Lennard v Jessica Estates Pty Limited

CATCHWORDS: REAL PROPERTY - Restriction on use of land lodged pursuant to s 88B Conveyancing Act - Whether restriction rendered inapplicable by s 28 Environmental Planning and Assessment Act and provisions of Local Environmental Plan - STATUTORY INTERPRETATION - Whether construction given to provision of Local Environmental Plan below produced an irrational result - WORDS AND PHRASES - Meaning of 'prohibits' - Whether an instrument which permits certain land uses only with consent is in effect a prohibition - Meaning of 'land use' - Meaning of 'development' - Distinction between 'development' and 'land use'. - RELIEF - Whether conduct of the respondent in relation to construction amounted to laches - Exercise of discretion to grant relief.

Conveyancing Act 1919 (NSW): section 88B LEGISLATION CITED: Environmental Planning and Assessment Act 1979 (NSW): sections 4, 4B and 123 Singleton Local Environmental Plan 1996 (NSW): clauses 2, 3, 6, 9, 28 and 35

Cooper-Brookes (Wollongong) v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297; Foley v Padley [1984] HCA 50; (1984) 154 CLR 349; Hillpalm Pty Ltd v Heaven's Door Pty Ltd [2004] HCA 59; (2004) 220 CLR 472; House v The King [1936] HCA 40; (1936) 55 CLR 499; CASES CITED: Jessica Estates Pty Ltd v Lennard [2007] NSWSC 1175; Jessica Estates Pty Ltd v Lennard [2007] NSWSC 1434; Public Transport Commission NSW v J Murray-More (NSW) Pty Ltd [1975] HCA 28; (1975) 132 CLR 336; R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681; Strathfield Municipal Council v Poynting [2001] NSWCA 270; (2001) 116 LGERA 319; Young v Gosford City Council [2001] NSWLEC 191; (2001) 120 LGERA 243

Tony Lennard PARTIES: Laura Lennard Jessica Estates Pty Limited

COUNSEL: A: J R Clarke R: J E Robson SC / J E Lazarus

SOLICITORS: A: Curtis Delaney Gray, Singleton R: Colin Biggers & Paisley, Sydney

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT JUDICIAL OFFICER: Austin J; Brereton J

LOWER COURT DATE OF DECISION: 22 October 2007; 10 December 2007

LOWER COURT MEDIUM NEUTRAL CITATION: Jessica Estates v Lennard [2007] NSWSC 1175; [2007] NSWSC 1434

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40021/08 SC 4500/07

TOBIAS JA McCOLL JA BELL JA

Friday 30 May 2008 TONY LENNARD AND LAURA LENNARD v JESSICA ESTATES PTY LTD Judgment

1 TOBIAS JA: The respondent, Jessica Estates Pty Ltd (Jessica), is the developer of 121 residential lots at Singleton known as the "Hunter View Estate" (the Estate), which comprised the whole of the land in DP 1061723. 2 On 24 July 2006 the appellants, Mr and Mrs Lennard, purchased Lot 122 in the Estate (Lot 122) which was then vacant. The appellants were not its first purchasers. Camilla Romano originally purchased the Lot 122 from the respondent in 2003. 3 All lots in the Estate were subject to an instrument lodged with the Deposited Plan under s 88B of the Conveyancing Act 1919 (NSW) (the Instrument). Item 5 of Part 1 of the Instrument identified a restriction on the use of each lot in the Estate, the benefit of which was ascribed to each other lot (the restriction). The terms of that restriction on use were set out in Part 2 of the Instrument of which para (k) is presently relevant: "(k) Unless the Registered Proprietor obtains the prior written consent of Jessica the Registered Proprietor shall not: (i) construct more than one dwelling on the Lot Burdened, (ii) construct any building of the nature known as semi-detached duplex on the Lot Burdened, (iii) use or permit to be used the Lot Burdened for any purpose other than as a private dwelling, (iv) alter a building on the Lot Burdened in such a way as to create a further dwelling on the Lot Burdened, (v) subdivide the Lot Burdened, and (vi) operate or permit to be operated upon or about the Lot Burdened a childcare centre, kindergarten or other similar activity." 4 On 15 March 2007, Singleton Council (the Council) granted development consent to the erection of two three-bedroom residential units upon Lot 122. The proposed development was in the form of two attached dwellings identified in the Singleton Local Environmental Plan 1996 (NSW) (the LEP) as "dual occupancy - attached". It was common ground that this type of development constituted a semi-detached duplex within the meaning of para (k)(ii) of the Instrument. 5 Subsequently, on 20 June 2007 the Council granted development consent to a two-lot strata subdivision of Lot 122. Again, it was common ground that such a subdivision fell within the terms of para (k)(v) of the Instrument. 6 Construction of the duplex without Jessica's consent commenced on 5 July 2007. Prior to and at the time of that commencement, Jessica had written to the appellants' solicitors objecting to the proposed work on the ground that the construction of the duplex would be in breach of paras (k)(i) and (ii) of the Instrument and threatening legal action to prevent the commencement and/or the continuation of construction. As events transpired Jessica did not institute proceedings until 12 September 2007.

7 By summons filed on 12 September 2007 (the summons) Jessica claimed a declaration that the appellants were in breach of para (k) by commencing the construction of the duplex without first obtaining its written consent. It also sought orders that the appellants be restrained from carrying out any further construction work on Lot 122 without first obtaining that consent and that they forthwith take all necessary steps to remove the duplex constructed upon that land. 8 The appellants maintained that para (k)(i), (ii) and (v) of the Instrument did not apply to Lot 122 because of the operation of cl 6(1) of the LEP. That provision was in the following terms: "(1) If any agreement, covenant or similar instrument prohibits a land use allowed by this plan, then it shall not apply to that land use (to the extent necessary to allow that land use)." 9 Clause 6 of the LEP was inserted pursuant to s 28 of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act) which relevantly provided as follows: "(1) In this section, regulatory instrument means any Act (other than this Act), rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made. (2) For the purpose of enabling development to be carried out in accordance with an environmental planning instrument or in accordance with a consent granted under this Act, an environmental planning instrument may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development or shall apply subject to the modifications specified in that environmental planning instrument. (3) A provision referred to in subsection (2) shall have effect according to its tenor, but only if the Governor has, before the making of the environmental planning instrument, approved of the provision." (Emphasis in original). 10 The requirement in ss (3) was complied with: see cl 6(2) of the LEP. 11 On the return of the summons before Austin J as Duty Judge on 25 September 2007, the parties agreed that its hearing should be expedited. His Honour considered that, pursuant to cl 28.2 of the Uniform Civil Procedure Rules, the following two questions should be determined separately: "(a) Whether any of the provisions of paragraph (k)(i), (ii) or (v) of the restriction on the use of land, noted on DP 1061723, prohibit land use allowed by the Singleton Local Environmental Plan ('the LEP') and accordingly do not apply to that land use; and (b) If the answer to (a) is 'yes', which of the provisions of paragraph (k)(i), (ii) and (v) prohibits a land use allowed by the LEP and accordingly does not apply to that land use …" 12 The separate questions were heard by Austin J on 2 October 2007 and answered on 22 October 2007 as follows: (a) None of the provisions of para (k)(i), (ii) and (v) of the restriction on the use of land noted on DP 1061723 prohibits land use allowed by the Singleton Local Environmental Plan;

(b) Question (b) does not arise. See Jessica Estates Pty Ltd v Lennard [2007] NSWSC 1175. The consequence of these answers was that the construction of the duplex and its subdivision into two strata lots was in breach of the provisions of the Instrument referred to in the answer to question (a). 13 Having so answered the separate questions there remained for determination the question of whether, as a matter of discretion, the relief sought by Jessica should be granted. The hearing of that issue came before Brereton J who, on 10 December 2007, relevantly made the following declaration and orders: "1. Declare that by constructing the duplex residential building which currently stands on Lot 122 in DP1061723, situate at and known as 122 Casey Drive, Singleton in the State of NSW the defendants have contravened the restriction as to user contained in the s 88B instrument referred to in DP1061723 by, without written consent of the plaintiff, constructing more than one dwelling and constructing a building of the nature known as a semi-detached duplex on the said lot.

2. Order that the defendants be restrained from, by themselves their servants and agents, contravening the restriction as to user contained in the s 88B instrument referred to in DP1061723 by, without the written consent of the plaintiff: 2.1 … 2.2 … 3. Declare that in the event that the building which currently stands on Lot 122 is modified so that it contains only one dwelling and is no longer a semi-detached duplex adapted for two separate occupancies, there will no longer be a contravention of the said restriction.

4. Order that enforcement of Order 2 be stayed until 31 March 2008.

6. Order that the defendants pay the plaintiff's costs of the proceedings."

See Jessica Estates Pty Ltd v Lennard [2007] NSWSC 1434. 14 By a Notice of Appeal filed on 19 February 2008 the appellants appealed against the determination of Austin J with respect to the two questions and also against the exercise by Brereton J of his discretion to grant the relief referred to. With respect to the latter, the appeal was confined to his Honour's finding that Jessica was not disentitled to the relief sought on the ground that it was guilty of laches. As the filing of that appeal was out of time, the appellant sought, by Notice of Motion also filed on 19 February 2008, an extension of time within which to file their Notice of Appeal.

The appeal from the answers given by Austin J 15 I have set out above the relevant provisions of para (k) of Part 2 of the Instrument, as well as the relevant provisions of cl 6 of the LEP. It was common ground that Jessica had standing to restrain a breach of para (k) as the Instrument provided that, for a period of five years from the date of registration of the plan of subdivision (which was 13 January 2004), Jessica shall be entitled to the benefit of the restrictions and may bring proceedings to enforce them, notwithstanding that at the time of commencement of any such proceedings it was not itself the proprietor of any lot benefited by the Instrument. It was also common ground that Item 5 in Part 1 of the Instrument fell within the expression "any agreement, covenant or similar instrument" in cl 6(1) of the LEP.

16 His Honour approached his consideration of the separate questions by breaking them down into three further questions for determination: · Do any of sub-paras (i), (ii) and (v) of para (k) " prohibit " activity?

· If so, does the provision prohibit a " land use "?

· If so, is that land use " allowed " by the LEP? 17 In relation to the first, the issue was whether the requirement in para (k) of the Instrument that the registered proprietor of a "Lot Burdened" obtain the prior written consent of Jessica before undertaking the activities listed therein amounted to a 'prohibition' within the meaning of cl 6(1) of the LEP. Austin J held that para (k) was a prohibition in the relevant sense, a finding which the responded challenged in its Notice of Contention.

18 The second question, which raises the critical issue to be decided on the appeal, requires a consideration of the proper interpretation to be given to the phrase "land use" in cl 6(1). It is critical because Austin J found that none of the activities (to use a neutral term) identified in sub-paras (i), (ii) and (v) of para (k) was "a land use" within the meaning of cl 6(1). Hence, that clause was not enlivened so that the Instrument did in fact preclude the appellants' activities on Lot 122. This led to judgment being entered for Jessica in the subsequent hearing before Brereton J.

19 The third question, whether any of the activities mentioned in para (k) of the Instrument were "allowed" by the LEP, was not in dispute: it was assumed that it should be answered, Yes. That leaves the first two questions to be now considered in detail.

Whether sub-paras (i), (ii) and (v) of para (k) of the Instrument " prohibit " activity in the relevant sense 20 After considering the arguments advanced by the parties, Austin J reached the following conclusions (at [43]): "▪ [Paragraph] (k) contains a series of provisions that prohibit specified conduct unless the plaintiff's prior written consent is obtained; ▪ those provisions are qualified prohibitions, the qualification being that the prohibition does not apply if consent has been obtained; ▪ it is in accordance with the ordinary meaning of the word 'prohibit' and its cognate forms to describe qualified provisions such as the provisions of para (k) as 'prohibiting' the activities to which the provisions are directed; ▪ the EPA Act, the LEP, and planning law generally, provide no basis for adopting a more restricted concept of prohibition in clause 6 of the LEP than the ordinary meaning of that term; ▪ consequently each provision of para (k), including each of para (k)(i), (ii) and (v), 'prohibits' the activity that it designates, for the purposes of clause 6." 21 Notwithstanding that Jessica was ultimately successful below, it sought to challenge these conclusions in its Notice of Contention. It submitted that cl 6(1) of the LEP must be construed in its context of being part of an environmental planning instrument. In planning law a clear distinction exists between development that requires consent, development that does not require consent and development that is prohibited. It is a distinction that is reflected in the zoning tables in the LEP itself and in the EPA Act. 22 As "prohibition" in planning law has a particular well established meaning, namely, absolute as distinct from conditional prohibition, it follows, so it was submitted, that an instrument that permits particular development or a particular land use only with consent, be it the consent of an authority under the EPA Act or otherwise, is not a prohibition within the meaning of cl 6(1). 23 Furthermore the draughtsperson of cl 6(1) must be taken to have used the word "prohibits" in its technical planning sense as applying only to an instrument which absolutely prohibits a land use otherwise allowed by the LEP and not one in respect of which a third party could override the prohibition contained in the relevant regulatory instrument. It was therefore contended that para (k) imposed merely a potential restriction on development because its effect was to permit particular types of development with the respondent's prior written consent so that it did not, in the planning sense, prohibit development. 24 In dealing with similarly framed submissions below, Austin J preferred the statement of Gibbs CJ in Foley v Padley [1984] HCA 50; (1984) 154 CLR 349 at 358-359 to the effect that a qualified prohibition was nonetheless a prohibition. At [32] his Honour referred to the distinction in the environmental planning context to which reference has been made between provisions both in the EPA Act and the LEP which permitted development only with consent on the one hand and prohibited development absolutely on the other. 25 His Honour (at [33]) considered that the concept of a restriction of a use of land for the purposes of s 88B of the Conveyancing Act encompassed a restriction having the effect of an absolute prohibition as well as a qualified restriction. He further considered (at [36]) that none of the provisions to the EPA Act to which he had referred denied, expressly or by implication, the proposition emerging from the general case law that an instrument that provided that specified development could not be carried out except with consent was conceptually a qualified prohibition. His Honour was thus of the view that where an instrument had the effect, absolutely or conditionally, that a person must not carry out a development, it constituted a prohibition. There was no reason, his Honour concluded (at [38]), to infer that either the provisions of the EPA Act or the LEP should be taken as implying a restricted use of the concept of prohibition.

26 Jessica challenged this analysis on appeal by reference to Strathfield Municipal Council v Poynting [2001] NSWCA 270; (2001) 116 LGERA 319 and like cases, which draw a distinction between a complete or absolute prohibition on the one hand and a less than complete prohibition on the other. However, the remarks of this Court in those cases should be confined to the context in which they were made, namely, whether a particular provision was or was not a "development standard" as defined in s 4 of the EPA Act. These authorities are of no assistance in construing cl 6(1) of the LEP in the present case.

27 Hence, in my opinion the primary judge's determination of this issue in this respect was correct and Jessica's challenge to it should be rejected. The clear object of cl 6(1) is to permit a "land use" which is "allowed" by the LEP to proceed subject to obtaining the Council's consent and notwithstanding that that land use is prohibited by an instrument. The fact remains that the designated activities referred to in subparagraphs (i) to (vi) of para (k) are prohibited by that instrument unless and until Jessica's written consent is granted. If that consent is granted in relation to a particular activity, subject to the second question determined by his Honour (in relation to "land use"), there is no relevant prohibition upon which cl 6(1) can operate. But where such consent is refused, the effect of para (k) is to absolutely prohibit the designated activities.

28 I nevertheless accept that cl 6(1), if it operates at all, operates upon the relevant restriction in the abstract in the sense that if a particular land use is permissible with consent under the LEP, then to the extent to which that land use is prevented by a regulatory instrument, the latter is to have no application to the extent necessary to allow that land use to occur. In my view a land use which in terms is prohibited unless the prior written consent of a third party is obtained and where that consent can be refused in that party's absolute discretion, is an instrument which relevantly prohibits that land use. 29 Jessica further submitted that para (k) of the Instrument "prohibits nothing" and that its effect is to permit particular types of development on the land burdened, albeit only with the respondent's prior written consent. However, I would not view para (k) in that way. Rather, as did the primary judge, I would view it as an absolute prohibition subject to an exception where the prior written consent of the respondent is obtained to the particular activity. I would therefore reject Jessica's submission that, by using the word "prohibits", cl 6(1) was intended to have a narrower scope than a clause purporting to suspend the operation of a regulatory instrument imposing restrictions, as distinct from a prohibition, on land uses.

Whether sub-paras (i), (ii) and (v) of para (k) relate to "land use" within the meaning of cl 6(1) 30 As noted in [18] above, Austin J found that each of the activities listed in sub-paras (i), (ii) and (v) of para (k) was not a "land use" within the meaning of cl 6(1). The consequence of that interpretation was that cl 6(1) was not enlivened in the present case so that the Instrument precluded the appellants' activities on Lot 122. In so construing cl 6(1), his Honour relied heavily on the following definition of "development" in s 4(1) of the EPA Act: "(a) the use of land, (b) the subdivision of land, and (c) the erection of a building, and (d) the carrying out of work, and (e) the demolition of a building or work, and (f) any other act, matter or thing referred to in s 26 that is controlled by an environmental planning instrument …" 31 His Honour also referred to ss 4(2) and 4B(1) of the EPA Act which, relevantly, provided as follows: " 4(1) ... (2) A reference in this Act to: (a) the use of land includes a reference to a change of building use, and … (f) the carrying out of development includes a reference to the use of land or a building, the subdivision of land, the erection of a building, the carrying out of a work, the demolition of a building or work or the doing of any other act, matter or thing referred to in section 26 that is controlled by an environmental planning instrument. … 4B Subdivision of land (1) For the purposes of this Act, subdivision of land means the division of land into two or more parts that, after the division, would be obviously adapted for separate occupation, use or disposition. …"

32 Although the parties had argued the case at first instance in reliance upon the provisions of the EPA Act current as at the date of the hearing, Jessica drew this Court's attention to the fact that in the form in which it was in 1996 when the LEP was made, the expression "development" in relation to land was defined in s 4(1) of the EPA Act to mean: "(a) the erection of a building on that land, (b) the carrying out of the work in, on or over or under that land, (c) the use of that land or of a building or work on that land, (d) the subdivision of that land." 33 It was also pointed out that although the expression "land" is defined in the EPA Act in its current form as including "(d) a building erected on the land", that extension of the definition of "land" was not in the Act as it was in 1996 when the LEP was made. Further, the EPA Act in 1996 did not contain s 4(2)(a) which provides that a use of land includes a reference to a "change of building use", an expression defined in s 4(1) to mean a change of use of a building from, in effect, one use recognised as appropriate in one class of building under the Building Code of Australia to a use which that code recognises as appropriate to a different class of building.

34 I mention these matters as Jessica submitted that they supported the construction of cl 6(1) of the LEP adopted by the primary judge and which it sought to uphold. However, in my opinion they add little, if anything, to the resolution of the question of construction required to be undertaken. 35 At [47] his Honour considered that both the definition of "development" (in its then current form) and the terms of s 4(2)(f) conveyed the idea that for the purposes of the EPA Act, the concept of development encompassed a number of things including the use of land, the subdivision of land and the erection of a building, each being a subset of "development" and being conceptually distinct one from the other. This was particularly so with respect to the subdivision of land on the one hand and the erection of a building on the other. Separation of the concepts of use and subdivision was, his Honour considered (at [48]), confirmed by s 4B(1) which was predicated upon the division of land into two or more parts being anterior to the occupation and use of the land after that division.

36 Austin J considered that this view was confirmed by McHugh A-CJ, Hayne and Heydon JJ in Hillpalm Pty Ltd v Heaven's Door Pty Ltd [2004] HCA 59; (2004) 220 CLR 472 (at 487 [42]), where their Honours said: "No doubt, as counsel for the respondent pointed out, 'development' as used in the EPAA, could refer to the subdivision of land, the use of land or to both subdivision and use. It by no means follows, however, that a person occupying a lot in a plan of subdivision carries a development out on the land by simply occupying the land. Where, as here, the subdivision was the relevant development, the subsequent purchaser of a subdivided lot does not 'carry that development out' by occupying, and thus using one of the lots in the subdivision." (Emphasis in original) 37 However, this statement was made in the context of whether the occupier of a lot in a subdivision, many years after the subdivision had been registered, was amenable to s 123 of the EPA Act which empowers the Land and Environment Court to order the remedy or restraint of a breach of the Act in circumstances where that occupier was supposedly in breach of a condition of the original subdivision consent requiring the creation of a right of way over that lot. Their Honours held in the paragraph referred to that a subsequent user or occupier of the subdivided lot could not, by virtue of his occupational use of the lot after it had been created by the registration of the plan of subdivision, be said to be carrying out the original subdivision, being the "development" in respect of which a breach of the relevant condition was alleged. 38 The question in the present case is somewhat different, namely, whether the carrying out of a subdivision of land is a "land use" or, as Jessica would submit, a use of land. Nonetheless, the distinction drawn by the primary judge between the subdivision of land into lots and the use of those lots for the purpose for which they were created is one which has found favour in a number of first instance decisions of the Land and Environment Court and referred to by his Honour in [50] of his judgment. The distinction is encapsulated in the statement of McEwen AJ in Young v Gosford City Council [2001] NSWLEC 191; (2001) 120 LGERA 243 at 255 [30] that: "It has long been accepted that subdivision per se is not a 'use' but the rearrangement of boundaries or allotments which does not approve any particular use." 39 The primary judge then said: "51 Clause 6 of the LEP was authorised, if at all, by s 28(2), the scope of which depended on the defined concept of development. The section permitted the environmental planning instrument to override regulatory instruments affecting all or any of the activities falling within the concept of development. In my opinion, by using the words 'land use', rather than by using the defined term "development" or listing the ingredients of that definition, the drafter of clause 6 selected only part of what was encompassed by the concept of development, namely the use of land.

52 As a matter of ordinary meaning, there is a difference between 'land use', on the one hand, and on the other hand subdividing land or erecting a building on land. By the words chosen, the drafter caused clause 6 to be limited so as not to apply to subdivision and erection of buildings." 40 At [53] his Honour considered that, although it would be irrational for the person who drafted cl 6(1) to limit its scope to absolute as opposed to qualified prohibitions, it would not be irrational to limit its scope to a subset of "development", namely, the use of land. It would be rational, so his Honour considered, for a regulatory instrument to prevail insofar as it prohibited the subdivision of land and the erection of buildings whilst accepting that any prohibition on the uses of land after subdivision or completion of the erection of a building thereon should yield to the requirements of "the public environmental planning process for the benefit of the community in the longer term". His Honour then concluded: "57 In my view subparagraphs (i), (ii) and (v) of para (k) do not relate to 'land use' for the purposes of clause 6, and therefore those subparagraphs are not affected by clause 6 or by the development consent issued to the [appellants] by Singleton Council. The activity described in subparagraph (i) is construction of more than one dwelling, an activity to be contrasted with the use of the land after that construction by occupation of the dwelling (the dwelling being, as counsel for the [appellants] stressed, part of the 'land' as defined in s 4(1) of the EPA Act). The subparagraph deals with density of development, not land use. The activity in subparagraph (ii) is the construction of a semi-detached duplex, a different activity from the use of the land by occupation of the duplex once it is constructed. The subparagraph deals with building design, not land use. The activity described in subparagraph (v) is subdivision of the Land, an activity which (as s 4B and the cases confirm) is anterior to the use of the subdivided land."

41 As will be appreciated, the primary judge drew a distinction between on the one hand the construction of more than one dwelling in the case of para (k)(i) and the construction of a semi-detached duplex in the case of para (k)(ii) and on the other the use of the land after construction either of a second dwelling or a semi-detached duplex, that use being the occupation of the land by a second dwelling or a duplex as the case may be. Whilst his Honour thought it would be rational to permit a regulatory instrument to prohibit subdivision and the erection or construction of buildings for a particular use, it would be irrational for such an instrument to prohibit the use of that building after it was erected or the use of the land after it was subdivided.

42 An illustration of the effect of his Honour's approach is of some assistance: although the construction of a semi-detached duplex upon land to which para (k)(ii) applies without Jessica's consent would be precluded by the Instrument, nevertheless once such a building is constructed, presumably with the Council's consent, cl 6(1) of the LEP would trump any prohibition contained in the Instrument which purported to prevent its use for the purpose for which it had been erected. 43 The thrust of the primary judge's reasoning with respect to the construction of cl 6(1) of the LEP was that the draftsperson, being aware of the definition in the EPA Act of "development" and that the definition distinguishes between the erection of a building, a carrying out of work, the subdivision of land and the use of land, must have intended by the adoption of the expression "a land use" in cl 6(1) to confine the operation of that provision to a use of land with the consequence that it had no application to a regulatory instrument that prohibited the erection of a building, the carrying out of work or the subdivision of land. Although his Honour acknowledged that the expression "a land use" was neither defined in the LEP nor in the EPA Act, nonetheless he considered that it should be construed as a reference to "the use of land", thus bringing it within the equivalent subset in the definition of "development" in s 4(1) of that Act (whether in its original or amended form). 44 The appellants sought to challenge this interpretation by arguing that the distinction adopted by the primary judge between the use of a building already erected upon the land burdened and the use of a building proposed to be erected was, in the present context, irrational in the sense in which that word is used in the cases on statutory construction. They submitted that the restrictive interpretation of cl 6(1) adopted by the primary judge had stripped it of any utility and left it with no work to do. This was somewhat of an over-statement, although I would accept that such a construction would leave the provision with limited work to do. This is particularly so given that the restrictions on use contained in a regulatory instrument, such as a s 88B instrument, are imposed at the time of registration of a deposited plan when the lots created by that plan are vacant, so that cl 6(1) would have no effect upon such an instrument which prohibited the erection of particular buildings upon those lots. 45 Jessica sought to support the primary judge's construction of cl 6(1). The parts of their submissions I find necessary to address may be summarised as follows: · The primary judge was correct to hold that the definition of " development " in the EPA Act distinguishes between the erection of a building, the carrying out of work, the subdivision of land and the use of land. Therefore, the draftsperson of the LEP must have intended by the adoption of the expression " a land use " in cl 6(1) to confine the operation of that provision to a use of land with the consequence that it had no application to a regulatory instrument that prohibited the erection of a building, the carrying out of work or the subdivision of land. This interpretation was a fortiori given also the definition of " development " in the EPA Act as it stood at that date of gazettal of the LEP, which also distinguished between " use of land " and "the erection of a building " and " subdivision of… land ".

· As at the date the LEP came into force, the definition of " land " in s 4(1) of the EPA Act did not include " a building erected on the land ". However, in my view neither party gains comfort from that fact. Upon the basis of the current definition of " land ", a use of land includes the use of a building erected on the land. Neither Austin J nor Jessica contended that a use of land excluded the use of a building erected upon the land: they were accepted as one and the same. The point is that the current extended definition of " land ", whilst including the use of a building erected on the land as a use of the land itself, says nothing with respect to whether the erection of a building upon land is a use of that land. That is the critical issue to be determined on this appeal.

· Neither sub-paras (i) or (ii) of para (k) involved a restriction on the use of a building for any particular purpose. In the case of para (k)(ii) there is a restriction on the type of dwelling that might be constructed, but there is no restriction on its use, once constructed.

· Clause 6(1), on its true construction, is directed to regulatory instruments which prohibit the manner in which land is used. Thus, for instance, if an instrument provided that land could not be used as a fire station then plainly cl 6(1) would apply. I interpolate that this may be true but on Jessica's construction of the provision, it would not apply to an instrument which prohibited the erection of a fire station or of a building to be used for that purpose. As I understand the submission, Jessica would therefore contend that sub-para (vi) of para (k) is caught by cl 6(1) where the prohibition is on the operation upon the land burdened of a childcare centre, kindergarten or other similar activity. The inference is that the expression " operate or permit to be operated " is equivalent to " use or permit to be used ". The sub-paragraph therefore prohibits " a land use " within the meaning of cl 6(1). The same observation applies to para (k)(iii).

· Accordingly, the various subparagraphs of para (k), leaving to one side para (k)(v) relating to subdivision, draw a clear distinction between the construction or erection of buildings on the one hand and the use of land or a building upon the land on the other. There was no reason why the expression " a land use " in cl 6(1) should not be construed as confined to a prohibition on the use of land or a building erected upon the land which was otherwise allowed by the LEP notwithstanding that such a construction would leave untouched a regulatory instrument that prohibited the erection or construction of such a building upon the land.

46 Jessica also placed some reliance on cl 35(1) of the LEP which is in the following terms: "(1) Nothing in this plan prevents a person, with the consent of the Council, (a) from carrying out development on land referred to in schedule 4 for the purpose of a building, work, place or land use specified in relation to that land in that Schedule; or (b) if specified in that Schedule, from carrying out a subdivision of that land." It was submitted that cl 35 emphasised the distinction between a building, a work, a place and a land use as well as subdivision. 47 With respect to this last submission, when one goes to Schedule 4 to the LEP, it is headed "Additional land uses". The uses there listed include business premises, tile shop, motor showrooms, tourist facilities, refreshment rooms, professional engineering consulting business, offices and the erection of a single dwelling on a single lot created by consolidation of nominated lots. Each of those "land uses" clearly envisage the erection of buildings for the nominated purpose of use. If one was to assume that each of the parcels of land identified in Schedule 4 were subject to a restriction in a regulatory instrument that prohibited the erection of buildings upon each of those parcels for the nominated use, then notwithstanding the terms of cl 35 and Schedule 4, cl 6(1) on Jessica's construction would have no application to such a prohibition.

48 The whole thrust of the LEP is to nominate various land uses which may be carried out upon land with the consent of the Council and which are prospective in the sense that each requires the making of a development application for the erection of buildings to enable the nominated uses to be carried out. Jessica's submission would therefore appear to produce an irrational and unintended result. 49 The expression "land use" is used in the LEP in a number of places. Clause 2, which sets out the aims and objectives of the LEP, refers in subclause (f) to the retention of options for "alternative land use strategies". Clause 3, which provides for the manner of implementing the aims and objectives of the LEP, refers in subparagraph (a) to "identifying on the map a pattern of broad land use zones". In cl 9(1) the expression "ancillary land use" is defined to mean "any land use that is directly ancillary, inseparable from, or necessary for another land use". 50 There can be no doubt that the expression "a land use" in cl 6(1) is ambiguous. The contrary was not contended. But if one is to give the provision a purposive construction, there are sound reasons for avoiding the narrow construction adopted by the primary judge and supported by Jessica. In particular, its meaning should not be confined by the definition of "development" in s 4(1) of the EPA Act upon the basis that each of the subsets within that definition are to be regarded as mutually exclusive. In my view they are not. Thus, the carrying out of work on land involves the use of the land upon which the work has been carried out. For example, the carrying out of work would include being the construction of a dam upon land, which in turn involves the use of that land for the purpose of a dam. So also does the use of land for residential purposes include the erection of buildings, such as dwellings, for that said purpose. The erection of a building itself in my view involves a use of the land upon which the construction work is being performed. The land is being used for the purpose of erecting a building thereon. 51 In my opinion, therefore, as a matter of logic the expression "a land use" in cl 6(1) of the LEP extends not only to the use of land for a particular purpose but also to the erection of buildings to enable that use to be carried out. Such a construction is perfectly consistent with its planning context and, as will appear, with the implementation of the aims and objectives of the LEP with respect to the land uses identified therein as permissible with the Council's consent. I would regard any other construction of the provision as being irrational in the relevant sense. 52 It is well established that the rules of statutory construction permit the avoidance of an irrational result of a particular construction unless the language of the provision in question is intractable or where, although the language is not intractable, the operation of the provision, read literally, is such as to indicate that it could not have been intended by the draughtsperson: Cooper Brookes (Wollongong) v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320 per Mason and Wilson JJ. At 321 their Honours said:

"On the other hand, when the judge labels the operation of the statute as 'absurd', 'extraordinary', 'capricious', 'irrational' or 'obscure' he assigns a ground for concluding that the legislature could not have intended such an operation and that an alternative interpretation must be preferred. But the propriety of departing from the literal interpretation is not confined to situations described by these labels. It extends to any situation in which for good reason the operation of the statute on a literal reading does not conform to the legislative intent as ascertained from the provisions of the statute, including the policy which may be discerned from those provisions. Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended." 53 To similar effect, Gibbs J observed in Public Transport Commission v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336 at 350 that "where two meanings are open … it is proper to adopt that meaning that will avoid consequences that appear irrational and unjust." 54 The present is not a case of supplying omitted words; nor is it a case in which words of general application are required to be read down: cf R v Young [1999] NSWCCA 166; (1999) 46 NSWLR 681 at 688-689 [16]-][22]. In that case Spigelman CJ observed (at 687-688 [15]) (omitting citations): "15 Where the words actually used are not reasonably capable of being construed in the manner contended for, they will not be so construed. If a court can construe the words actually used by the Parliament to carry into effect the Parliamentary intention, it will do so notwithstanding that the specific construction is not the literal construction and even if it is a strained construction. The process of construction will, for example, sometimes cause the court to read down general words, or to give the words used an ambulatory operation. So long as the court confines itself to the range of possible meanings or of operation of the text - using consequences to determine which meaning should be selected - then the process remains one of construction." 55 The intention of the draughtsperson in inserting cl 6(1) into the LEP is to be found in cl 3(g) which provides that the aims and objectives in cl 2 of the LEP are to be implemented by, inter alia, "(g) suspending certain regulatory instruments where the operation of such instruments would prevent the carrying out of development in accordance with this plan." 56 Although Jessica as well as the primary judge fastened upon the fact that the draughtsperson of cl 6(1) had used the expression "a land use" rather than "development" which otherwise would have accorded literally with terms cl 3(g), nonetheless in my opinion that fact does not require the expression "a land use" cl 6(1) to be read down in the manner advocated. As cl 3(g) is the source of cl 6(1), the latter should take its meaning from the former if otherwise an ambiguity exists and the words used in cl 6(1) permit of a range of possible meanings including the erection of buildings for the purpose of a land use allowed by the LEP. 57 Accordingly, in my opinion cl 6(1) extends to the prohibition contained in para (k)(ii) of the Instrument which purports to prohibit the construction of a semi-detached duplex. Although the primary judge considered that that sub-paragraph dealt with building design rather than land use, I cannot with respect agree. The provision is concerned with the erection of a building of a particular type rather than a particular design but that type is related to the building's use, as a semi-detached duplex, that is, as two attached dwellings. 58 A similar observation may be made with respect to his Honour's adoption of Jessica's submission that para (k)(i) was concerned only with density rather than land use. It contended that this subparagraph was not in truth a restriction on the use to which Lot 122 could be put and, therefore, it was not a restriction or prohibition on "a land use". Rather it was a restriction on the number of dwellings that could be constructed on that lot and not on its use. 59 It is true that para (k)(i) prohibits the construction of more than one dwelling rather than more than one building. However, in my view it does not follow that that is not a restriction on the use of the land. The land may be used for the purpose of one dwelling or more than one dwelling. Its use for, say, two dwellings is in my opinion different to its use for one dwelling. If its use is restricted to the latter then the land cannot be used for the purpose of the former. That in my view is a restriction on its use. 60 It follows from the foregoing that in my opinion Austin J erred in holding that neither sub-paras (i) or (ii) of para (k) of the Instrument prohibited "a land use allowed by" the LEP. 61 The prohibition on subdivision contained in para (k)(v) is more problematic. The issue is whether "a land use allowed by" the LEP includes the subdivision of land for a particular purpose of use. It is true that in some contexts the cases have drawn a distinction between the subdivision of land on the one hand and the use of land as subdivided on the other. That distinction has been covered in the definition of "subdivision of land" in s 4B(1) of the EPA Act which contemplates the division of land into two or more parts anterior to the actual use or occupation of those parts. However, in my opinion the expression "a land use" in cl 6(1) of the LEP is capable of including the subdivision of land for the purpose of a use permitted by the LEP. Generally speaking, in the context of planning, land is not subdivided except for a particular purpose. Thus the Estate was subdivided for the purpose of creating residential lots i.e. lots intended to be used for residential purposes. 62 In the present case, the Council granted its consent to a strata plan of subdivision of the duplex to enable it to be separately used and occupied as two dwellings. In these circumstances I see no reason why the subdivision or strata subdivision of Lot 122 in the present case was not a subdivision for the purpose of enabling its use for two dwellings and so constituted "a land use" within the meaning of cl 6(1). 63 Such a construction accords with common sense and the language of cl 6(1) is not so intractable as to deny its adoption. It would in my opinion border on the irrational to exclude the strata subdivision of the duplex where otherwise the duplex may be constructed and used for the purpose of separate dwellings.

64 Again, if cl 6(1) is to take its meaning from the intention of the draughtsperson as expressed in cl 3(g) of the LEP, it follows that in accordance with the principles of construction to which I have referred, the expression "a land use" in cl 6(1) is capable of including the subdivision of the land for a purpose allowed by the LEP. Thus his Honour ought to have included para (k)(v) as a restriction on the use of land noted in the Instrument which prohibited a land use allowed by the LEP. Conclusion on the appeal from the answers given by Austin J to the separate questions

65 It follows from the foregoing that separate question (a) in [12] above should be answered "Yes", reversing the answer given by Austin J. Separate question (b) should thus be answered: "Each of paragraphs (k)(i), (ii) and (v) prohibits a land use allowed by the LEP and accordingly does not apply to that land use". Therefore, in my opinion the appellants must succeed on the appeal with respect to each of para (k)(i), (ii) and (v) of the Instrument. Jessica's summons filed on 12 September 2007 should be dismissed.

The appellants' challenge to the decision of Brereton J with respect to laches 66 In light of my conclusion above, it is unnecessary to consider the appellants' challenge to the grant of relief by Brereton J. However, for the sake of completeness and as the matter was fully argued by the appellants (notwithstanding that Jessica was not called upon to respond to the appellants' submissions) I should shortly indicate my view on their challenge with respect to laches. 67 In exercising his discretion to grant relief, Brereton J rejected the appellants' assertion that the respondent was not entitled to relief by reason of laches. It is unnecessary to set out the facts which his Honour considered in detail in making his finding: they are more than adequately recited in his judgment. Essentially the appellants challenged his finding at [47] of his judgment that Jessica had not stood by while the duplex was erected "brick-by-brick" without taking any action. His Honour disagreed with that submission and determined that Jessica had acted with appropriate vigilance. 68 At the end of the day the appellants were forced to concede that their challenge was to his Honour's characterisation of the facts as found by him rather than to his factual findings. It was acknowledged that his Honour was exercising a discretion and that the onus was on the appellants to demonstrate that its exercise miscarried in the sense referred to by the High Court in House v The King (1936) 55 CLR 499 at 504-505. In my opinion that onus was not discharged. No error in the exercise by the primary judge of his discretion was demonstrated. Had the appellants not otherwise succeeded on the appeal, I would have dismissed their challenge to the orders made by Brereton J.

Conclusion 69 For the foregoing reasons the appellants' appeal succeeds. I would therefore propose the following orders: (a) Extend the time in which the appellants were to file their Notice of Appeal with Appointment up to and including 19 February 2008.

(c) Set aside the declarations and orders made by Brereton J on 10 December 2007.

(d) Dismiss the summons filed by the respondent on 12 September 2007.

(e) The respondent to pay the appellants' costs of the proceedings before Austin J and Brereton J and the costs of the appeal (excluding the Notice of Motion for an extension of time in which to file their appeal) but to have with respect to the costs of the appeal, a certificate under the Suitor's Fund Act , 1951 if otherwise qualified. 70 McCOLL JA: I agree with Tobias JA.

71 BELL JA: I agree with Tobias JA. **********

18/09/2008 - 'responded' to 'respondent' - Paragraph(s) 17

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