four grounds I have dealt with above and was not raised in the Applicants' submissions or pleadings.

53. This leaves the question of whether I should make Order (c) and Order (d) given my finding in relation to ground 1 that a display home is prohibited in this zone. The Applicants have not been successful on any other ground raised by them. The Council and the Second Respondents argued that, on discretionary grounds, the relief sought by the Applicants should not be granted.

54. Section 124 of the EP&A Act provides that: Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach. Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 is authority for the propositions that the discretionary power conferred on the Court by s 124 is wide and unfettered and that the Court is not limited in the circumstances which it may take into account in the exercise of its discretion. Kirby JA in Sedevcic sets out at p 339-341 a number of guiding principles , which I do not need to repeat here, which should be considered by the Court in exercising the discretion granted by s 124. These include: (1) the width and unfettered nature of the discretion granted to the Court by s 124; (2) the fact that the orders sought are the enforcement of a public duty imposed by an Act of Parliament regulating development and the use of the environment; (3) that fact that the EP&A Act permits any person to bring proceedings in the Court for an order to remedy or restrain a breach; (4) that there is a legislative purpose of upholding, in the normal case, the integrated and co-ordinated nature of planning law, in order to secure equal justice; (5) that where orders are sought by a Council the Court may be less likely to deny relief than it would in litigation between private persons; and (6) that where relief is sought against the erection of a building which, once having occurred can only be remedied at great cost or inconvenience, the discretion is more readily exercised than in circumstances where a continuing breach by conduct exists. 55. The Council argued that the Court should exercise its discretion to decline relief for the following reasons: (a) a DUAP circular entitled "Department of Urban Affairs and Planning Circular 24" of May 1993, issued after the decision in Jennings Group , states that display homes are important and appropriate in residential zones; (b) the adverse impacts on Kerosene Cottage which the Applicants assert will result from the proposed development do not relate to the display home use but are objections to the building per se; (c) there are other buildings in the neighbourhood which conduct business or commercial uses; (d) the breach of the LEP will be transitory because it will cease at some future point when the Second Respondent elects to sell the display home as a residence; and (e) Council officers assessed the display home use and considered its impacts to be acceptable.

56. The Second Respondent argued that the Court should exercise its discretion to decline relief for the following reasons: (a) the Second Respondent and its employees have acted in good faith in seeking and obtaining Council consent for the proposed development. There is no evidence to the contrary. Nor is there evidence of "bad faith" on the Council's part; (b) it was the evidence of the Council officer, Mr Rufus, that the impacts of the proposal are acceptable subject to certain conditions. Council supports the continued use of the land for a dwelling house (display home) in accordance with the development consent. The Second Respondent argues that the Council's views are significant as it is the relevant consent authority in this matter; and (c) the use of the land as a dwelling house (display home) does not instinctively offend nor is it repugnant to the objects of land zoned 1(c) under the 1994 LEP.

57. In relation to Order (d), the evidence was that there has been work undertaken in building the structure including earthworks, the laying of the concrete slab, the erection of the still frame and the engagement of contractors for electrical and building works. Additional materials have been purchased but not used given the interlocutory injunction in force since 12 September 2003. Further, the cost of the work undertaken by the Second Respondent is estimated to be approximately $50,000 plus GST, not including the purchase price paid by directors of the Second Respondent to acquire the land.

58. The Applicants rely on Kirby JA in Sedevcic at 339 where he states that: In exercising the discretion, it must be kept in mind that the restraint sought is not, in its nature, the enforcement of a private right… It is the enforcement of a public duty imposed by or under an Act of Parliament, by which Parliament has expressed itself on the public interest which exists in the orderly development and use of the environment. Further, the Applicants submit that: (a) the opinion expressed in "Department of Urban Affairs and Planning Circular 24" does not have the force of law and the public benefit of display homes is not such that it outweighs the need to uphold the planning law; (b) the impact of the proposed development on the Applicants will be increased by its use as a display home compared to its use as a dwelling; (c) the breach was a deliberate one in which the Second Respondent sought to gain a commercial advantage; (d) the Applicants acted in a timely manner in bringing proceedings once aware of the proposed development; and (e) the Second Respondent was aware that the validity of the development consent was being challenged by the Applicants at the time it commenced construction. Finding in relation to Orders (c) and (d) 59. This Court has wide discretion in relation to both whether it grants relief and the nature of that relief if granted. The reasons put forward by the Respondents as to why relief should be refused in circumstances where I have found that the proposed development is prohibited are not compelling in suggesting that I should allow the prohibited use to continue. Regardless of the conduct, opinions or motives of the Respondents and regardless of whether display homes are sympathetic to rural residential uses, the fact remains that this use is prohibited under the terms of the LEP. It is important that planning instruments be correctly applied and there is a strong legislative purpose served by upholding planning laws to ensure justice is afforded.

However, the circumstances of this case are unusual because while use of the dwelling for a display home is prohibited, use as a dwelling house requires no development consent under the LEP and would be legal provided the requirements set out in Pt 2 of the LEP are satisfied. Development for the purpose of "single dwellings" is permitted under the LEP without development consent provided that: (a) a sewer is available, or (b) the Council is satisfied by a geotechnical or water balance assessment (or both) that disposal of domestic waste water within the boundaries of the allotment is feasible.

This is the reason why I will make the declaration that the use of the dwelling house for a display home is prohibited, rather than make the declaration sought by the Applicants that the development is prohibited. If the use of the dwelling changes it may not be prohibited under the LEP. Accordingly, the question arises as to whether Order (c) or Order (d), or another order, ought be made.

In the alternative, the Council and Second Respondent submitted that, if the use of the proposed development as a display home was found to constitute prohibited development and I refused to exercise my discretion to decline relief, then the conditions of the development consent dealing with the display home use could be severed and the development consent could continue to have effect as giving consent to a dwelling house. In this regard, the Council noted that under the provisions of the LEP a "single dwelling" was, assuming certain preconditions are met, permissible on the land without the need for development consent.

This submission raises the issue of whether it is open to the Court to read down or sever the terms of the development consent. I reject the Council's and the Second Respondent's submission that it would be appropriate to read down or sever the terms of the development consent so as to transform it into a consent for a dwelling. In my view, the conditions concerning the display home use are not severable as the development application makes clear that consent is sought to use the whole of the proposed development for the purposes of a display home and that is what consent has been given for. Further, under the provisions of the LEP, there would be no need for development consent in any event if the premises were to be used solely as a dwelling house. This suggests it would be beyond the power of this Court to grant a development consent in circumstances where no such consent is required under the LEP.

It remains to determine the appropriate form of relief to grant. Whilst I do not accept that it is, in the circumstances, appropriate to read down the terms of the development consent I have already noted that it is the use of the proposed development as a display home which is prohibited under the LEP and not the use of the proposed development as a dwelling. Order (c) "that the Second Respondent is restrained from carrying out development and construction work in accordance with the development consent" as drafted by the Applicant is too broad. It would restrain the Second Respondent from carrying out building work in accordance with the terms of the development consent which I have found to be invalid but may have unintended consequences given that use of the development as a dwelling house is not illegal. I consider that it is appropriate to make Order (c) in a modified form, to the effect that the Second Respondent is restrained from using the dwelling at 22 Collits Place, Little Hartley as a display home.

Order (d), if made, would have the effect of requiring the Second Respondent to demolish works which could be erected without any requirement to obtain development consent. In my view the LEP grants the Second Respondent the right to use the proposed development as a dwelling without the need to obtain development consent provided certain conditions are met and this right should not be constrained by the orders made in these proceedings. Accordingly, it is not appropriate for the Court to make Order (d).

It is not appropriate or necessary that the interlocutory orders made by this Court on 12 September 2003 continue. Provided there is a change of use of the structure presently under construction to a dwelling when completed and the requirements in Pt 2 of the LEP are met there will be no breach of the LEP.

Orders 66. The Court makes the following declarations and orders: 1. The Court declares that the Second Respondent's use of the dwelling the subject of DA 209/02 at Lot 14 DP 851241 known as 22 Collits Place Little Hartley as a display home is prohibited under the Lithgow LEP 1994. 2. The Court orders that the Second Respondent be restrained from using the dwelling the subject of DA 209/02 at Lot 14 DP 851241 known as 22 Collits Place Little Hartley as a display home. 3. Interlocutory order 2 made by Cowdroy J on 12 September 2003 is dissolved. 4. The question of costs is reserved. 5. The exhibits may be returned.

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