Mulpha Norwest Pty Ltd v The Hills Shire Council

Land and Environment Court (NSW)|2020-04-23|Before: Pain J

Judgment

The Applicant has filed an appeal in relation to its development application (DA) for development on land in the Castle Hill area. The determination of a separate question under r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) was ordered in these Class 1 proceedings in Mulpha Norwest Pty Ltd v The Hills Shire Council [2020] NSWLEC 7. The separate question states as follows: Whether, on the proper construction of cll 4.4, 4.5 and 7.12 of The Hills Local Environmental Plan 2012, the floor space ratio of the building on the site must be calculated separately for the land within Area A from the remainder of the site.

Environmental Planning and Assessment Act 1979

Relevant sections of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) provide: Part 1 Preliminary … 1.4 Definitions (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires - … building includes part of a building, and also includes any structure or part of a structure (including any temporary structure or part of a temporary structure), but does not include a manufactured home, moveable dwelling or associated structure within the meaning of the Local Government Act 1993. … land includes - (a) the sea or an arm of the sea, (b) a bay, inlet, lagoon, lake or body of water, whether inland or not and whether tidal or non-tidal, and (c) a river, stream or watercourse, whether tidal or non-tidal, and (d) a building erected on the land.

The Hills Local Environmental Plan 2012

The Hills Local Environmental Plan 2012 (NSW) (THLEP 2012) referred to by the parties as in force before 6 December 2019, continues to apply to the proposed development, pursuant to cl 1.8A of The Hills Local Environmental Plan 2019 (NSW), which commenced on 6 December 2019) provided: Dictionary (Clause 1.4) … floor space ratio - see clause 4.5. Floor Space Ratio Incentive Map means the Hills Local Environmental Plan 2012 Floor Space Ratio Incentive Map. Floor Space Ratio Map means The Hills Local Environmental Plan 2012 Floor Space Ratio Map. … gross floor area means the sum of the floor area of each floor of a building measured from the internal face of external walls, or from the internal face of walls separating the building from any other building, measured at a height of 1.4 metres above the floor, and includes - (a) the area of a mezzanine, and (b) habitable rooms in a basement or an attic, and (c) any shop, auditorium, cinema, and the like, in a basement or attic, but excludes - (d) any area for common vertical circulation, such as lifts and stairs, and (e) any basement - (i) storage, and (ii) vehicular access, loading areas, garbage and services, and (f) plant rooms, lift towers and other areas used exclusively for mechanical services or ducting, and (g) car parking to meet any requirements of the consent authority (including access to that car parking), and (h) any space used for the loading or unloading of goods (including access to it), and (i) terraces and balconies with outer walls less than 1.4 metres high, and (j) voids above a floor at the level of a storey or storey above. … Part 4 Principal development standards … 4.4 Floor space ratio (1) The objectives of this clause are as follows - (a) to ensure development is compatible with the bulk, scale and character of existing and future surrounding development, (b) to provide for a built form that is compatible with the role of town and major centres. (2) The maximum floor space ratio for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map. 4.5 Calculation of floor space ratio and site area (1) Objectives The objectives of this clause are as follows - (a) to define floor space ratio, (b) to set out rules for the calculation of the site area of development for the purpose of applying permitted floor space ratios, including rules to - (i) prevent the inclusion in the site area of an area that has no significant development being carried out on it, and (ii) prevent the inclusion in the site area of an area that has already been included as part of a site area to maximise floor space area in another building, and (iii) require community land and public places to be dealt with separately. (2) Definition of "floor space ratio" The floor space ratio of buildings on a site is the ratio of the gross floor area of all buildings within the site to the site area. (3) Site area In determining the site area of proposed development for the purpose of applying a floor space ratio, the site area is taken to be - (a) if the proposed development is to be carried out on only one lot, the area of that lot, or (b) if the proposed development is to be carried out on 2 or more lots, the area of any lot on which the development is proposed to be carried out that has at least one common boundary with another lot on which the development is being carried out. In addition, subclauses (4)-(7) apply to the calculation of site area for the purposes of applying a floor space ratio to proposed development. (4) Exclusions from site area The following land must be excluded from the site area - (a) land on which the proposed development is prohibited, whether under this Plan or any other law, (b) community land or a public place (except as provided by subclause (7)). … (6) Only significant development to be included The site area for proposed development must not include a lot additional to a lot or lots on which the development is being carried out unless the proposed development includes significant development on that additional lot. … Part 7 Additional local provisions … 7.12 Development on certain land within the Sydney Metro Northwest Urban Renewal Corridor (1) The objectives of this clause are as follows - (a) to support the provision of increased housing around train stations forming part of the Sydney Metro Northwest at densities compatible with the future character of the surrounding area, (b) to ensure the provision of a mix of dwelling types in residential flat buildings, providing housing choice for different demographics, living needs and household budgets, (c) to promote development that accommodates the needs of larger households, consistent with the demographics and family household structures of The Hills Shire. (2) This clause applies to development that involves the erection of one or more buildings that contain dwellings on land identified as "Area A" on the Floor Space Ratio Map [map not included]. (3) Despite clause 4.4, the consent authority may consent to development on land to which this clause applies with a floor space ratio that does not exceed the increased floor space ratio identified on the Floor Space Ratio Incentive Map [map not included], if the consent authority is satisfied that - (a) no more than 25% of the total number of dwellings (to the nearest whole number of dwellings) contained in the development are to be studio or 1 bedroom dwellings, or both, and (b) at least 20% of the total number of dwellings (to the nearest whole number of dwellings) contained in the development are to be 3 or more bedroom dwellings, and (c) at least 40% of all 2 bedroom dwellings contained in the development will have a minimum internal floor area of 110m2, and (d) at least 40% of all 3 bedroom dwellings contained in the development will have a minimum internal floor area of 135m2, and (e) the following minimum number of car parking spaces are to be provided for the development - (i) for each dwelling - 1 car parking space, and (ii) for every 5 dwellings - 1 car parking space, in addition to the car parking space required for the individual dwelling. (4) In this clause - internal floor area does not include the floor area of any balcony.

Interpretation Act 1987

Section 6 of the Interpretation Act 1987 (NSW) states: Part 2 Words and expressions 6 Definitions to be read in context Definitions that occur in an Act or instrument apply to the construction of the Act or instrument except in so far as the context or subject-matter otherwise indicates or requires.

Statement of agreed facts

The parties provided a statement of agreed facts (SOAF) (attachment and footnote omitted) as follows: The Site 3. The Site is comprised of the whole of one and part of another registered lot: (a) 2-6 Maitland Place, Norwest is the whole of Lot 22 DP 1034506 (Lot 22). (b) 40 Solent Circuit, Norwest comprises part of Lot 2105 DP 1201899 (Part Lot 2105). 4. The Site has been approved to be consolidated into a single lot, to be known as Lot 221 in the subdivision of Lot 22 and Lot 2105 DP 1201899 (Lot 221) pursuant to the development consent granted to DA504/2018/ZA by the Respondent on 27 November 2017. A copy of the plan of subdivision is at Tab 5 of the Agreed Bundle. 5. The plan of subdivision creating Lot 221 has not yet been registered. 6. The Site, being unregistered Lot 221, has an area of 4,998m2. 7. Lot 22 has an area of 2,649m2. [that part of the Site in Area A] 8. Part Lot 2105 has an area of 2,349m2.[uncoloured area] 9. An aerial photograph of the Site is at Tab 4 of the Agreed Bundle. Zoning and floor space ratio controls applying to the Site 10. The Hills Local Environmental Plan 2012 (THLEP 2012) applies to the Site and the proposed development. 11. The Site is zoned R4 High Density Residential under THLEP 2012. 12. Development for the purposes of a residential flat building is permitted in the R4 Zone. 13. Clause 4.4(2) of THLEP 2012 provides: The maximum floor space ratio for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map. 14. Pursuant to the Floor Space Ratio Map FSR_016, a maximum floor space ratio (FSR) of 1:1 applies to the portion of the Site currently comprising Lot 22. It is also identified on the Floor Space Ratio Map FSR_016 as being mapped "Area A". 15. The Floor Space Ratio Map shows the whole of Lot 2105 as being uncoloured, which means that no FSR development standard applies to the portion of the Site comprising Part Lot 2105. Gross floor area of the proposed development 16. The proposed building has a total gross floor area (GFA) of 14,903m2, as GFA is defined in THLEP 2012. 17. The GFA of the proposed building is located exclusively on that part of the Site within Lot 22. [that part of the Site in Area A] 18. The proposed building's loading dock, basement and ground floor car parking and a landscaped podium, do not include any calculable GFA and are located on the part of the Site comprising Part Lot 2105. [uncoloured area] Other provisions of THLEP 2012 applying to Lot 22 ("Area A") 19. Clause 7.12 of THLEP contains additional provisions for development that involves the erection of one or more buildings that contain development on land identified as "Area A" on the Floor Space Ratio Map. [Lot 22] 20. The respondent is satisfied that the specific requirements in paragraphs (a)-(e) of sub-clause 7.12(3) of THLEP 2012 would be met by the proposed development. 21. The effect of clause 7.12 is that the land within "Area A" comprising Lot 22 has an increased maximum FSR of 3.0:1. How to calculate the FSR for the proposed development 22. Clause 4.5 of THLEP 2012 specifies the way to calculate the FSR and site area for the proposed development. 23. As the Site comprises unregistered Lot 221 in the approved subdivision of Lot 22 and Lot 2105 DP 1201899, the site area may be taken to be the area of Lot 221 in accordance with sub-clause 4.5(3)(a) of THLEP 2012. 24. Alternatively, if by virtue of Lot 221 being unregistered, the Site is taken to be comprised of two lots, the site area may be taken to be determined according to sub-clause 4.5(3)(b). 25. No land is required to be excluded from the site area pursuant to sub-clauses 4.5(4) and (5). 26. The site area includes lots on which significant development is being carried out within the meaning of clause 4.5(6). 27. Sub-clauses 4.5(7) - (11) are not relevant to the calculation of site area in this case. 28. The proposed building has an FSR of 2.98:1:1 and complies with clauses 4.4 and 7.12 if the calculation of FSR includes the whole of proposed Lot 221. [Applicant's case] 29. The proposed building has an FSR of 5.628:1 and does not comply with clauses 4.4 and 7.12 if the calculation of FSR is confined to the area of the Site within "Area A". [Council's case]
On the Floor Space Ratio Map (FSR Map) below the Site (consolidated Lot 221) is outlined in red. The portion of the Site that is in Area A (2-6 Maitland Place, or Lot 22) is shown in blue hatching. The parties agree that cl 7.12 increases the maximum permissible floor space ratio (FSR) of land within Area A to 3.0:1 (SOAF par 21). For the portion of the Site that is uncoloured (40 Solent Circuit, or part Lot 2105) no FSR development standard applies (SOAF par 15).
If the Site for the development as a whole is included in the FSR calculation, the calculation of FSR in accordance with cl 4.5 results in an FSR of 2.98:1, less than the maximum permitted under cl 7.12, being 3.01:1 according to the Applicant. If the site area of the development considered for calculating the FSR does not extend beyond Area A, the FSR in that part of the Site in Area A will be 5.628:1 which exceeds the permitted FSR in Area A according to the Council (as reflected in the SOAF pars 28, 29).

Tender bundle

The Applicant tendered an agreed bundle containing a statement of environmental effects, architectural plans and landscape plans prepared for the DA, aerial photographs of the Site, an approved plan of the subdivision, an extract of the FSR Map with boundaries of the Site marked on it, and relevant planning instruments including current and historical versions of THLEP 2012 and relevant FSR Map and Floor Space Ratio Incentive Map (FSR Incentive Map).

Applicant's submissions

The Applicant submitted that the answer to the separate question is no. Clause 4.5 must be used to inform cll 4.4 and 7.12 so that the FSR includes the whole development on unregistered Lot 221 currently Lot 22 (that part of the Site in Area A) and part Lot 2105.
Local environmental planning instruments (LEPs) are delegated legislation: Interpretation Act s 3. General principles of statutory construction apply to them: Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389; [1996] HCA 36 at 398. A construction should be preferred that is consistent with the language and purpose of all the provisions of such instruments: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 (Project Blue Sky) at [69]. The ordinary and grammatical meaning of the provisions to be construed will usually correspond with the legislative intention and will be the meaning adopted in the construction of a statute: Project Blue Sky at [78]. The language is to be read in context having regard to the objective which it was designed to promote, however, the primary focus must remain on the text: Cranbrook School v Woollahra Council (2006) 66 NSWLR 379; [2006] NSWCA 155 (Cranbrook School) at [36]. There is no general principle requiring laxity or flexibility in construing delegated legislation, or statutory instruments generally: 4Nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191 at [107]. Legislative intent is not to be discerned by reference to pre-conceived ideas or vague notions of what might or might not be desirable. Intent is to be objectively determined. It is manifested by the use of language (Wilson v Anderson (2002) 213 CLR 401; [2002] HCA 29 at [8]) in the document to be construed: Matic v Mid-Western Regional Council [2008] NSWLEC 113 at [8].
The maximum FSR for a building on any land is set by cl 4.4 of THLEP 2012. However, the incentive FSR provision in cl 7.12 operates "despite clause 4.4" to provide for increased FSR for development on certain land, in this case the land marked "Area A" on the FSR Incentive Map. When read in the context of THLEP 2012, the effect of cll 4.4 and 7.12 are to establish the maximum FSR that applies to land, that is to impose a development standard on land by reference to maps that form part of THLEP 2012. The maps (and, therefore, the clauses) reference the result of an FSR calculation, they do not qualify or inform the manner in which the calculation is to be made yielding that result (contrary to the Council's case).
How the FSR of a building is to be calculated is determined by cl 4.5 only. The objectives of cl 4.5 are set out in cl 4.5(1) and are to "define floor space ratio" and "set out rules for the calculation of the site area of development for the purpose of applying permitted floor space ratios". Clause 4.5 refers to "site", "site area" and "lot", not "land".
Clause 4.5(2) provides that the FSR of "buildings on a site is the ratio of the gross floor area of all buildings within the site to the site area". Clause 4.5(3) then defines what is "taken to be" the "site area" as (relevantly) the area of a lot or lots on which the development is to be carried out.
Accordingly, FSR is not defined by the land which is identified for the purpose of cll 4.4 and 7.12. Rather, it is determined by a comparison of the "gross floor area of all buildings within the site" and the "site area" (cl 4.5(2)). Properly construed, the definition of site area defines the site, which is determined by reference to lots (cl 4.5(3)).
It is clear, particularly from cl 4.5(3)(b), that the lots which inform the site area are parcels of land defined by their cadastral boundaries. The definition of "site area" practically operates to designate what the site area is. The lots of land on which development is to be carried out are "taken to be" the "site area" for the purpose of "determining the site area of proposed development for the purpose of applying a floor space ratio" under THLEP 2012.
It is agreed that the development proposed in the DA is to be carried out upon Lot 22 and part Lot 2105, which have a combined area of 4,998m2 (SOAF at pars 6, 7 and 8). That is the site area determined in accordance with cl 4.5(3)(b). The gross floor area (GFA) of the buildings proposed on Lot 22 and part Lot 2105 is 14,903m2. As a result, the FSR for the (whole) development calculated in accordance with cl 4.5 is 2.98:1, which complies with the 3.0:1 FSR control as it applies to Lot 22 (that part of the Site in Area A) because of cl 7.12 (SOAF at pars 21, 28).
A key controversy is what is meant by site area. Clause 4.5(3) must be applied and requires consideration of the whole lot, not a part of the lot meaning only lot 22. The area of the Site includes that part of the Site in Area A and the part that is not in Area A.
It is understood that Council's position is that because Lot 22 (that part of the Site in Area A), when considered in isolation, will have upon it a building that has a ratio of GFA to land area of greater than 3.0:1 (5.628:1, par 29 SOAF), this means cl 7.12 of THLEP 2012 will be breached by the development proposed in the DA. The Council's approach is fundamentally flawed.
First, the Council's determination of the ratio of GFA to the land area of Lot 22 (that part of the Site in Area A) is not, by definition, a determination of FSR for the purpose of THLEP 2012 because it does not apply cl 4.5. It is the calculation of something else. As cl 7.12 (and cl 4.4) regulates the FSR on land (and not simply the ratio of building area to any land area), how could it be said that there could be breach of cl 7.12 (or cl 4.4) if the FSR being applied is not calculated in accordance with the terms of THLEP 2012? This is what Council seeks to do.
Second, the circumstance that the GFA of the building proposed in the DA happens to be confined to that part of the building located on Lot 22 (that part of the Site in Area A) is irrelevant to the determination of the FSR. The distribution of floor area within the site is irrelevant to the calculation of FSR when determined in accordance with cl 4.5 (the parties agree that cl 4.5(6) is satisfied (SOAF par 26).
The Council seeks to impermissibly define site area by reference only to Lot 22 (that part of the Site in Area A). Such an application pays no regard to the function and operation of cl 4.5(3) which specifically and deliberately defines site area for the purpose of calculating FSR by reference to the lots upon which a development as a whole is to be carried out. Rather, the Council seeks to equate the phrase "site area" in cl 4.5(3) with the word "land" in cll 4.4 and 7.12. The distinction between these concepts (site area being particularly defined and land being used generically in the context of cll 4.4 and 7.12) ought to be assumed to have been deliberate and the distinction must be respected when construing the provisions.
While it is said that a definition is no more than an aid to the construction of a statute (Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966] HCA 74 at 635) and that the meaning of a definition turns on the context in which it appears considered as a whole (Cranbrook School at [39], Bay Simmer Investments Pty Ltd v State of New South Wales (2017) 222 LGERA 286; [2017] NSWCA 135 at [74] per Leeming J), Council's approach to the construction of cl 4.5 ignores the terms of cl 4.5(3). It would substitute Area A, which is defined by reference to a map that forms part of THLEP 2012 (and not determined by reference to the development being carried out at all) as a new integer in the FSR equation. There is simply no scope for such an interpretation.
The only basis on which areas can be excluded from the calculation of site area are as provided in cl 4.5(4) and (6) (in this case). There is no infringement of subcl (6) (noting that all the development relevant to GFA is located on Area A and the development on non-Area A is not of the kind that is used in the calculation of GFA).
In reply, the words of cl 4.5 are not ambiguous and should be given their ordinary and grammatical meaning: DM & Longbow Pty Ltd v Willoughby City Council (2017) 228 LGERA 342; [2017] NSWLEC 173 (DM & Longbow) at [14], [18] and nor should the Court substitute its preference for a more convenient operation of the clause and choose an interpretation that better enables that operation, at [24]. There is a clear difference in language between "land" in cll 4.4 and 7.12 and "site" and "site area" in cl 4.5(3) which must be maintained, contrary to the Council's approach: DM & Longbow at [23].
Clause 4.5 is not solely a definitional clause, it also has operational effect as it sets out the rules for the calculation of the site area of development. It has two stated objectives, being to define floor space ratio and to set out rules for the calculation of the site area of development for the purpose of applying permitted FSRs. These provisions apply directly to the calculation of FSR in cll 4.4 and 7.12. Caution should be exercised before concluding that a definition should not apply according to its terms: Hastings Co-operative Ltd v Port Macquarie-Hastings Council (2009) 171 LGERA 152; [2009] NSWCA 400 (Hastings) at [33]-[35], [39].
Only cl 4.5 can govern the application of FSR, not land identified on the map in cl 7.12. Clause 7.12 has no part to play in determining the manner in which the FSR which it permits is to be calculated. Clause 4.5 mandates the sole method of calculating the FSR of a proposed development (SOAF par 22). The assessment of a DA requires consideration of the proposed FSR and must be done by resort to cl 4.5(3). First the site area must be determined. This is for the specified purpose of applying permitted FSRs, cl 4.5(1)(b) and (3), being the permitted ratio in cll 4.4 and 7.12.
Site area is comprehensively defined in cl 4.5(3). It is the area of the proposed development with the exclusion of land identified in subcll (4)-(7). Land within the Site but to which cl 7.12 does not apply is not one of those exclusions. It remains part of the site area of the proposed development for the purpose of applying a FSR fixed by cll 4.4 or 7.12. Site area is not an area identified by reference to a map, for example the FSR Map. If this had been intended cl 4.5(3) could have included a rule to be applied in circumstances where a development site was subject to differing FSRs. The Council impermissibly amends both the area of the site and the definition of site area so as to produce a calculation of FSR limited only to that part of the Site in Area A, which is only part of the site of the whole development. This introduces a new integer into cl 4.5 for which there is no basis of construction and therefore impermissibly rewrites THLEP 2012.
The Council seeks to ignore cl 4.5(2) and (3) by imposing its own rules for the calculation of site area where a site consists of parcels of land with different maximum FSRs. This does not accord with the definition in cl 4.5(2). The application of permitted FSRs are applied by the rules in cl 4.5(1)(b) and (3).
The limits of a site area are not the boundaries on an FSR Map. An applicant must comply with the maximum FSR in cll 4.4 and 7.12 (subject to cl 4.5) as calculated in accordance with the stated requirements in cl 4.5.

Council's submissions

The answer to the separate question is yes. The operative provisions in THLEP 2012 are cll 4.4 and 7.12 and these apply in the first instance. Clause 4.5 is not operative, being definitional only.
Principles of construction apply to LEPs as delegated legislation. The text must be considered: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 [2009] HCA 41 at [47]. Construction which is consistent with the language and purpose of the provisions of the instrument as a whole is to be preferred: Project Blue Sky at [69], [78]. The role of definitions in a statutory instrument is relevant: Cranbrook School at [38]-[39] per McColl JA citing Gibb v Federal Commissioner of Taxation at 635 and Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12 at [103]. A definition does not operate independently, it is an aid to construction. The approach in Kelly v The Queen was applied in Heatscape Pty Ltd v Mahoney (2017) 223 LGERA 66; [2017] NSWCCA 135 at [43] (Heatscape). Section 6 of the Interpretation Act requires that definitions be read in context.
Focussing on the words of cl 4.5, it is evident that it fulfils a role only of defining or determining the way in which FSR is to be calculated. The provision has no independent operation. It does not set a FSR standard or apply that standard to any particular land. Indeed, the objective of the clause is stated to be "to define floor space ratio" and "set out rules for the calculation of the site area of development for the purpose of calculating floor space ratio".
In this case, cll 4.4 and 7.12 of THLEP 2012 are the substantive enactment and the operative clauses. They set a maximum FSR for the land to which the clauses apply. The substantive enactment is the limit on floor space imposed by cl 4.4, as varied by cl 7.12, applied to the land in Area A.
Contrary to the principles of statutory construction outlined above, the Applicant relies on the essentially definitional effect of cl 4.5 to contend that the FSR is dictated by the site of the development and not by the land to which the FSR applies. However, in accordance with the principles of statutory construction set out above, the definition cannot operate independently to determine the land to which the clause applies, but must yield to the operative provision.
Analysing the problem by inserting the definition in cl 4.5 into the operative clauses according to the principle in Kelly v The Queen above at [31], assuming the Site to effectively be a single lot, albeit that the registration of the consolidation may not have been effected, results in the following for cl 4.4(2): The maximum [ratio of the gross floor area of all buildings within the site to the] [area of the lot on which the development is proposed to be carried out] for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map.
In cl 7.12(3), the provision becomes: Despite clause 4.4, the consent authority may consent to development on land to which this clause applies with a [ratio of the gross floor area of all buildings within the site to the] [area of the lot on which the development is proposed to be carried out] that does not exceed the increased floor space ratio identified on the Floor Space Ratio Incentive Map…
In both cll 4.4 and 7.12 the controlling words are "the land" and "the land on the Floor Space Ratio [Incentive] Map". The land in both cases is the same as shown on the relevant map that governs the application of the FSR, not the definition of "site" under cl 4.5. The consent authority may only grant consent to development on land to which the clause, whether cll 4.4 or 7.12 applies, not to land that extends beyond that in the FSR Map or FSR Incentive Map. The Applicant ignores cl 7.12(2).
Contrary to the Applicant's submission summarised above at [11] that the maps and clauses reference the result of an FSR calculation rather than informing it, the map does "qualify or inform the manner in which the calculation is to be made" because it identifies the land to which the FSR calculation is to be applied.
Again, contrary to the applicant's submissions summarised above at [21] that the Council impermissibly defines "site area" by reference only to Lot 22 (that part of the Site in Area A), the Council does not equate site area with land, rather the approach required by the definition in cl 7.12 demonstrates that there are three key words with which to grapple.
The first word is the lot on which development is to be carried out. the word "lot" is not defined, but in context, probably means a lot registered in a current plan. Clause 4.5(3) makes clear that lot can include more than one lot. Thus lot comprises the lot or lots on which development is to be carried out. No issue arises of which lot is the subject of the FSR control.
The second key word is "site". The site is determined by reference to the lot or lots on which the development is to be carried out. While the site must be the whole of a lot or lots, there is nothing in the definition of site area that mandates that it comprise the whole of a site. Firstly, the objective in cl 4.5(1)(b) suggests otherwise. Secondly, there is a further textual indicator in cl 4.5(4) that suggests that in some cases only part of a site might be counted, by providing for exclusions from site area. Thus, context dictates that "site" for the purposes of applying the definition to an operative clause does not always have to include the whole of a particular site. Thirdly, subcl (6) specifies that lots on which significant development is not taking place can be excluded from the GFA calculation. Fourthly, under cl 4.5(2) the clause can only apply to land to which the clause applies.
The third word "land" is not specifically defined in THLEP 2012. It is defined in s 1.4 of the EPA Act. The only relevant part of that definition for present purposes is that land includes "a building erected on the land". As the definition of "building" under the EPA Act can also mean "part of a building", it follows that in the context of calculating the GFA of a building on a site, it can be done by calculating the GFA of part of a building on [part of] a site.
Moreover, the definitions of "floor space ratio" and "site area" must be looked at in the context in which they are to be applied. They are only applied for the purposes of cll 4.4 and 7.12, which unambiguously dictate application by the FSR Map or the FSR Incentive Map, as the case may be. Land is fixed by one of these maps. Applying strict principles of statutory construction, permissible FSR must only be that part of a site on the land to which the clause applies.
There is an ascending hierarchy revealed by the composite definition and operative provision, being that the Site is determined by the whole of the lots that make up the site area. But when the site area is used to calculate the FSR, the site area must be adjusted so as to comprise only so much of the Site as is contained within the land to which the FSR applies or for any other reason under cl 4.5(4) or (6). The land to which the FSR applies is fixed and determined by the FSR Map, which is thus the controlling provision and the site area must yield to the controlling map.
It follows that where the Site extends beyond land the subject of one FSR control into another, in order not to infringe the operative provision in the FSR control for the land, being the FSR Map, it is necessary to carry out separate FSR calculations for each part of the Site. Otherwise, a breach of the operative provision will occur if the GFA on that land shown in the FSR Map exceeds the permitted amount.
Where the site area falls partly on land to which one FSR applies and partly on land to which another FSR applies, it is necessary to read the word "site" to mean "part of the site" and to read "building" to mean, consistently with the EPA Act definition, part of a building. Accordingly, that part of the building that sits on one part of the Site being the land to which one standard on the FSR Map applies must be calculated separately to the part of the building on land to which a different FSR applies.
This is not to say that cl 4.5(3) should be ignored, as the Applicant says above at [22] is the Council's position, but rather the words must be read in context having regard to this unusual situation in which the Site extends beyond the land shown in the FSR Map. It can be seen that the FSR Map respects cadastral boundaries at the time the map was prepared (agreed bundle at Tab 6, above at [6]). From this it might be inferred that the drafter probably did not anticipate that a site would not respect cadastral lots and that a site made up of registered lots would be affected by more than one FSR control. Indeed, the use of the words "lot" and "site" together in the definitional cl 4.5 is a clear indicator of this. Accordingly, some flexibility has to be applied to the word "site" in order to make sense of the provision: Tovir Investments Pty Limited v Waverley Council [2014] NSWCA 379 (Tovir) at [54]-[55].
The Applicant's approach would, in contrast, allow the definition to govern the operative clause by allowing the limit on FSR on the land shown in the FSR Map in cl 7.12 to be exceeded, contrary to cl 7.12. The setting of FSR limits on maps under cll 4.4 and 7.12 cannot have been intended to be subverted by enabling an applicant to achieve the FSR limit by setting its own boundaries for the Site under cl 4.5 that would then dictate the FSR on land beyond that shown on the map.
A further contextual consideration is to be found in the objectives in cl 4.5. While in this case it is true that the additional site area beyond the land subject to the FSR control does have significant development on it, and thus would not infringe the objective in cl 4.5(1)(b)(i), the significant development in this case does not constitute GFA. By including within the site area parts of a site beyond Area A that contain significant development, but not GFA, the same consequence arises as if there was no significant development on that part of the Site. In other words, the GFA is all contained within that part of the Site in Area A and no GFA is contained in the parts of the Site beyond Area A. In this way, the Applicant is effectively extending the area of land to which the FSR standard applies and using the additional land to reduce its FSR on the land shown in the FSR Incentive Map.
Obviously where a particular site is entirely contained within land having the same FSR on the FSR Map, no complications arise in the calculation of the FSR. Ordinarily it might be expected that a site is either coincident or less than the area of the FSR Map. In those cases, cl 4.5 can be applied to the whole site without any difficulty. However, where a site extends beyond the boundaries of land shown in the FSR Map it does not mean that land is extended by a site divined by an applicant. This would be an entirely idiosyncratic outcome determined at the whim of an applicant and contrary to the underlying object of cl 4.5.
In this case, cl 7.12(3) operates as an exception to cl 4.4(2) by providing for a greater FSR on certain land (that part of the Site in Area A) to which the clause applies. The land at 2-6 Maitland Road is that part of the Site in Area A. It is that land to which the FSR applies, not the land at 40 Solent Circuit (Part Lot 2105) (see SOAF par 3).
Accordingly, cl 4.4 in combination with cl 7.12 on the Site requires the calculation of the part of the Site, which comprises land within Area A, using the GFA within that part of the Site. The FSR on that part of the Site is limited by cl 7.12. As the remainder of the Site is not subject to a FSR standard, the GFA of the part of the Site at 40 Solent Circuit (Part Lot 2105) does not need to be calculated.
The Applicant relied on Hastings in which the Court of Appeal examined dictionary definitions that raised separate problems of construction and needed to be addressed by reference to their own terms: at [18]. The resolution was to recognise that the definitions did not operate separate to context: at [39]. That approach should be distinguished because here there is no relevant independent definition other than for the purposes of the operative clause in THLEP 2012. In Heatscape the proper construction was defined precisely by areas shown on the map: at [43]. The same principle must be applied here.
The central flaw in the Applicant's submission is that only that part of the Site in Area A commands calculation of FSR. Rather, it is the land in the FSR Incentive Map that governs the calculation of FSR.

Consideration

The principles of statutory construction are broadly agreed, that environmental planning instruments are a species of delegated legislation and should be interpreted in accordance with general principles of statutory construction: Collector of Customs v Agfa-Gevaert Limited at 398. Construction which is consistent with the language and purpose of all provisions is to be preferred: Project Blue Sky at [69], [78].
Firstly, applying the principle of construction that where words are plain and unambiguous they should be given their ordinary and grammatical meaning per Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26 at 305 (Gibbs CJ) cited in Roden v Bandora Holdings Pty Ltd (2015) 213 LGERA 103; [2015] NSWLEC 191 at [42], cll 4.4 and 7.12 address the same issue and share the same drafting. The FSR of any building on land (which includes part of a building in light of the definition in s 1.4 of the EPA Act) must comply with the maximum FSR limits in the FSR Map in cl 4.4(2). Buildings on certain land can comply with a different maximum FSR as identified in the FSR Incentive Map referred to in cl 7.12(3). The objectives of cl 7.12 are specified in subs (1). A portion of the Site is in Area A identified on the FSR Incentive Map. That the objective of both clauses is to impose a limit on the maximum FSR on specified land is clear in their respective objects.
For the reasons given by the Council summarised above at [31]-[54] cll 4.4 and 7.12 are the operative provisions in THLEP 2012 for the land specified in the FSR Map that each clause refers to. There is no principle of statutory construction which requires these clauses to be read as if needing to incorporate cl 4.5 which deals with the calculation of FSR based on site area, not land. Clause 4.5 defines FSR in subs (2) as "the ratio of gross floor area of all buildings within the site to the site area". While cl 4.5 specifies a mechanism for calculating GFA based on site area as specified in subcl (3), that is not called up by the drafting of cll 4.4 and 7.12. Those clauses stand alone. They are clear in their terms and capable of application without recourse to cl 4.5. Essentially cll 4.4 / 7.12 have different work to do compared to cl 4.5, as is clear from the different language each uses. The Applicant's submissions to the contrary set out at [12]-[17] above are not accepted. The site area need not be determined in order for the FSR limits specified in cl 7.12(3) to apply. The Applicant's criticism of the Council set out at [19]-[20] above that it equates the words "site area" in cl 4.5(3) with "land" in cll 4.4 / 7.12 is misplaced. It is the Applicant's approach which impermissibly does that.
Secondly, the Council argues that cl 4.5 is a definitional provision, not an operative provision. I agree that it is in essence definitional in its terms. As the Council submitted, its role is to define or determine the way that FSR is to be calculated. The clause does not set standards or have any independent operation, as the Council submitted. That its role is definitional is clear from its objectives. That it includes a mechanism for calculating FSR does not change its essential definitional role. Section 6 of the Interpretation Act provides that definitions that occur in an Act or instrument apply to the construction of the Act or instrument unless the context or subject-matter otherwise indicates or requires. Both parties cited Cranbrook School at [38] where McColl J cited Gibb v Federal Commissioner of Taxation at 635: In Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628 at 635, Barwick CJ, McTiernan J and Taylor J stated: "The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense - or are to be taken to include certain things which, but for the definition, they would not include. Such clauses are, therefore, no more than an aid to the construction of the statute and do not operate in any other way … the effect of the Act and its operation in relation to dividends as defined by the Act must … be found in the substantive provisions of the Act which deal with 'dividends'".
McColl JA at [39] cited Kelly v The Queen at [103]: 103 As I earlier pointed out, the function of a definition is not to enact substantive law. It is to provide aid in construing the statute. Nothing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to negate the evident policy or purpose of a substantive enactment. There is, of course, always a question whether the definition is expressly or impliedly excluded. But once it is clear that the definition applies, the better - I think the only proper - course is to read the words of the definition into the substantive enactment and then construe the substantive enactment - in its extended or confined sense - in its context and bearing in mind its purpose and the mischief that it was designed to overcome. To construe the definition before its text has been inserted into the fabric of the substantive enactment invites error as to the meaning of the substantive enactment. In so far as the judgment of Megarry J in No 20 Cannon St Ltd v Singer & Friedlander Ltd (109) suggests his Lordship thought that an interpretation or definition clause should be construed independently of the substantive enactment, I think his Lordship erred. The long title to the first Interpretation Act 1850 (UK) (13 & 14 Vict c 21) was "An Act for shortening the Language used in Acts of Parliament". The long title to the Acts Interpretation Act 1931 (Tas), is "An Act to provide certain rules for the interpretation of Acts of Parliament; to define certain terms commonly used therein; and to facilitate the shortening of their phraseology". These titles convey the true purpose of an interpretation or definition clause. It shortens, but is part of, the text of the substantive enactment to which it applies.
The application of the approach in Kelly v The Queen varied reflecting the parties' different arguments. The Council referred to Heatscape in which the Court of Appeal applied Kelly v The Queen in construing a clause requiring development consent for works in heritage conservation areas identified on a map. The Court of Appeal said at [43] that the proper construction required the definition of "heritage conservation area" to be inserted into the operative provision.
The Applicant relied on Hastings in which Basten JA (Allsop P agreeing at [1]) held that due to particular definitional provisions in a LEP, the approach identified in Kelly v The Queen was not the only approach to a definitional provision, in that it was necessary to consider the same term separately from operative provisions in different parts of the LEP in issue in that case. The LEP posed particular construction challenges which necessitated such an approach. The reasoning of the Court of Appeal in Hastings reflects the very particular drafting of the LEP in question. It is not a statement of universal application given strong authority in the Court of Appeal and in the High Court in Kelly v The Queen that the approach to a definitional provision is that such provisions aid in the construction of the operative provisions.
The Council applied the approach in Kelly v The Queen in construing cll 4.4 and 7.12, as extracted at [35] and [36] above, correctly concluding in [37] the controlling words in cll 4.4 and 7.12 are "land" and "land in the FSR [Incentive] Map". The control is not "site" as defined in cl 4.5. The further construction arguments of the Council considering cl 7.12 concerning "lot" (at [40] above), "site" (at [41] above), and "land" (at [42] above) confirm this. As the Council submitted, permissible FSR can only be for that part of a site on land to which cl 7.12 (or cl 4.4) applies.
The Council's approach correctly applies the approach in Kelly v The Queen, thereby ensuring that cl 4.5 is an aid to construing the LEP, and no more. I also agree with and adopt the Council's submissions in [43]-[46] above, including that there is a clear hierarchy as between cll 4.4 and 7.12 whereby the site area in cl 4.5 must be adjusted to be within the land which the FSR controls those clauses are directed to.
Thirdly, the Applicant seeks to have its chosen site area for the development as a whole, which extends beyond Area A, influence the calculation of FSR for that part of the Site in Area A as specified on the FSR Incentive Map. As the Council submitted (see [47]-[48] above), the Applicant relies on the essentially definitional effect of cl 4.5 to contend that the FSR is dictated by the Site of the development and not by the land for which FSR is specified on the FSR Incentive Map. It so happens that different FSR controls apply to the two different lots of the Applicant's Site (that part of the Site in Area A or Lot 22 and non-Area A or part Lot 2105) (SOAF par 3).The Site does not reflect the cadastral boundaries at the time the FSR Incentive Map was prepared (as shown on the extract of the FSR Map at Tab 6 of the agreed bundle, above at [6]). As the Council submitted, where a site extends beyond land identified in the FSR maps, a separate calculation of FSR is required in order not to infringe the FSR Map limits resulting in a breach of an operational provision. Site can include part of a site as the Council submitted and "building" means part of a building (EPA Act s 1.4). Flexibility in construction is acceptable in applying the approach in Kelly v The Queen, here in relation to "site", in order to make sense of the provision: Tovir (Leeming JA at [54]). The FSR of a building on land defined on the FSR [Incentive] Map must be calculated separately from any other land that is part of a development site which falls outside the area identified on the map.
Further support for the correct construction is also identified in the Council's submissions concerning textual consideration in [49]-[50] above which I agree with and adopt.
Fourthly, the Applicant's approach would negate the application of cl 7.12 despite its clear terms is identified by the Council, pointing out at [48] above that the FSR cap in the FSR Incentive Map will be exceeded. As the Council stated, THLEP 2012 was not intended to operate so that an applicant could define its site area by setting boundaries it chooses and applying those boundaries to dictate the FSR on land shown on the FSR Incentive Map. As the Council submitted, if the Applicant's approach to cl 7.12 is applied, the express provisions of the clause limiting the FSR on specified land, here Area A, will not be met by that part of the Site in Area A. The limits on the maximum FSR for the land identified on the FSR Incentive Map (cl 7.12) are exceeded. That is clear from the SOAF par 29. While the Applicant submitted there was no breach of cl 7.12 because the Council's approach is not calculated in accordance with THLEP 2012, to the contrary, the Applicant's approach results in a substantial increase in FSR on the land in Area A, as identified in the SOAF par 28.
The GFA of the proposed building for the purposes of cl 4.5 is confined to that part of the building on the Site located in Area A (SOAF pars 17, 18) to enable compliance with the FSR control in cl 7.12.
Contrary to the Applicant's submissions above at [24] citing DM & Longbow at [24], the appropriate construction of THLEP 2012 I have adopted, accepting the Council's construction of the relevant clauses does not reflect the Court's view of a more convenient operation of cl 7.12.
The Applicant's criticism of the Council (par 21) for defining "site area" by reference only to that part of the Site in Area A is misplaced. The Applicant's criticism that the Council equates "site area" in cl 4.5(3) with "land" in cll 4.4 and 7.12 does not correctly reflect the Council's argument. If anything the Applicant's approach does this impermissibly, for the reasons I have given above. To describe the reference to "land" in cll 4.4 / 7.12 as generic, to be contrasted with "site area" which is particularly defined, is also misplaced. "Land" in cll 4.4 / 7.12 is specifically defined by a map. I would not describe the reference as generic but very specific.
Contrary to the Applicant's submission that the Council's construction adds a fresh integer into the FSR equation, I consider the Applicant's approach is an attempt to do that.
That the only basis for excluding areas from the calculation of site area is as provided in cl 4.5(4) and (6) is only relevant if cl 4.5 applies as a whole. For the reasons canvassed above, its application must of necessity be modified in order to give effect to the FSR control in cl 7.12(3).

Conclusion

The Council's answer to the question posed is correct. The land at 2-6 Maitland Road (Lot 22) is land within Area A. It is the land to which the FSR applies, not the land at 40 Solent Circuit (Part Lot 2105). Only the GFA of that land is relevant to the FSR calculations for the purposes of applying cl 7.12.
The separate question should be answered: Yes, on the proper construction of cll 4.4, 4.5 and 7.12 of The Hills Local Environmental Plan 2012, the floor space ratio of the building on the site must be calculated separately for that part of the site within Area A from the remainder of the site.

Amendments 25 June 2020 - typographical error in legal representation, omission of post nominals to counsel - cover page. 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: 25 June 2020

(2017) 222 LGERA 286

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