Logan-Bald Partnership v Byron Shire Council

IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES No. (1)0229 of 2002

12 December 2002 LOGAN-BALD PARTNERSHIP Applicant v BYRON SHIRE COUNCIL Respondent Judgment

Facts 1 By development application No. 10.2002.180.1 ("the application") made to Byron Shire Council ("the council") on the 25 March 2002 the applicant seeks approval for the construction of eight two-bedroom townhouses and strata subdivision ("the development") on land known as 114 Bangalow Road, Byron Bay ("the land") being Lot 2 in Deposited Plan 505064. Such land is located within the local government area affected by the Byron Local Environmental Plan 1988 ("the LEP") and pursuant thereto it is zoned 2(a) (Residential zone), hereafter referred to as "the 2(a) zone". 2 The applicant proposes to discharge effluent from two of the townhouses directly into council's sewer main and to discharge waste from the remaining six townhouses into a sewerage disposal installation known as an Ecomax system. 3 A question of law is raised by the council as follows:- 1. Whether the proposal comprises designated development for the purposes of the Environmental Planning and Assessment Act 1979; and 2. If the answer to 1 above is in the affirmative, whether the Appeal can be upheld and the Development Application in its present form be approved.

Council's submission 4 Council submits that the development proposed is "designated development" as defined in s 4(1) of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). Part 1 of Schedule 3 of the Environmental Planning and Assessment Regulation 2000 ("Regulation 2000") lists certain types of development which are classified as "designated development". Clause 29 of Regulation 2000 relates to sewerage systems or works. Clause 29(3) of Schedule 3 specifies the criteria relevant to the applicant's proposal, namely:- (3) Sewerage systems or works that store sewerage, sludge or effluent and: (a) … (b) that are located: (i) within 100m of a natural water body or wetland, or (ii) in an area of high water table or highly permeable soils, or (iii) …, or (iv) on a floodplain, or (v) within 250m of a dwelling not associated with the development. 5 The proposed Ecomax system would be located within 250 metres of a dwelling not associated with the development as provided in cl 29(3)(b)(v) of Regulation 2000, and the relevant criteria are fulfilled. 6 The council submits that Regulation 2000 has the effect that if any part of the proposed use comprises "designated development", the whole use is classified as one in respect of designated development. Accordingly council submits that the whole development application is one made in respect of "designated development".

Applicant's submissions 7 The applicant submits the Ecomax system does not "store" sewerage, sludge or effluent and therefore is not within the scope of cl 29(3) of Regulation 2000. 8 The applicant further submits that, as a matter of characterisation, the application is one for subdivision and the erection of dwelling houses rather than development for a sewerage system. The applicant acknowledges development consent is required by reason of the combined operation of s 76A(1) of the EP&A Act and of cl 9 of the LEP in respect of its application to the 2(a) zone. However, the applicant contends that the development is not one made in respect of "designated development".

The Ecomax System 9 The Ecomax system comprises three components. Initially waste is drained by gravity into a primary tank having a holding capacity of 7,500 litres where it remains for 24 hours. During this time anaerobic bacterial processes are designed to operate on the waste ("the initial process"). In the primary tank the waste separates into three strata. At the top is a floating component, below which is a liquid layer and beneath those is a layer of solids. Following the initial process the liquid layer is pumped from the primary tank into pump wells where the biological process continues. Thereafter the liquid waste is pumped from those wells into mounds containing sand and iron known as Ecomax cells. The mounds are covered with vegetation which is intended to absorb and biodegrade nutrients from within the mounds.

Does the Ecomax system "store" waste? 10 To deal with the applicant's submission that the Ecomax system does not "store" sewerage waste it is necessary to consider its waste treatment process. After the influx of waste into the Ecomax system, solids accumulate in the primary tank and are ultimately removed approximately every 18 months. Accordingly the tank not only holds the waste whilst the initial process is carried out but also stores solid waste. In view of these facts the primary tank stores waste. The Ecomax cells also hold waste during the degrading and leaching process. Accordingly the Court rejects the applicant's submission that the Ecomax system does not "store" waste.

Characterisation 11 The Environmental Planning and Assessment Regulation 1980 ("Regulation 1980") and the Environmental Planning and Assessment Regulation 1994 ("Regulation 1994") each contained a Schedule 3 pertaining to designated development. The preambles to such Schedules described "designated development" as follows:- Development for the undermentioned purposes or development of the undermentioned types is designated development. 12 Regulation 2000, which took effect on 1 January 2001, contains a Schedule 3 in similar terms as that in Regulation 1980 and in Regulation 1994, but contains no preamble. Accordingly any reference to "purpose" of a development or "types" of development has been omitted. 13 In Maxwell and Anor v Hornsby Council [2002] NSWLEC 92, Pain J considered the changes to the EP&A Act and Regulation 2000 relevant to the classification of development as "designated development". Her Honour determined that categorisation of the purpose of a development was irrelevant under Regulation 2000 in view of the omission of the words which appeared in the preamble to Schedule 3 of Regulation 1980 and Regulation 1994. Accordingly, the question of purpose of the development or of its type was irrelevant to the determination of whether the development constituted "designated development". Her Honour determined that if the proposed development contained an activity of the type enumerated in Schedule 3 of Regulation 2000, the entirety of such development acquired the classification of "designated development" by reason of that activity. 14 The applicant challenges the correctness of the decision in Maxwell and submits that such a fundamental change in approach to statutory interpretation in planning law could not have been contemplated by virtue of the omission of words from the Schedule 3 preamble. The applicant submits that a consent authority is still required to apply the traditional test of characterisation. Such test requires the consent authority to ascertain the dominant purpose of a development. Authorities such as Penrith City Council v Waste Management Authority & Anor (1990) 71 LGRA 376 at 380-389; Foodbarn Pty Limited & Ors v Solicitor-General (1975) 32 LGRA 157 at 161; Bonus Pty Ltd v Leichhardt Municipal Council (1954) 19 LGR 375; Shire of Perth v O'Keefe & Anor (1964) 110 CLR 529 at 535; 10 LGRA 147; Lyne and Anor v Moree Plains Shire Council (1999) 110 LGERA 120; and Moore and Anor v Yarrowlumla Shire Council (2002) 120 LGERA 109 emphasised the need to establish the real and substantial purpose of a development. 15 Subsequent to Her Honour's decision in Maxwell, Talbot J delivered judgment in Momentum Architects Pty Limited v Hornsby Shire Council [2002] NSWLEC 192. His Honour's decision departed from the conclusion reached by Her Honour, Pain J, in Maxwell. His Honour noted that Her Honour in Maxwell did not consider it necessary to characterise the purpose or type of development, since it related to a legislative context "that no longer exists". His Honour observed that Pain J distinguished the decision of the New South Wales Court of Appeal in Penrith City Council v Waste Management Authority & Anor and Pearlman J in Lyne and Anor v Moree Plains Shire Council and of Bignold J in Canyonleigh Environment Protection Society Inc. v Wingecarribee Shire Council (1997) 95 LGERA 294 on the ground that they were based upon previous legislative schemes. His Honour said:- The critical change that Her Honour identifies in Maxwell is that the definition no longer includes reference to "purposes" or "types" mentioned in the Schedule.

Talbot J concluded the change to the text of Schedule 3 was insufficient to alter the established approach adopted in decisions of the Court of Appeal and of this Court interpreting the requirements of the EP&A Act . 16 If the approach of Talbot J is correct the consent authority is required, when considering a development application pursuant to the provisions of s 78A of the EP&A Act, to undertake the process of characterisation.

Provision of the EP&A Act prior to 1 July 1998 17 Until the Environmental Planning and Assessment Amending Act 1997 ("the Amending EP&A Act") was enacted, "designated development" was defined in the EP&A Act as follows:

designated development means any class or description of development that is declared pursuant to section 29 or 158 to be designated development for the purposes of this Act.

Section 29 of the EP&A Act related to environmental planning instruments which declared any class or description of development to be designated development. Section 158 of the EP&A Act provided that regulations might contain "provisions declaring any class or description of development (whether by reference to the type, purpose or location of development or otherwise) to be designated development …".

Alteration to Legislation 18 The Amending EP&A Act came into operation on 1 July 1998. The definitions of "designated development" and of "development" were deleted from s 4(1) of the EP&A Act and substituted by the existing definitions. The change in the definition of "development" is inconsequential for present purposes. The new definition of "designated development" was simplified as follows:- designated development has the meaning given by section 77A. 19 Section 77A of the EP&A Act provides: Designated development is development that is declared to be designated development by an environmental planning instrument or the regulations.

Section 78A of the EP&A Act relevantly provides: 78A(1) A person may, subject to the regulations, apply to a consent authority for consent to carry out development. (2) A single application may be made in respect of one or more of the types of development referred to in paragraphs (a)-(f) of the definition of development in section 4(1). 20 Clause 4(1) of Regulation 2000 provides:- What is designated development?

4(1) Development described in Part 1 of Schedule 3 is declared to be designated development for the purposes of the Act unless it is declared not to be designated development by a provision of Part 2 or 3 of that Schedule.

Do the legislative changes affect the existing regime? 21 The Second Reading speech for the Environmental Planning & Assessment Amendment Bill refers to the object of the legislative changes. In the Second Reading speech the Minister for Urban Affairs and Planning and Minister for Housing, Mr C. Knowles, (Hansard 15 October 1997 p 827) said:- The aim is to align the level of assessment with the complexity and likely environmental impact of a development proposal. The reforms also clarify the assessment and decision-making process for local and State developments and rationalise the range of matters to be considered at the assessment stage. 22 As a result of the amendments to the definition of "designated development" in s 4(1) of the EP&A Act and the introduction of Schedule 3 of Regulation 2000, the classification of a use as "designated development" has been made more readily identifiable. If a proposed use is listed in Pt 1 of Schedule 3 to Regulation 2000, that use constitutes "designated development" within the meaning of s 77A. No question arises concerning the "purpose" or the "type" of the proposed use. 23 However, whilst the task of classification of an activity as "designated development" has been simplified by the amendments, the obligation of the consent authority to characterise the use proposed for the whole development remains. Where a proposed use includes a use which is designated development the latter may be a subordinate or ancillary use. Accordingly it is necessary to determine the dominant purpose of the development.

Glass JA in Foodbarn at p 161 said:- It may be deduced that where a part of the premises is used for a purpose which is subordinate to the purpose which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used.

Subsequently, the New South Wales Court of Appeal in Penrith City Council v Waste Management Authority said at p 384:- Because the words of the statutory definition may relate to parts only of a development as proposed, it is necessary, in performing the task of characterisation to consider the 'character and extent and other features of the activities' proposed to decide whether, properly classified for legal purposes, they fit into the definition against which they are being measured. This is what Glass JA suggested in Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 161. It is what Hope JA said explicitly in CB Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270.

Such principle has been extensively used to establish the true characterisation of a development the subject of a development application. 24 In Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 (CA) Meagher JA said at p 409:- Notwithstanding the principles laid down in Foodbarn , it does not follow that a use which can be said to be ancillary to another use is thereby automatically precluded from being an independent use of the land. It is question of fact and degree in all the circumstances of the case whether such a result ensues or not. 25 If the "designated development" use is the dominant or the sole or independent purpose an environmental impact statement is required pursuant to s 78A(8)(a) of the EP&A Act. 26 The legislative changes created by the Amending EP&A Act and Regulation 2000 do not operate to displace such test. The real and substantial purpose of the development must still be determined to establish its true character. That is, the ability to readily classify a use as "designated development" resulting from the amendments does not lead to the conclusion that the whole use necessarily assumes the character as one of "designated development", if only part of the use is so classified.

Application to the present circumstances 27 Applying the test of characterisation, the use of the sewerage system constitutes "designated development". However, such use is subsumed in the dominant purpose of the development which is for housing and subdivision. 28 Section 78A of the EP&A Act provides for the making of an application for development. In Momentum, Talbot J drew attention to the text of s 78A(8) which relevantly provides:- 78A(8) A development application must be accompanied by: (a) if the application is in respect of designated development [emphasis added] - an environmental impact statement prepared by or on behalf of the applicant in the form prescribed by the regulations, or 29 In the present circumstances the application for development is not one "in respect of designated development".

Answer to the Question of Law 30 The question of law is to be answered as follows:- 1. Part of the applicant's development proposal comprises designated development for the purposes of the Environmental Planning and Assessment Act 1979. 2. That part of the applicant's development application which comprises designated development as defined in the Environmental Planning and Assessment Act 1979 is subordinate to the dominant purpose of the development application, which is made in respect of "development" as defined in s 4(1) of the said Act. 3. The applicant's development application is therefore not one made in respect of designated development.

Orders 31 The Court orders that:

1. These proceedings be remitted to the Registrar and listed for call over on the 18th day of December 2002.
2. The exhibits (with the exception of Exhibit 2) be returned.
3. Costs be reserved. **********

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.