MMP 888 Pty Ltd v Randwick City Council

Planning framework

1. The site is located within the R2 Low Density Residential zone, in which dual occupancies (attached) are permitted with consent.
2. The objectives of the zone are as follows: 1 Objectives of zone • To provide for the housing needs of the community within a low density residential environment. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. • To recognise the desirable elements of the existing streetscape and built form or, in precincts undergoing transition, that contribute to the desired future character of the area. • To protect the amenity of residents. • To encourage housing affordability. • To enable small-scale business uses in existing commercial buildings.
3. Clause 2.6 sets out the requirements by which consent may be granted for the subdivision of land: 2.6 Subdivision - consent requirements (1) Land to which this Plan applies may be subdivided, but only with development consent. …
4. Of greatest relevance to this dispute is the minimum subdivision lot size for strata plan schemes in the R2 zone as defined at cl 4.1A of the RLEP: 4.1A Minimum subdivision lot size for strata plan schemes in Zone R2 (1) The objective of this clause is to ensure that land to which this clause applies is not fragmented by subdivisions that would create additional dwelling entitlements. (2) This clause applies to land in Zone R2 Low Density Residential. (3) The size of any lot resulting from a subdivision of land to which this clause applies for a strata plan scheme (other than any lot comprising common property within the meaning of the Strata Schemes (Freehold Development) Act 1973 or Strata Schemes (Leasehold Development) Act 1986) is not to be less than the minimum size shown on the Lot Size Map in relation to that land. … (4) Despite subclause (3), if the subdivision is of a lot on which there is a dual occupancy (attached): (a) the size of each lot resulting from the subdivision is not to be less than 400 square metres, and (b) 1 dwelling must be situated on each lot resulting from the subdivision.
5. There being no definition for 'subdivision' in the dictionary of the RLEP, the meaning of 'subdivision' is found in s 6.2 of the EPA Act and provides, relevantly: (1) For the purposes of this Act, subdivision of land means the division of land into 2 or more parts that, after the division, would be obviously adapted for separate occupation, use or disposition. The division may (but need not) be effected: (a) by conveyance, transfer or partition, or (b) by any agreement, dealing, plan or instrument rendering different parts of the land available for separate occupation, use or disposition. (2) Without limiting subsection (1), subdivision of land includes the procuring of the registration in the office of the Registrar-General of: (a) a plan of subdivision within the meaning of section 195 of the Conveyancing Act 1919, or (b) a strata plan or a strata plan of subdivision within the meaning of the Strata Schemes Development Act 2015. Note. …

The Applicant's position on calculating lot size

1. The Applicant's position is set out in written submissions prepared by Mr Palmer that assists me to understand his preferred construction of cl 4.1A. In summary, the Applicant submits that the words in cl 4.1A mean what they say, and that the 'lot' as described in the clause, is one that results from a strata subdivision, being a strata lot.
2. Furthermore, a strata lot or lots result from the registering of a strata plan. Section 6.2(2)(b) of the EPA Act defines a strata plan or a strata plan of subdivision by reference to the Strata Schemes Development Act 2015 (SSD Act). In turn, the SSD Act provides guidance on the requirements of a strata plan, and how its area is to be measured.
3. At s 9 of the SSD Act, the effect of registering a plan as a strata plan is said to be the subdivision of land (being land under the Real Property Act 1900 that is held in fee simple), including all or part of a building into lots within the meaning of the SSD Act, with or without common property.
4. The result or outcome of a strata subdivision caused by the registering of a strata plan are the lots and/or common property that comprise a strata scheme as defined by s 4 of the SSD Act, and so the lot described in cl 4.1A to which a minimum lot size area is affixed, must be a strata lot.
5. A lot, being a strata lot, is defined at s 4 of the SSD Act as follows: lot, in relation to a strata scheme, means one or more cubic spaces shown as a lot on a floor plan relating to the scheme, but does not include any common infrastructure, unless the common infrastructure is described on the plan, in the way prescribed by the regulations, as a part of the lot.
6. In determining the floor area of the strata lot, Mr Palmer directs me to the definition of floor area at s 4 of the SSD Act as being "the area occupying a horizontal plane by the base of the cubic space of the lot".
7. The floor area is shown on a floor plan which is defined at s 4 of the SSD Act to mean a plan that: (a) defines by lines (each a base line) the base of the vertical boundaries of each cubic space forming the whole of a proposed lot, or the whole of a part of a proposed lot, to which the plan relates, and (b) shows: (i) the floor area of each proposed lot, and (ii) if a proposed lot has more than one part - the floor area of each part together with the aggregate of the floor areas of the parts, and (c) if a proposed lot or part of a proposed lot is superimposed on another proposed lot or part - shows the separate base lines of the proposed lots or parts, by reference to floors or levels, in the order in which the superimposition occurs.
8. As strata title is different to Torrens title, it is only right that the two forms of land tenure should be measured differently. As strata lots can be stacked vertically as cubic spaces that may be superimposed in whole or in part, it is appropriate that all of the horizontal planes at the base of each cubic space be included when calculating the area of the lot.
9. The proposed strata plan at Exhibit C depicts a number of cubic spaces, defined by reference to labels such as CY, STEP, DECK, PT1 and PT2. Each of these cubic spaces, according to the Applicant, are added together in order to arrive at the area of the strata lot, which is required to achieve 400m2 to satisfy cl 4.1(3), by reference to the Lot Size Map, and by reference to the numerical value at cl 4.1(4).
10. According to Mr Palmer, a strata lot that does not achieve 400m2 in area, by the method of calculation set out at [20] and [21], offends the object at cl 4.1A(1) as it would have the effect of fragmenting land in the R2 zone.
11. With reference to the numerical value found in the Lot Size Map, I should regard it as simply a number that relates to various types of development, including strata subdivisions, and there is nothing to suggest it being an area 'on the ground', as held by the Respondent. In the absence of words to the alternative, the Applicant relies on McEwen AJ in TC Punnett and Associated Pty Ltd v Warringah Council (2001) 115 LGERA 314; [2001] NSWLEC 152 at [26] to submit that the figure of 400m2 derived from the minimum lot size map simply says what it says, and applies whatever the lot is. To the Applicant's mind, this is the area required of a strata lot.
12. Furthermore, such a reading follows Preston CJ in DM & Longbow v Willoughby City Council (2017) 228 LGERA 342; [2017] NSWLEC 173 at [19] as the language of the provision is read in context and has regard for the objective. Additionally, I should adopt the guidance of Biscoe J in Parks and Playgrounds Movement Inc v Newcastle City Council (2010) 179 LGERA 346; [2010] NSWLEC 231 at [71] and avoid the trap of delving into the subjective intention of parliamentarians or ministers in order to rely on material that is extrinsic to the RLEP.
13. Instead, I should view the provisions of cl 4.1A as sitting alongside complementary provisions at cl 4.1AA which sets minimum subdivision lot sizes for community title schemes, and at cl 4.1C which sets controls for minimum lot sizes for dual occupancies (attached).
14. The R2 zone permits a range of development types, including boarding houses, dual occupancies (attached), dwelling houses, group homes and semi-detached dwellings. The relevance of this, according to the Applicant, is that no additional dwelling entitlements arise from the development the subject of the development application, and there is no practical physical or visible distinction that results from a strata subdivision that would set this development apart from similar dwellings in the street.
15. To Mr Palmer, the subdivision at subcl (4) must be the same type of subdivision referred to in subcl (3), and that once constructed, only one dwelling will be situated on each lot resulting from the subdivision, consistent with cl 4.1A(4)(b).
16. Irrespective of my findings in relation to the strata subdivision, the Applicant submits that I may approve the demolition of the existing structures on the site, and the construction of the dual occupancy.

The Respondent's position on calculating lot size

1. The Council's preferred reading of cl 4.1A is to give weight to the objective set out at cl 4.1A(1), and particularly to its operative part, "to ensure that land is not fragmented by those subdivisions". In support of this approach, Mr Hemmings SC for the Respondent relies on s 33 of the Interpretation Act 1987 to the effect that in the interpretation of a statutory rule, a construction that promotes the object underlying the rule is preferable to a construction that does not.
2. According to Mr Hemmings, strata subdivision can lead to fragmentation of the land. Where a development is for an attached dual occupancy, absent of strata subdivision, the development can provide a home for elderly parents, or adult children, or could act as a rental property under a single ownership. However, a two lot strata subdivision permits the development to be sold and, in so doing, creates additional dwelling entitlements.
3. To understand what the RLEP regards as acceptable, one finds it at cl 4.1A(3) being an area of 400m2 by reference to the Lot Size Map, that Mr Hemmings describes as being an area measured "on the ground".
4. The effect of the objective at cl 4.1A(1) and the area nominated in the Lot Size Map, when taken together, is that a subdivision - whether Torrens title or strata title - which results in an area on the ground of less than 400m2, has the effect of fragmenting land, which is inconsistent with the objective of the provision.
5. The Lot Size Map applies in a consistent manner to the suite of development standards in the RLEP that deal with minimum subdivision lot sizes at cll 4.1, 4.1AA, 4.1A, 4.1B, and 4.1C, and in all cases the Lot Size Map refers to the subdivision of land. Lot size minimums are even defined by reference to the Lot Size Map at cl 4.2(3) in rural subdivision.
6. The Respondent accepts that the reference to a 'lot' in cl 4.1A(3) is to a strata lot, but to Mr Hemmings the dispute lies in how the size of the lot referred to in cl 4.1A(4)(a) is required to be measured so as to know whether it complies with the required minimum of 400m2.
7. According to the Respondent, the lot size in the RLEP relates to the subdivision of land, yet the Applicant reaches for a different legislative scheme, being the SSD Act, to define 'lot size' and seeks to aggregate the area of land, with the internal area of the ground floor and the first floor to achieve a minimum of 400m2. However, the RLEP contains provisions related to determining the area of floor space at cl 4.5 and so reference to the SSD Act is misplaced.
8. For the lot size minimum to apply to anything but the land area would permit any applicant to effectively comply with the minimum subdivision lot size control in cl 4.1A(3) by proposing strata subdivision, and then build bigger buildings until an area of at least 400m2 is achieved.
9. However, according to Mr Hemmings, the Applicant's position is not supported by the definitions in the SSD Act. Evidence for this is that a 'lot' as described by the Applicant is not consistent with the definition at s 4 of the SSD Act, which describes "cubic spaces" whereas the site, which the Applicant seeks to include in calculating the area is not a cubic space. Likewise, 'floor area' is defined as "the area occupied on a horizontal plane by the base of the cubic space of the lot", which would only allow the Applicant to calculate the ground floor area, and not the first floor as it is integral to the lot and cannot be calculated separately.
10. Additionally, where strata subdivision is considered at cl 4.5 of the RLEP, subcl (5) permits area to be calculated for the purposes of deriving FSR only where it is not superimposed on area below. However, as the Applicant seeks to include the area of spaces that are superimposed on area below in the calculation of the lot size, the Applicant cannot rely on this provision.

Findings

1. This appeal, as set out in the Class 1 application (Exhibit A), seeks consent for the demolition of a single dwelling and erection of an attached two-storey dual occupancy development, and strata subdivision.
2. The construction of the attached dual occupancy is proposed on a Torrens title lot that the Applicant intends to then subdivide by the registering of a strata plan.
3. While the issues in dispute are different to those advanced in the matter of DM & Longbow v Willoughby City Council (2017) 228 LGERA 342; [2017] NSWLEC 173, Preston CJ's finding at [21], is relevant here as it was in that matter: "The applicant's proposed subdivision is for the subdivision of the existing land (being land under the Real Property Act 1900 that is held in fee simple) into individual lots and common property by the registration of a plan as a strata plan under s 9 of the Strata Schemes Development Act 2015. The object of such subdivision is the land under the Real Property Act. The land does not answer the description of being "individual lots in a strata plan". Any individual lots in a strata plan will only result from the registration of a plan as a strata plan that creates the lots. Hence, the "individual lots" will be the result of the subdivision but not what are being subdivided."
4. Applying his Honour's logic to the particular circumstances of this matter, it follows that the strata lots proposed by the Applicant will be the result of the strata subdivision, but not what are being subdivided. The subject of subdivision is land, which precedes a circumstance where a strata plan may be then registered, the result of which will be strata lots.
5. Clause 4.1A(4) provides for the circumstance where there is a lot on which there is a dual occupancy (attached). According to the dictionary in the RLEP, a dual occupancy (attached) is defined as "two dwellings on one lot of land that are attached to each other", as is the case here.
6. Substituting the definition from the dictionary in place of the defined term, subcl (4) would read, in effect: "Despite subclause (3), the subdivision intended to result from the registration of a strata plan scheme of a lot on which two dwellings on that one lot are attached to each other, the size of each resulting lot is to be not less than 400m2, and one dwelling must be situated on each lot resulting from the subdivision."
7. The purpose in using the preposition "on" when referring to the requirement for there to be one dwelling on each lot resulting from subdivision, is to recognise that the result or outcome of the subdivision of the land must be that the two attached dwellings continue to be founded in the same way in which they were founded before subdivision of the land - that is, having the same ground support on the site. That ground support, being the land on the site, must have a minimum area of 400m2 for each dwelling.
8. Such an outcome is consistent with the objective of the clause expressed in cl 4.1A(1) as it avoids the fragmentation of dwelling entitlements by preserving the status quo in respect of land on which there is an attached dual occupancy, and limits the density of development in a zone prescribed Low Density Residential.
9. Further support to this position is found when the provisions of cl 4.1A are read in context with cl 4.1C which permits dual occupancy (attached) development, absent of strata subdivision, if the area of the lot is at least 450m2.
10. The Applicant submits that the Lot Size Map fixes a number that relates to various types of development, including strata subdivisions, and says nothing about being an area 'on the ground'. However, the provisions of cl 4.1A are qualified by operation of cl 4.1(4) of the RLEP which relates expressly to the subdivision of a lot on which there is a dual occupancy (attached).
11. While the Lot Size Map is said, at subcl 4.1A(3), to operate when a strata subdivision is proposed in the R2 zone, cl 4.1A(4) does not refer to, or rely on the Lot Size Map, but expressly states a lot size area of 400m2.
12. The Applicant argues that the strata lot must achieve a minimum of 400m2 in area, being the site and internal area aggregated together. The FSR and height of building controls act to place an upper limit on the total floor area.
13. What underlies this proposition is that a strata lot must achieve 400m2 in area if it is to avoid offending the objective at cl 4.1A(1). Put another way, a strata lot with an area of anything less than 400m2 is not permissible, presumably as it would result in fragmentation by virtue of a subdivision that would create additional dwelling entitlements.
14. However, if I adopt the Applicant's position that the purpose of the provision is to encourage strata lots of at least 400m2 in area, it follows that the removal of just 22m2 of floor area on Level 1 of the proposed development at No 40 Creer Street would result in the area of the strata lot being less than 400m2 and so be impermissible. Yet it would still fully comply with the FSR and height of buildings control and would have, in the words of the Applicant, no practical physical or visible distinction that would set this development apart from similar dwellings in the street.
15. Furthermore, while an area contained within a building envelope can be described as a cubic space by virtue of it having walls supporting floors, the site itself, or parts thereof, does not answer the description of a 'cubic space' as suggested by the Applicant at [21] and so the areas marked CY in Exhibit C cannot fall within the definition on which the Applicant seeks to rely when determining the area of the lot.
16. Finally, I cannot accept the Applicant's position that the aim of the provision would be to promote greater floor area, where the objectives of the zone include to protect the amenity of residents, and to encourage housing affordability. Arriving at such a conclusion is consistent with the objectives for the R2 zone, re-produced at [9]. That consistency adds further support to the contextual interpretation that accords with the principles of statutory interpretation.
17. I acknowledge the result is an interpretation that differs from that expressed in earlier decisions of Commissioners. As a general principle, while decisions on merit appeals do not engage the doctrine of precedent, comity would ordinarily suggest that a prior decision be followed on a question of interpretation unless it is respectfully considered that the earlier decision(s) is clearly wrong. For the reasons stated above, I cannot follow the reasoning applied in earlier decisions by other Commissioners.
18. The parties, and their planning experts, agree that any consideration as to whether the development is consistent with the desired future character of the area is contingent on my finding in relation to the method by which lot size is determined.
19. The Applicant submits that if I find in favour of the Respondent, the Court can grant consent for the demolition of the existing structures on the site, and for the construction of the dual occupancy dwellings, but decline to grant consent for the strata subdivision.

Directions

1. For the reasons already stated, I consider the proposal, absent of strata subdivision, to warrant the grant of consent for the demolition of the existing dwelling, and construction of the dual occupancy (attached) dwelling only.
2. As the draft conditions of consent at Exhibit 4 contain provisions related to the proposed strata subdivision of the site, the Court directs the parties to settle conditions that reflect my intention to grant consent to the demolition of the existing dwelling on the site and the construction of the dual occupancy (attached) only within 21 days of these directions.

Addendum made on 18 February 2020

1. In accordance with the terms of my directions at [59] of my judgment of 30 December 2019, the parties provided me with finally agreed conditions of consent on 5 February 2020. Relevantly, those conditions of consent excised any requirement for works associated with a subdivision of the site.
2. As a result, and in accordance with my findings, I am therefore satisfied that consent to the development application should be granted subject to conditions of consent, except for that specified part of that development relating to the strata subdivision of the site, pursuant to s 4.16(4)(b) of the EPA Act.

Orders

1. The Court orders that: 1. The appeal is upheld. 2. Development consent is granted for DA/906/2018 for the demolition of a single dwelling and erection of an attached two-storey dual occupancy development at 40 Creer Street, Randwick subject to the conditions of consent at Annexure 'A', except for that part of the application for strata subdivision for which consent is not granted. 3. All Exhibits are returned, except for Exhibits A and 5.

Amendments 20 February 2020 - See Addendum at [60]-[62] for final orders. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 February 2020