Jojeni Investments Pty Ltd v Mosman Municipal Council

Land and Environment Court (NSW)|2014-03-11|Before: Sheahan J

Planning Issues 16There is no controversy surrounding the historical planning instruments that have applied to the land (see applicant's subs par 21, and the Lovell report). 17As a consequence of successive changes to the planning regime, which deem the 1933 building approval to be now a post-Environmental Planning and Assessment Act 1979 ("the EPA Act") development consent ("DC"), any consent granted and in force at the commencement of the EPA Act is protected by s 109B of that Act as a species of existing use. The applicant contends that it has an existing use right as a RFB, but the Council insists that it is for a building containing no more than two flats. See Winn v Director General, National Parks and Wildlife [2001] NSWCA 17; (2001) 130 LGERA 508, at [248]. 18The current use of the land is prohibited under the 2012 Mosman LEP, which zones the land "R2" (a "low density residential" zoning - the land was formerly zoned "2(a1) Residential"). 19One objective of the "R2" zone (Lovell fol 207) is retention of Mosman's "low density residential environment", and, in environmentally sensitive residential areas, its "single dwelling character". Dwelling houses, boarding houses, semi-detached dwellings, bed and breakfast accommodation, home businesses, respite day care centres, and home occupations are permitted (only home occupations without consent). "Dwelling house" means the same as in 1998 (Lovell fols 271 - 272). "Multi dwelling housing" means three or more attached or detached on a single lot, but not "RFB" (fol 286). The relevant land use table specifies that "dwelling-houses" and "semi-detached dwellings" are permissible with consent, and all other uses are prohibited (with the exception of home occupations, which is irrelevant for present purposes). It is agreed between the parties that the current use remains prohibited by the 2012 LEP. 20The use ought be classified by reference to activities authorised by the relevant consent. The respondent rejects, in the circumstances of the present case, the so called species/genus test. 21As the applicant proceeds on the basis that the existing use in the present case arises under s 106 of the EPA Act by reason of the consent, the respondent is content to adopt the same approach. 22However, the parties disagree as to whether the existing use rights extend to more than "2 flats in a building". 23Sections 106 and 107 provide: 106. In this Division, existing use means: (a) the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would, but for Division 4 of this Part, have the effect of prohibiting that use, and (b) the use of a building, work or land: (i) for which development consent was granted before the commencement of a provision of an environmental planning instrument having the effect of prohibiting the use, and (ii) that has been carried out, within one year after the date on which that provision commenced, in accordance with the terms of the consent and to such an extent as to ensure (apart from that provision) that the development consent would not lapse. 107. (1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use. (2) Nothing in subsection (1) authorises: (a) any alteration or extension to or rebuilding of a building or work, or (b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned, or (c) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of an existing use, or (d) the continuance of the use therein mentioned in breach of any consent in force under this Act in relation to that use or any condition imposed or applicable to that consent or in breach of any condition referred to in section 80A (1) (b), or (e) the continuance of the use therein mentioned where that use is abandoned. (3) Without limiting the generality of subsection (2) (e), a use is to be presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months. 24The species/genus test was articulated by McHugh J in Royal Agricultural Society v Sydney City Council (1987) 61 LGRA 305 who said (at 310 - 311): Accordingly, a test has been devised which requires the purpose of the use of land to be described only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on at the relevant date. Thus the test is not so narrow that it requires characterisation of purpose in terms of the detailed activities, transactions or processes which have taken place. But it is not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities etc as a class have made of the land. ... The foregoing cases were concerned with the activities of a particular business or industry or with activities of a common kind. But I see no reason why the principle upon which those decisions were based is not also applicable to a case where land is used for activities, processes or transactions of widely differing kinds. If the activities, processes or transactions are capable of being treated as all or the majority of the species of a genus, then that genus may properly be regarded as describing the purpose of the use of the land. If they are not, then it may be that the only conclusion is that the land has been used for more than one purpose. If that conclusion is drawn, then each purpose is to be characterised in accordance with the principles set out earlier in this judgment.

Applicant's Submissions 25Although the 1933 approval itself is not available, the applicant relied on the secondary documents before the Court to submit that that 1933 approval was for "flats", and that, accordingly, the "existing use" is for "flats" generally. (See the approved plans in Exhibit R2, the building register in Exhibit A1, tab 1, and frequent references in Council and Valuer-General records, eg in Exhibit A2). 26As recently as 1983, a Council assessment report described the building as "Class II" (which is a RFB), and the Council imposed on that approval the standard conditions applicable to a RFB (subs par 15). 27For the respondent to characterise and limit the existing use to only two flats focuses inappropriately on the physical characteristics of the building, and on the precise manner in which the use was carried out, i.e. on the nature of the use rather than the purpose of the use (see Tp19, LL3 - 11), which would, contrary to authority, elide "the distinction between use and building": Ashfield Municipal Council v Armstrong ("Armstrong") [2002] NSWCA 269; (2002) 122 LGERA 105, at [11]. See also Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343; Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; (2007) 151 LGERA 400, and El Boustani v The Minister administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; (2014) 199 LGERA 198. 28The applicant relied on the following passage of Kitto J in Shire of Perth v O'Keefe ("O'Keefe") [1964] HCA 37; (1964) 110 CLR 529; (1964) 10 LGRA 147, at 535, 150 (Tp18, LL11 - 19): ... the provision is made that the land may continue to be used for that purpose: not the precise manner of use for that purpose may alone continue but that use generally for that purpose may continue. The application of the by law in a particular case has therefore not to be approached through a meticulous examination of the details of processes or activities, or through a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use at the material date. and submitted (at Tp19, LL3 - 11): What we say cannot be done, and it's the error that the, in our submission, the respondent falls into, is rather than focus upon the purpose of the use, which is the character that the use imparts to the land, and in our submission that's residential flats in a building, they focus incorrectly upon the detail to say, no it's not residential flats in a building. It's two residential flats and that, in our submission is focussing upon the building and not focussing upon the rights of use, not focussing upon the purpose of use, not focussing upon the town planning purpose that the authorities recognise this approach to interpretation must take.

Respondent's Submissions 29Although the parties agree that the existing use is not to be characterised by the species/genus test because that use originates from a development consent - Botany Bay City Council v Workmate Abrasives Pty Ltd ("Workmate") (2004) 138 LGERA 120 - the applicant's reliance on the test in O'Keefe, concentrating on the level of purpose, and ignoring the specific uses authorised by the consent, is an example of the genus test "par excellence" (Tp27, L20). 30Counsel for the respondent says (at Tp29, LL7 - 18): Purpose has nothing to do with it. You don't look at the purpose of the use and characterise it more broadly than the activities or uses of land which are authorised by the consent. You just construe the consent, that's all. ... We say there is a development consent, therefore Workmate Abrasives applies, the genus test doesn't. Shire of Perth v O'Keefe is irrelevant and your Honour simply construes the consent. 31In Workmate, the owner had development consent for the use of the premises for the manufacture and reconditioning of industrial machinery, but that use was later prohibited, and the land was being put to a wider variety of industrial and commercial uses, including, the conversion of abrasive materials into various items, a warehouse/distribution centre, and commercial offices (subs par 19). The trial judge applied the genus test, and found that the premises enjoyed existing use rights. 32The Court of Appeal found that the uses to which the land was being put were not protected by existing use rights, as they extended beyond the use for which development consent was granted. In reaching this decision, Stein AJA (with whom Spigelman CJ and Cripps AJA agreed), said at [12] - [14]: 12. ... the only [consent] that matters is the 1974 consent ... for the purpose of manufacturing and reconditioning of industrial machinery. That, it seems to me, was the only "lawful purpose" that could become an existing use under s 106(a) of the EPA Act. 13. It is plain that the use to which the premises are being presently put, and was being put at the time of the hearing before the Land and Environment Court, is not the use that was granted consent in 1974. It follows ... that the present use is not a lawful purpose and, therefore, the existing use rights under the EPA Act do not pertain to the present use of the premises. 14. His Honour seems to have been diverted into exploring the genus test. In my opinion, counsel for the appellant is correct to suggest that the test is irrelevant to a situation where the existing use is claimed to flow from an existing development consent. The genus test would be relevant for characterisation, if there was no consent, but there was in this case. It was the rights of use under the 1974 consent which were protected by s 106. At the date of the prohibition coming into force, the first respondent had no rights to use the land for the purposes of steel fabrication. 33Accordingly, the "lawful purpose" which enjoys the benefit of existing use rights in the present case, is only that use for which consent was granted. Properly construed, the consent was for use of a dwelling-house for two flats only, the numerical limitation being an essential element of the permissible development, and its characterisation must be limited in this way. 34If the genus test were to apply, it would result in the characterisation of the use at a level of generality that would have enabled the expansion of the use to any number of flats so long as they were comprised in a RFB. That approach was rejected in Workmate, and is contrary to the approach adopted by the High Court in Weston Aluminium Pty Ltd v Environment Protection Authority [2007] HCA 50; (2007) 156 LGERA 283.

Consideration 35In Workmate, it was clearly established that the genus test ought not be applied when one is characterising an existing use, the lawful purpose of which stems from a development consent. 36Reliance on O'Keefe is, therefore, inappropriate to the present case, as it was in Botany Bay City Council v Parangool Pty Ltd ("Parangool") [2009] NSWLEC 198. 37In Parangool, development consent was granted for a warehouse for the storage and distribution of alcohol, a use which was subsequently prohibited. Approval was then sought for the "occupation of an existing warehouse building for general warehouse use". Lloyd J found that such a use was not protected by existing use rights, and was, therefore, prohibited. His Honour said (at [16] - emphasis mine): The commissioner correctly set out the factual and legal position at pars [45] and [46]. The commissioner, however, applied at pars [49] and [52], the genus test explained in Shire of O'Keefe [sic] in arriving at her conclusion that she had the power to consent to the application. But since the existing use in the present case was dependent upon the express and limiting terms of the development consent, that test - as explained in the Workmate Abrasives case - is irrelevant. 38Thus, the approach to characterisation in O'keefe does not apply in these circumstances. 39Likewise, in MM & SW Enterprises Pty Ltd v Strathfield Council [2010] NSWLEC 8; (2010) 172 LGERA 125, Pepper J held that a development consent granted for "commercial offices" did not authorise use of the premises as a "brothel" as an existing use under ss 106 and 107 of the EPA Act. Her Honour said (at [81] - [83] - some citations omitted): 81. In circumstances where premises are subject to a development consent, the terms of the consent become the "lawful purpose" from which an existing use can arise pursuant to s 106(b)(i) of the EPAA ... 82. Only the "lawful purpose", that is, the terms and conditions stipulated in the development consent, can be relied upon by the applicant to secure existing use rights. Any other "use" - such as an unlawful use or an actual use that is different from the consenting use - is not a lawful use, and cannot be relied upon to gain existing use rights (ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 80). 83. In order to determine what the lawful purpose is, the Court must look to the ambit of the language in the development consent to determine whether the use is lawful under planning law and therefore protected. 40It is appropriate for the Court to rely, in the present case, on secondary materials, to shed light on exactly what was approved. 41The approved plans (Exhibit R2) show approval for the conversion of a dwelling house into two flats, often known as a "duplex". Approval was not given for "flats" generally, or for a RFB, as defined and understood (see [3] above). 42The lawful purpose is, therefore, for two flats, and this is the purpose that is preserved under the EPA Act.

Conclusion 43Accordingly, the applicant cannot achieve the declaration sought in its summons. 44The respondent sought (par 25, as amended in argument at Tpp4, LL42 - 43, and p38, LL8 -10) a declaration that the existing use right is limited to "two flats in a ... house", and, as that would succinctly reflect these reasons, I am content to adopt that form of words. 45The parties agreed (Tp48) that the question of costs should be reserved.

Orders 46The Orders of the Court will, therefore, be: (1)The Court declares that the property known as 7 Arbutus St, Mosman, has the benefit of existing use rights as two flats in a house. (2)The applicant's summons is otherwise dismissed. (3)The question of costs is reserved. (4)The exhibits may be returned, including those in Mr Lovell's affidavit.

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: 08 August 2014

(2011) 180 LGERA 343

(2002) 122 LGERA 105

(2004) 138 LGERA 120

(2005) 142 LGERA 104

(2007) 151 LGERA 400

(2014) 199 LGERA 198

(2010) 172 LGERA 125

(2007) 156 LGERA 233

(2001) 130 LGERA 508

(2007) 156 LGERA 283

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