Pancho Properties Pty Ltd v Wingecarribee Shire Council

Land and Environment Court (NSW)|1996-11-07|Before: Talbot J, Mr P

The applicant, Pancho Properties Pty Ltd, purchased the subject land comprising 8.1 hectares within Zone 7(b) Environmental Protection (Landscape Conservation) under the Wingecarribee LEP 1989 (the LEP) in June 1996.

At the time of purchase there was an existing dwelling house on the land.

On 7 November 1996 the respondent refused a development application for the erection of a new residence on the land for the reason that it was contrary to the provisions of cl 13(2)(b) and cl 13(3) of the LEP. The LEP has since been amended and relevantly cl 13(2) and cl 13(3) are now cl 13(3) and cl 13(4) respectively.

These provisions are as follows:- (3) Subject to subclause (4), a dwelling-house may, with the consent of the council, be erected on land to which this clause applies, but only if the land -

… (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.

In the correspondence that followed refusal of the development application, the council indicated that "the existing dwelling will need to be demolished or rendered uninhabitable prior to occupation of the new dwelling" .

On 17 January 1997 a further development application, No 13/97, was lodged.

The description of the proposal originally referred to a "new residence" . The reference to the new residence has been deleted and in lieu thereof the proposal is described as a "replacement dwelling" .

The plan lodged in support of the second development application, No 13/97, identified the location of the replacement residence and noted "existing cottage to be de-commissioned" .

By Notice of Determination dated 5 February 1997, DA 13/97 was approved subject to conditions including Condition 3 as follows:- 3. This consent is issued in accordance with Clause 23 of Wingecarribee Local Environmental Plan 1989, and Council advises that upon completion of the replacement dwelling, the original dwelling must be removed from the site.

Clause 23 of the LEP provides:- Replacement of existing dwelling-houses 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.

Clause 13(4) qualifies the effect of cl 23 in zones 1(a), 1(b), 5(c), 7(a) and 7(b).

Subsequently, building approval No 97/0163 was issued in respect of the proposed new building. Condition 32 is as follows:- 32. Removal of Original Dwelling

In accordance with Condition 3 of the Development Consent DA 13/97, the original dwelling must be removed from the site upon completion of the replacement dwelling.

The approved building plans also made reference to "existing cottage to be de-commissioned" .

Following the issue of development consent 13/97 on 5 February 1997, the solicitors acting for the company entered into correspondence with the council regarding the prospect of retaining the existing small cottage as a residence for the farm manager notwithstanding Condition 3 of the development consent and Condition 32 of the building approval. Various alternatives were canvassed in that correspondence which ran between 17 June 1997 and 21 August 1997.

Construction of the new dwelling was completed in 1997.

In the meantime, during October 1997, the applicant lodged a further development application, No 476/97, as a land use application, seeking approval of the original dwelling as a "manager's residence" . The third development application was refused by Notice of Determination dated 19 December 1997 for the reason that the property does not warrant a "Managers (sic) Cottage/Rural Worker's Dwelling " due to inadequate site area and insufficient intensity of the use of the property and that the proposal does not comply with the minimum 40 hectare requirement for rural worker's dwellings as required by cl 13(4) of the LEP.

On 4 February 1998 the applicant commenced proceedings 10072 of 1998 (the condition proceedings) by way of appeal against Conditions 3 and 5 of development consent 13/97. The appeal in relation to Condition 5 is not relevant to the present proceedings. There has been no appeal in respect of Condition 32 of BA 97/0163.

On 4 February 1998 the applicant also commenced proceedings by way of an appeal against the refusal of development application No 476/97 in proceedings 10071 of 1998 (the manager's residence proceedings).

On 16 December 1998 the council issued a Building Certificate for the new building pursuant to s 149A of the Environmental Planning and Assessment Act 1979 (the EP&A Act).

On 6 January 1999 the applicant lodged a further land use application, DA 29/99, dated 7 December 1998 seeking approval to use the existing cottage as a rural worker's dwelling. The application bore a note that "this is not an application for section 13(4) approval" .

Finally, on 3 March 1999, the applicant commenced proceedings 10138 of 1999 (the rural worker's dwelling proceedings) by way of an appeal against the deemed refusal of the land use application DA 29/99 lodged on 6 January 1999.

The land use applications lodged with the council in October 1997 and January 1999 might fairly be regarded as attempts by the applicant to seek formalisation of the retention of the existing cottage. Nevertheless it must be understood however that the council relies upon the applicant's actions whereby it proceeded with the erection, completion and occupation of the new dwelling by the end of 1998 as acceptance of the conditions requiring removal of the original building.

The manager's residence proceedings were heard by Assessor Roseth (as he then was) who determined that the development application be refused. The applicant successfully appealed against the determination of Assessor Roseth and the proceedings have been remitted to him for determination pursuant to s 56A of the Land and Environment Court Act 1979 (the Court Act).

The hearing of all appeals has been deferred pending the resolution of preliminary questions of law raised by various notices of motion.

Seven Notices of Motion, one of which is in the form of a Question of Law, were listed for hearing by the Court on 11 October 1999. The hearings took place over the ensuing three days during which a further Notice of Motion, returnable instanter, was filed in Court by leave.

The following identical question of law is raised by the council in all proceedings:- Whether the applicant can now be dissatisfied with Condition 3 where:- i) it was granted consent in terms of the application made to council; ii) it having taken the benefit of the consent now cannot seek to avoid the burden.

The following issue is raised by the council in the condition proceedings:- Whether, having regard to cl 23 of the LEP, the applicant cannot seek approval to amend the consent by deleting Condition 3.

In the condition and the rural worker's dwelling proceedings the council has asked the Court to determine the following question:- Whether having regard to cl 13(3) and cl 13(4) of the LEP, the proposed use of the existing dwelling is prohibited. Further that SEPP 1 has no application.

In the rural worker's dwelling proceedings, the applicant asks the Court to determine that cl 13(3) and cl 13(4) of the LEP do not apply to a rural worker's dwelling as defined in the Model Provisions.

The council now submits for the first time that the applicant cannot seek consent to use the existing dwelling which it is bound to demolish and thereby benefit from its own illegality. In response, the applicant contends, in the manager's residence proceedings, that the respondent council is estopped from alleging that the application is incompetent, the council, having invited the application, accepted and determined it and contested the appeal without previously raising the issue.

In summary, the issues that the Court must determine are as follows:- (a) Is the council estopped from raising the issue of the competency of the application in the manager's residence proceedings?

(b) Whether an application to use the existing dwelling is competent.

(d) Whether, having regard to cl 23 of the LEP, the applicant cannot seek approval to amend the consent by deleting Condition 3.

(e) Whether cl 13(3) and cl 13(4) of the LEP contain a development standard or a prohibition.

(f) Whether cl 13(3) and cl 13(4) of the LEP apply to a rural worker's dwelling.

Each of the above issues will be dealt with in turn.

(a) Is the council estopped from raising the issue of the competency of the application in the manager's residence proceedings?

In a letter dated 12 August 1997 the council advised solicitors acting for the applicant that council cannot consider the retention of the existing dwelling and use of that dwelling as a manager's cottage unless a new development application is submitted accompanied by a SEPP 1 objection. The letter also referred to an opportunity to create an attached dual occupancy within the 7(b) Environmental Protection (Landscape Conservation) zone.

By Land Use Application No DA476/97 lodged on 13 October 1997, the applicant sought consent to use the existing cottage as a manager's residence. By that date building approval in respect of the new dwelling had been granted on 3 June 1997 and the new residence was in the course of construction.

The application was refused on two stated grounds, neither of which went to the competency of the application in the present sense.

The issue of the competency of the application was not raised before Assessor Roseth, or on the appeal against the determination of Assessor Roseth pursuant to s 56A of the Court Act.

Mr McClellan QC submits on behalf of council that the Court could not grant such a consent. The relevant principle relied upon is that the law will not allow enforcement of "rights directly resulting to a person asserting them from the crime of that person" ( Troja v Troja (1994) 33 NSWLR 269 at 294 explaining Helton v Allen (1940) 63 CLR 691 at 709). The council claims the Court is being asked to sanction the illegality of using the existing dwelling which the applicant is bound to demolish.

Mr Tobias QC, who appears for the applicant, asserts his client was entitled to rely on the representation by council that there was no impediment to lodging a development application.

The council's argument is twofold, firstly, that the Court is dealing with public policy which requires that a person cannot benefit from the commission of an offence and secondly that the actions of the council cannot create an estoppel against the proper exercise of power by the Court. The Court must accept the burden of implementing public policy.

Apart from the compelling argument that the Court must always have regard to public policy, the issue can be resolved by reference to the relevant principles of estoppel discussed by the High Court in The Commonwealth of Australia v Verwayen (1990) 170 CLR 394. There is one doctrine of estoppel which provides that a Court may do what is required to prevent detriment to a person who has relied upon an assumption as to a present, past or future legal as well as factual state of affairs where the assumption is induced by the party estopped.

The council made no direct assertion in terms that the application would be competent, only that the council could not consider the matter unless a new development application is lodged. It merely canvassed the opportunities.

On the other hand, the applicant says that the council, by its conduct at the outset and confirmed by its subsequent acquiescence, created the expectation that the competency of the development application would not be and was not disputed and that, relying on that representation, Pancho altered its position to its detriment.

The Court does not recognise the relationship between the council and the applicant at the relevant time as one where, even if there was a representation of the kind alleged it is to be regarded as binding and intended to induce the applicant to act on it.

The circumstances in Verwayen can be distinguished. In that case the Commonwealth had asserted that liability would be admitted and then reverted to relying on the statute of limitation.

Any detriment to the present applicant appears to sound in costs, if at all. The evidence discloses no more. The detriment accepted by the High Court in Verwayen was a measure beyond costs incurred.

Apart from the above, it is difficult to see how any representation by a council could in effect act as an estoppel against the Court, acting in the same capacity as the council on appeal, whereby the Court is prevented from determining the application in accordance with the law.

If the present application is incompetent, then the Court is bound to find so irrespective of whether the issue is directly raised, provided of course that the parties have the opportunity to address it.

(b) Whether an application to use the existing dwelling is competent.

While ever Condition 3 of development consent DA 13/97 and Condition 32 of BA 97/0163 remain, the retention of the first dwelling on the site will be contrary to law.

Whereas in most cases the taking of a benefit from a crime cannot be prevented or overcome except by the application of the principle relied upon by the council, that is not the situation here. It is always open for an owner to make an application for consent which has the effect of modifying another consent or for modification of an existing consent. This position may be contrasted to the capacity of a murderer to overcome the consequence of the crime. In the present case, the public law provides the means for bringing an illegal position to an end. However, until that is successfully accomplished the commission of an offence will continue and the person has no lawful right to enjoy the non-complying development.

The applicant is not seeking to use the premises for an unlawful purpose. Rather it is seeking to regularise a future use which otherwise would be unlawful. The benefit to the applicant only accrues once the illegality has ceased. In the meantime it is exposed to whatever remedy is provided for in respect of a breach of the EP&A Act or the Local Government Act 1993, as the case may be. The legislation even contemplates that an application may be made to carry out work which is founded on works which came about unlawfully (see for example s 124(3) or s 80A(1)(b) of the EP&A Act; Hemmings J in Hooper and Anor v Lucas and Ors (1990) 71 LGRA 27 and Bignold J in Rancast Pty Ltd v Leichhardt Council (1995) 89 LGERA 139). In other words the Act stipulates that an unlawful building may remain if it can be put to a lawful use. Nevertheless, until that use is approved, the applicant may remain liable to prosecution pursuant to s 125 of the EP&A Act.

As Mr McClellan points out, the relevant principle upon which he relies has been applied to contracts ( Alghussein Establishment v Eton College [1991] 1 All ER 267), insurance policies ( Beresford v Royal Insurance Co Ltd [1937] 2 KB 197), trusts, wills and intestacies. The Court accepts that the circumstances in which the principle may be applied are not closed (see the discussion by Mahoney JA in Troja at 296).

In Rutland v Shoalhaven City Council (1997) 94 LGERA 370 Bignold J had to consider the ongoing effect of a condition of consent to subdivision whereby further subdivision was forbidden. After considering the established axioms of planning law that conditions of an existing consent do not fetter upon an entitlement to a fresh consent, his Honour concluded, at 377, that because the very legal existence of the existing lot which the applicant was seeking to further subdivide depended upon the development consent which itself was predicated upon the stipulation that the subject land be not further subdivided, the obtaining of fresh development consent did not constitute an independent chapter in the planning history of the subject land. He said he had no difficulty in considering that the proposed subdivision involved a direct infringement of the condition and thereby resulted in a contravention of the EP&A Act vide s 76(2)(b), s 122 to s 124 (inclusive) and s 125. Ultimately Bignold J found the complete answer in the provisions of s 91(2) of the EP&A Act which it should be noted is confined in its application to development being the subdivision of land.

Although Lloyd J appears to follow Rutland in Mason Architects v North Sydney Council [1999] NSWLEC 176, his basis for doing so is not readily apparent from the judgment, except that he agreed that an existing development consent imposed a condition which absolutely prohibited the proposed development.

In the present case the very legal existence of the original dwelling does not depend on the development consent in respect of the new dwelling. No question of subdivision is involved. While the class 1 application in the condition proceedings remains on foot, it suspends the effect of Condition 3, indeed the whole consent, until the appeal is determined. There is no question of the applicant choosing to carry out development so that it voluntarily brought the land within a constraint imposed by a pre-existing development consent as appears to have been the case in Mason Architects . The relevant Condition 3 is currently ineffective because it does not operate pending determination of the appeal. The failure to comply with the condition is not, for the moment, unlawful.

It is not necessary to determine whether Rutland or Mason Architects are correctly decided. Neither decision makes reference to s 91(3)(b) (now s 80A(1)(b)) of the EP&A Act. The authorities cited in Rutland , at 375, do not appear to me to address the issue. If the decisions in Rutland and Mason Architects are right in the way contended by Mr McClellan, then they may have the consequence that a condition of consent has greater force than a future rezoning of the land even where that later rezoning has the effect of changing the whole planning context of the land. Furthermore it would be to give a condition of consent the effect of a rezoning.

Subject to what is said later in these reasons about deferring the manager's residence proceedings and the rural worker's dwelling proceedings until the condition proceedings are resolved, there is no reason why the applications are not competent, notwithstanding the failure to comply with Condition 3.

If Condition 3 is modified or deleted on any hearing of a merits appeal, I agree with the applicant that, because Condition 32 of the building approval is based on Condition 3, and as the building approval is now deemed to be a development consent under the EP&A (Savings and Transitional) Regulation 1998, then either Condition 32 could not be enforced, or alternatively it could also be modified to bring it into line with the new form of Condition 3.

It is the council's position that Pancho, as the grantee of development consent, having gone ahead with the development, thereby accepted the condition in respect of the first dwelling and accordingly cannot now appeal against that condition as a person dissatisfied with its provisions.

This is so, according to the council, because the applicant obtained a consent to the subject matter of the development application, namely to erect a replacement residence and further because the demolition of the existing dwelling was a fundamental condition to the approval of the new dwelling, and the applicant, having proceeded to complete the second dwelling, accepted that position.

The council relies on the decision by Hardy J in Bryson Industries Ltd v Sydney City Council (1962) 8 LGRA 395. The appellant in that case appealed against a condition of consent requiring execution of a deed which it had already executed in accordance with the condition. Hardy J observed that it matters not whether the correct principle to apply is one of estoppel in pais or election or some analogous doctrine such as the "approbate and reprobate" principle. On any approach, as from the date of the execution of the deed, the appellant no longer was entitled to appeal against the condition. Further, when the deed was executed, the condition worked itself out and became spent as a condition with the consequence that the obligations and disabilities of the appellant henceforth flowed, not from an existing operative condition specified in the council's decision, but from the provisions of the deed executed pursuant to the condition. The circumstances in the present case are not analogous to the facts in Bryson . The applicant has acted on the consent but has not complied with the condition.

In Waters and Anor v Hurstville City Council (1991) 77 LGRA 10 Bannon J concluded that the applicants had elected to accept the benefit of the respondent's conditional approval of their building application and should not be heard to allege they are aggrieved. In that case the condition provided that an existing dilapidated cottage shall be demolished within a period of twelve months and that a non-terminating bank guarantee shall be lodged with council as a surety that the cottage is demolished. The surety was provided.

Bannon J made no reference to an earlier decision of Waddell J in Parramatta City Council v Travenol Laboratories Pty Ltd and Anor (1978) 35 LGRA 368 which has since been followed by Bignold and Sheahan JJ in this Court. Waddell J observed, at 377 as follows:- There must be many cases, where the imposition of a condition is all that is in contest between an applicant and a council, in which the proper and convenient course to follow would be to permit the development in question to proceed immediately and leave the justification for the condition to be determined later on appeal. To follow such a course would often prevent financial loss to the landowner, be in the public interest, and be a responsible exercise of local government powers.

Bignold J expressly embraced the above view in Rein, Warry & Co v Wollondilly Council unreported 10542 of 1993 27 April 1994.

Although Sheahan J in Tegra (NSW) Pty Ltd v Harden Shire Council unreported 10168 of 1998 10 July 1998 has accepted an observation made by Bignold J in Rein Warry that it would be a very inconvenient result if the developer who is dissatisfied with a condition of development consent and had appealed against the imposition of that condition was unable to act upon that consent until that appeal had been determined by the Court, that opinion as expressed by Bignold J appears to be inconsistent with the operation of the provisions of s 93.

In Tegra Sheahan J found that the condition in question was only ever partially complied with and the company had clearly indicated its objection to the condition and made persistent efforts to have it deleted or altered and accordingly did not really "elect" at any stage to follow a course of action inconsistent with its right to appeal.

I agree with the observation by Bannon J in Waters , at 13, that the more obvious danger to the present applicant is that if it persists with its appeal in the condition proceedings and succeeds, the approval granted to it in respect of the replacement dwelling may well be set aside in toto on the basis that the council would not have granted it without the condition.

The applicant has indicated that if it is unsuccessful in having the condition deleted or modified on appeal, then it will comply with the condition in its original form. It should be observed in this regard that, although cl 23 of the LEP provides that a second dwelling house may be erected "if the firstmentioned dwelling-house is intended to wholly replace the secondmentioned dwelling-house" Condition 3 reflects but one means of satisfying the requirements of cl 23. Whatever the applicant meant by the expression used in the plans, namely, that the "existing cottage to be de-commissioned" , it would nevertheless be consistent with cl 23 if the structure remained on the land and is used for some other purpose.

Although by 17 June 1997 construction of the new dwelling had commenced following the issue of a building approval on 3 June 1997, the applicant has since then persistently made representation to the council for retention of the original dwelling. Condition 3 did not operate until "completion of the replacement dwelling" . The applicant had well and truly made it clear to council by the date of completion that it was not satisfied with Condition 3. The first formal step in seeking to regularise the retention of the first dwelling was taken when land use application 476/97 was presented to council in October 1997. There is no direct evidence that suggests the applicant ever acquiesced in Condition 3. That position was maintained until the date when the appeal was lodged, namely on 4 February 1998.

In all of the above circumstances, the Court is satisfied that the applicant, Pancho Properties Pty Ltd, is relevantly dissatisfied with the provisions of Condition 3 and entitled to appeal against that condition.

(d) Whether, having regard to cl 23 of the LEP, the applicant cannot seek approval to amend the consent by deleting Condition 3.

A close appraisal of cl 23 reveals two elements which are critical to an understanding of the provision.

Firstly, it operates as a concession where there is an intention to wholly replace the secondmentioned dwelling house. The erection of a second dwelling house may proceed, with the consent of the council, while ever that intention is extant. Arguably, it is only necessary for the intention to be manifest at the time consent is granted. A practical construction however leads to a result that the erection cannot proceed, notwithstanding the consent of council, if the intention is revoked.

The relevant intention was encapsulated in Condition 3.

Irrespective of what approach is taken, the applicant has never unconditionally abandoned its intention to relevantly remove the existing dwelling by complying with Condition 3 if it fails in its endeavour to have the condition modified.

The position is confused by the fact that it appears the existing dwelling was being used as a residence for the farm manager at the time of lodgement of the application for approval of the new dwelling. An expressed intention is to use the new dwelling as a "weekender and for school holidays" . Notwithstanding an apparent lack of intention to replace "like with like" , except as a dwelling house in the general sense, the council nevertheless made express reference to cl 23 in Condition 3 thereby indicating it considered itself to be acting in accordance with that clause.

Secondly, Mr McClellan asserts that cl 23 is aimed at controlling visual amenity by limiting the density or number of buildings having the appearance or size of a dwelling house and that, in construing the clause, regard should be had to that objective in accordance with s 33 of the Interpretation Act 1987.

His argument turns on the meaning of "wholly replace" . He says the term "wholly replace" should be read as meaning that the only way a dwelling house could be built would be for the first house to be replaced. Whilst the applicant contends that the term "wholly replace" means to "substitute" and not to "remove" the first dwelling house, a more accurate interpretation of the phrase would be to not only replace the "use" of the first dwelling house but also provide a physical replacement. If the word "wholly" did not precede the word "replace" then, according to the council, it would be open for the Court to find that an intention to replace the "use" of the first dwelling house would be enough to comply with cl 23.

Contrary to Mr McClellan's submission, the reference "wholly replace" does not go so far as to stipulate that the structure must be demolished or removed. The applicant foreshadowed the maintenance of the building comprising the original dwelling when it made reference to decommissioning it or rendering it uninhabitable. These are not words of demolition. The applicant does not accept that the expression "wholly replace" equates to "wholly remove" .

Removal involves the taking away of what is there, whereas when something is replaced, then the new or alternative thing is provided as a substitute. In the context of a use the same structure can be utilised for different purposes.

Clause 23 relates to the whole of the shire. It is qualified by cl 13(4) which allows a second dwelling house in accordance with that subclause in the specified zones including the 7(b) zone.

Condition 3 of the development consent is prima facie a proper exercise of the power of council to impose a condition to give effect to cl 23. Nevertheless, other conditions such as requiring the building to be given over to a use other than a dwelling house could equally be a reflection of the intention of cl 23. The item required to be replaced is a building having the character or purpose of a dwelling house not necessarily the building itself.

The definition of rural worker's dwelling refers to a dwelling in contradistinction to a dwelling house which is separately defined as a building containing one but no more than one dwelling. It is not necessary for a rural worker's dwelling to be a dwelling house. However a rural worker's dwelling will be a dwelling house where it is the only dwelling contained in the building as is now proposed by the applicant.

The facts indicate that the applicant seeks to use the original dwelling to provide accommodation for its farm manager, either as a manager's residence (DA 476/97 in the manager's residence proceedings) or a rural worker's dwelling (DA 29/99 in the rural worker's dwelling proceedings). However, if the applications are unsuccessful, then the applicant may seek to use the building for some other purpose such as a stable, a garage or some associated agricultural use (DC 13/97 in the condition proceedings).

Neither DA 476/97 nor DA 29/99 can proceed while ever Condition 3 remains in force. Unless Condition 3 is modified in a way which is consistent with cl 23, namely by allowing the structure to be maintained for a purpose other than a dwelling house, or in accordance with cl 13(4), the land use applications cannot be applied to any lawful building. The building must either be rendered uninhabitable or converted to another use.

Subject to the effect of cl 13(4) the applicant is entitled to pursue the condition proceedings. A proposal to delete Condition 3 altogether would be contrary to cl 23 subject to the effect of cl 13(4). The appeal against Condition 3 is not confined in terms to deleting it.

It is obviously necessary for the Court to be appraised of the outcome of the condition proceedings before the remaining questions in relation to the manager's residence proceedings and the rural worker's dwelling proceedings become relevant, if at all.

If Condition 3 is modified, the manager's residence proceedings and the rural worker's dwelling proceedings will be competent in respect of a future use of the building unless the dwelling house use ceases in the meantime.

Foreseeably a subsequent reconversion of the building may amount to the erection of a second dwelling house. Alternatively, as a matter of merit at least, the Court would have regard to how there came to be two dwelling houses on the land notwithstanding cl 23. In that context the purpose of cl 23 would be a relevant consideration.

However, the question whether cl 13(3), cl 13(4) and cl 23, operating separately or together, act as a bar to consent to use the original dwelling for either purpose will remain.

For the moment the Court is confined to finding that cl 23 does not amount to an insurmountable hurdle to the consideration and determination of the condition proceedings which, according to Mr Tobias, may be directed at retaining the structure which is the building comprising the original dwelling albeit for a different purpose.

(e) Whether cl 13(3) and cl 13(4) of the LEP contain a development standard or a prohibition

It must be borne in mind that the condition proceedings relate to a development application to erect a second dwelling house. By contrast the rural worker's dwelling proceedings are an attempt to regularise the retention of the original dwelling.

Initially the council relied solely on the decision of Lloyd J in Dixson v Wingecarribee Shire Council [1999] NSWLEC 105;(1999) 103 LGERA 103 for the consequence that cl 13 of the LEP prohibits the erection of a dwelling house because the land has an area of significantly less than 40 hectares. Lloyd J dealt with cl 13(3) and cl 13(4) in particular and determined that the 40 hectares restriction was a prohibition. Hence it is not amenable to SEPP 1 as a development standard. Mr McClellan submitted that Lloyd J should be followed on the basis of judicial comity and because the council has placed reliance on the judgment for administration of the LEP. A contrary decision therefore would lead to confusion.

Mr Tobias on the other hand strongly urged the Court to reject the reasoning of Lloyd J. According to him, it is contrary to the conventional wisdom about the distinction between a prohibition and a development standard, accepted over the 20 years since the EP&A Act was introduced (see for example Kotevski v Shoalhaven City Council unreported 10345 of 1994 20123 of 1994 Pearlman J 10 November 1994).

The failure of the council to raise the issue in the condition proceedings until now lends some force to the observation by Mr Tobias that provisions in similar terms have heretofore been applied as development standards. It was not until after Lloyd J considered the effect of cl 13(4) in Dixson that the issue was raised in the condition proceedings. This was after Assessor Roseth had delivered a judgment on 20 November 1998 and an appeal pursuant to s 56A was determined on 8 February 1999.

Irrespective of the Court's determination of other questions raised by the various Notices of Motion which could have an impact upon the future conduct of the proceedings whereby the issues regarding the proper application of cl 13 ultimately may not arise, the parties, having argued the question, expressly requested the Court to determine the matter nevertheless.

The applicant submits that the proper interpretation of the LEP as a whole must lead to the conclusion that cl 13(4) deliberately refers to "dwelling houses" and not "rural worker's dwellings" . If cl 13(3) and cl 13(4) were intended by the draftsperson to apply to all rural worker's dwellings as well as the particularised dwelling houses, that could have been done by specific reference.

The applicant also submits that there is no basis for the conclusion by Lloyd J that, when read together with cl 9, the context requires that efficacy be given to cl 13(4) so that it applies equally to dwelling houses to be used for rural workers as to agricultural workers. Accordingly, because there is no other relevant specific provision in respect of rural worker's dwellings cl 13(4) is not a provision in the plan contemplated by cl 9(2) in the case of all rural worker's dwellings.

Lloyd J concluded that if cl 13(4) did not apply to a rural worker's dwelling "there could be any number of rural worker's dwellings on any allotment of land irrespective of size" . The applicant refers to cl 9(3) of the LEP, which requires development to be carried out consistent with the objectives of the zone, and cl 16B, which requires consideration of the effect on the heritage significance and visual quality of the land. It is submitted these provisions constrain the number of rural worker's dwellings which could be maintained on a particular block of land.

Primarily on the basis that it would mean that cl 13(4) has no work to do, Lloyd J rejected the submission made by Mr Bingham on behalf of the applicant in Dixson that the LEP does not contain any minimum allotment size for the erection of a rural worker's dwelling.

Reference to the definition of a rural worker's dwelling shows that, in one sense, it is more narrow than the category of dwelling referred to in cl 13(4). It is confined to a dwelling to be occupied by a worker engaged in rural occupation on the land upon which the dwelling is erected. Clause 13(4) allows for the worker to be engaged on adjoining or adjacent land. Clause 13(4) requires that the occupier of the dwelling must be employed or engaged by the owner of the land on which the dwelling is erected. The definition of a rural worker's dwelling does not make a connection between the owner of the land and the rural occupation in which the occupant is engaged. In that context the definition of a rural worker's dwelling is broader than that referred to in cl 13(4).

For example, cl 13(4) applies to a person employed by the owner of the land in the use for the purpose of agriculture, of land belonging to the owner, which adjoins or is adjacent to that land. The relevant criteria are:- (a) The occupier is employed by the owner of the subject land;

(b) The occupier is employed by the owner for the purpose of agriculture;

(d) The land used for the purpose of agriculture adjoins or is adjacent to the subject land.

The definition of a rural worker's dwelling requires that the occupier is engaged in rural occupation on the subject land. There is no requirement for the occupier to be employed or engaged by the owner.

The applicant, quite correctly in my opinion, makes no distinction between a person engaged in rural occupation and a person employed or engaged in a use for the purpose of agriculture. Nevertheless, I agree that pursuant to cl 13(4) additional dwellings may be erected with the consent of the council in circumstances beyond those strictly applicable to a rural worker's dwelling.

In Dixson the facts enabled his Honour to conclude that what was proposed was a rural worker's dwelling and that it fell within the category of dwelling house contemplated by cl 13(4).

I accept that it is correct to say a rural worker's dwelling comprised within a dwelling house to be occupied by a person engaged by the owner of the land in the use, for the purpose of rural occupation on that land falls within the category of dwelling house referred to in cl 13(4). The draftsperson has deliberately referred to dwelling houses and to the employment of the occupier by the owner but at the same time widened the concession to allow for agricultural pursuits on adjoining or adjacent land.

I cannot therefore agree with Lloyd J's observation that, if cl 13(4) has no application to a rural worker's dwelling, there is no work for it to do. For the reasons I have explained, it applies to other development which is not strictly regarded as a rural worker's dwelling. Mr Bingham appears to be correct in the submission he made in Dixson that the LEP does not contain any minimum allotment size for the erection of a rural worker's dwelling in every case. That assertion needs to be confined to dwellings which are not also dwelling houses. I also agree with Mr Tobias that there is work for cl 13(4) to do in relation to buildings that are not rural worker's dwellings according to the definition.

Nor can I agree with his Honour that the purpose of the subclause is to control the number of dwellings on non-urban land where in terms it only applies to dwelling houses. Presumably his Honour intended to refer to dwelling houses when he made that statement.

However, his Honour went on to say that, even if the applicant was correct in its submission, the proposal in that case was for a particular kind of rural worker's dwelling, namely one to which cl 13(4) applies.

It is apparent therefore that cl 13 generally is intended to limit the number of dwelling houses on allotments of land. There does not appear to be any intention to limit the number of rural worker's dwellings per se or dwellings generally.

In the rural worker's dwelling proceedings, the application is for a change of use of an existing building. The applicant points out that cl 13 deals only with the erection of a dwelling house. In Dixson the applicant proposed to convert about 80 per cent of an existing stable into a dwelling. The remaining part of the building would be used as a store. His Honour appears to have dealt with argument on the basis that the erection of a dwelling house was the relevant development. Mr Tobias submits that Dixson has no application to a case such as the present where it involves an application to change the dwelling house use to a use for the purpose of a rural worker's dwelling. Here again the applicant says that Lloyd J was demonstrably wrong in holding that the only way an application can be made for development consent to a rural worker's dwelling is pursuant to cl 13(4).

According to Mr Tobias, the judgment of Lloyd J can be distinguished on the above basis so that the effect of cl 13(4) can be determined in accordance with the circumstances of this case and further by having regard to matters not argued before Lloyd J.

Although the rural worker's dwelling proceedings might be distinguished on the basis that the application relates only to a change of use, the condition proceedings still involve the erection of a dwelling house notwithstanding that the consent has been acted upon and the erection of the dwelling house is complete.

In the applicable 7(b) zone, dwelling houses and rural worker's dwellings are specified as development which may be carried out with development consent. Dwelling houses are permissible with development consent in the 5(c) zone. There is no reference to rural worker's dwellings in that part of the Table. The same applies in the 7(a) zone. Clause 13 applies in each of the above zones as well as zone 1(a) and 1(b) where dwelling houses and rural worker's dwellings fall within the range of innominate uses which may be carried out with development consent. Clause 13 therefore applies in circumstances where either dwelling houses or rural worker's dwellings are development which may generally be carried out only with development consent. Clause 9(2) of the LEP applies the Table as otherwise provided by the plan. Clause 13 is such an exception. Clause 13 qualified cl 23 in respect of the land in the nominated zones.

Clause 13(3) provides that a dwelling house may be erected on land to which the clause applies "but only if the land" has an area of not less than 40 hectares or meets one of the other seven criteria set out in the subclause. Clause 13(4) on the other hand refers to "not more than two additional dwelling-houses" .

Subclause (3) makes no reference to occupation of a dwelling house by any person employed or engaged in agricultural or rural pursuits on the land or adjoining land except, maybe, in so far as the land could have been created as a concessional allotment which is separately defined in cl 13(2) by reference to earlier planning instruments none of which are in evidence.

It appears to be common ground that cl 13(4) establishes a ceiling or limit to the number of "additional" dwelling houses that may be erected in accordance with the subclause to the effect that there may be two additional dwelling houses in addition to a dwelling house erected pursuant to cl 13(3).

It has not been submitted by either side that the erection of the existing dwelling house, whenever that was, was unlawful. Accordingly, cl 13(4) is the only relevant provision for present purposes.

Lloyd J refers to subcl (3) as using "the language of a prohibition" . He treats subcl (4) as an exception to subcl (3).

Properly construed, the effect of cl 13(4) is to limit the erection of not more than three dwelling houses per 40 hectares. In terms, it is a separate and distinct control by allowing not more than two additional dwelling houses which answer the criteria set out in the subclause.

The question might be more succinctly expressed as whether the 40 hectare prescription in cl 13(4) is an essential element of the description of the land. Lloyd J relied on the test applied by the Court of Appeal in North Sydney Municipal Council v P D Mayoh Pty Ltd [No. 2] (1990) 71 LGERA 222.

In Kruf v Warringah Shire Council (unreported 15 December 1988) Holland J found it is not possible sensibly to say that an absolute prohibition on a form of development in a specified locality is setting a standard for that form of development. In Quinn O'Hanlon Architects Pty Ltd v Leichhardt Municipal Council (1989) 68 LGRA 114 Cripps J considered a clause which provided that a building "shall not be erected" within a foreshore building line was a development standard. The opinions in Quinn O'Hanlon and Kruf were expressly approved by Clarke JA in Mayoh .

In Mayoh cl 14A(1)(a) of the LEP stipulated a residential flat building shall not be erected on land if the building on adjoining land had certain specified characteristics. Clarke JA (at 237) cautioned against accepting the relevance of decisions on other clauses in other instruments. Mahoney JA emphasised (at 233) that in the construction of any instrument it is necessary to determine the effect of the words in question by having regard to the intention derived from the meaning of them in context (see also Kingston and Anor v Keprose Pty Ltd (1987) 1 NSWLR 404 at 423).

In Bell and Anor v Shellharbour Municipal Council (1993) 78 LGERA 429 (at 433) Cripps JA pointed to a self-evident difference between a clause absolutely prohibiting development on the one hand and a clause regulating development by specifying requirements or fixing standards on the other. In Dixson (at 111; [34]) Lloyd J construed the application of the decision in Bell as requiring a development standard to be something which was within the applicant's control and thus amenable to change in the development application. It is difficult for me to find any support for this proposition in Bell .

Lloyd J said that cl 13(3) and cl 13(4) prohibit the use of land having the specified characteristics for the named purpose by laying down absolute prohibitions against the development of certain land within relevant zones. He placed reliance on the words used by Mahoney JA in some obiter remarks in Mayoh when he referred to the distinction between a provision which in form provides "on land of characteristics x no development may be carried out" and a provision which in form provides "on such land development may be carried out in a particular way to a particular standard" . These observations need to be regarded in the context of the particular type of provision with which the Court of Appeal was dealing in Mayoh .

With the greatest of respect to his Honour I cannot construe either cl 13(3) or cl 13(4) as prohibitions. The words "may … be erected" are clearly permissive and the area of 40 hectares is referring to a requirement or standard in respect of the carrying out of the development.

This contrasts to the clause under consideration in Mayoh which was couched in the language of a prohibition by stipulating the building in question "shall not be erected" and stipulated a control which made no reference to the physical aspects of the land itself.

Mahoney JA construed the definition "development standard" in s 4 of the EP&A Act. He identified three things (at 232; 233) which I believe can be fairly summarised as follows:- (a) the definition deals with provisions relating … to what occurs in the carrying out of development;

(b) that with which the definition deals is the details of development which is to be carried out or the standards to be observed in the carrying out of it;

(c) the matters detailed in subparagraphs (a) to (n) assume that development can be carried out and provide for the things which are required and the standards which are to be observed in the carrying out of that development.

It is consistent with Mahoney JA's analysis to construe cl 13(4) so that development for the erection of the specified dwelling houses is permissible provided the standard or requirement in respect of the minimum area of 40 hectares is observed. No specific development is prohibited. In my opinion therefore the 40 hectare requirement is a development standard because it fixes a requirement to be complied with in carrying out the development.

The question of whether I, as a single Judge, should follow the decision of another single Judge was considered and the answer explained by Holland J in Michael Realty Pty Ltd v Carr [1975] 2 NSWLR 812 at 820 as follows:- I do not think that I am relieved by the decision of Needham J. ([1975] 1 N.S.W.L.R. 76) of my duty to bring my own judgment to bear on the point in question. There is no rule of law which binds a judge to abide by the decision of another judge of co-ordinate jurisdiction, but a judge of first instance will, as a matter of judicial comity, usually follow the decision of another judge of first instance in the same jurisdiction, unless convinced that the judgment was wrong: Metropolitan Police District Receiver v. Croydon Corporation ([1956] 1 W.L.R. 113); Albion Insurance Co. Ltd. v. Government Insurance Office (N.S.W.) ((1969) 121 C.L.R. 342, at pp. 348, 349); Halsbury's Laws of England , 3 rd ed., vol. 22, p. 801, par. 1689. As I have said, I think I am bound, first, to consider the matter for myself in order to decide whether I ought to follow the decision of Needham J. ([1975] 1 N.S.W.L.R. 76).

In the present case I am convinced that the decision of Lloyd J is wrong and that I should not follow it.

(f) Whether cl 13(3) and cl 13(4) of the LEP apply to rural worker's dwellings

For the reasons already given, the subclauses only apply where the rural worker's dwelling is a dwelling house. Furthermore, they only apply where erection of a rural worker's dwelling is proposed. They have no direct application to a change of use that does not necessitate erection of a building.

In Matter No 10072 of 1998 (the condition proceedings) the Court makes the following orders:- 1. Paragraphs 1 and 2 of the respondent's Notice of Motion dated 9 July 1999 are dismissed.

By consent paragraph 3 of the respondent's Notice of Motion dated 9 July 1999 is dismissed.

Questions of Law dated 3 March 1998 are answered as follows:- (4) No. (5) By consent dismissed.

In Matter No 10071 of 1998 (the manager's residence proceedings) the Court makes the following orders:- 1. The respondent's Notice of Motion dated 9 July 1999 is dismissed.

The respondent's Notice of Motion dated 25 August 1999 is dismissed.

The applicant's Notice of Motion dated 11 October 1999 is dismissed.

In Matter No 10138 of 1999 (the rural worker's dwelling proceedings) the Court makes the following orders:- 1. The respondent's Notice of Motion dated 9 July 1999 is dismissed.

The respondent's Notice of Motion dated 25 August 1999 is dismissed.

The applicant's Notice of Motion dated 17 August 1999 is dismissed.

These are all class 1 proceedings and nothing has been put by either party to the effect that Practice Direction 10 shall not apply in regard to costs so that unless either party applies within seven days, there will be no order as to costs.

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.

Land and Environment Court of New South Wales CITATION: Pancho Properties Pty Ltd v Wingecarribee Shire Council [1999] NSWLEC 245

(1999) 103 LGERA 103

At a glance

Court

Decision date

Before

Source

Judgment (158 paragraphs)

Parties

Cases Cited (12)

Cited By (9)