Optima Developments Pty Limited v Wyong Shire Council

Environmental Planning and Assessment Act 1979 Interpretation Act 1987 LEGISLATION CITED: State Environmental Planning Policy 36 - Manufactured Home Estates State Environmental Planning Policy 21 - Caravan Parks Wyong Local Environmental Plan 1991

Central Coast Care v Wyong Shire Council (2003) 124 LGERA 320; Coffs Harbour Environment Centre Inc. v Minister for Planning and Coffs Harbour City Council (1994) 84 LGERA 324 ; CASES CITED: Mete v Warringah Council (2004) 133 LGERA 420; Project Blue Sky v ABA (1998) 194 CLR 355 ; Windsor Developments Pty Ltd v Wyong Shire Council Land and Environment Court No. 10521 of 1990 unreported, 13 June 1991

APPLICANT Mr S B Austin QC SOLICITORS Phillips Fox LEGAL REPRESENTATIVES:

RESPONDENT Mr T F Robertson SC SOLICITORS Abbott Tout

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10714, 10715, 10716 and 10717 of 2005 Optima Developments Pty Limited v Wyong Shire Council

JUDGMENT 1 Talbot J: This is an appeal under s 97 of the Environmental Planning and Assessment Act 1979 ("EPA Act"), from the decision of the Wyong Shire Council ("the council") to refuse four development applications to subdivide under community title, various lots within a Court-approved mobile home park known as Pacific Lakes Manufactured Home Estate. Senior Assessor Jensen, as he then was in 1991, determined an application for development consent to the mobile home park under the provisions of Wyong Local Environmental Plan 91 (Windsor Developments Pty Ltd v Wyong Shire Council Land and Environment Court No. 10521 of 1990 unreported, 13 June 1991) by granting consent to the development application. The consent has been modified since but in immaterial respects for present purposes. 2 The development application the subject of proceedings 10716 of 2005 seeks development consent for additional dwelling sites to the Pacific Lakes Manufactured Housing Estate and subdivision of a community lot into 25 neighbourhood lots. 3 The three development applications the subject of the other proceedings seek development consent for additional dwelling sites and subdivision respectively of two neighbourhood association lots into two neighbourhood lots and one residue association lot (10714 of 2005); of one community development lot into 15 neighbourhood lots (10715 of 2005) and of one neighbourhood lot into two neighbourhood lots (10717 of 2005). The land 4 The estate is situated on the corner of Elizabeth Bay Drive and the Pacific Highway, at No 171 Pacific Highway, Lake Munmorah. It presently comprises Lot 1, DP 285788; Lot 1, DP 270244; Lot 9, DP 270244; Lot 14, DP 270244; Lot 25, DP 270244. Relevant planning controls Wyong Local Environmental Plan 1991 (WLEP) 5 Under the provisions of the WLEP the land, to which the current proceedings relate, is zoned 7(b) (Scenic Protection Zone). The development is not prohibited within the zone and is not development that can be carried out without development consent. Accordingly it is permissible only with development consent under the terms of WLEP. 6 Clause 14 of the WLEP applies to land in the 7(b) zone. Under cl 14(2), a person shall not subdivide land to which the clause applies so as to create an allotment having an area of less than, in the case of the 7(b) zone, 20ha. 7 A "caravan park" is defined in WLEP as land used as a site for moveable dwellings, including tents and caravans or other vehicles used for temporary or permanent accommodation or the erection, assembly or placement of cabins for temporary accommodation of tourists.

SEPP 21 provides in clause 7: In any environmental planning instrument (whether made before or after this Policy), references (however expressed) to caravan parks or to camping grounds, or to caravan parks and camping grounds, include references to caravan parks, within the meaning of this Policy.

There is no definition equating to "mobile home park" or "manufactured home estate" ("MHE") in WLEP.

8 The area of the proposed lots in the development applications the subject of the present proceedings is in each case less than 20ha.

State Environmental Planning Policy 36 - Manufactured Home Estates (SEPP 36) 9 Clause 3 of SEPP 36 provides (1) This Policy applies to land that is within the City of Gosford or the Shire of Wyong and to all other areas in the State that are outside the Sydney region. (2) However, this Policy does not apply to land described in Schedule 1, being land subject to a local environmental plan prepared in accordance with the principles of a direction issued in conjunction with this Policy and made under section 117 of the Act.

There is no land currently identified in Schedule 1. 10 Under cl 4(1) of SEPP 36 the SEPP prevails to the extent of the inconsistency with any other environmental planning instrument as follows: In the event of an inconsistency between this Policy and any other environmental planning instrument (other than State Environmental Planning Policy No.4 - Development without Consent) whether made before or after this Policy, this Policy prevails to the extent of the inconsistency.

11 Clause 6 of SEPP 36 provides as follows: 6 Where development for the purposes of a manufactured home estate may be carried out Development for the purposes of a manufactured home estate may be carried out pursuant to this Policy on any land on which development for the purposes of a caravan park may be carried out, except: (a) land within one or more of the categories described in Schedule 2, or (b) … (c) ... 12 Schedule 2, item 6, refers to: Any [land] which under any environmental planning instrument is within an area or zone identified in that instrument by the description: · open space, other than open space (private recreation) · environmental protection · scenic protection · rural where the land is not adjacent to or adjoining land zoned for urban use. 13 SEPP 36 further deals with development of manufactured home estates as follows: 7 Development consent required for manufactured home estates (1) Development for the purposes of a manufactured home estate permitted to be carried out by this Policy may be carried out only with the development consent of the council. (2) A council must not consent to any such development unless it imposes, as a condition of the consent, a requirement that an approval to operate a manufactured home estate on the land on which the development is to be carried out must be obtained under Part 1 of Chapter 7 of the Local Government Act 1993. (3) Nothing in this Policy requires a separate development consent to authorise the placing of each manufactured home within a manufactured home estate. 8 Subdivision of manufactured home estates (1) Land on which development for the purposes of a manufactured home estate may be lawfully carried out (whether or not because of a development consent granted pursuant to this Policy) may be subdivided: (a) under section 289K of the Local Government Act 1919 for lease purposes, or (b) under the Community Land Development Act 1989, only with the development consent of the council. (2) A council must not grant a development consent for such a subdivision if any of the lots intended to be created by the proposed subdivision would contravene a requirement of the Local Government (Manufactured Home Estates) Transitional Regulation 1993. (3) Any prohibition or restriction on the subdivision of land imposed by any other environmental planning instrument (whether made before or after this Policy) does not apply to such a subdivision. (4) This Policy does not allow the subdivision of land within a Crown reserve. 14 The following definitions are contained in the dictionary of SEPP 36: caravan park means land (including a camping ground) on which caravans (or caravans and other moveable dwellings) are, or are to be, placed or erected.

manufactured home means a self-contained dwelling (that is, a dwelling that includes at least 1 kitchen, bathroom, bedroom and living area and that also includes toilet and laundry facilities), being a dwelling: (a) that comprises 1 or more major sections that are each constructed, and assembled, away from the manufactured home estate and transported to the estate for installation on the estate, and (b) that is not capable of being registered under the Traffic Act 1909, and includes any associated structures that form part of the dwelling.

manufactured home estate means land on which manufactured homes are, or are to be, erected. 15 I note that WLEP, SEPP 21 and SEPP 36 define caravan park in different terms. The only distinction appears to be that cabins are included in the WLEP definition without any practical consequences for present purposes. No issue has been raised that the land the subject of the development application is not land on which caravans and other moveable dwellings are or are to be placed or erected. The extended definition of caravan park in SEPP 21 is, for present purposes at least, identical to the definition in SEPP 36.

The Section 117 Direction 16 In conjunction with SEPP 36 the Minister for Planning made a direction under s117 directing each council in the first schedule to exercise its functions in relation to the preparation of a draft local environmental plan in accordance with the second schedule. Schedule 1 to the S117 Direction specifies Gosford City Council, Wyong Shire Council and all councils outside the Sydney region. 17 Schedule 2 provides as follows: (1)… (2) Draft Local Environmental Plans must: A.(i) retain existing zones of lands that permit caravan parks in Local Environmental Plans. This will enable the development of caravan parks in accordance with State Environmental Planning Policy No. 21 - Caravan Parks (SEPP 21), and manufactured home estates (MHEs) in accordance with SEPP No. 36 - Manufactured Home Estates (SEPP 36) in those zones; OR (ii) (a) define MHEs in accordance with their definition in SEPP 36 and make them a permissible use in suitable residential, rural or other zones that council considers appropriate. The subdivision of such MHEs by long term lease of up to 20 years or under the Community Land Development Act 1989 must be permissible with consent. (b) allow caravan parks in accordance with their definition in SEPP 21 and retain such caravan parks in zones where they are currently permissible. B. when rezoning land for residential, rural and other purposes, include MHEs as defined under SEPP 36 as a permissible use provided that such land is suitable and considered by council to be appropriate for this use. The subdivision of MHEs by long term lease of up to 20 years or under the Community Land Development Act 1989 must be permissible with consent. (3) In identifying suitable zones and locations for MHEs in draft local environmental plans council shall take into account the following principles contained in SEPP 36: (i) the categories of land set out in Schedule 2 of the SEPP as to where MHEs should not be located. (ii) the principles listed in clause 9 of the SEPP which councils are required to consider when assessing and determining MHE development and subdivision proposals. State Environmental Planning Policy 21 (SEPP 21) 18 SEPP 21 - Movable Dwellings applied in its original form when development consent was granted in 1991. It was replaced by a new SEPP 21 - Caravan Parks in 1992. Question to be determined 19 The Statement of Issues filed by the respondent raises a number of points of law as follows: 1. Whether the proposed development is prohibited development within s76B of the EPA Act by reason of cl. 6(a) and Schedule 2.6 of SEPP No.36 - Manufactured Home Estates. 2. Whether development for the purposes of a manufactured home estate may be lawfully carried out on the subject land. 3. If the answer to question 1 is yes, whether the development may be lawfully carried out pursuant to existing use rights. 4. Whether pursuant to cl.8 of SEPP 36 the said land may be subdivided to enable the erection of manufactured homes? 5. If the source of permissibility is the Wyong LEP, can consent be granted for subdivision without the allowance of an appropriate SEPP 1 Objection with respect to the 20 ha minimum allotment size for subdivision in the 7(b) zone pursuant to cl 13(2)(b) of the Wyong LEP. The proposed lots are significantly less than 20 ha. 6. Despite SEPP 36 and the LEP, can consent be granted pursuant to existing use rights? 20 Only question one has been argued at this stage as the parties are proceeding on the basis that the resolution of the other outstanding legal issues will depend upon the answer to that first question.

The Argument 21 Mr Austin QC who appears for the applicant adopts the approach to the test for inconsistency between WLEP and SEPP 36 as that taken by Kirby P (as he then was) in Coffs Harbour Environment Centre Inc. v Minister for Planning and Coffs Harbour City Council (1994) 84 LGERA 324 at 331 as follows: The resolution of this dispute requires only that the word "inconsistency" be given its ordinary and natural meaning without the gloss which has necessarily developed around the meaning of the word in a constitutional setting. Upon that basis, there will be an inconsistency if, in the provisions of one environmental planning instrument, there is "want of consistency or congruity"; "lack of accordance or harmony" or "incompatibility, contrariety, or opposition" with another environmental planning instrument. 22 He submits therefore that the appropriate test for determining whether there is inconsistency between SEPP 36 and Wyong LEP within the meaning of cl 4(1) of SEPP 36 is whether there is "actual contrariety" because cl 6, in terms, identifies its field of operation as the carrying out of development of a manufactured home estate "pursuant to this Policy". In this way, he says, SEPP 36 expressly recognises that other instruments may themselves authorise development for that purpose and, if so, those instruments are left to their own field of operation by cl 6. 23 Accordingly, the limit placed upon the operation of SEPP 36 by cl 6 in respect of any land which under any environmental planning instrument is within an area or zone identified by the description "scenic protection" does not limit the operation of any other environmental planning instrument. Thus, as explained in 5 above, WLEP makes the proposed development on the subject land permissible with development consent. 24 Mr Austin refers to cl 8(1) of SEPP36 for confirmation of the construction that he relies upon, particularly the phrase in brackets "(whether or not because of a development consent granted pursuant to this Policy)" which he says expressly recognises that other environmental planning instruments may permit, with consent, development of land for the purposes of a manufactured home estate. Moreover, according to Mr Austin, it is clear from other provisions of SEPP36 and in particular cl 9 that SEPP36 addresses only matters which are relevant to an application for development consent pursuant to that policy. The position of the applicant is summarised as follows: (1) Development for the relevant purpose is permissible with consent under the Wyong LEP. (2) Subject to clause 8(2) under clause 8(1) of SEPP 36, consent for subdivision of the land may be granted. (3) Any prohibition or restriction on subdivision imposed by the Wyong LEP does not apply. As such, the restriction in clause 14(2)(b) of the Wyong LEP (the requirement that the subdivided lots have an area of not less than 20ha) does not apply. 25 If the applicant is right, therefore, the subdivisions proposed in the subject development applications may be approved pursuant to cl 8 without regard to the provisions of cl 14 (2)(b) of WLEP that impose a minimum area restriction of 20ha. 26 In oral submissions Mr Austin took the court to the aims and strategies in cl 2 of SEPP36 to demonstrate that the intention of making the instrument was to facilitate the establishment of manufactured home estates with development consent on any land within the Shire of Wyong where caravan parks are permitted (other than the categories of excluded land identified by Schedule 2) and on any other land where caravan parks are permitted under a local environmental plan prepared or maintained in accordance with the direction made under s117 of the EPA Act in conjunction with SEPP36. 27 Generally therefore the aim of SEPP36 is to broaden the opportunities for the establishment of manufactured home estates on land on which development for the purposes of a caravan park is permissible irrespective of constraints imposed by the zoning provisions of other instruments such as WLEP. 28 Mr Robertson SC, who appears for the council, takes a starkly different approach to Mr Austin. Relying upon s33 of the Interpretation Act 1987 (which applies to the construction of an environmental planning instrument pursuant to s5(6)) he also has regard to the purpose or object underlying SEPP36. However contrasting the facultative provisions of SEPP36 referred to by Mr Austin, he focuses on the constraints and restrictions contemplated in the following aims and strategies: 2(1)(a)…(b)…(c)… (d) to ensure that manufactured home estates are situated only in suitable locations and not on land having important resources or having landscape, scenic or ecological qualities that should be preserved, and (e) to ensure that manufactured home estates are adequately serviced and have access to essential community facilities and services, and (f)…(g)…

He also refers to the mandatory requirements of cls 7(2) and 8(2) of SEPP 36. 29 Mr Robertson rejects the applicant's submission that cl 8 of SEPP36 stands alone as a distinct opportunity for subdivision of a manufactured home estate. In support of his argument he refers to the strategies in cl 2(2) of SEPP36 to demonstrate that cl 8 is merely a subset of cl 6. The strategies are: (a) by allowing, with development consent, manufactured home estates on certain land on which caravan parks are permitted if the land meets the suitable locational criteria stipulated in this Policy (which it would not do if, for example, it contains important resources, is subject to natural or man-made risks or has sensitive environmental or ecological features), and (b) by applying this Policy to areas where there is likely to be a demand and suitable opportunities for the development of manufactured home estates, and (c) by allowing manufactured home estates to be subdivided with development consent either by way of leases for terms of up to 20 years or under the Community Land Development Act 1989, and (d) by enabling the Minister for Planning to exclude from this Policy any land that is subject to a local environmental plan prepared in accordance with the principles of a direction issued in conjunction with this Policy under section 117 of the Act. 30 These strategies are said to demonstrate that areas where caravan parks are permitted are likely to be where a demand for manufactured home estates will arise with the negative corollary being that manufactured home estates would otherwise be prohibited. This conclusion, he says, can be derived particularly from cl 2(2)(a) 31 According to Mr Robertson it is clear therefore that the underlying purpose of the policy is to enable the establishment of manufactured home estates but not so as to compromise landscape or scenic values by ensuring that they are located only in suitable locations. 32 Mr Robertson calls in aid Circular No. B31 issued on 16 July 1993 to provide a general outline of the background, purpose and operation of SEPP36 and the S117 direction to demonstrate the point that the provisions of SEPP36 are designed to operate as the sole means for the approval of manufactured home estates. He contends it is not sufficient for a council merely to make an LEP to provide for the development of manufactured home estates in order to avoid the controls in SEPP 36. It is also necessary for the land to be included in schedule 1 to SEPP36 before the policy does not apply to it. By requiring specific steps to exclude certain land from the operation of SEPP36 it is said to demonstrate that it was intended by the Minister for its provisions to be exclusive. 33 Mr Robertson categorises cl 6 of SEPP36 as a provision relating to permissibility (s76A of the EPA Act). It does not relate to the method of making a development application. He seeks to distinguish the circumstances that arise under SEPP36 from those considered under SEPP5 by Lloyd J in Central Coast Care v Wyong Shire Council (2003) 124 LGERA 320 namely that a development application for a nursing home could be considered either pursuant to SEPP5 or as permissible development under the applicable LEP depending upon the manner in which the applicant for consent made its application. See also Mete v Warringah Council (2004) 133 LGERA 420. 34 Therefore it is Mr Robertson's contention that SEPP36 operates as a qualification and exception to the provisions of WLEP by prohibiting development for a manufactured home estate upon land where otherwise it could take place. 35 He submits that the relevant inconsistency is created by SEPP36 restricting development in certain areas within the zone 7(b) despite the LEP allowing it. It is therefore the council's case that cl 6 deals with permissibility of use and implements the policy of SEPP36 to allow manufactured home estate development on land upon which development for the purpose of caravan parks is permissible provided it is not within an area or zone described in Schedule 2 or land included in Schedule 1. 36 In effect cl 6 is a zoning provision. There is no reference to a consent in cl 6. On the other hand clauses 7(1) and (2) impose a requirement for consent and a mandatory condition of consent as well as appointing the council as the consent authority. Mr Robertson argues that this provides further support for the negative corollary to which he refers, namely, that consent cannot be granted to development which is prohibited by the policy. 37 Clause 9 of the policy requires council to be satisfied about and to consider a number of matters before it may grant development consent. Mr Robertson says that clause 9 also supports the negative corollary he propounds in regard to clause 7. 38 He refutes the applicant's argument that it can rely on the provisions of another environmental planning instrument, namely the WLEP, as SEPP 36 provides a comprehensive statement of the circumstances in which MHEs are permissible. To find otherwise, he says, would lead to a situation where an application for a MHE development considered under WLEP would be determined free of the constraints imposed by SEPP 36 in contradiction to the aims and strategies in clause 2 of SEPP 36. If the underlying purpose of SEPP 36 is to regulate the development of MHEs there is, according to Mr Robertson, a direct inconsistency between its provisions and the WLEP. 39 Although recognising what was decided in Coffs Harbour Environment Centre Mr Robertson has drawn the Court's attention to the effect of s36(1) of the EPA Act following amendments after the Court of Appeal made its decision. Section 36(1) now provides:- In the event of an inconsistency between environmental planning instruments and unless otherwise provided:

(a) there is a general presumption that a State environmental planning policy prevails over a regional environmental plan or local environmental plan made before or after the policy, and

(b) there is a general presumption that a regional environmental plan prevails over a local environmental plan made before or after the regional environmental plan, and (c) the general presumptions of the law as to when an Act prevails over another Act apply to when one kind of environmental planning instrument prevails over another environmental planning instrument of the same kind. 40 According to Mr Robertson the reintroduction of a hierarchy of planning instruments removes any possible basis for unifying the repugnancy doctrine. Accordingly, section 36 expressly introduces the concept of "inconsistency" in substitution for any common law rules of construction such as repugnancy.

General Effect of SEPP36 and the S117 Direction 41 The overall scheme contemplates that manufactured home estates will be development permissible with consent in the nominated areas:- (1) on any land on which development for the purposes of a caravan park as defined in SEPP 36 (which for practical purposes is included in all LEPs by dint of SEPP 21) may be carried out subject to exceptions (a)(b) and (c) provided in clause 6 of SEPP 36. (2) on any land where MHEs are a permissible use under the provisions of any LEP made according to the form of a draft LEP dictated by Schedule 2 of the S117 Direction. 42 Moreover existing zones where caravan parks are permitted must be maintained or MHE development is to be made a permissible use in accordance with Schedule 2 clause A of the S117 Direction. 43 The scheme of SEPP 36 and the S117 Direction is clearly designed to facilitate the development of MHEs and to broaden the scope of the definition of caravan parks to include MHEs. 44 The immediate effect of SEPP 36 is to allow for the development of MHEs on land where caravan parks are a permissible use, except on the nominated categories of excluded lands. The future effect of the S117 Direction (made in conjunction with SEPP 36) is to maintain permissibility for MHE development in areas where development for the purposes of a caravan park currently may be carried out and to direct the zoning of additional land so as to permit MHE development. Significantly, councils are required by the S117 Direction to "take into account" the categories of land in Schedule 2 of the SEPP and the principles listed in clause 9 but the language does not dictate replication of those principles. 45 Caravan parks and MHEs are permissible with consent on all land within the 7(b) zone under WLEP as innominate uses. However a MHE is not permissible within the 7(b) zone under SEPP 36 by operation of clause 6 of SEPP 36 as a consequence of the combined effect of clause 6(a) and Schedule 2 item 6. 46 WLEP provides that a MHE is permissible in a scenic protection zone. SEPP 36 expressly prohibits development for a MHE in a scenic protection zone. They both apply to land within the area of Wyong Council. They are not consistent in the way they apply to scenic protection zones in Wyong. This is clearly an inconsistency. The general principles in the context of protection zones are therefore different. 47 The apparent inconsistency must be considered having regard to the overriding or overall aim of SEPP 36 to be permissive and facultative, not prohibitory. Read as a whole SEPP 36 contemplates that it will provide opportunities for development of MHE where caravan parks are permissible and where those opportunities did not previously exist. It is not surprising that SEPP 36 does not allow MHE development in sensitive locations such as scenic protection zones. The intent in that respect can be identified as nothing more than ensuring that an overriding provision such as SEPP 36 does not by its force allow development in those local areas. It is appropriate to respect the efficacy of an LEP where it already provides the opportunity for MHE development on its own terms. If the LEP allows and facilitates the development of MHEs in areas not contemplated by SEPP 36 that is not necessarily inconsistent with the primary aims and strategies of SEPP 36. 48 It is entirely consistent with the overall aim and strategies of SEPP 36 to broaden the areas upon which MHEs may be developed. Even the S117 Direction recognises that the exemption for areas specified in Schedule 2 to SEPP 36 is not a mandatory requirement for a draft LEP. Once it is accepted that a development application for consent to a MHE may be made under either an applicable LEP or SEPP 36 then it follows that permissibility is determined under the provisions of the environmental planning instrument under which the application is made. That is not to say that the provisions of another environmental planning instrument cannot be called in aid if the language of the respective instrument allows. Having regard to the express words in the brackets, in my view, clause 8 of SEPP 36 is such a provision. Accordingly once a MHE may be lawfully carried out the land may be subdivided under cl 8. However it is clear from the language of cl 8 that it contemplates that development consent for the MHE must be first obtained before a developer can rely upon cl 8 for the authority to subdivide. 49 The literal or grammatical meaning of the words in SEPP 36 accommodate the concept of a scheme which contemplates permissibility of MHEs either under its terms or the provisions of another environmental planning instrument. The context and general purpose of SEPP 36 is to provide and facilitate the opportunity to develop MHEs. The approach that I have taken is not inconsistent with those objectives (Project Blue Sky v ABA (1998) 194 CLR 355 at 381 and 384). 50 I am not satisfied that the proposed development is prohibited development within s76B of the EPA Act by reason of cl 6(a) and Schedule 2.6 of SEPP 36 and therefore development for the purpose of a MHE may be lawfully carried out on the subject land with consent. 51 The matter is listed for further hearing before Commissioner Watts on 14, 15 and 16 December 2005.

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