Pancho Properties Pty Limited v Wingecarribee Shire Council

(b) to recognise the value of the rural scenic landscape to the local tourist economy;

(c) to permit development and land use activities which are compatible with the heritage and scenic qualities of the key cultural landscape; and

(d) to recognise the potential of coal and extractive resources on land within the zone, and to ensure that their winning takes place by means which are compatible with the heritage and scenic qualities of the key cultural landscape.

16 Clause 23 of the LEP is in the following terms:- 23. A dwelling-house may, with the consent of the council, be erected on an allotment of land on which another dwelling-house is erected if the firstmentioned dwelling-house is intended to wholly replace the secondmentioned dwelling-house.

17 Clause 13(4) provides as follows:- 13(4) Not more than two additional dwelling-houses may, with the consent of the council, be erected on land to which this clause applies which has an area of not less than 40 hectares, if the council is satisfied that each additional dwelling-house - (a) will be occupied by a person employed or engaged by the owner of the land in the use, for the purpose of agriculture, of that land or of land belonging to the owner which adjoins or is adjacent to that land; and

(b) will be located on the same allotment of land as the main dwelling-house. 18 At the time of lodgement of the respective development applications development for the purpose of a rural worker's dwellings was permissible in the 7(b) zone but only with development consent. By Amendment No. 104 published in Government Gazette No. 109 on 25 August 2000 rural worker's dwellings became prohibited in the zone, subject to Savings Clause 13A as follows:- 13A Savings This plan applies to a development application made before the commencement of Wingecarribee Local Environmental Plan 1989 (Amendment No. 104) (which relates to the prohibition of development for the purpose of rural workers' dwellings on land to which clause 13 applies) as if that plan had not been made. 19 The following passages from the judgment of Giles JA in the Court of Appeal are useful in the context of the issues maintained by the council in the current hearing:- 27 The position in principle is affected by s 83(2) and (3) of the Act, whereby on the bringing of an appeal under s 97 the consent "ceases to be, or does not become effective" until determination of the appeal and, depending on the result, either "becomes effective and operates" from the date of determination or "is void and is taken never to have been granted". The consent continues to exist pending the determination of the appeal, but in a state of suspension such that carrying out the development to which it relates is not authorised ( Swadling v Sutherland Shire Council (1994) 82 LGERA 431). Until the appeal is brought, however, carrying out the development is authorised, and until that time the person abovementioned may still act on the consent while objecting to the condition. If the appeal is successful and the condition is removed, then it is not necessary to do what the condition had required. If the condition remains, then the person must either remove the works or comply with the condition. The court addresses the matter afresh as the consent authority (eg Naylor v Bankstown City Council [1980] 2 NSWLR 629), and there is, of course, a possibility that consent will be wholly denied, in which case the works must be removed. …

37 The council's argument was to the effect that applying for consent for a replacement dwelling pursuant to cl 23 of the LEP necessarily connotes that the dwelling it replaces will be removed, so there can not be dissatisfaction with a requirement to remove that dwelling. I do not think that is so. Clause 23 refers to an intention that one dwelling "wholly replace" the other. Erection of the new dwelling was and is consistent with the structure of the existing dwelling remaining, although it can not be used as a dwelling. Removal of the existing dwelling would not have been a necessary consequence of the consent in the absence of condition 3. …

47 In my opinion, however, condition 3 does not preclude consent to a use of the existing dwelling whereby it does not have to be removed from the land. Condition 3 is, of course, a very relevant matter in considering whether or not one or other of the applications should be granted, but it would be possible for consent to use the existing dwelling as a manager's residence or as a rural worker's dwelling to be granted on condition that the consent to the erection of the new dwelling be modified or surrendered (s 80A(1)(b) of the Act) or on condition that the new dwelling be removed (s 80A(1)(c)). That is sufficient to determine the separate question. However unlikely the grant of consent may be, it can not be said that the applications must fail. In the language of the question, they are competent. 20 I will deal with succinct issues in respect of the respective development applications in the chronological order of the dates of lodgement of the applications with the council. Matter No. 10072 of 1998 - The Condition Proceedings (DA 13/97) 21 The council's argument in relation to the Condition Proceedings is that by operation of s 83(2) of the EP&A Act development consent DA 13/97 ceased to be effective when the appeal was lodged pursuant to s 97. Accordingly, the Court, exercising the functions of the consent authority, has no power to grant development consent retrospectively to authorise the carrying out of development that already exists (Tynan v Meharg and Newcastle City Council (No 2) (1998) 102 LGERA 119 at 121; Ireland v Cessnock City Council (1999) 103 LGERA 285 at [77]; Signorelli Investments Pty Ltd v Sutherland Shire Council (2001) 114 LGERA 27 at [18] - [21] and Noble v Cowra Shire Council [2003] NSWLEC 178, unreported at [43]). Furthermore, the council contends that a grant of development consent is precluded where the applicant does not intend that the new dwelling house wholly replace the existing dwelling house as required by cl 23 of the LEP. Moreover, it is alleged the proposed development is inconsistent with the objectives of the 7(b) zone and will cause a detrimental effect in the locality that will not be offset by any community benefit. 22 In the Court of Appeal judgment Giles JA made it clear, at [37] and [47] quoted above, that he was firmly of the opinion the consent granted pursuant to cl 23 authorised the construction of the new dwelling house only on the basis that it "wholly replace" the existing dwelling house as a dwelling. He recognised nevertheless that the structure of the existing dwelling could remain although it cannot be used as a dwelling. Furthermore, removal of the existing dwelling would not have been a necessary consequence of the consent in the absence of condition 3. I do not propose to waiver from this opinion as I am bound by what the Court of Appeal decides. Given the identical facts there is no prospect of distinguishing the Court of Appeal decision. 23 Relying on the principles applied by the Court of Appeal, arguably, it would be sufficient to simply delete condition 3 and let the applicant take such steps as might be lawfully available to it in relation to obtaining an approval to an authorised future use of the original dwelling house building. In my view, that course may cause more problems than it solves in a practical sense. I therefore propose to exercise the Court's discretion to impose a new condition 3 as follows:- (3) The original dwelling house erected on the land shall not be used for the purpose of a dwelling house except with consent first granted by the council or used otherwise for any other purpose except in accordance with the provisions of the Environmental Planning and Assessment Act 1979.

24 This condition will still satisfy the intention referred to in cl 23 that the new dwelling house will wholly replace the existing dwelling house as the only dwelling house on the land. It allows the applicant to abandon the new dwelling in the future and to revert to the use of the original building as a dwelling house with consent. 25 The council's argument that development consent cannot be granted for development that is already complete has no application to the present case. The facts are that development consent DA 13/97 was granted on 5 February 1997 and the new building was completed in late 1997 prior to the lodgement of the appeal on 4 February 1998. The council issued a building certificate on 16 December 1998. The construction of the building was completed during the period when the development consent was operating and effective. It only ceased to be effective by dint of s 83(2) after the building was finished. As Giles JA confirmed, at [27] quoted above, the consent continues to exist pending determination of the appeal (Swadling v Sutherland Shire Council (1994) 82 LGERA 431). In the circumstances of the facts of this case the consent will again become effective and operate from the date of judgment allowing the appeal. The legislative scheme does not retrospectively take away the initial effectiveness of the consent for the period commencing from the original date of grant of consent pending lodgement of an appeal. 26 Both buildings are well hidden or disguised from any relevant vantage point outside the land and, accordingly, there is no substance in argument that the presence of the new dwelling will be detrimental or contrary to the objectives of the zone.

Matter No. 10071C of 1998 - The Manager's Residence Proceedings (DA 476/97) 27 The application made pursuant to cl 13(4) of the LEP is for development consent to a change of use of the existing dwelling house to a manager's residence with alterations and additions. 28 Clause 13(4) relevantly, for present purposes, demands that the following four matters be satisfied before the development application is considered on its merits:-

(1) The proposal must be for the erection of an additional dwelling house; (2) The additional dwelling must be erected on the same allotment as the main dwelling house (cl 13(4)(b)); (3) The proposed occupant of the proposed dwelling house must be "employed or engaged" by the owner of the land for the purpose of agriculture; and

(4) Subject to a successful objection made pursuant to State Environmental Planning Policy No. 1 - Development Standards ("SEPP 1") the area of the land must be not less than 40 hectares. 29 The plans accompanying the development application show that some internal walls will be removed, an office will be extended and a lounge room will be added to the original cottage. Otherwise, the existing structure will remain and form part of the building after the work is complete. What is to be erected, therefore, is only part of the building ultimately to be comprised within the proposed house. There will be no additional building as such. At the present time, there are already two buildings on the land, one of which, pursuant to the original condition 3 to development consent DA 13/97, either has to be demolished or removed from the site by some other means or, pursuant to condition 3 to be imposed by the Court, cannot be used as a dwelling without consent. The grant of DA 13/97 has taken away the status of the use of the latter structure as a dwelling house. Therefore, the proposed additions and alterations do not comprise additions and alterations to a lawful dwelling house. 30 Alternatively, the proposed additions and alterations do not amount to the erection of an additional dwelling. They are merely additions and alterations to an existing structure which has the form of a dwelling house. Notwithstanding the applicant's reliance upon the definitions of "building" and "erection of a building" in s 4 of the EP&A Act that encompass part of a building, cl 13(4) specifies that the building in question is to be an additional dwelling house. 31 The proposed works do not answer that description. The definition of building and erection of a building cannot, as a matter of practicality, be transposed to the concept of an additional dwelling house referred to in cl 13(4). Accordingly, what the applicant proposes is to carry out alterations and additions as part of an existing dwelling house as distinct from the erection of an additional dwelling house. The application, therefore, does not fall within the ambit of cl 13(4). 32 The applicant contends that the council is estopped from raising an issue that the proposed works do not relevantly constitute the erection of a dwelling house within the meaning of cl 13(4). The Court nevertheless must be satisfied that the jurisdictional facts to support the determination of the development application have been established. The Court does not have the power pursuant to cl 13(4) to grant consent to the erection of a building other than a dwelling house that is an additional dwelling house. What the applicant proposes does not fall into that category for the reasons I have explained. The applicant does not propose to modify or surrender development consent DA 13/97 as contemplated by Giles JA at [47].

Matter No. 10138 of 1999 - The Rural Worker's Dwelling Proceedings (DA 29/99) 33 The application for consent to use the original cottage as a rural worker's dwelling is expressly stated to be an application for change of use other than pursuant to cl 13(4) of the LEP and does not involve a proposal to carry out any building work. 34 Prior to making Amendment No. 104 to the LEP on 25 August 2000, a dwelling house was development permissible with the consent of the council in the 7(b) zone. 35 Amendment 104 had the effect of prohibiting rural worker's dwellings in zone 7(b), subject to the Savings Provisions quoted in [18] above.

36 A rural worker's dwelling is defined by the incorporated provisions of the Model Provisions as follows: "rural worker's dwelling" means a dwelling which is on land upon which there is already erected a dwelling and which is occupied by persons engaged in rural occupation on that land; 37 Development application DA 29/99 was made before 25 August 2000. Clause 13A, therefore, has the effect of preserving the rights of the applicant in respect of the development application as if the amendment, which resulted in development for the purpose of a rural worker's dwelling being prohibited, has not come into force. Nevertheless, in my view, the draft amendment did exist. The final making of the plan by the Minister is all that is outstanding. For the purposes of s 79C of the EP&A Act, therefore, the consent authority, in this case including the Court, in determining the development application is to take into consideration the provision of Amendment 104 as a draft environmental planning instrument that has been placed on public exhibition, the making of which is imminent. All that cl 13A does is preserve the application against the absolute prohibition that otherwise resulted when the amending LEP was made. 38 It is the applicant's case that whereas the original dwelling was, and still is, occupied by a person engaged in rural occupation of the subject land, that same person will continue to occupy the building if consent to use it for the purpose of a rural worker's dwelling is granted. 39 The scheme of the LEP is that dwelling houses are permissible on the land but only with development consent, except as otherwise provided in the LEP (see cl 9(2)). There is no reference to a rural worker's dwelling in the Table applicable to the 7(b) zone prior to Amendment 104. Clause 23 makes no distinction between a rural worker's dwelling house and any other dwelling house that is intended to wholly replace an existing dwelling house. Clause 13(3) allows that a dwelling house may, with the consent of the council, be erected on land within the 7(b) zone subject to conditions (a) to (h) referred to in the clause. Although cl 13(4) contemplates that not more than two additional dwelling houses may be erected on the land if the conditions of the clause are satisfied, the applicant has not pursued this option. Condition 3 of development consent DA 13/97 is not authority for the continued use of the original dwelling as a dwelling house either before or after the appeal to this Court in matter No. 10072 of 1998. 40 The applicant, having chosen to engage cl 23 to obtain consent for the new dwelling, cannot subsequently resile from that position and seek to obtain development consent to a change of use of the original dwelling building that is inconsistent with the prohibition resulting from the application of cl 23. The use of the existing building will remain the same. In that context it cannot be said that the new dwelling house is intended to wholly replace the original house. Either the development application was originally in respect of prohibited development and, therefore, is not saved by cl 13A or, even if it is to be treated as if the amendment was never made, it nevertheless remains as an application in respect of prohibited development. 41 Once again, there is no proposal by the applicant to seek modification or surrender of another development consent or to accept that the new dwelling be removed as contemplated by Giles JA at [47]. Nor is the applicant seeking consent to a use of the original dwelling structure (other than as a dwelling house) whereby it does not have to be removed from the land. Moreover, this is not a case where it is open for the Court to grant development consent in respect of prohibited development. 42 Although a rural worker's dwelling is by definition a dwelling which is on land upon which there is already erected a dwelling, that does not, in my opinion, overcome the prohibition arising out of the application of cl 23.

Whether the occupier will be a person employed or engaged by the owner for the purpose of agriculture or engaged in rural occupation on the land 43 Notwithstanding the consequences of the finding already made that the appeals in relation to matter No. 10071C of 1998 and matter No. 10138 of 1999 must fail, I propose to deal briefly with the submissions made in regard to the prospect of the proposed use of the original dwelling being for the purpose of a dwelling house contemplated by cl 13(4) or as a rural worker's dwelling. 44 The following facts are either agreed or established by the evidence:-

(1) Pancho Properties Pty Limited is the owner of the land as the trustee of a trust for the benefit of the Solomon family.

(2) Out of 8.6 hectares only about 6 hectares are capable of being used for grazing.

(4) Apart from one pony, up to 20 Shetland ponies on the property from time to time are owned by Mr Osborne, the occupant of the original cottage.

(5) Mr Osborne continues to occupy the original cottage holding over under a residential lease.

(6) There is no formal agreement in respect of the right of Mr Osborne to use any part of the property for grazing.

(7) Any wine produced from the grapes grown in the vineyard has been used for personal consumption by the Solomon family.

(8) The produce of a small olive orchard, if any, and vegetable garden are used for personal consumption by the Solomon family.

(9) There is no contract of employment between Mr Osborne and Pancho Properties Pty Limited.

(10) Thoroughbred breeding is not carried on by Pancho Properties Pty Limited.

45 There is strong justification for concluding that the primary purpose of use of the property is the pursuit of a lifestyle by the Solomon family as a rural residential retreat. Any agricultural use is either incidental to that purpose or carried on by Mr Osborne, who maintains aspects of the property in return for his use of the land. There is little or no evidence to substantiate the carrying on of a commercial enterprise by Pancho Properties Pty Limited. All the so-called agricultural purposes are, therefore, ancillary to a residential use of the new dwelling. 46 It will be problematical for the applicant to persuade the Court on the basis of the evidence as it stands that the original cottage will be occupied by a person employed or engaged by the owner for the purpose of agriculture of that land. Nonetheless, on the balance of probabilities, Mr Osborne could be a person engaged in rural occupation on the land notwithstanding the minimal or even nominal nature of that activity. 47 It is not necessary to make a final determination. However, it is worth noting my impression after considering the issues in this case that provisions such as cl 13(4) and the definition of a rural worker's dwelling foreseeably could create significant difficulties for monitoring and supervision of the performance under development consents granted relying on those provisions. Moreover, cl 13(4) in particular appears in terms only to impose the tests for satisfaction at the date of consent whereas at least the definition of a rural worker's dwelling is, on its face, prescriptive of future use.

Conclusion 48 Each of the appeals in matter No. 10071C of 1998 and matter No. 10138 of 1999 will be dismissed and the respective development applications determined by refusal of consent. 49 In matter No. 10072 of 1998 development application DA 13/97 is determined by grant of development consent, subject to the conditions imposed by the council on 5 February 1997, except condition 3 which shall be in the following terms:- (3) The original dwelling house erected on the land shall not be used for the purpose of a dwelling house except with consent first granted by the council or used otherwise for any other purpose except in accordance with the provisions of the Environmental Planning and Assessment Act 1979. 50 The exhibits may be returned.

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