John G Nelson Pty Limited v Wyong Shire Council

The Council submitted in relation to grounds 2 and 3 there was no unreasonable delay or lack of procedural fairness afforded to the Applicant. In particular, the Commissioner's comments in par 19 and 20 of his judgment indicated that the Applicant was well aware of the proposed LEP amendment and was not taken by surprise when it was passed. The Council argued that the parties were given the opportunity to make submissions regarding the draft LEP amendment, referring to various pages of the transcript and Exhibit Q in support. The Council also pointed out that the amendment was gazetted on 31 August 2001, only 24 days after the hearing was completed. The Council argued that if it was suggested the delay was to facilitate the gazettal of the amendment and thereby prejudice the Applicant or benefit the Respondent, the lapse of 24 days could not be considered to be unreasonable or prejudicial to the Applicant. There was not unreasonable delay in the delivery of the judgment and even if there had been that is not a question of law under s 56A.

Finding 14. All of these grounds together are said to amount to an error of law warranting a declaration that the decision of Commissioner Nott be set aside and the matter be re-heard. 15. I do not consider the matters raised in relation to delay and procedural fairness (grounds 2, 3) demonstrate there was any denial of procedural fairness or unreasonable delay in the circumstances. Counsel for the Applicant agreed when questioned by me that it was in no way prevented from having the matter relisted at any time up to the time of determination. Indeed the Commissioner raised that possibility in his letter dated 19 December 2001 to the parties. In relation to delay in the delivery of judgment, I do not think this is an error of law, being more in the nature of an administrative matter. 16. I do not consider the Commissioner erred in his construction of the law as stated in par 24 of his decision (grounds 4, 5). While Sofi may not be authority for the precise formulation in the statement made by the Commissioner, it does stand for the proposition that the law to be applied is the law at the date of hearing. Furthermore, he also includes "cf" (i.e. compare with) before his reference to Sofi which suggests that he was not quoting Sofi as a direct authority for that proposition. I do not think the Commissioner's overall conclusion on the applicable law is incorrect. Misconstruction of the Court of Appeal in Kinley (Ground 1) 17. In ground 1 the Applicant challenges the Commissioner's finding as to the object or purpose of the amendment to the relevant LEP where he says in par 16 of the judgment that it was to "…overcome the quirk or anomaly in the LEP that was brought to light by the Court of Appeal's decision in Kinley …". This was said to be a misconstruction of the Court of Appeal's decision in Kinley v Wyong Shire Council [1999] NSWCA 213 as no anomaly was identified. This was said to have caused the Commissioner falling into error in the determination of this application. 18. The Council argued that ground 1 does not identify a question of law under s 56A of the Court Act. The comments by the Commissioner in par 16 were only an explanation of the genesis of the amendment 133 to the LEP. What the Commissioner had to determine and did determine was the effect of the amendment, not its historical background, and to that extent the comment had no bearing on the outcome of the case. Finding 19. I agree with the Council's submissions that this is not an error of law within the meaning of the Court Act, but rather an observation with no demonstrable impact on the Commissioner's decision. (2) Misconstruction of cl 14 of the LEP (Ground 6) 20. In ground 6 of the Notice of Motion the Applicant challenges the Commissioner's construction of cl 14 of the LEP in his decision. The Commissioner is said to have held incorrectly that subdivision could not take place under cl 14 in the judgment at par 25 and 26. The Applicant argued cl 14(3) of the LEP now operated to permit subdivision of land in certain circumstances. 21. Clause 14(2) of the LEP states: Except as provided by subclauses (3) and (4), a person shall not subdivide land to which this clause applies so as to create an allotment having an area of less than - (a) in the case of land within Zone No. 1(c), 7(a), 7(d), 7(e), 7(f) or 7(g) - 40 hectares; (b) in the case of land within Zone No. 1(a) or 7(b) - 20 hectares (c) in the case of land within Zone No. 7(c) - 2 hectares. 22. Clause 14(3) of the LEP relevantly states: A person may, with the consent of the Council - (a) subdivide land to which this clause applies where - (i) the land is partly within one zone and partly within another zone; (ii) the area of the land within one of the zones is not less than the area specified in subclause (2) in respect of that zone; (iii) the area of the land in the other zone is less than the area specified in subclause (2) in respect of that zone; and (iv) one of the allotments to be created by the subdivision comprises the whole of the land referred to in subparagraph (iii) 23. Neither of the proposed allotments meets the minimum area criteria in cl 14(2). The Applicant submitted the land the subject of the application satisfied each of the criteria in cl 14(3), thereby enabling subdivision with consent. Clause 14(3) did apply, because: (a)(i), the land is partly within one zone and partly within another zone; (a)(ii), the area of 7(b) zoned land is not less than the minimum area of 20 hectares specified in cl 14(2); (a)(iii), the area of 7(a) zoned land is less than the 40 hectare minimum specified in cl 14(2); (a)(iv), one of the allotments, Lot 2, comprises the whole of the land referred to in subparagraph (iii), i.e. the 7(a) zoned land. The Applicant therefore argued subdivision was permissible with consent. 24. The constraints the Commissioner imposed on applying cl 14(3)(a), namely applying the minimum areas under cl 14(2), referred to in par 26 of the Commissioner's judgment, are said to be contrary to the decision of the Court of Appeal in Kinley. 25. Furthermore, the Applicant argued that the lot created by the subdivision under cl 14(3)(a), Lot 2 in this case, does not only have to comprise the land referred to in cl 14(3)(a)(iii) i.e. the 7(a) zoned land. Clause 16 and 17 of the LEP envisage a situation where a dual zoned lot is created by cl 14(3)(a) of the LEP. 26. The Council argued that in par 25 of his judgment, the Commissioner merely expressed doubt that cl 14(2) would authorise the creation of the proposed Lot 2 and noted in par 25 and 26 that the proposed lot did not meet the minimum area requirements specified under the LEP for lots in the 7(a) and 7(b) zones. That is a finding of fact and was open, on the evidence, to the Commissioner. He made no determinative findings as to the legal effect of cl 14(3) in par 26. Finding 27. Did the Commissioner make a determinative finding on the legal effect of cl 14 of the LEP? I think the judgment when viewed at pars 25, 26 and 28 shows that the Commissioner did make a determinative finding on the application of cl 14(3)(a) to the effect that it did not allow the Applicant's subdivision. However, it is not entirely clear that he made a determinative finding on the construction of cl 14(3)(a)(iv).

28. There are essentially two questions raised in relation to whether the Commissioner erred in the construction of cl 14(3) in par 26:
29. Whether the Commissioner erred in law in holding that the proposed subdivision lots in cl 14(3)(ii) had to comply with cl 14(2) i.e. the minimum area of an allotment in that zone.
30. Whether the Commissioner erred in law in relation to the interpretation of cl 14(3)(a)(iv). Clause 14(3)(a)
31. I certainly concur with the Commissioner's statement in par 26 that cl 14(3) is a difficult clause to construe. The Commissioner stated that "the intent of [cl 14(2) and 14(3)(a)] is that the lot or lots created from the zoned land referred to in cl 14(3)(a)(ii) should meet the minimum area requirement for a lot in that zone" (in par 26). I understand this to mean that he found that the 7(b) land in the proposed Lot 1 and Lot 2 had to be at least 20 ha in area in each lot. (As the 7(a) land did not meet the minimum area of 40 ha in cl 14(2) which was nevertheless permissible under cl 14(3)(a)(iii), I do not think the Commissioner intended to refer to this land.)

30. In Kinley, Sheahan J had been asked to consider "Does cl 14(2) of the Wyong Local Environmental Plan 1991 apply to the subdivision of land which is within more than one zone?" He answered no. On appeal to the Court of Appeal the parties did not take issue on this interpretation. However, Meagher JA stated (at [12]): If it matters, I think his Honour was plainly right. The draftsman of cl. 14 was quite able to state which provisions of the clause apply to land partly within one zone and partly within another. He did so in cl. (14)(3) [sic] . One must, therefore, assume cl. 14(2) does not apply to such land. Priestly JA agreed with Meagher JA's interpretation of Sheahan J's answer to question 4, stating that it was "the one most readers would take as the obvious one" (at [7]).

31. The interpretation of Sheahan J, Meagher JA and Priestly JA that cl 14(2) does not apply to dual zoned lots is persuasive, if not binding. Therefore, in my opinion cl 14(2) does not apply to either of the proposed allotments created under cl 14(3)(a). Thus, the lots created from the land in cl 14(3)(a)(ii), i.e. the 7(b) zoned land in Lot 1 and Lot 2, do not need to meet the minimum area of 20 ha for 7(b) zoned land. The Commissioner, therefore, erred in law in holding that each of the proposed allotments created from the 7(b) land (i.e. the land referred to in cl 14(3)(a)(ii)) had to meet the minimum area for a lot in that zone.

Clause 14(3)(a)(iv) 32. In relation to the interpretation of cl 14(3)(a)(iv) the Commissioner stated at par 26 that: it is not clear whether the lot referred to in cl 14(3)(a)(iv) may comprise the zoned land referred to in subpar (ii) in addition to the whole of the zoned land referred to in subpar (iii). That is to say in the present case, it is not clear that 8.8 ha of the 7(b) land may be combined with the whole of the 7(a) zoned land in Lot 2.

33. Clause 14(3)(a)(iv) states: one of the allotments to be created by the subdivision comprises the whole of the land referred to in subparagraph (iii) [emphasis added]
34. As the Commissioner recognised, the meaning of cl 14(3)(a)(iv) is not clear on its face. This is mainly due to the use of the word "comprises", which makes it unclear whether the zone 7(a) land had to be contained in an allotment by itself or whether it could be combined with part of the 7(b) zoned land as is proposed for Lot 2.

35. The Macquarie Dictionary, Revised 3rd edition, defines comprise to mean:
36. to comprehend; include; contain. 2. to consist of; be composed of…3. to combine to make up…Traditional usage is that a whole may comprise parts or components. Some writers nevertheless use comprise on the analogy of consist or compose…

36. Thus, it is clear that there are two possible interpretations open on the definition of comprise, one perhaps being more accepted than the other i.e. parts make up the whole. However, in my opinion, when read with cl 16, cl 14(3)(a)(iv) can only have one possible meaning and that is that the lot created under cl 14(3)(a)(iv) can include, in this case, not only the 7(a) zoned land but also the 8.8 ha of the 7(b) zoned land to form the proposed Lot 2. Clause 16 concerns the circumstances in which a dwelling house may be constructed on an allotment.
37. The relevant sections of cl 16 read: (1) Except as otherwise provided by this plan, one dwelling-house only may be erected, with the consent of the Council, on an allotment of land in existence on the appointed day or with an area not less than the applicable minimum area specified in clause 14(2) or 14(3)(b), within Zone No. 1(a), 1(c), 7(a), 7(b), 7(c), 7(d), 7(e) or 7(f). (2) Notwithstanding subclause (1), the erection of a dwelling-house on an allotment of land created in accordance with clause 14(3)(a), being the allotment referred to in subparagraph (iv) of that paragraph, is prohibited.
38. The meaning of cl 14(3)(a)(iv) can be seen by taking the opposite proposition and applying it to cl 16, i.e. that the allotment created by cl 14(3)(a)(iv) only includes the land in subcl (iii) (in this case the 7(a) zoned land). If one goes to cl 16(1), because the area of the 7(a) zoned land is less than the minimum area in cl 14(2), a house cannot be erected on it. This interpretation makes cl 16(2) redundant i.e. if the allotment created under cl 14(3)(a)(iv) only included the 7(a) zoned land (which is necessarily less than the area specified in cl 14(2) as cl 14(3)(a)(iv) recognises) there would be no need for the provision of cl 16(2), as cl 16(1) already would not allow the development, the area of land being less than that specified in cl 14(2). Therefore, cl 16(2) can only have meaning if the lot created by cl 14(3)(a)(iv) can contain more than the land specified in cl 14(3)(a)(iii) (i.e. more than the 7(a) zoned land in this case).
39. The overall effect of this interpretation of cl 14(3) is that the proposed subdivision is permissible with consent under that clause. I find that the Commissioner erred in law in the construction of cl 14(3)(a), at the minimum in holding that cl 14(2) applied to cl 14(3) (as I have said it is not clear whether he adopted a particular interpretation of cl 14(3)(a)(iv)). For the reasons set out above the proposed subdivision is permissible with consent under cl 14(3)(a). (3) Consideration of future development (Grounds 7, 9 and10)
40. Grounds 7, 9 and 10 suggest that the Commissioner erred in confining his analysis of future development to the construction of two houses, one on each of the two proposed subdivision lots, as being the only option for development on the land. While the development application did provide indicative house locations it was accepted by the Applicant at all times that development consent would not permit the erection of a dwelling house and that a development application for a dwelling house would be required for each of the houses. It was argued that this was such a major focus of the judgment that the Commissioner mislead himself to the extent that he prejudged an application which had not been formulated. As matters such as location, size of dwelling and provision of services were not provided it was not acceptable to conclude that a dwelling house was not appropriate or acceptable.
41. Given that other uses are available on zone 7(a) and 7(b) land, for example agriculture, it was appropriate that the Court should have had regard to possible future land uses such as these. The Commissioner's analysis was constrained to only one possible land use, i.e. the construction of two dwelling houses, to the exclusion of others. Although to in par 49 of the Commissioner's judgment he acknowledged that it was possible no house would be erected on the proposed lots, the error manifested in a failure to acknowledge other permissible land uses under the zone.
42. Further, in par 28 the Commissioner erred in referring to the possible application of a SEPP 1 application in the context of a dwelling house and erroneously prejudged the matter.
43. In reply the Council argued that in par 5 of the judgment the Commissioner found that one of the main issues at the hearing was the suitability of the subject land for "two future dwellings". This was in response to the proposed subdivision plan on which was noted "proposed house sites". The Commissioner noted this issue encompassed issues including threatened species, tree preservation, bushfire hazard reduction, sewage disposal, impact on water catchments and visual impact. These matters were raised in the Statement of Issues filed in the proceedings. The Applicant clearly accepted the issue as relevant by tendering plans and calling expert evidence at the hearing in relation to these issues. Further it is well established that in determining an application to subdivide land the Council, and the Court on appeal from the Council's decision, may look beyond the mere subdivision of land as proposed and consider the likely future use or development of the proposed subdivided land after subdivision and the general likely impact of that resultant development. See Seraphina Bell Pty Ltd v Willoughby Municipal Council (1967) 14 LGRA 209; Shoalhaven City Council v Lovell (Gleeson CJ, Mahoney P and Sheller JA, NSWCA, 4 December 1996, unreported). Finding
44. The focus by the Commissioner on the two proposed dwellings as a possible future use is appropriate and is supported by Seraphina and Shoalhaven City Council. The fact that the Commissioner expressed a view in relation to a possible SEPP 1 application is not an error of law. He was not forming a conclusive view on a legal issue in this regard. No error of law has been committed in relation to grounds 7, 9 and 10.

(4) Failure to take into account cl 17 of the LEP (Ground 8) 45. It was further argued by the Applicant that the Commissioner failed to have any regard to cl 17 of the LEP. That clause operated over and above cl 16 and deemed a "dual-zone" lot as a single zone lot for the purposes of cl 16. Consequently the limitations on the construction of dwelling houses in cl 16(2) do not apply and a dwelling house would be permissible with consent on Lot 2. 46. The Council argued that the Commissioner did not hold that cl 16 of the LEP acted to prohibit the erection of a dwelling after subdivision. In his judgment in par 27 he did not find that the LEP acted "to prohibit the erection of a dwelling" but, without finding, expressed the view that it "would appear" that only one house could be erected with consent and only within one lot. Finding on Ground 8 47. In par 27, the Commissioner does express a view that the erection of a house on Lot 2 is expressly prohibited by cl 16(2) of the LEP. He therefore concluded that only one house can be built on the subject land with development consent and that is on Lot 1. Does the Commissioner's failure to refer to cl 17 in relation to his finding that cl 16(2) does not permit a dwelling house on Lot 2 constitute an error of law and, if it does, is there any consequence of that error? 48. Clause 16 sets out when a dwelling-house can be erected. The relevant provisions of cl 16 are set out at par [37]. Clause 17 is titled "Dwelling-houses: split zoned parcels". Clause 17 of the LEP is in the following terms: Notwithstanding any other clause of this plan, an allotment which is partly within one zone, being a zone other than Zone No. 1(d), 2(a), 2(b), 2(c), 2(d) or 2(g), and partly within another zone may be treated for the purposes of the erection of a dwelling-house as being a singular zoned allotment within either of those zones for the purposes of clause 16. 49. It essentially provides that where an allotment is partly within two different zones including 7(a) and 7(b) zoned land, it can be treated as being a singular zoned allotment within either of those zones for the purposes of cl 16 i.e. the erection of a dwelling house. Therefore the starting point for determining if a dwelling house can be constructed on an allotment which is partly within two zones, such as the proposed Lot 2, is cl 17. This clause allows the lot to be treated as being within either the 7(a) or 7(b) zone for the purposes of cl 16. One then has to go back to cl 16 to determine whether a dwelling house is permissible. 50. Clause 16(1) relevantly provides that a dwelling house can be erected provided that the minimum area specified in cl 14(2) is complied with. In relation to land zoned 7(a) and 7(b) the minimum area under cl 14(2) for building a house is 40 ha and 20 ha respectively. Clause 17 allows Lot 2 (which is partly within two zones) to be treated as being within either of zones 7(a) or 7(b) for the purposes of cl 16. Therefore, the minimum area of land for the purposes of cl 16(1) is, at its lowest (and on the choice most favourable to the Applicant) 20 ha. The proposed area of Lot 2 is 27.11 ha. As this is greater than the minimum area required by cl 16(1) (by the operation of cl 17 in relation to split zoned parcels) a dwelling house is permissible under cl 16(1) on Lot 2.

51. However, one still has to consider the operation of cl 16(2). I do not agree with the Applicant's submission that cl 16(2) is "overridden" by cl 17 when the whole of cl 17 is read, particularly the words at the end "…for the purposes of clause 16". Clause 16(2) prohibits the erection of a dwelling house on the lot created in cl 14(3)(a)(iv). The fact that cl 17 allows a dual zoned lot to be treated as being within one zone for the purposes of cl 16 does not mean that a lot loses the character of being the lot created under cl 14(3)(a)(iv). Thus, although cl 17 operates over the top of cl 16 to allow dual lot zones to be treated as being within a singular zone, it does not have the effect of removing the prohibition on the erection of a dwelling house on the allotment created under cl 14(3)(a)(iv). Therefore, the erection of a dwelling house on Lot 2 is prohibited.
52. It may be that the Commissioner did consider cl 17 but did not mention it in his judgment. As the same conclusion results from applying cl 17 and cl 16(2) i.e. a house cannot be erected on Lot 2, I do not think there has been a demonstrable error of law on the Commissioner's part.
53. I also note that if the proposed subdivision was to take place, it does not appear that cl 16 would allow a dwelling house to be built on the proposed Lot 1 as it will not meet the minimum area required by cl 16(1) i.e. 20 ha as required by cl 14(2). I make this observation only in relation to cl 16 of the LEP as the matter was not raised by the Applicant's arguments and so has not been considered exhaustively in this judgment.
54. I also note that the Commissioner appears to have thoroughly and adequately canvassed the merit issues presented by the parties and also assumed in par 27 that cl 14(3)(a)(iv) was met for the purposes of applying cl 16. Nevertheless, it is appropriate to refer the matter back to Commissioner Nott for further consideration. I do not see any justification whatsoever for returning the matter to another Commissioner as the Applicant requested.
55. The Applicant is seeking its costs of the appeal and I note that the Court's usual practice in s 56A appeals is that the costs follow the event. Nevertheless, as no submission on costs has been heard from the parties, I will reserve my decision on the question of costs. Finding
56. I consider that an error of law has been committed by Commissioner Nott in relation to ground 6 raised in the Applicant's Notice of Motion. Order

The Court orders that: (1) The appeal is upheld. (2) The decision of Commissioner Nott dated 17 January 2002 is set aside. (3) The matter is remitted to Commissioner Nott for rehearing in accordance with the findings in this judgment (4) The question of costs is reserved.

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