Karlos v Tweed Shire Council - [2018] NSWLEC 164 - NSWLEC 2018 case summary — Zoe

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Karlos v Tweed Shire Council

[2018] NSWLEC 164

Land and Environment Court (NSW)|2018-09-13|Before: Moore J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2018-09-13

Before

Moore J

Catchwords

11 Elvina Avenue Pty Ltd v Pittwater Council
Doering v Pittwater Council
1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685 Ireland v Cessnock Council (1999) 110 LGERA 311

Source

Original judgment source is linked above.

Catchwords

11 Elvina Avenue Pty Ltd v Pittwater CouncilDoering v Pittwater Council1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685 Ireland v Cessnock Council (1999) 110 LGERA 311

Judgment (42 paragraphs)

[1]

TABLE OF CONTENTS General introduction The nature of these proceedings These are not enforcement proceedings Outcomes of the proceedings The overall result The proposed vehicle size increase The proposed removal of the volumetric extraction limit The present proceedings Mr Karlos's 2015 modification application The appeal to the Court The Council's jurisdictional contention The statutory basis for the jurisdictional contention The Council's merit contentions The site inspection Introduction The objectors The supporters Mr Karlos's on-site evidence The Tweed Heads Court House hearing The Sydney hearing (Phase 1) The volumetric extraction conditions at the present operation Mr Karlos's new material Introduction The proposed Amended Statement of Facts and Contentions Introduction The proposed amended Contentions The proposed amended conditions of consent The resumed hearing on 30 April The scope of the 2003 consent Introduction The approved use Condition (1) Introduction The Statement of Environmental Effects The plans Other relevant elements of the SEE The observed 2018 development The comparative position of the 2003 approved development and the site at present The decision-making sequence The legal framework Consideration Introduction The larger delivery vehicles The volumetric extraction limit condition The outcome of the whole modification application An "amber light" approach Orders Annexure A

[2]

The nature of these proceedings

These proceedings require me to decide whether or not two elements of Mr Larry Karlos's development consent to extract water for commercial purposes at his property, 477 Urliup Road, Urliup (the site), should be modified. In 2003, Tweed Shire Council (the Council) granted development consent (the 2003 consent), subject to conditions, to Mr Karlos to establish a commercial water extraction operation. The use approved by and the operational scope of the 2003 consent are described in some detail later.
When the proceedings commenced, only one modification was contemplated with that proposed change being that Mr Karlos sought approval to move from six-metre long rigid tanker vehicles (for the transportation of water from his bores to a bottling plant across the border in Queensland) to the ability to use 19-metre long articulated vehicles for that purpose.
During the course of the hearing, it emerged that there was, in the conditions imposed at the time of granting his original water extraction development consent, two conditions that imposed a maximum rate of extraction of 5 megalitres of water per year for this purpose. It is clear, from the way Mr Karlos is currently operating his water extraction activities, that this limit is being breached significantly. Mr Karlos has been permitted, therefore, to amend his proposal also to seek removal of this annual water extraction limit and other interrelated conditions.
These two topics give rise to the only matters I am required to determine in these proceedings.
In this context, I am required to consider a legal test imposed in both ss 4.55(1A) and (2) of the Environmental Planning and Assessment Act 1979 (the EP&A Act). That test is whether the development, if both or either of the proposed modifications were to be approved, would be substantially the same development as that which had originally been granted development consent on 14 August 2003 (the 2003 consent).
If I do not conclude that this test is satisfied with respect to both or either of the changes sought by Mr Karlos, I do not have jurisdiction to approve both or either of the elements which did not satisfy that test.
Only if I am satisfied and the jurisdictional test with respect to both or either of the proposed changes, can I then proceed to consider whether or not, on the merits, such a change should be approved.
I also explain the concept of an "amber light" approach to consideration of the proposed modifications. It is in this potentially applicable context that the above comments propose alternative possible outcomes for the mandated assessment of the two modification elements now sought by Mr Karlos.

[11]

The statutory basis for the jurisdictional contention

As can be seen, the Council's jurisdictional contention is founded on what the Council says is the non-satisfaction of the test mandated to be met as a necessary prerequisite to the consideration of the merits of a modification application. That test is whether the development, if the proposed modification application was to be approved, would result in an approved development which would be an operative development substantially the same as that which had been approved by the Council in 2003.
The relevant provisions, in ss 4.55(1A)(b) and (2)(a) of the EP&A Act, are in the following terms: 4.55 Modification of consents - generally (1) … (1A) Modifications involving minimal environmental impact A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) …, and (b) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all), and (c) …, and (d) …. (2) Other modifications A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which consent was originally granted and before that consent as originally granted was modified (if at all), and (b) …, and (c) …, and (d) …. (3) … (4) … (5) (Repealed) (6) … (6A), (7) (Repealed) (8) …
Although, as earlier noted, the 2003 consent has been modified several times by the Council subsequent to the original approval, the jurisdictional test takes as the baseline, for the jurisdictional comparative process, the unmodified original terms of the 2003 consent.
However, the state of the consent, if it was to be modified as presently sought, is to be the consent in its fully modified form (that is, incorporating not merely that which is proposed in this contested application but also having regard to the earlier approved modifications).

[12]

The Council's merit contentions

In addition to the jurisdictional contention earlier set out, the Council raised seven separate merit contentions with respect to the proposed modification. These merit contentions (not reproducing the particulars set out in the SOFAC in reply) are in the following terms: 2. The modification application should be refused because approval of the proposed modification to delete Condition 3 will have an unacceptable impact on Urliup Road, and in that regard is inconsistent with the aims of Tweed LEP 2014. 3. The modification application should be refused because the development as proposed to be modified is inconsistent with the character of the surrounding locality, and with the objectives of the RU2 Zone. 4. The modification application must be refused because it has not been demonstrated that suitable vehicular access exists between the Bilambil Village and the subject site to accommodate the proposed 19m trucks, as required by clause 7.10(e) of Tweed LEP 2014. 5. The modification application should be refused because it has not been demonstrated that the approval of the development as proposed to be modified will have unacceptable adverse affects on the safety, efficiency and ongoing operation of Urliup Road as a result of the nature, volume and frequency of vehicles using the road to gain access to the land. 6. The modification application should be refused because approval of the development as proposed to be modified would have an unacceptable impact on the amenity of residents in the locality and users of Urliup Road. Having regard to the impact on amenity, the number and nature of submissions received, and the contentions raised above, approval of the modification application is not in the public interest. 7. Having regard to the number and nature of submissions received, the impact that approval of the modification application will have on the amenity of residents, and the contentions raised, approval of the modification application is not considered to be in the public interest. 8. The modification does not adequately demonstrate that approval of the development as proposed to be modified will not have an unacceptable impact on flora and fauna along Urliup Road
It is to be noted that, in addition to the particulars that were provided in the original document, Mr Karlos's legal representatives made a subsequent, extensive request for further and better particulars. This request was made on 23 January 2018 and responded to by the Council's legal representatives in a lengthy letter dated 23 February 2018. This letter formed part of Exhibit F in the proceedings.
However, as I have concluded that the total modification fails the jurisdictional test (as a consequence of each of its separate elements failing that test), it is not necessary to address any of the Council's merit objections to Mr Karlos's application.

[16]

Mr Karlos's on-site evidence

Mr Karlos deposed an affidavit in support of his modification application. It is unnecessary to traverse that material in the present context.
However, during the site inspection, Mr Karlos explained to me the physical aspects of his water extraction operation. I reproduce, at Annexure A, the site plan provided to the Council with Mr Karlos's 2003 development application. The effect of the incorporation of that plan in condition (1) of the 2003 consent is separately discussed. For the present purposes, it is appropriate to note that it gives a general understanding of the layout of the site.
However, it is also to be observed that, as also later discussed, this site plan does not depict the location of the turning loop which has actually been constructed on the site; the location of the five storage tanks on the hill to the south of Bilambil Creek that have been installed subsequent to the granting of the 2003 consent; the location of the additional bores that have been sunk since the granting of the 2003 consent; and the location of the water loading facility at approximately the southern midpoint of the turning loop now constructed on the site.
Although the entrance driveway from Urliup Road can be seen on the Site Plan at Annexure A, what is not readily able to be appreciated is that this portion of the site is virtually flat between Urliup Road and Bilambil Creek.
There are five licensed bores on the site.
One of them, a "stock and domestic supply bore", is located in the vicinity of Mr Karlos's dwelling. It was his evidence, on site, that this bore was used for domestic-related activities such as garden-watering; topping up his swimming pool; washing his car; and other domestic activities of this nature. He did, however, observe that the potable water supply for the dwelling was not drawn from this bore but was obtained from the water that was pumped for the purposes of his commercial operations. He observed that this arrangement had been adopted because the bores that were used for water extraction were drilled and encased to bedrock, thus providing a higher quality water supply then could be obtained from the stock and domestic bore.
Of the four bores associated with his commercial activities, one of them is on the upward slope on the southern side of Bilambil Creek, approximately halfway between the storage tanks for the water extraction business and the boundary fence with the neighbouring property to the south-west. Mr Karlos explained that this bore was used for monitoring purposes and enabled checking of any "cone of depression" drawdown in the immediate water table.
The three remaining bores are located, approximately in a straight line, with one of them being located toward the centre of the grassed area enclosed within the perimeter of the turning loop roadway.
The other two bores are up the slope on the southern side of Bilambil Creek but down-slope from the storage tanks later discussed. The bore which is the further south of these two bores, Mr Karlos advised me, had been drilled significantly deeper than the adjacent, middle bore. As a consequence, Mr Karlos informed me that that deeper bore to the south of the creek, together with the bore in the middle of the truck-turning arrangement, were the two bores which were used primarily for water extraction, with the shallower of the three being kept in reserve but, as I understood him, used from time to time.
Mr Karlos pumps to five storage tanks located a little further up-slope from the two bores on the southern side of Bilambil Creek. A flat pad has been benched and these tanks, each with a capacity of 22,000 litres (giving a total storage capacity of 110,000 litres) have been installed in a closely spaced line on their pad, across the slope in a generally east-west line.
Mr Karlos informed me that, when pumping water to the storage tanks, the extraction rate was approximately 10,000 litres per hour. He also informed me that water was generally pumped from the storage tanks to fill up road tankers removing water to the bottling plant, rather than using gravity feed (although I did understand that gravity feed might be possible if required).
The filling station for the road tankers had a partial low brick enclosure that appeared to be about knee-high and open toward where the road tanker would pull up. There was also an awning over the equipment for the water loading apparatus. It was Mr Karlos's evidence that it took approximately 15 minutes to fill a six-metre road tanker. However the driver also had a range of administrative duties in recording gauge readings and other needed data in a log book - with this data being the necessary information required for Mr Karlos's administration of the commercial relationships he has with those who bottle the water he supplies.
The nature and location of what exists on the site for the operation of Mr Karlos's commercial water extraction activities, and the nature and extent of the approved activities and the approved locations of those activities, are matters to which it will be necessary to return. For the present purposes, it has been sufficient to provide this somewhat detailed description of the nature and location of the elements of Mr Karlos's installation to understand where they are and what they do.

[19]

The volumetric extraction conditions at the present operation

Because, in 2003, Mr Karlos's proposed development was considered by the Council to be integrated development, it was required to be referred to the Department of Sustainable Natural Resources (the Department and subsequent bodies responsible for regulating water extraction activities are subsequently referred to collectively as the Water Regulator). As a consequence of that referral, the Water Regulator provided to the Council the General Terms of Approval (GTAs) constituting the conditions that the Water Regulator required be incorporated in the development consent. Relevant to these proceedings, the Water Regulator proposed two conditions. The first of these was under the heading "Conditions Relating to Water Entitlements" and was in the following terms: The authorised annual entitlement will not exceed 5 ML.
The second of the Water Regulator's relevant conditions was under the heading "Conditions for Water Use". This condition, related to but not in identical terms to the first condition, was: The volume of groundwater extracted as authorised must not exceed 5 ML in any 12 month period commencing 1 July. The allocation will be reviewed if there is any change in the ownership of the land.
I pointed out to the advocates that these conditions had not been modified and that, as a consequence, unless there was some statutory basis that mandated that the development consent be read as incorporating the volumetric extraction limits applicable to Mr Karlos's present water removal from his bores pursuant to any water licensing regime under the Water Management Act 2000, the maximum five megalitre per annum in any 12-month period, measured from 1 July, still applied as a restrictive condition pursuant to the EP&A Act.
Calculating the present maximum rate of practical water extraction (and assuming that, for this purpose, Mr Karlos's current bore licences - from the Water Regulator, however now named - encompassed the full present potential volumetric extraction), the limit on vehicle movements when understood in combination of the full suite of relevant conditions in the development consent raised issues of concern.
At the present time, at six loads of a six-metre truck per day, every day, with such a vehicle holding approximately 13,000 litres of water, Mr Karlos's annual water extraction would be approximately 28.5 megalitres.
If the present proposed vehicle size modification was to be approved, the maximum annual volume physically able to be extracted, if only the vehicle size and movement restrictions were taken into account, would be 65.7 megalitres.
Obviously, having regard to the volumetric limit imposed by the Water Regulator's GTAs in 2003 (and remaining currently operative), Mr Karlos's activities would exhaust that volumetric entitlement (if operating at the maximum present permitted daily six-metre vehicle's capacity) in approximately 64 days.
If the volumetric limit imposed by the development consent conditions were to be applied to movements of the 19-metre articulated vehicle (holding approximately 30,000 litres of water) proposed by the modification application, the current maximum permitted volumetric extraction would be exhausted in less than 28 days.
I indicated to Mr El-Hage that I considered that, whatever might be the merits of the presently proposed modification (and I was not to be taken as expressing any view on those merits at that time), it seemed to me that I could not have jurisdiction to modify the development consent in the fashion presently sought unless I did so in a fashion which made the consent internally inconsistent.
To render it consistent would require me to impose a further condition restricting the maximum number of vehicle movements per annum (for either the 6-metre tankers or the 19-metre articulated vehicles) so that the five megalitre annual extraction limit would not be exceeded. I indicated that imposition of such a condition would, potentially, be within power in light of the decision of McClellan CJ given in 1643 Pittwater Road Pty Ltd v Pittwater Council 11 Elvina Avenue Pty Ltd v Pittwater Council Doering v Pittwater Council 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685.
I took an adjournment of several hours to permit Mr El-Hage to consider the matters I had raised, as they had not been raised at any prior time by the Council.
When the hearing resumed, later that day, Mr El-Hage indicated that he, and others who were advising Mr Karlos, needed some time to consider the matters which I had raised. As a consequence, further hearing of the matter was adjourned until 30 April 2018.

[23]

The proposed amended Contentions

In addition to the original contentions set out in Exhibit C, the additions to the Appellant's contentions were in the following terms: Deletion of Conditions made per the General Terms of Approval for Integrated development (a) The development application was not integrated development for the purposes of section 91 of the Environmental Planning and Assessment Act 1979 (EP&A Act). As a result, the Respondent could not have imposed the conditions that purported to be made per the General Terms of Approval for Integrated development for an approval under section 116 of the Water Act 1912. The conditions are invalid and should be excised from the conditions. i. The development application did not include a proposal to enlarge, deepen or alter the existing bore. As such, this would not necessarily mean that a bore will be altered as contemplated by section 112 of the Water Act 1912. Accordingly: • the proposed development did not require an approval under Division 3 of Part 5 of the Water Act 1912 in order for it to be carried out. • it therefore follows that the development was not integrated development requiring an approval under section 116 of the Water Act 1912. ii. The applicant for the original development application did not elect to have the development assessed as integrated development. The Provisions of Part 4, Division 5 of the EP&A Act are beneficial and facilitative. As such, the development application should not have been assessed as integrated development. iii. The licencing and control of Bores is no longer managed under the Water Act 1912. Part 2 of Schedule 10 of the Water Management Act 2000 converted all former entitlements under Part 5 of the Water Act 1912 to be replaced by an approval under the Water Management Act 2000. A different legislative and licensing scheme now applies to the licencing and control of Bores on the Premises. The current General Terms of Approval are now spent and have no work to do.

[25]

The resumed hearing on 30 April

At the commencement of the hearing on 30 April, Mr El-Hage sought to rely on the four items set out at [72] that had been filed in the week prior to the resumed hearing. A lengthy exchange place concerning whether and, if so how, those documents, particularly the proposed Amended Statement of Facts and Contentions could or should be accommodated in these proceedings.
I was concerned that the proposed additional Contention 2 could only be added as a result of an application for leave to amend and that such amendment, given that it was substantial and not purely procedural, could only be effected by a Notice of Motion. No such Notice of Motion had been filed - although, as I indicated, Mr Holt's affidavit was, potentially, capable of being regarded as sufficient to support such a Notice of Motion.
I indicated that I was prepared to deal with the application for leave to amend if an undertaking was given that such a Notice of Motion would be filed. Mr El-Hage gave that undertaking and I then proceeded to deal with the question of whether or not the amendment should be permitted.
Leave to amend was opposed by Mr Seton on the basis that the proposed removal of the water management conditions was entirely unrelated to the amendment application which had been made to the Council. He submitted that what was now proposed was, as a consequence, so different as to require a separate, fresh modification application to be made to the Council on behalf of the Appellant. He submitted that the present proceedings were not amenable to being amended to permit agitation of this issue.
On a contingent basis, he advanced the proposition that, if I was minded to permit the amendment, the Council would require time to consider not only the legal basis upon which the outcome sought by the amendment was said to be founded, but also to consider whether further evidence would be necessary to address the proposed amendment.
I canvassed a range of options to progress the matter, as I considered it would be appropriate to set out the reasons for my determination of the amendment application (whatever its outcome might be).
I have taken the view that, although there is a distinct difference between the modification proposed to the 2003 consent when these proceedings were commenced and that which would require to be dealt with if the proposed modification to remove the volumetric limit was permitted to be added, it was appropriate to permit amendment for this to occur.
I reached this conclusion because, although potentially of adverse significance to Mr Karlos on a jurisdictional basis, the approach that Mr El-Hage proposed was one that would have me conclude that I could delete the volumetric water conditions without needing to engage with the jurisdictional test.
Although I have, for the reasons set out in this decision, concluded that that approach would be erroneous and that the jurisdictional test needed to be addressed antecedent to consideration of any merit or other basis for potential modification of the 2003 consent, I was satisfied that it was appropriate to permit the amendment.
Doing so, I was satisfied, would be consistent with the overriding purpose set by s 56 of the Civil Procedure Act 2005 of enabling the just, quick and cheap resolution of all the issues genuinely in dispute between the parties.
In addition, because this issue had arisen solely as a result of my reading of the volumetric and other water conditions incorporated in the 2003 consent rather than from any matters addressed by either of the parties, issues of late amendment did not arise. As a consequence, permitting time for this additional element of the dispute to be considered and addressed by both parties was, in my view, the appropriate way forward rather than rejecting the proposed amendment to delete the water conditions that had been imposed at the request of the Water Regulator.

[29]

The Statement of Environmental Effects

Condition (1) mandates that the development must be carried out in accordance with the SEE, as lodged with the Council in support of the development application leading to the granting of the 2003 consent. In setting out various elements of the SEE in the following paragraphs, I have added emphasis where I consider it is appropriate as providing a proper understanding of the relevant limitations imposed by the 2003 consent.
The SEE that was lodged with the 2003 development application, and incorporated in the 2003 consent by condition (1), set out a number of matters that are relevant in these proceedings. The SEE was in Exhibit 6 at Tab 2. First, under the heading "Background", the SEE noted: The rural industry would comprise the bottling of mineral water for commercial sale. The water is obtained from an existing bore located on the subject land. The current bore licence (30BL179893), issued by the Department of Land and Water Conservation on 25 January 2002 is for stock and domestic purposes only. Accordingly, development consent from Tweed Shire Council for the rural industry, and a commercial license from the Department of Land and Water Conservation, are required prior to the commencement of commercial bottling operations.
In the description of the proposal, under the heading "General", the SEE said: It is proposed to establish a mineral water bottling operation of the land. The proposal comprises: • installation of a 30,000-litre storage tank in the existing pool shed, • installation of filter systems to both the inlet and outlet of the storage tank, • connection of the existing bore to the storage tank, • establishment of a work and storage area for the bottling operations within the confines of the pool shed.
The second element in the general description of the proposal is under the heading "Infrastructure". This read: The infrastructure associated with the operation consists of the following: • existing bore, located approximately 150 metres from the pool shed (Bore Licence No 30BL179893 issued by the Department of Land and Water Conservation, 25 January 2002), • pool shed, part of building approval 1221/95 issued by Tweed Shire Council, 1 November, 1995, • 30,000-litre plastic storage tank, • filter system, • 20-litre storage bottles, • details of the location of the pool shed is indicated on the plans.

[31]

Other relevant elements of the SEE

There are several other elements of the SEE which warrant being noted. The first, under the heading "Details of Operation", is the comment that: If demand for bulk water supplies justify it, a 1000-litre storage tank fitted to a trailer would be purchased to assist with delivery.
It is to be observed that the portion of the description in the SEE relating to the proposed method of extracted water from the site in bottled form, together with the future possibility of trailer-based removal, plays no role in my consideration of either element of this modification application, as conditions (3) and (4), in combination, create the permitted regime for the purposes of the 2003 consent for water removal in lieu of that which had been described in the SEE.
A second aspect, under this heading, is the notation (Exhibit 6, Tab 2, folio 12) that: Supplies would be loaded and unloaded adjacent to the bottling room.
It is clear that this does not occur.
Under the heading, "Hygiene/health requirements", the SEE notes (at folio 16): The pool shed would be upgraded to meet the requirements for a bottling room complying with Food Safety Standard 3.2.3.
This has been rendered irrelevant as the pool shed no longer performs any functional role as I understood Mr Karlos's on-site description of his operational model.
Finally, under the heading "Amenity/character", the following appears (at folio 16): The proposed bottling operation would be conducted within an existing structure and would not involve any new construction or activities which would be likely to conflict with rural amenity of the locality.
The first element of this statement is not reflective of the current position. There is no scope in the present proceedings for consideration of the second element as there is no approval sought, using these proceedings as the vehicle, for any of the new structures on the site servicing Mr Karlos's activities.
There is nothing in the terms of the 2003 consent that would necessitate having regard to any documents other than the SEE and plans to which reference is made in condition (1). There is certainly no need to have regard to any of the provisions of the Interpretation Act 1987 to provide a foundation for reference to any other documents.

[33]

The comparative position of the 2003 approved development and the site at present

It is important, in the context of that with which I am required to grapple in these proceedings, that it is appropriate to list a number of points disclosing the comparative position between that which was approved by the 2003 consent and the operational activities currently being undertaken by Mr Karlos on the site. These differences, relevantly, are: 1. The 2003 consent permitted extraction of water for commercial bottling purposes from a single existing bore located on the property. It is to be inferred from the Figure 3 Site Plan (see Annexure A) that this bore is the one described by Mr Karlos as currently being used for monitoring purposes and located toward the boundary of the site with the neighbouring property to the west. As earlier set out, water for Mr Karlos's current commercial water extraction operation is obtained from three separate bores (in the generally linear arrangement earlier discussed at [48] and [49]), none of which were identified in the 2003 consent plans; 2. The water pumped from the bores used for extracting water for commercial usage purposes is stored in five 22,000 litre tanks part way up the hill on the southern side of Bilambil Creek (as earlier described at [50]). The 2003 consent plan authorised the use of a single 30,000 litre tank said to be contained in a building described as Pool Shed shown in Figure 2 Pool Shed Layout (also see Annexure A); and 3. The water loading facilities currently utilised to load the present six-metre tanker trucks which carry water from the site to the bottling plant (a loading facility of some technical sophistication and incorporating equipment permitting the data recording by the tanker trucks' drivers as earlier discussed, at [52]) is not depicted at all on the 2003 development consent Figure 3 Site Plan; and 4. The loop road which has been constructed to facilitate movements of the tanker trucks to and from the loading facility described in the preceding point is also absent from the 2003 development consent plans in the Figure 3 Site Plan. I observe that it has not been suggested to me by Mr El-Hage that construction of this loop road was not an activity which would have required the granting of the Council's approval prior to its construction.
It is to be observed that the Amended Statement of Facts and Contentions tendered on behalf of Mr Karlos (Exhibit O) notes a number of modification applications being made to the Council. The relevant elements of those, where modification was approved by the Council, are dealt with elsewhere.
With respect to the physical infrastructure located on the site and utilised by Mr Karlos for the purposes of his commercial water extraction activity, none of the modification applications (whether granted or not) described in Exhibit O, proposed approval by the Council of any variation to the infrastructure shown in the March 2003 plans nominated in condition (1) of the 2003 consent.
It therefore follows, on Mr Karlos's own case, the additional infrastructure now utilised for the purposes of his commercial water extraction activities has not been the subject of approval by the Council. In addition, there is no basis of which I am aware permitting the conclusion that this additional infrastructure for commercial water bottling purposes is exempt from the requirement for consent to be given by the Council.
There is no certification of the adequacy of this additional infrastructure for building certificate purposes, nor any application for consent for it to be used for the purposes of commercial water extraction (in line with the approach set out by Bignold J in Ireland v Cessnock Council (1999) 110 LGERA 311; [1999] NSWLEC 250 and subsequently followed consistently by this Court), that would permit approval for future use for such purposes.

[34]

The decision-making sequence

Mr El-Hage submitted, for Mr Karlos, that I should address, initially, questions as to whether or not the conditions, which are sought to be modified or removed in these proceedings, were ones which were within jurisdiction to be imposed in the first instance.
In this fashion, he sought, with respect to both the vehicle limitation issue and the annual water extraction limit issue, to have me determine what might, in broad terms, be matters for declaratory relief prior to me determining the question of whether or not, if I was to grant the modification application as proposed in its now amended form, the development as modified would remain substantially the same development as that which was approved by the Council by the granting of the 2003 consent, subject to the conditions proposed to be modified/removed.
In this respect, the proposed decision-making sequence advanced on behalf of Mr Karlos contains a fundamental and insuperable flaw. The flaw is that the necessary first question to be asked in any merit decision-making process such as these is do I have the jurisdiction to order the outcome sought by the applicant in such proceedings?
In these proceedings, being an application to modify the 2003 consent, the specific jurisdictional question to be answered is that which comes from s 4.55 of the EP&A Act. That question, in summary, is: Will the development, if modified in the fashion sought, result in a development which is substantially the same as the development which was originally approved?
If, and only if, that question is answered in the affirmative, do any other issues arise for consideration and determination in a Class 1 appeal seeking to modify an existing development consent.
The submissions made by Mr El-Hage that some alternative decision-making sequence, potentially more favourable to Mr Karlos, is the process that I should adopt is misplaced. If I was to follow that course and address any of the merit matters, no matter how framed on behalf of Mr Karlos, I would be committing an error, as I would be proceeding without determining whether or not the necessary jurisdictional test had been satisfied.
In layperson's language, such tests are not infrequently described as "gates" that must be open before further steps on the path to merit consideration can be undertaken. If the gate is unable to be opened because a necessary jurisdictional prerequisite has not been satisfied, further merit assessment steps remain shut off in such proceedings.
It is, therefore, necessary for me to consider, first, whether the jurisdictional "gate" is open. If it is not, Mr Karlos's appeal must be dismissed and his modification application (as permitted to be amended during the course of the hearing) must be determined by refusal.

[35]

The legal framework

It is now appropriate to turn to describe the evolution of the legal framework which is now applicable for the consideration of whether or not the prerequisite jurisdictional question to consideration of the merits of Mr Karlos's application to amend the 2003 consent can be answered "yes" or not.
There are tests that have been laid down over many years for assessing whether a development modification, if approved, will result in a development that remains substantially the same development as that for which consent was originally given.
The proposition was originally discussed by Stein J in Vacik Pty Limited v Penrith City Council (1992) NSWLEC 8 (Vacik) in which his Honour said (in that unreported decision), "In my opinion, substantially when used in the section" - that is, the section that was then application for modification applications but remaining relevant now - " means essentially or materially or having the same essence."
That interpretation was endorsed by the Court of Appeal in North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 43 NSWLR 468. In the leading judgment, at p 475, Mason P said: The meaning of substantially the same development is discussed by Stein J in Vacik Pty Limited v Penrith City Council…. in terms with which I respectfully agree.
In Vacik, Stein J also sounded the cautionary note that: One should not fall into the trap of saying that the development was for a certain use - extractive industry - and, as amended, it will be for precisely the same use and accordingly is substantially the same development. What is important is that a development, particularly extractive industry, must be assumed to include the way in which the development is to be carried out
Vacik continued to note that, in that case, an additional and distinctly different use was proposed to be included as part of the overall activities on the site that was the subject of that application. In that case, the applicant did not submit that the new, separate use of the land was incidental or ancillary to the dominant use. Indeed, the applicant conceded that a separate development consent might have been needed for the additional use.
In this case, the broad use (but not the specifically nominated single existing bore use) remains the same - commercial extraction of water for bottling.
More recently, Bignold J, in Moto Projects (No 2) Pty Limited v North Sydney Council (1999) 106 LGERA 298 at p 309, dealt with the test that had been discussed by Stein J and by the Court of Appeal in terms as follows: The relevant satisfaction required by section 96(2)(a) to be found to exist in order that the modification power be available involves an ultimate finding of fact based upon the primary facts found. I must be satisfied that the modified development is substantially the same as the original approved development. The requisite factual finding obviously requires a comparison between the development as currently approved and the development as proposed to be modified. The result of the comparison must be a finding that the modified development is essentially or materially the same as the currently approved development. The comparative task does not merely involve a comparison of the physical features or components of the development as currently approved and modified where that comparative exercise is undertaken in some type of sterile vacuum. Rather, the comparison involves an appreciation qualitative as well as quantitative of the developments being compared in their proper contexts including the circumstances in which the development consent was granted.
Those two propositions, that is, the quantitative nature of the modification and the qualitative nature of the modification, pose two separate tests, both of which need to be satisfied if the modification application is to be approved as resulting in a modified development that will be substantially the same as the development for which consent was originally given.

[36]

Introduction

I have earlier set out the legal framework within which this modification application is to be determined. I have also explained the circumstances by which I granted leave to Mr Karlos to amend that which was being considered in these proceedings by adding the proposed removal of the water management conditions imposed in the 2003 consent.
In this context, it is to be observed that the jurisdictional test earlier set out is not to be applied, as a matter of law, separately to the two modification elements now being considered by me. These proceedings comprise a single modification application and not two separate applications. Although what are two separate elements encompassed within these amended modification proceedings, they comprise, now, a single agglomerated proposed modification to the existing consent.
Whilst, for the reasons explained below, each of these elements, taken separately, would warrant refusal of this single modification application, taken together there can be no doubt as to the correctness of the necessity to dismiss this appeal.
Finally, in this introduction, it is appropriate to note that I have already set out details of how Mr Karlos has physically modified his activities, since the granting of the 2003 consent, in a number of fashions which would appear to have required development consent (whether by fresh development application or modification to the 2003 consent being irrelevant for the purposes of these proceedings) from the Council.
Because this modification application warrants refusal on the basis that it fails the mandatory jurisdictional test necessary before the merits of either element now encompassed by it can be considered, it is unnecessary for me to address the extent to which it might or might not be permissible to modify a development consent in circumstances where the consent, if modified, could only be effective by relying on development elements on the site which required consent from the Council but for which such consent had never been sought and obtained.
However, I have significant reservations about whether an otherwise jurisdictionally qualifying and merit-acceptable modification application could be approved in such circumstances, particularly where the unapproved development was, in a functional sense, an essential operative prerequisite for any modified development and where the expressly described permitted use (see [91]) is not that actually being carried out.
I consider separately below each element of the (now) modification application. I do so for the reasons later set out concerning a potential "amber light" approach to the application's outcomes.

[37]

The larger delivery vehicles

On 20 March 2015, the Council modified Mr Karlos's 2003 consent by deleting condition (4) and inserting, instead, a new condition (4A) that permitted 10 trips (five round trips) per day for delivery purposes. The new condition setting these vehicle operation parameters was to operate for a 12-month trial period. On 20 March 2016, the trial period expired and condition (4A) lapsed.
However, Mr Karlos had lodged a further modification application with the Council, which application sought, amongst other things, a further alteration to the vehicle movement regime, this time on a permanent basis. The Council granted this aspect of Mr Karlos's further modification application and inserted condition (4B) in his 2003 consent. This condition, operative from 3 June 2016, imposed a permanent vehicle movement limit of 12 trips per day (six round trips). It is this vehicle movement condition which currently applies to Mr Karlos's activities.
As I have earlier observed, the comparison that must be made for consideration of the jurisdictional test set by s 4.55 of the EP&A Act is whether the development, if modified in the fashion sought by Mr Karlos concerning permitted vehicles size, would result in a development that was substantially the same development as that which was approved by the 2003 consent.
Although in June 2016, the 2003 consent was modified so that condition (4B) now permits 12 vehicle trips (that is, six round trips) per day, the relevant comparative position for this modification application requires consideration against the terms of condition (4) of the 2003 consent, as that condition read when the consent was originally granted. Although I have earlier set out that condition, it is appropriate to repeat it in this present analytic context. Condition (4), as originally imposed, read: 4. Daily delivery movements are restricted to two (2) trips per day.
It is therefore, the position that the vehicle size modification seeks approval, for the purposes of s 4.55 of the EP&A Act, not merely to increase the overall length of the permitted delivery vehicles by some 200% and increase the volumetric capacity of the vehicles by some 130%, but there would also be a 500% increase in the frequency of movement of those larger vehicles when compared to what was permitted by the terms of the 2003 consent at the time that consent was granted.
For the purposes of the qualitative and quantitative analysis mandated by Moto, the necessary comparison to be made is between the original operative effect of conditions (3) and (4), as imposed in 2003 (a single round trip by a six-metre tanker), and what would be the outcome if the vehicle movement modification as now sought was to be approved (19-metre articulated vehicles undertaking six round trips per day).
I have set out the nature of Urliup Road between the village and Mr Karlos's property. The objector evidence given during the course of the site inspection and the written material from objectors in Exhibits 3 and 9 made it clear that the nature of the interaction between other road users (whether in vehicles, pedestrian or mounted being irrelevant) was fraught as a consequence of the present operation using the six-metre rigid vehicles presently permitted. The impact on other road users of the present activities is, I accept, significant, despite the fact that there have been no actual recorded accidents involving the six-metre rigid tankers accessing Mr Karlos's property for the purposes of removing extracted water to the bottling plan.
Taking the traffic evidence of Mr Hollyoak (for Mr Karlos) at its highest (thus accepting that, for the purposes of this consideration, 19-metre articulated tanker vehicles are able to access the property by utilising Urliup Road in its present configuration), it was, nonetheless, the position that the manner of their transit would differ from that of the smaller rigid vehicles.
The nature of the swept paths showing movements round the various bends makes it clear that the larger vehicles' occupation of road space, whilst doing so, would be considerably greater than is the existing position with the smaller rigid vehicles.
This, in itself, is a significant, qualitative difference between the present activities for the removal of extracted water from Mr Karlos's property.
I have earlier set out the capacity of the currently permitted and that of the proposed future tanker vehicles. At the movement utilisation rate originally permitted by the 2003 consent, the maximum volume of water permitted to be removed from the site per day is 13,000 litres. If the proposed 19-metre articulated vehicles were to be permitted, the maximum volume of water able to be removed on any day would increase to 180,000 litres. This would be an increase of nearly 1,200 %.
This increase in the volume of water able to be removed from the site to the bottling plant is significantly quantitatively different from that which was originally permitted pursuant to the 2003 consent.
As a consequence, on an overall consideration of this element of the single modification application now being considered, the proposed amendment to condition (3), if approved, could not be regarded as resulting in a modified development which would be substantially the same as the original development approved by the Council.
I add that the submission for Mr Karlos that off-site vehicle impacts are matters to be addressed pursuant to the Roads Act 1993 rather than the EP&A Act is risible and does not require any analysed response.
On this basis alone, the appeal must be dismissed as there is no satisfaction of the necessary jurisdictional prerequisite to assess its merits.

[38]

The volumetric extraction limit condition

Water conditions were imposed, as part of the suite of conditions applicable to the 2003 consent, as a consequence of the provision of the GTAs provided by the Water Regulator. The GTAs were based on the outcome of a referral by the Council of Mr Karlos's development application to the Water Regulator as integrated development.
I interpolate that the payment by Mr Karlos of the relevant fee to permit this referral to occur is not taken by me to constitute an admission on behalf of Mr Karlos that the development was, as a matter of law, properly characterised as integrated development. In the context of the jurisdictional determination I am to make pursuant to s 4.55 of the EP&A Act, this is irrelevant.
By the amendment permitted by me during the course of the proceedings, Mr Karlos seeks the removal of all of the conditions incorporated in his development consent arising as a result of the imposition of the GTAs proposed by the Water Regulator.
It is fair to observe that, for the purposes of the jurisdictional test which I must consider, only two of those conditions are relevant. Both these conditions simply impose a maximum annual water extraction rate of 5 megalitres (see [21] earlier setting out the terms of the relevant conditions).
I have earlier set out, in my consideration of the proposed vehicle size modification, the fact that condition (4) in the 2003 consent as originally granted only permitted a single round trip per day of a six-metre delivery vehicle removing water from the site for transport to the bottling plant.
The effect of this is that, for the reasons explained above, the combination of conditions (3), (4) and those imposing the volumetric limit of the 2003 consent as originally granted, operate so that Mr Karlos's water extraction operation would permitted to operate on every day of the year at a daily extraction rate of 13,000 litres.
If the volumetric limit was removed (without increasing the size of the permitted delivery vehicles) and having regard to the number of permitted delivery round trips arising as a consequence of the 2016 modification to the 2003 consent, the maximum volume of water able to be extracted as a consequence of the inter‑operation of the conditions as would be modified (confined to six-metre-long tankers) would be 28.47 megalitres per year.
This is to be compared with the 5 megalitre maximum extraction permitted by the 2003 consent.
If the volumetric limit was removed (combined with increasing the size of the permitted delivery vehicles) and having regard to the number of permitted delivery round trips arising as a consequence of the 2016 modification to the 2003 consent, the maximum volume of water able to be extracted as a consequence of the inter‑operation of the conditions as would be modified (utilising 19-metre-long articulated tankers) would be 65.7 megalitres per year.
Each of these outcomes is to be compared with the 5 megalitre maximum extraction permitted by the 2003 consent.
I have earlier set out, at [66] and [67], the fact that the present volumetric limit in the 2003 consent would permit only 64 days operation of Mr Karlos's activities (if using six-metre rigid vehicles) and less than 28 days per annum if using 19-metre articulated vehicles).
The proposed changes to these temporal operational limitations that arise from the volumetric limit are of equal significance in a quantitative sense to the volumetric change that would arise if the modification to the water extraction limit was changed.
For the purposes of the test in s 4.55 of the EP&A Act, either of the outcomes which would arise or potentially arise (depending on the permitted vehicle size), if the volumetric limit was removed, could not be regarded as resulting in a "substantially the same development", in a quantitative sense, when compared to the maximum 5 megalitre limit on water extraction which was authorised by the 2003 consent.

Karlos v Tweed Shire Council

At a glance

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Before

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Judgment (42 paragraphs)

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Cases Cited (7)

Cited By (1)