Flower v Lane Cove Council

The Site

1. The Site's two street frontages face Barwon Road to the east and Henley Street to the west. Its width is 15.75 to the east and 15.75 to the west, with a depth of 41.95 to the north and 47.25 to the south. There are two single storey dwellings on the site, with each dwelling oriented towards a street frontage with separate vehicular and pedestrian entrances: Statement of Environmental Effects, Exhibit A at Folio 1. Surrounding developments comprise developments on Torrens Title lots. There are no strata subdivided dual occupancy developments in the surrounding low density residential zone: Exhibit 5 at folio 28.
2. The Site has been the subject of considerable activity over the years, resulting in numerous engagements with the Council. The Council granted approval for conversion of the dwelling to a dual occupancy in March 1985. A further development consent (DA 20/99) was granted on 8 March 1999 for construction of a dwelling fronting Henley Street. In 2012 another consent (DA 4/2012) was granted for the demolition of the dwelling fronting Henley Street for construction of a new dwelling, and alterations and additions to the dwelling fronting Barwon Road. Torrens Title subdivision of the dual occupancy development into two lots was refused in January 2014. The refusal was confirmed by Lane Cove Independent Hearing and Assessment Panel (IHAP) under a section 82A review in June 2014: Exhibit 5 at folio 28.

The Statutory Controls

1. In short form, the Site is located within Zone R2 - Low Density Residential pursuant to the provisions of the LEP. Dual occupancies are permitted with consent, as are dwelling houses. Subdivision is permitted with consent, subject to some restrictions. The minimum lot size specified for the zone is 550m2, subject to limited exceptions. These are set out further below.
2. The Lane Cove Development Control Plan also applies, particularly Part B - General Controls, and Part C1 - Dwelling Houses and Dual Occupancies. In addition, a planning proposal to amend the LEP was approved by the Greater Sydney Commission subject to conditions requiring a number of amendments. The weight to be afforded to this proposal is discussed further below.
3. The LEP provides as follows: 1.2 Aims of Plan (1) This Plan aims to make local environmental planning provisions for land in Lane Cove in accordance with the relevant standard environmental planning instrument under section 33A of the Act. (2) The particular aims of this Plan are as follows: (a) to establish, as the first land use priority, Lane Cove's sustainability in environmental, social and economic terms, based on ecologically sustainable development, inter-generational equity, the application of the precautionary principle and the relationship of each property in Lane Cove with its locality, (b) to preserve and, where appropriate, improve the existing character, amenity and environmental quality of the land to which this Plan applies in accordance with the indicated expectations of the community, (c) in relation to residential development, to provide a housing mix and density that: (i) accords with urban consolidation principles, and (ii) is compatible with the existing environmental character of the locality, and (iii) has a sympathetic and harmonious relationship with adjoining development. 2.3 Zone objectives and Land Use Table (1) The Land Use Table at the end of this Part specifies for each zone: (a) the objectives for development, and (b) development that may be carried out without development consent, and (c) development that may be carried out only with development consent, and (d) development that is prohibited. (2) The consent authority must have regard to the objectives for development in a zone when determining a development application in respect of land within the zone. (3) In the Land Use Table at the end of this Part: (a) a reference to a type of building or other thing is a reference to development for the purposes of that type of building or other thing, and (b) a reference to a type of building or other thing does not include (despite any definition in this Plan) a reference to a type of building or other thing referred to separately in the Land Use Table in relation to the same zone. (4) This clause is subject to the other provisions of this Plan. The objectives of the R2 - Low Density Residential Zone include the following: − To provide for the housing needs of the community within a low density residential environment − To enable other land uses that provide facilities or services to meet the day to day needs of residents − To retain, and where appropriate improve, the existing residential amenity of a detached single family dwelling area. 2.6 Subdivision - consent requirements (1) Land to which this Plan applies may be subdivided, but only with development consent. (2) Development consent must not be granted for the subdivision of land on which a secondary dwelling is situated if the subdivision would result in the principal dwelling and the secondary dwelling being situated on separate lots, unless the resulting lots are not less than the minimum size shown on the Lot Size Map in relation to that land. "Secondary dwelling" is defined to mean a self-contained dwelling that: (a) is established in conjunction with another dwelling (the principal dwelling), and (b) is on the same lot of land as the principal dwelling, and (c) is located within, or is attached to, or is separate from, the principal dwelling. 4.1 Minimum subdivision lot size (1) The objectives of this clause are as follows: (a) to promote consistent subdivision and development patterns in zones. (2) This clause applies to a subdivision of any land shown on the Lot Size Map that requires development consent and that is carried out after the commencement of this Plan. (3) The size of any lot resulting from a subdivision of land to which this clause applies is not to be less than the minimum size shown on the Lot Size Map in relation to that land. (4) This clause does not apply in relation to the subdivision of individual lots in a strata plan or community title scheme. (4A) Despite subclause (3), the size of a lot for the purpose of a dual occupancy must not be less than: (a) for dual occupancy (attached) - 750 square metres; and (b) for dual occupancy (detached) - 900 square metres. Provisions with regard to setback and landscaping, as required under the Lane Cove DCP, were not pursued with any vigour and accordingly are not considered further in this decision.

Evidence

1. Mr Rajiv Shankar, Council's Manager, Development Assessment gave evidence for the Council, while Mr Benjamin Black was the consultant town planner engaged by the Applicant. Together they authored a Joint Expert Report: Exhibit 4. They also provided oral evidence in the hearing.
2. The expert evidence proceeded on the basis that the primary objection by the Council to the Application lay with the first two of the Council's contentions; namely, the minimum subdivision lot size specified in the LEP, and consistency with the aims of the LEP.
3. The experts disagreed in their assessment as to whether or not the proposal could in fact be properly characterised as a strata title application.

Contentions of the Parties

1. The Applicant's arguments can be summarised as follows: subdivision of land is permissible within the R2 zone pursuant to clause 2.6 of the Lane Cove LEP with development consent from the Council. While such consent is impermissible if the subdivision would result in the principal dwelling and a secondary dwelling being situated on separate lots, this is no bar here as the two existing dwellings on the Site do not include a primary and a secondary dwelling. This is because a dual occupancy is defined as two detached dwellings on one lot of land, but does not include a secondary dwelling.
2. The Applicant stressed that this application was for a strata, not for Torrens, Title, subdivision. Indeed, the Applicant provided a copy of the Council's refusal for subdivision of Torrens Title (as distinct from this application for strata subdivision), which reasons for refusal included the following: that "the proposed Torrens Title subdivision is inconsistent with clause 4.1 Minimum Subdivision lot size of the Lane Cove Local Environmental Plan 2009": Exhibit F.
3. The objectives of the R2 zone are met, although not all objectives need to be met: it is enough, says the Applicant, for one objective to be met.
4. With respect to the minimum lot size restriction, the Applicant's position is that cl 4.1(4) provides an exemption which allows his application to pass this threshold challenge. Key to the Applicant's argument is that the proposal does not create more than one lot: it creates two units within the lot, with a body corporate.
5. Any outstanding matters (such as the identification of common property, and stormwater management) can be dealt with at the point of registration; prior to determination or made subject to a deferred condition.
6. The Council's contentions are as follows: − The proposed strata subdivision would result in two lots which do not comply with the objectives of cl 4.1, or the controls of cl 4.1(3) of the LEP in respect of minimum subdivision lot size. − The development is contrary to the aims of the LEP, particularly 1.2 (c), and the future LEP controls. Strata subdivision would result in a pattern of subdivision which does not accord with urban consolidation principles and is contrary to other planning considerations. − The proposal is inconsistent with the objectives of the R2 zone. − The proposal is inconsistent with the established and desired future pattern of subdivision in the area. − The subdivision would result in a development which has not been shown to be permissible within the R2 zone. − The DA does not comply with building design provisions in the DCP with respect to setback and landscaping requirements. − It is contrary to the public interest having regard to the development patterns in the surrounding streets.
7. At the hearing, the Council's position was summarised thus: as a threshold matter, the proposed subdivision does not comply with cl 4.1(3) because the lots are too small, with the result that there is no power to approve. It is unable to be saved by the exemption provided for within cl 4.1(4) because in this case it does not apply. Secondly, on merit, the proposal is inconsistent with the predominant existing and desired subdivision within the zone. Thirdly, the proposal is inconsistent with the planning approach evidenced by the proposal to amend the LEP which is on exhibition.

Does the LEP allow the proposed strata title subdivision?

1. The application which first the Council, and now the Court, is asked to approve is an application for subdivision described thus: "Strata subdivide the existing dual occupancy to create 2 lots: Lot 32A and Lot 32B": Exhibit 5 at folio 8.
2. For the Applicant to have a prospect of success in his appeal, he must establish that strata title subdivision of the kind contemplated is permissible. The minimum lot size prescribed in clause 4.1(3) provides a difficulty to him, as the lots are below the minimum size of 550 m2, but he contends that individual lots will not be created by the strata subdivision, so there is no breach of the size restriction.
3. The Council rejects this analysis, pointing to the definition of "subdivision" for the purposes of the LEP. In defining "subdivision" section 4B of the EPA Act expressly includes subdivision by strata plan of subdivision: s 4B (2)(b) EPA Act.
4. There are various interpretations which could be given to cl 4.1(4), which clause has not been helpfully drafted. Indeed, the unhelpful nature of the drafting is evidenced by the fact that the Council has had to seek an amendment to put beyond doubt Council's intentions with respect to such development, through the Gateway amendment process (discussed further below).
5. On one view, which is that advanced by the Council, the exemption could be said to apply only when a strata plan or community title is already in existence. If that interpretation is correct, the Applicant derives no benefit from it, as there is presently no such scheme. The other interpretation leaves the door open to the Applicant: that the minimum subdivision size is not applicable to the subdivision of individual lots which are to be contained within a strata plan.
6. The Applicant's expert contends that "the minimum lot size requirements of the LEP do not apply to the subdivision of an individual lot in a strata plan", while the Council's expert says that "effectively the manner in which the subdivision is proposed is similar to and resembles a Torrens Title subdivision where the minimum lot size requirement does apply": Exhibit 4 at folio 2. The similarity to a Torrens Title subdivision, Council says, is evident through the absence of common property, and absence of shared space to be enjoyed by both residences.
7. The Council relied upon the decision of Bignold J in Smith v Wollondilly Council [1995] NSWLEC 42 (Smith) in support of its contention that strata subdivision would create lots of a size impermissible under the LEP. In that case, the Applicant argued that the strata subdivision he proposed did not create allotments but lots as defined by the Strata Titles Act 1973. As in this case, the Applicant sought not to fall foul of restrictions on the size of land which could be subdivided.
8. His Honour did not agree with the Applicant's submission, finding that The proposed development although creating "lots" under the Strata Titles Act also, by virtue of the fact that the bases of proposed lots embrace the whole of the surface area of the appeal site, involves the creation of two allotments each having an area of less than [the minimum required]. Moreover, I hold that the proposal to create an area of … common property also involves the creation of an allotment having an area of less than [the minimum required]...
9. His Honour further found that the proposed plan of strata subdivision is "indistinguishable in form from the form of a conventional land subdivision of the appeal site, the only difference … being that it is intended to create cubic spaces under the strata subdivision".
10. In addition, it is to be observed that, in this case, the application before the Court proposes no common property. This position is, thus, one which more starkly reflects the criticism to be drawn from Smith.
11. In the matter before the Court I do not accept that the strata subdivision does not result in the creation of lots, but simply of units, for the purposes of deciding whether or not cl 4.1 (3) applies. Consistent with Smith, I find that the proposed development will result in the creation of two lots of less than the minimum size prescribed, and are therefore impermissible under the LEP. I further find that the exemption in cl 4.1(4) does not apply for the reason that there is no strata plan in place, as the proposal is to subdivide land into strata title.
12. On this basis, the proposal is prohibited and the appeal must fail.
13. If this finding is wrong and the Applicant's interpretation is the correct one, for the reasons set out below - specifically, the proposal's inconsistency with the Council's planning approach and Council policy - the appeal also fails.

The Proposal is inconsistent with the Council's Planning Approach

1. Another ground on which the Council resisted this appeal lay in the contention that the proposal was not consistent with the Council's planning approach, as evidenced by the proposal to amend the LEP. I note that the LEP amendment proposal itself is reflective of the Council's policy position with respect to subdivision of dual occupancies. Each of these matters is discussed separately below.

What weight should be given to the proposed amendment to the LEP via the Gateway process?

1. Section 79C (1)(a) of the EPA Act requires inter alia the following matters to be taken into account: any environmental planning instrument, and any proposed instrument that is or has been the subject of public consultation under the EPA Act and has been notified to the consent authority.
2. A determination was made under s 56(2) of the EPA Act to allow for various "routine revisions" to be made to the LEP: Exhibit 5 at folio 78. The amendment relevant to this case is set out in more detail as follows: "Cl.4.1 Minimum Subdivision Lot Size (4B) Despite any other provision of this Plan, development consent must not be granted to a development application for the subdivision of land on which development for the purpose of dual occupancy is erected or is proposed to be erected if the subdivision would result in each of the dwellings that comprise the dual occupancy being located on separate lots".
3. It is helpful in this case to consider the explanation which was given by the Council for its planning proposal insofar as it relates to cl 4.1. The explanation was that "it had been understood, in liaison with the Department during drafting of the LEP under the Standard LEP, that the "dual occupancy" definition prevented subdivision". Further, the Council states that "DA applicants frequently query this as a basis for refusals and it is intended now to clarify that dual occupancies may not be subdivided" : Exhibit 5 at folio 67.
4. The Applicant submitted that the proposal was "embryonic" and it was too soon in the process to accord the amendment the status of having certainty and imminence, the benchmarks for the attribution of weight in the consideration of a development application, relying upon the decision of Pearlman CJ in Architects Haywood and Bakker Pty Ltd v North Sydney Council [2000] NSWLEC 138 at [33].
5. In that decision, the Draft LEP was significantly further advanced than is the case here, it having been placed on exhibition twice, with submissions being considered in preparation for submission to the Minister so it could be made: at [33].
6. Pearlman CJ found that while the Draft LEP would eventually be made, and to that extent it is certain and imminent, "its precise final form is not certain at this stage, for that depends upon any amendments made consequent upon submissions and amendments which might be required by the Minister. But those are matters of detail not of substance, and the planning approach which it adopts must in my opinion be regarded as certain to be brought into force within the reasonably foreseeable future. Hence I place significant weight upon its provisions in the assessment of the development application in this case": at [33].
7. In the case of the Lane Cove LEP, the Council submitted that the proposal was on exhibition, and had been since November 2016. That period was to have concluded on 12 January 2017. In the Gateway Determination dated 6 July 2016 (Exhibit 5, folio 77), Council was issued with an authorisation to exercise the delegation for this planning proposal, following the period of public exhibition and any other procedural requirements. Given this, it is the Council's submission that rather than the amendment needing to be returned to the Minister for a decision, as Council holds the delegation there is no reason why subdivision of dual occupancies would not ultimately be treated in similar terms to that which is in the planning proposal.
8. That to me is putting matters at their highest, while describing the planning process as embryonic seeks to afford the proposal the least weight possible.
9. It is my view that while the process for the amendment to the LEP is not concluded, the amendments proposed therein, specifically with respect to subdivision of dual occupancy, are to be accorded some weight in this decision, albeit not determinative.

The Council's Policy on Strata Subdivision of Dual Occupancy

1. Council policy is reflected in the remarks in the Delegated Authority Report, as follows: "Dual occupancy developments are permitted with consent within the R2 zone. However, it is Council's long term policy not to permit subdivision of dual occupancy as such would result in one dwelling on one separate lot and form two semi detached dwellings which are not permissible under the LEP": Exhibit 5, folio 29. The report goes on to note that " a semi detached dwelling means a dwelling that is on its own lot of land and is attached to only one other dwelling": folio 29.
2. The report then outlines Council's policy to prohibit strata subdivisions of dual occupancies, by referring to a meeting of Council held on 2 December 2015. At that meeting, Council resolved to adopt for exhibition the changes to the LEP that are set out above.
3. The role of a policy of a Council, and the weight to be given to it in any decision, is considered in the decision of Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 492; (2004) 136 LGERA 254. In that case, McClellan CJ set out, at [92], the following matters to be considered when deciding what weight to be given to a policy which is not reflected in any formal environmental planning instrument: To my mind, the matters which are relevant when determining the weight to be given to a planning policy adopted by a council are as follows: − the extent, if any, of research and public consultation undertaken when creating the policy; − the time during which the policy has been in force and the extent of any review of its effectiveness; − the extent to which the policy has been departed from in prior decisions; − the compatibility of the policy with the objectives and provisions of relevant environmental planning instruments and development control plans; − the compatibility of the policy with other policies adopted by a council or by any other relevant government agency; − whether the policy contains any significant flaws when assessed against conventional planning outcomes accepted as appropriate for the site or area affected by it.
4. His Honour also referred at [89] to Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289, (2003) 129 LGERA 195, in which case Mason P discussed the role of policy in the consideration process. The President (with whom Spigelman CJ and Ipp JA agreed) held that "nothing in the EPA Act stipulates that environmental planning instruments are the only means of discerning planning policies or the public interest": at [2(b)].
5. In this case, Council has continued to press its policy with respect to not supporting subdivision of dual occupancies. According to the Council, no dual occupancy subdivisions had been permitted since 1994 - 1995. It has therefore been in place for over twenty years. The Council further submitted that the amendment proposal reflected this long-standing approach of not allowing subdivision where dual occupancy occurs. The Applicant's expert agreed that no subdivisions of dual occupancies had been allowed under the 2009 LEP.
6. Having regard to those factors I find that the Council's policy is to be given some weight in this decision, albeit not determinative weight.

Findings

1. For the reasons set out above, I find that the LEP does not permit strata subdivision as proposed in the application as it fails to comply with minimum size requirements specified in cl 4.1 (3) of the LEP. I further find that the exemption contained in cl 4.1 (4) is not available in this case. The proposal is therefore prohibited.
2. I am further of the view that, while taken in isolation, the proposed amendments to the LEP (which adopts a planning approach which refuses such a style of development), and Council's policy position with respect to subdivision of dual occupancies, may not individually justify the refusal of the consent, taken together they also lead to the conclusion that the appeal ought not be allowed on that separate basis.
3. The Council advanced other grounds which is not necessary for me to deal with, because the Application clearly fails on the two grounds set out above.

Orders

1. The Court Orders are: 1. The appeal is dismissed. 2. Development Application No. DA 117/16 to strata subdivide the existing dual occupancy to create two lots at 2 Henley Street, Lane Cove, is determined by refusal. 3. The Exhibits are returned. ...................... Rosemary Martin Senior Commissioner 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: 17 March 2017