Lemworth Pty Limited v Liverpool City Council

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40202/01 LEC 10979/00 STEIN JA HODGSON JA ROLFE AJA

Tuesday, 6 November 2001 LEMWORTH PTY LIMITED v LIVERPOOL CITY COUNCIL The appellant operates a brothel on the first floor of a two-storey building in Northumberland St, Liverpool. Development consent was granted in June 1997, shortly before the Liverpool Local Environmental Plan prohibited brothels in areas zoned for business, as is the case in this area. The use of the first floor of the building as a brothel constitutes an 'existing use' within the meaning of Division 10 of Part 4 of the Environmental Planning and Assessment Act 1979. In August 2000 the appellant lodged a development application with the respondent seeking consent to alterations and additions to the existing premises and the use of the ground floor as a brothel. After a deemed refusal by the Council, the appellant appealed to the Land and Environment Court where Cowdroy J was asked whether Cl 42 of the Environmental Planning and Assessment Act Regulations 2000 would permit a grant of development consent for the 'enlargement, expansion and/or intensification of the existing use … so as to include the ground floor'. Cowdroy J answered in the negative and leave to appeal was sought. The leave application and substance of the appeal were heard concurrently.

Held: Per Stein, Hodgson JJA and Rolfe AJA:

1. Leave to appeal granted.

Per Stein and Hodgson JJA:

1. The appeal concentrated on ascertaining the meaning of 'land' in Cl 42(2) of the Environmental Planning and Assessment Act Regulations 2000. Although the earlier authorities of Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 and Parramatta City Council v Brickworks Limited (1972) 128 CLR 1 are now of limited assistance, they were still relevant to the construction of the Regulation in question as they provide some guidance on the construction of the word 'land'.

2. The question as to what constitutes the 'land' must be determined in accordance with the facts and circumstances of the particular existing use and the proposed enlarged, expanded or intensified use.

• Scully v Leichhardt Council (1994) 85 LGERA 109 applied
• South Sydney City Council v Houlakis (1996) 92 LGERA 401 applied

3. The whole of the land could not be regarded as a 'unit' for the purpose of the brothel use. The distinct unit of land used at the relevant date was plainly the first floor, for which development consent was originally sought and granted.

• Salvation Army v Newcastle City Council (2000) 107 LGERA 40 applied
• Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 applied

4. The 'land' in question is the first floor of the building. There is only room for an intensification or enlargement of the existing use within that area. 5) The finding that the 'land' is limited to the first floor of the building does not deprive the regulation of work to do. In other factual situations or where it can be established that the land is being held in reserve for the existing use it will operate.

6. That consent to the first floor use as a brothel involves the use of stairs from the ground floor and the car park does not expand the 'land' on which the existing use is being carried out to those areas or to the whole of the building or allotment.

7. The construction of Clause 42 as put forward by the appellant would counter the trend of narrowing rather than expanding existing uses and defeat the clear intent of the legislature, which, since the inception of the Environmental Planning and Assessment Act 1979, has been to circumscribe and restrict existing use rights. At no stage has this trend been reversed.

• Vanmeld Pty Ltd v Fairfield City Council (1992) 75 LGRA 374 per Handley JA applied
• South Sydney City Council v Houlakis (1996) 92 LGERA 401 per Beazley JA applied
• King v Lewis (1991) 74 LGRA 362 applied
• North Sydney Municipal Council v Boyts (1989) 67 LGRA 344 per Kirby J applied

Per Rolfe AJA (in dissent):

1. The words 'enlargement' and 'expansion' should be given the meaning which a reading of them demands, being that 'enlargement' clearly means that the area on which the existing use is carried out will be increased. This is also the most usual meaning of the word 'expansion' in this context. There can be no realistic 'enlargement' or 'expansion' in many cases if an additional area, albeit within the 'land' cannot be used.
2. The work of the words of the Regulation is greatly limited by a restrictive construction in circumstances where there is no apparent justification for adopting one. This is supported by the width of the words used, that one can go beyond the land actually used if another part of the land has been reserved, that there are factual situations which allow the use of another part of the land, and that any development application has to be considered on its merits. There is little utility in drawing fine distinctions where the relevant authority can determine the matter on the merits.

Orders:

1. Leave to appeal granted.
2. Appeal upheld in part.
3. Appellant to pay the respondent's costs of the appeal.
4. The following rider be added to the answer of his Honour to the question before the Court: Unless the ground floor of the premises was included in the land which was used for the existing use of a brothel immediately before the relevant date by reason of being held in reserve or otherwise.
5. The matter be remitted to the Land and Environment Court for any further hearing.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40202/01 LEC 10979/00 STEIN JA HODGSON JA ROLFE AJA

Tuesday, 6 November 2001 LEMWORTH PTY LIMITED v LIVERPOOL CITY COUNCIL Judgment 1 STEIN JA: This is an application for leave to appeal from a question of law determined by Cowdroy J in the Land and Environment Court. Since the court is of the view that it is appropriate to grant leave, I will proceed to the substantive appeal.

The facts 2 The background facts upon which Cowdroy J answered the question posed were agreed between the parties. From the Statement of Agreed Facts I mention the following. The subject land is that contained in Lot 6 in DP 631256, upon which a two storey commercial building is erected. It has a street frontage to Northumberland Street, Liverpool. At the rear of the building is a car park. Access to the upper floor of the building is via a staircase leading from the street level and also by stairs from the car park. 3 On 17 June 1997 the Land and Environment Court upheld an appeal (by the present appellant) and granted development consent for a brothel on the first floor of the premises. The consent was subject to a number of conditions. 4 On 29 August 1997 development for the purpose of a brothel became prohibited in areas zoned Business 3(a) under the Liverpool Local Environmental Plan 1997 (the LEP). However, the use of the first floor as a brothel constitutes an 'existing use' within the meaning of Division 10 of Part 4 of the Environmental Planning and Assessment Act 1979 (the Act). 5 The appellant lodged a development application with the Council on 2 August 2000. It sought consent to the alteration of and additions to the existing premises and the use of the ground floor as a brothel. 6 A deemed refusal appeal to the Land and Environment Court was commenced by the appellant on 12 October 2000 and the Council formally refused the application on 16 January 2001.

The question and answer 7 The question of law formulated by the respondent Council, and which Cowdroy J was asked to answer, is as follows: Whether Clause 40 (Clause 42 of the Environmental Planning and Assessment Regulation 2000) of the Environmental Planning and Assessment Regulation 1994 would permit development consent to be granted for the enlargement, expansion and/or intensification of the existing use of the first floor of the premises at 239 Northumberland Street Liverpool so as to include the ground floor of the premises at 233-239 Northumberland Street, Liverpool? 8 On 2 March 2001 his Honour answered the question in the negative and as follows: Clause 42 does not permit development consent to be granted for the enlargement, expansion and/or intensification of the existing use of the first floor of the premises at 233-239 Northumberland Street, Liverpool, so as to include the ground floor of the premises of 233-239 Northumberland Street, Liverpool. 9 The parties are agreed that, depending on the fate of the appeal, his Honour should have imposed a qualification on the answer. That is because the appellant maintains that it could call evidence that the portion of the ground floor, into which it seeks to expand the brothel, was held by it in reserve for such purpose. This would require a qualification to his Honour's answer should the appellant fail in its contention that Cowdroy J was wrong. Counsel for the respondent, Mr I Hemmings, accepts this position. Thus, even if the respondent succeeds in supporting his Honour's decision and his answer to the question, the determination will have to be qualified so as to leave it open for the appellant to seek to prove that the ground floor was held in reserve for the brothel.

The Judgment below 10 Cowdroy J noted the submission of the appellant that the Council was empowered to consent to an enlargement, expansion or intensification of an existing use under cl 42 of the EPA Act Regulations 2000. Clause 42 provides: (1) Development consent is required for any enlargement, expansion or intensification of an existing use. (2) The enlargement, expansion or intensification: (a) must be for the existing use, or for a changed existing use, but for no other use; and (b) must be carried out only on the land on which the existing use was carried out immediately before the relevant date. [emphasis added] 11 His Honour noted that the appellant contended that, pursuant to cl 42, the consented use as a brothel on 17 June 1997 was applicable to the whole of the land on which the building was erected. Reliance was placed on conditions of consent regarding car parking to the rear of the building. 12 The Council submitted that 'land' in cl 42(2)(b), taking its definition from s 4 of the Act, must in this case apply only to the first floor of the building (the existing use) and not to the entire property or building. 13 His Honour noted that s 107(2)(b) of the Act limited the effect of the High Court decisions in Eaton & Sons Pty Ltd v Warringah Shire Council (1972) 129 CLR 270 and Parramatta City Council v Brickworks Limited (1972) 128 CLR 1. 14 Cowdroy J referred to Salvation Army v Newcastle City Council (2000) 107 LGERA 40 wherein Pearlman J concluded that the whole of the land in that case was not entitled to the benefit of an existing use that was only conducted on portions of the land parcel. 15 Cowdroy J said: 20. In the present circumstances the consent was granted for 'the first floor level' of the building. The extension of the use sought by the applicant is in respect of the separate portion of the building over which council retains planning control. It is irrelevant that the consent in respect of the existing use on the first floor encompasses part of the car park at the rear of the premises since there is no evidence that the ground of the building was to be held in reserve. Proof of such fact is essential if it is to be relied upon to justify the extension of such use.

and 21. Section 107(2)(b) operates to restrict any extension of an existing use by declaring that the protection afforded by s 107(1) does not authorise any increase in the area of a use. Since the term 'building' as contained by s 4 of the Act includes part of a building, the operation of s 107 of the Act and cl 42 of the Regulations would not permit any increase in the use made of a part of a building under an existing use right. So construed council has no power to consent to such an extension under cl 42 of the Regulations. 16 Cowdroy J added that the construction urged by the appellant could produce unusual results. He gave an example of a ground floor shop in a residential tower empowering the extension of the shop use throughout the building erected on the same 'land'. 17 His Honour said that Parliament had intended to contain the enlargement of existing uses to the confines of the 'land' which had the benefit of the use. His Honour referred to Vaughan-Taylor v David Mitchell-Melcann Pty Ltd (1991) 25 NSWLR 580 and concluded that the limitation on the extension of existing uses in s 107(2)(b) of the Act substantially altered the concept of existing use.

The submissions on appeal 18 Briefly stated the appellant submits that pursuant to cl 42 of the Regulation, the land on which the existing brothel use had been carried out is either the whole of the block of land on which the building and car park is situated, or the footprint of the land beneath the building. On either view, the ground floor forms part of the land on which the existing use has been carried out. 19 On behalf of the appellant, Mr Austin QC submits that cl 42(2)(b) imposes a geographical limit upon the area of any enlargement, expansion or intensification. The words in sub-clause (b) of the Regulation ought not be given a narrow or restrictive construction. The 'land' referred to therein should not be treated as equivalent to the area upon which the existing use is carried out. To confine it to the actual area physically used for the existing use would defeat the evident purpose of the regulation. The appellant conceded that 'intensification' could only be on the same area but an 'enlargement' or 'expansion' needed to be on a wider area than the existing use but necessarily confined to the 'land'. 20 The Council submits that, for the purposes of cl 42, the ground floor is not the 'land on which the existing use was carried out'. On its behalf, Mr I Hemmings argues that 'land' is defined by an inclusive definition in s 4 of the Act and relates to a topographical entity only and not to a bundle of rights, (North Sydney Council v Ligon 302 Pty Limited (1996) 91 LGERA 352)). 21 Clearly 'land' cannot be confined to mean only the surface of the land. In this case, the development consent relates to the 'land' being the first floor of the building. 22 For the purposes of the Act, 'land' may be construed to mean not only 'a building erected on the land' (s 4) but also part of the building, again see the s 4 definition. The land cannot mean the whole of the allotment. 23 The respondent further submits that 'land' in cl 42 should be understood in the context of the discussion in Eaton and Brickworks. Section 107(2)(b) was included in the Act to limit the extent of existing use rights (Vaughan-Taylor). Clause 42 permits expansion of an existing use beyond the area actually physically and lawfully used but, at the same time, imposes a limit on that expansion. Relying on the Salvation Army case, the 'land', for the purposes of cl 42, and in the circumstances of this case, is limited to the first floor of the building, that being the 'land' which is the subject of the development application and consent.

Consideration 24 The appeal has concentrated on ascertaining the meaning of 'land' in cl 42(2) of the Regulation. While Beazley JA properly observed in South Sydney City Council v Houlakis (1996) 92 LGERA 401 at 406 that the earlier authorities of Eaton and Brickworks are now of limited assistance, in one aspect they are still relevant to the construction of cl 42(2). 25 Brickworks and Eaton were both concerned with Ordinances which restricted the enlargement or extension of existing uses to the land on which the existing use was carried out at the relevant date. To this extent, they provide some guidance on the construction of the word 'land' in clause 42. 26 In 1986 the Act was amended with the plain intention of overcoming the liberal construction by the High Court of the 'existing use of land' in Brickworks and Eaton (see for example, Priestley JA in Vaughan-Taylor (at 374), Clarke JA in Ku-Ring-Gai Municipal Council v Mobil Oil, (Unreported, Court of Appeal, 3 June 1992) and Clarke JA and Beazley JA in Houlakis). 27 The Regulations made for the purpose of s 108(1) at the time of the Mobil case at first instance were the 1980 Regulations, see (1990) 70 LGRA 419 at 421 Mobil Oil v Ku-Ring-Gai Municipal Council. Regulation 53(2)(b) provided that any rebuilding of an existing use shall 'be carried out only on the allotment or allotments' on which the existing use was carried out immediately before the relevant date. See also cl 52A(2)(b) regarding any enlargement, expansion or intensification. I held that the existing use rights applied to the whole of the allotment on which the use was being carried out on the relevant date. 28 The appeal was determined after the decision in Vaughan-Taylor, which also post dated my decision at first instance in Mobil. Clarke JA noted that, as a result of the amendments to the existing use provisions in the Act (ss 107 and 109), existing use rights were to be interpreted more narrowly than previously. However, enlargement and other alterations were facilitated with the consent of the local council. To this end, s 108 authorised the making of regulations. Regulation 53(2)(b) fixed the limitation on which the rebuilt building may stand. It used the words 'allotment or allotments'. 29 However, the next set of Regulations made in 1994 changed the renumbered cl 41(2)(b) from 'allotment or allotments' to 'land'. See also cl 42(2)(b) regarding rebuilding. 30 The regulation was considered by Pearlman J in Scully v Leichhardt Council (1994) 85 LGERA 109. There it was submitted on behalf of the Council that 'land', having regard to the change in the regulation, was restricted to the footprint of the particular building. Her Honour rejected the submission. In considering the meaning of 'land' in the relevant statutory context, she said (at 111): In my opinion, the inquiry must as a consequence be directed to the particular existing use. What is the nature and extent of the particular existing use? The facts and circumstances which establish the particular existing use will set the parameters for the "land" which is referred to in cl 41(2). Those facts and circumstances might show that the "land" in the particular case is in fact the footprint of a particular building; or it might show that it is the whole of the deposited plan allotment upon which the building is erected; or it might show that it is an area larger than the footprint but smaller that the allotment. 31 In Houlakis Clarke JA (at 403) said that when a question arises as to whether there had been an enlargement, expansion or intensification of a use within s 109(2)(c) of the Act, the court is required to examine the extent of the use of the relevant land at the date the instrument came into force, and the later use which is claimed to be an enlarged, expanded or intensified use. This was a question of fact. 32 The most recent decision (leaving aside that of Cowdroy J subject to appeal) is the Salvation Army. This case was also concerned with Regulations 40(2)(b) and 42(2)(b), which are in relevantly identical terms. 33 Pearlman J referred to a statement of Meagher JA in Steedman v Baulkham Hills Shire Council (1991) 87 LGERA 26 at 27 to the effect that the correct approach to the determination of the existence of existing use rights was as explained in Brickworks and Eaton, that 'if the land is rightly regarded as a unit and it is found that part of its area was physically used for the purpose in question it follows that the land was used for that purpose'. Her Honour rightly qualified this statement by noting that Walsh J in Eaton (at 278) said that plainly, in some cases, the physical use for a particular purpose of a small portion of a large building would not warrant a finding that the whole area was used for that purpose. 34 Her Honour then referred to Mobil and noted that wording of the relevant regulation applicable in that matter had been changed from 'allotment' to 'only on the land'. 35 Pearlman J concluded that the facts did not warrant a finding that the whole of the land was used for the purpose of panel beating and spray painting. Nor could it be regarded as a 'unit' simply because it formed one allotment of land. Nor was the part not being so used held in reserve for future expansion. Referring to Barwick CJ in Eaton at 273, her Honour held that the total area of the land 'was disproportionate to the nature of the business intended to be conducted'. 36 Brickworks held that a use of land meant a present use and not an intended use. A physical use of the land was not necessary. This aspect of the case was changed by the amendments to the existing use provisions in the Act, see Vaughan-Taylor. 37 Gibbs J said (at 23) that an existing use of land referred to land which from a practical point of view should be regarded as one piece of land and not necessarily within one subdivision or title. 38 Eaton applied Brickworks to the effect that a physical use was not an indispensable element. The judgment of Walsh J is of some assistance. His Honour said (at 278): For the practical working out of the provisions of the Ordinance it is important that the area of land which should be regarded as brought by an existing use within the operation of cl. 30 should be capable as far as is possible of being identified in a way which avoids detailed investigations and complicated disputes of fact. It is clear, in my opinion, that it will not be possible in all cases to avoid the difficulty of resolving questions of fact and of degree or to avoid the necessity of drawing a line to mark off one area from another within land within the same ownership. It seems plain that in some cases the physical use for a particular purpose of a small portion of a large holding would not warrant a finding that the whole area was used for that purpose. 39 In concluding his reasons for judgment Walsh J said (at 279): Finally, I think that the fact that in 1955 the appellant applied for an approval for the use of the whole of the land as one unit for a specified purpose and that the respondent granted that approval is a fact which, although not decisive, tends to support the conclusion that the allotment should be treated as one piece of land. 40 In the subject appeal, the appellant applied for a development approval to use the first floor as a 'unit' for the purposes of a brothel. That is the application which the Council granted. Applying Walsh J's observations in Eaton, referred to above, this is not decisive but it supports the conclusion that the 'land' is confined to the first floor. 41 Gibbs J referred to whether the land can be rightly regarded as a 'unit' (at 281). If it was so rightly regarded, it would follow that the land was used for the particular purpose. 42 Here it cannot be said that the whole of the land can be regarded as a 'unit' for the purpose of the brothel use. Nor can the ground and first floor of the building together be so regarded, leaving aside whether the ground floor was being held in reserve for the brothel use. The unit of land was plainly the first floor, for which development consent was sought and granted for the brothel use. 43 Stephen J (at 291) said: Where a claimed existing use is of a kind which involves active physical use nice questions of fact and degree may arise when the claimant's land contains some areas of apparently unused land. In many instances commercial and industrial sites will no doubt contain small areas of unused land. Only by first ascertaining the characteristics of the particular purpose of use claimed and comparing that with the evidence concerning the relevant land, regard being had to the absolute and relative sizes, locations and, perhaps, pattern of distribution of unused land, will it be possible to conclude whether all the land should be viewed as one whole, used for the claimed use or, on the contrary, as distinct portions, some of which have not shared in the claimed use. 44 When regard is had to this statement, it will be seen that the whole of the land was not used for the brothel purpose, nor was the ground floor. Rather, a distinct portion of the land (the first floor) was so used at the relevant date. 45 It seems to me that, in the circumstances of this case, the 'land' in question is the first floor of the building. There are a number of reasons to so conclude. 46 The first floor was the subject of the appellant's development application and the development consent granted by the Council. 47 Secondly, the first floor is easily definable, see Eaton at 278. 48 Thirdly, the first floor is a unit and the ground floor, or part of it, is not part of that unit simply because it is in the same building. Certainly, the whole of the land is not the unit, nor in my view is the building as a whole. 49 Fourthly, the first floor has been used for the purposes of a brothel, which is the existing use saved since the prohibition of brothels in the Business zones by the LEP. 50 Lastly, there is no evidence, at least at this stage, that the ground floor, or any part of it, was being held in reserve for the existing use of a brothel. 51 This conclusion may mean that, on the facts of this case, there is only room for an intensification of the use within the first floor, or its enlargement (if that is possible) within that area. An expansion to the ground floor would not be possible. That does not mean that the regulation does not have work to do in other factual situations or where it can be established that land is being held in reserve for the existing use. 52 That the consent to the first floor use as a brothel involves the use of the stairs from the ground floor and the car park does not, in my opinion, expand 'the land' on which the existing use is being carried out to those areas or to the whole of the building or allotment. 53 Many development consents involve extraneous parking, sometimes removed from the site. But this does not mean that such areas become, for the purpose of the existing use provisions in the Act, part of the land the subject of the use within the Regulation. 54 What must be kept steadily in mind in approaching the issue in the appeal is that the use of land as a brothel has now been prohibited in the Business zones. If the appellant's arguments are correct, then their prohibition could be easily undermined, indeed set at naught, subject to a merit assessment by the Council. 55 Many examples can be conjured up which demonstrate how the appellant's position could lead to unintended, indeed extraordinary consequences. His Honour gave one such example which I have mentioned earlier. One should emphasise that his Honour's example would occur notwithstanding that the shop use in the zone became a prohibited use. 56 Other more extreme examples may readily spring to mind. Mr Austin has argued however that extreme examples may be put to one side because of the need for a merit assessment. However, it seems to me that examples may be considered because they could be indicative of a preferred construction of the Regulation. 57 It may nonetheless be more productive to look at real examples or ones which could bear a reasonable result. For example, the Salvation Army case. 58 The Newcastle City Council had refused a development application made by the Salvation Army with respect to a site, made up of two allotments, with considerable frontage to a major road. The site was adjoined by television studios to the north and by a Seventh Day Adventist Conference Centre to the north-west. Also in the area was a retirement complex and some large rural residential lots. The Salvation Army sought to develop hostel accommodation and a warehouse and distribution centre on the site. In appealing the Council's decision it claimed the benefit of existing use rights for a panel beating and spray painting business which operated on one of the allotments before the commencement of an LEP prohibiting such a use. Not all of the allotment was being used for the purpose of panel beating and spray painting, merely one distinct area. Other parts of the allotment were used for the purpose of the grazing of livestock and for a dwelling house. There was no evidence that the part of the allotment which was not being used in the panel beating business was being held in reserve for future expansion, and the salvation army failed to establish existing use rights in relation to the whole of the allotment. 59 Counsel for the respondent provided a hypothetical example of a 100ha property. One hectare of the property had existing use rights and the surrounding 10ha had been held in reserve for the use in the Eaton sense. Clause 42 would permit the expansion of the use within that 10ha, which would relevantly be 'the land', but not for the balance of the property. 60 Since the inception of the Environmental Planning and Assessment Act 1979 existing use rights have been circumscribed and restricted. This has happened progressively over many years. At no stage has this trend been reversed and a more liberal protection afforded to such 'rights', which, as has been pointed out, is itself a misnomer for a 'privilege'. See Handley JA in Vanmeld Pty Ltd v Fairfield City Council (1992) 75 LGRA 374 and Beazley JA at 406 in Houlakis. Existing use rights are really a relaxation of a prohibition. 61 The 1986 amendments to the Act and the Regulations underpinning the expansion, enlargement, intensification and rebuilding of existing uses was not a liberalisation of those rights. As Cripps J observed in King v Lewis (1991) 74 LGRA 362 the effect of the amendments was to overcome the High Court decision in Norman v Gosford City Council (1975) 132 CLR 83. 62 Rather, the amendments were a further restriction. The amendment to the Regulation in 1994 to substitute 'land' for 'allotment or allotments' was a further narrowing. 63 As I have already said, the need for a merit assessment of the change sought, whether an expansion or rebuilding etc, is beside the construction point. 64 Kirby J observed in North Sydney Municipal Council v Boyts (1989) 67 LGRA 344 at 345, that existing use rights are a transitional derogation, which are designed for a time only to cushion the impact of planning legislation on private owners. It seeks to protect those owners who have established use of their land, which has continued without abandonment. 65 When the provisions of the Act are analysed, including their changing nature and legal interpretation, a narrowing rather than an expansion of existing uses and their rebuilding, expansion, enlargement and intensification, is to be seen. As I said earlier, the construction urged by the appellant would turn this trend around and permit the clear intention of the legislature to be defeated. The expansion provisions could empower a council to approve an expansion of an existing use, which had become prohibited, to such an extent as to mock the legislation. 66 I would dismiss the appeal, except in the one respect conceded by the Council. To the question answered by his Honour should be added the following rider: Unless the ground floor of the premises was included in the land which was used for the existing use of a brothel immediately before the relevant date by reason of being held in reserve or otherwise.

3. Appellant to pay the respondent's costs of the appeal.

4.The following rider be added to the answer of his Honour to the question before the Court: Unless the ground floor of the premises was included in the land which was used for the existing use of a brothel immediately before the relevant date by reason of being held in reserve or otherwise.

5. The matter be remitted to the Land and Environment Court for any further hearing. 68 HODGSON JA: I agree with Stein JA. 69 The matter of existing use is dealt with in Pt.4 Div.10 of the Environmental Planning & Assessment Act 1979. The sections relevant to this case are ss.106-109, which are in the following terms: 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 4A of Part 3 or 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.

108(1) The regulations may make provision for or with respect to existing use and, in particular, for or with respect to: (a) the carrying out of alterations or extensions to or the rebuilding of a building or work being used for an existing use, and (b) the change of an existing use to another use, and (c) the enlargement or expansion or intensification of an existing use. (2) The provisions (in this section referred to as "the incorporated provisions") of any regulations in force for the purposes of subsection (1) are taken to be incorporated in every environmental planning instrument. (3) An environmental planning instrument may, in accordance with this Act, contain provisions extending, expanding or supplementing the incorporated provisions, but any provisions (other than incorporated provisions) in such an instrument that, but for this subsection, would derogate or have the effect of derogating from the incorporated provisions have no force or effect while the incorporated provisions remain in force. (4) Any right or authority granted by the incorporated provisions or any provisions of an environmental planning instrument extending, expanding or supplementing the incorporated provisions do not apply to or in respect of an existing use which commenced pursuant to a consent of the Minister under section 89 to a development application for consent to carry out prohibited development.

109(1) Nothing in an environmental planning instrument operates so as to require consent to be obtained under this Act for the continuance of a use of a building, work or land for a lawful purpose for which it was being used immediately before the coming into force of the instrument or so as to prevent the continuance of that use except with consent under this Act being obtained. (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 the use therein mentioned, 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 presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months. 70 Regulations have been made under s.108, including the following cl.42 of the Environmental Planning & Assessment Regulations 2000, which is in the following terms: 42(1) Development consent is required for any enlargement, expansion or intensification of an existing use. (2) The enlargement, expansion or intensification: (a) must be for the existing use, or for a changed existing use, but for no other use; and (b) must be carried out only on the land on which the existing use was carried out immediately before the relevant date. 71 As noted by Stein JA, the cases of Parramatta City Council v. Brickworks Limited (1972) 128 CLR 1 and Eaton & Sons Pty. Limited v. Warringah Shire Council (1972) 129 CLR 270 concerned town planning Ordinances which in effect permitted the enlargement or extension of existing uses within the land on which the relevant existing use was carried out at the relevant time. They decided in effect that this land was not restricted to the area of land actually physically and lawfully used at the relevant time, but extended to so much land as could be regarded as being used for the relevant purpose: questions of fact and degree could arise in particular cases as to whether areas not physically used for the purpose at the relevant time should reasonably be regarded as included in a whole area of land used for the purpose, or rather regarded as distinct areas not used for the purpose. 72 The effect of introducing provisions to the effect of s.107(2)(b) and s.108(1) was to limit the statutory entitlement to continue an existing use to land physically used for that purpose at the relevant time, but to authorise the making of regulations pursuant to which the use could be enlarged or expanded onto additional land. The current regulations are in a form introduced in 1994. Prior to 1994, the regulations authorised the granting of development consents to enlarge or expand existing uses up to the extent of the allotments or allotments on which the use was carried out at the relevant time. Under those regulations, development consent could be granted to enlarge or expand the use over the whole of the allotment or allotments on which the use was carried out, no matter how small the area was on which the use was physically carried out, and no matter that other uses had been carried out on other areas of the allotments at the relevant time. 73 The 1994 Regulations substituted the term "land" for the expression "allotment or allotments". In my opinion, the effect of this change was that the approach of the High Court in Brickworks Limited and Eaton was to be applied to determine the extent of the area into which an existing use could be permitted to expand pursuant to development consent. 74 Applying that to this case, the question is, what was the land on which the use as a brothel was carried out at the relevant time? This certainly included the land actually physically and lawfully used as a brothel at that time. The question would be whether any more of the property 233-239 Northumberland Street, Liverpool was so used at that time. It would be relevant to consider whether some other part of the property was held in reserve for that use, what use or uses if any were being made of other parts of the property, and also the physical set up of the property and title boundaries. The ultimate question would be that contemplated by the decisions in Brickworks and Eaton, namely to this effect: is there some area of land including the first floor of the premises but extending beyond it that can fairly be regarded as a whole area used for the relevant purpose at the relevant time? 75 I agree with the orders proposed by Stein JA. 76 ROLFE AJA: The issues, relevant facts and applicable statutory provisions applicable to the determination of this appeal are set forth in the reasons for judgment of Stein JA, a draft of which I have had the advantage of reading. 77 Clause 42 is intended to set forth the ambit of the "privilege" afforded to an existing use in particular circumstances. It allows for an enlargement, an expansion or an intensification of an existing use provided, relevantly, that the enlargement, expansion or intensification is carried out "only on the land on which the existing use was carried out immediately before the relevant date". "Land" is given the meaning to which his Honour refers. 78 Unaided by the various authorities, which have considered this and similar points, I would have given the words "enlargement" and "expansion" the meaning which, in my opinion, a reading of them demands. "Enlargement" clearly means that the area on which the existing use is carried on will be increased, and that is the most usual meaning of the word "expansion" in this context. Put another way it is difficult to imagine an "enlargement" or "expansion" where this does not occur. 79 The relevant restriction on the "enlargement" or "expansion" is that it be restricted to the land on which the existing use was carried on. In my opinion, there can be no realistic "enlargement" or "expansion", at least in many cases, if an additional area, albeit within the "land", cannot be used. 80 Whilst it may be correct to say that the words still have work to do if their interpretation is restricted, that work is greatly limited by a restrictive constriction in circumstances where there is no apparent justification for adopting one. I shall seek to explain why there is no such justification in a moment. Accordingly, giving the words their ordinary and, and in my opinion, clear meaning, I would favour an affirmative answer to the specific question asked. 81 This conclusion, in my respectful opinion, is supported by these considerations. First, the width of the words used. Secondly, one can go beyond the land actually used on to another part of the "land", if it has been reserved. Thus there is no absolute prohibition on going onto another part of the "land", the act of reservation being sufficient to allow that to happen. It is difficult to see why that act should have a result more favourable than the plain words used in the Clause. Thirdly, there are factual situations allowing the use of another part of the "land". The right of reservation and such factual situations merely point up that "land" beyond that previously used, may, provided it is "land", be used. That is contrary to the view that, the only land which can be utilised is than on which the existing use takes place. Extreme examples can always be found, but in the present case the obvious area of "enlargement" or "expansion" would be to the ground floor. That was all that was sought and, as a matter of fact, I do not consider that would be going beyond a reasonable area for "enlargement" or "expansion", particularly bearing in mind that it may, in any event, have been "reserved". Fourthly, the respondent has to consider the application on its merits. I find little utility in the Court drawing fine distinctions in circumstances where the relevant authority can determine the matter on the merits. 82 I would propose the following orders:

1. Leave to appeal granted;
2. Appeal allowed
3. The answer given to the question in the Land and Environment Court be set aside and, in lieu thereof, the question be answered in the affirmative;
4. Respondent pay the appellant's costs of the appeal.

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