Pearse v Sharpe & Anor

KEY ISSUES: Judicial Review :- development consent - whether invalid - existing use - use for purpose of dwelling house - whether use for ancillary development is use for a different purpose - whether change of use prohibited in zone - whether consent uncertain and lacking in finality - application dismissed

LEGISLATION CITED: Environmental Planning and Assessment Act 1979

Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404; Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379; CASES CITED: Foodbarn Pty Limited v Solicitor-General (1975) 32 LGRA 157; Kindimindi Investments Pty Ltd v Lane Cove Council and Another (2006) 143 LGERA 277; Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 ; Westfield Management Limited v Perpetual Trustee Company Limited & Anor [2006] NSWCA 245

APPLICANTS Mr A M Pickles SOLICITORS Hannaford Lawyers

FIRST RESPONDENTS LEGAL REPRESENTATIVES: Mr D T Miller SOLICITORS DLA Phillips Fox

SECOND RESPONDENT Mr J A Ayling SC SOLICITORS Home Wilkinson Lowry

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

MARK THOMAS PEARSE CHERYL ANN PEARSE Applicants

RANALD WILLIAM SHARPE LEIGH ANN SHARPE First Respondents

SUTHERLAND SHIRE COUNCIL Second Respondent

JUDGMENT Jagot J: A. Introduction 1 On 9 February 2007 Sutherland Shire Council granted development consent DA 06/0693 for the development of land at 118 Ellesmere Road, Gymea Bay. The consent described the development as partial demolition of the existing garage and construction of a new dwelling, carport, swimming pool, driveway, covered walkway, and modifications to the existing waterfront cottage and the southern boundary wall, subject to conditions. The applicants own the property adjoining 118 Ellesmere Road. On 27 June 2007 the applicants commenced proceedings seeking a declaration that the consent was invalid and orders restraining the owners of 118 Ellesmere Road from carrying out development in reliance on the consent.

2 The applicants' points of claim identified three grounds of challenge to the validity of the consent. During the hearing of the matter the applicants' counsel explained that there were in fact two grounds of challenge. Both related to the existing waterfront cottage referred to in the development consent. First, the applicants claimed that the consent authorised a change of use of the waterfront cottage from the purpose of "dwelling" to the purpose of "ancillary development" in circumstances where "ancillary development" was not permitted in the applicable 7(a) Environmental Protection (Waterways) zone. Secondly, the applicants claimed that by imposing condition 7 on the consent the Council impermissibly left a matter for future determination with the consequence that the consent was not final and certain.

3 There was no dispute about the material facts or statutory context.

4 118 Ellesmere Road contains two lots (lot 4 in DP 8937 and lot 642 in DP 752064). A single storey dwelling house (described as a cottage) is located on the land partly on lot 4 and partly on lot 642.

5 When the consent was granted the Sutherland Shire Local Environmental Plan 2000 (the LEP) applied as the relevant environmental planning instrument by operation of a savings provision within the subsequent Sutherland Shire Local Environmental Plan 2006. Under the LEP lot 4 was zoned 2(e2) Residential and lot 642 was zoned 7(a) Environmental Protection (Waterways). A foreshore building line also affected the land under cl 20 of the LEP. Dwelling houses are permissible in zone 2(e2) but prohibited in zone 7(a). The applicants conceded that "the parcels of land upon which the existing cottage is sited have the benefit of existing use rights insofar as such rights permit the use of the land for the purpose of a dwelling house". This concession was consistent with the basis upon which the development application was lodged and determined by the Council.

6 Clause 5 of the LEP contained a set of definitions. Relevant definitions included: Ancillary development means a building, work or use which is used or carried out in conjunction with the primary legal use of a site. Dwelling means a room or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate permanent residence. Dwelling house means one dwelling on one allotment except where that dwelling forms a component of a dual occupancy housing development. Dual occupancy housing means two dwellings on land that is one allotment or that was one allotment when development consent was granted for the two dwellings. Watercraft facility means a pontoon, suspended ramp or walkway, jetty, mooring, wharf, slipway, watercraft landing and launching facility or the like, but does not include a marina.

7 Clause 33 of the LEP contained the development control table for land within zone 2(e2). The development control table identified development that was allowed without development consent, which required development consent and was prohibited in items 2, 3 and 4 respectively of the table. Item 4 (prohibited development) referred to any development other than development included in items 2 or 3. Item 3 (development that required consent) was in the following form: Ancillary development not included in item 2.

Development for the purpose of: child care centres, cluster housing, community facilities, dual occupancy housing, except on internal allotments, dwelling houses, educational establishments, medical facilities, places of public worship, recreation areas, residential medical practice, roads, tennis courts (private), utility installations, other than gas holders or generating works.

Development below the foreshore building line allowed by clause 20.

8 Clause 70 of the LEP contained the development control table for land within zone 7(a). The development control table identified development that was allowed without development consent, which required development consent and was prohibited in items 2, 3 and 4 respectively of the table. Item 4 (prohibited development) referred to any development other than development included in items 2 or 3. Item 3 (development that required consent) was in the following form: Development for the purpose of: aquaculture, beach and foreshore protection works not included in item 2, business activities associated with the provision of recreational activities within the waterways, marinas, swimming enclosures, watercraft facilities, works to enable public pedestrian access to facilitate recreational use of the waterway.

9 Clause 20(2) identified the foreshore building line for the purposes of the LEP. Clauses 20(3) to (6) were in the following form: (3) A person must not erect a building or carry out a work on land between a foreshore building line and the tidal water in respect of which the line is fixed.

(4) However, subclause (3) does not apply to: (a) boat sheds, (b) watercraft facilities, (c) in-ground swimming pools, no higher than 300 millimetres above ground level at any point (unless located in the area of Bundeena or Maianbar), (d) works, including mechanical works, to enable pedestrian access, (e) landscaping and barbecues.

(5) Development consent must not be granted to any development on an allotment of land affected by a foreshore building line, or to any development below the mean high water mark from time to time on an allotment or within the 7 (a) Environmental Protection (Waterways) zone adjoining the allotment, unless the consent authority is satisfied that the following buildings or works (if any) will be removed before, or within a reasonable time after, the development is carried out: (a) any building or work on the allotment between the foreshore building line and the mean high water mark or high water mark, in each case as shown on the latest registered Deposited Plan showing the allotment, not being a building or work specified in subclause (4), or (b) any building or work below the mean high water mark or high water mark, in each case as shown on the latest registered Deposited Plan showing the allotment, being a building or work on the allotment or on land adjacent to the allotment which is in the same ownership as the allotment or to which the owner or occupier of the allotment has some form of occupancy rights, but not being a building or work specified in subclause (4) (b). (6) However, subclause (5) does not apply to a building or work if the consent authority is satisfied that requiring removal of the building or work: (a) would be inconsistent with any of the objectives of this clause, or (b) is not necessary to achieve the objectives of this clause, or (c) is unreasonable or unnecessary in the circumstances of the case, having regard to the provisions of any relevant development control plan. (7) …

(8) To avoid doubt, State Environmental Planning Policy No 1 - Development Standards applies to a requirement made by subclause (3) in the same way as it applies to a development standard.

10 On or about 15 June 2006 one of the owners of 118 Ellesmere Road lodged a development application with the Council relating to the land. The development application form described the proposed development. Part of this description referred to "modifications to existing cottage (non structural) and changing its purpose from domicile to boat house". A statement of environmental effects accompanied the development application. This statement also identified the proposed development in various ways including reference to the "conversion of the existing waterfront cottage for use as a boathouse and storage for water based activities in conjunction with the new dwelling". The statement said the waterfront cottage had been on the land before the County of Cumberland Planning Scheme Ordinance came into force and had the benefit of existing use rights. It identified the cottage as in excellent repair, the presence of which reinforced the heritage significance of an adjoining item. It said that the owners did not intend to use the cottage for separate occupation but as an ancillary outbuilding for water based activities and were willing to give an undertaking to this effect. The statement included an objection under State Environmental Planning Policy No 1 - Development Standards. This document gave reasons supporting the conclusion that it would be unreasonable and unnecessary to require the boat shed to be removed.

11 By letter dated 30 October 2006 the owners informed the Council that they intended to use the cottage as a watercraft facility to store sails, kayaks, canoes, flotation devices, as a place to wash off salt water, and to provide toilet facilities and temporary shelter from the weather. This letter also referred to a drawing that had been lodged earlier showing some minor external alterations to the cottage described as "aesthetic" not "structural" alterations previously required by the Council when it granted development consent. This was a reference to an earlier development consent granted for the same or similar development that the owners surrendered.

12 The Council's independent hearing and assessment panel report concluded that it was unreasonable to require the cottage to be removed and recommended that consent be granted to the development application subject to conditions, including one that required more extensive external works to the cottage than the owners proposed. The Council resolved to grant the consent subject to conditions but did not require the further external works recommended by the panel to be carried out. Instead the Council imposed a condition relating to the cottage as follows: 7. Required Modifications to the Existing Cottage. The existing single storey cottage, which is generally situated at the foreshore of the property, shall be made/converted so that it is not capable of being used as a separate dwelling. The use of this building shall be as an ancillary outbuilding to the new dwelling. Only one dwelling house is permitted on the land. The use of the existing dwelling is to become ancillary to the use of the new dwelling immediately upon occupation of the new dwelling. The works to make/convert the existing dwelling, as referred to above, shall be carried out as part of this development consent but may be considered as stage 2 of the development works. In this regard details may be either shown on the plans endorsed as forming part of the Construction Certificate or may be detailed on plans forming stage 2 of the Construction Certificate. Where a staged Construction Certificate is issued by the Accredited Certifier stage 2 shall only be for the required modifications to the existing dwelling. The required modification works are to be completed within six months of occupation of the new dwelling.

13 Condition 1 requires the development to be carried out in accordance with nominated plans and documents including the details on the application form and on any supporting information received with the application except as varied by the other conditions.

14 The applicants' claims raised no issue about: - (i) the fact that the consent did not include a condition requiring the more extensive external works to the cottage recommended by the panel, (ii) the Council having reached or not any state of satisfaction within the meaning of cl 20(6) of the LEP, or (iii) whether condition 1 of the development consent incorporated by reference the plan showing the minor external works to the cottage proposed by the owners. The applicants' claims were confined as identified above, namely, the use of the cottage authorised by the consent involved a change of use from dwelling house to ancillary development which was prohibited in the 7(a) zone and the terms of condition 7 meant that the consent lacked finality and certainty.

15 The applicants accepted that the purpose for which development is carried out should not be identified by reference to the minutiae of the "detailed activities, transactions or processes which have taken place" on land (Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 at 310). Nevertheless, they submitted that the provisions of the LEP, the development application and development consent must be material to the identification of the purpose of development. In this case, the LEP defined "ancillary development" as a separate class of use distinct from the "primary legal use" of land. The zoning tables reinforced this distinction. The residential zones nominated as a separate class of development permitted with development consent "ancillary development not included in item 2". The 7(a) zone nominated highly specific classes of development as separate development purposes. Clause 20 of the LEP contemplated that, in the ordinary course, buildings and works on land zoned 7(a) should be removed other than the limited categories nominated in cl 20(3). The development application referred repeatedly to the proposed conversion of the existing cottage into a boat shed. Condition 7 of the development consent also referred to the cottage being made or converted into an ancillary outbuilding. Questions of fact and degree were involved. In the circumstances of this case, however, the development of the existing cottage involved a change of use from dwelling house to ancillary development, which was prohibited from being carried out in the 7(a) zone.

16 The respondents submitted that the consent did not authorise any change of use of the existing cottage. The cottage had been used for the purpose of a dwelling. It would continue to be used for that purpose, albeit not as a dwelling in its own right but for storage ancillary to a dwelling. The applicants' arguments either assumed that the land did not have the benefit of existing use rights (which was the basis of their points of claim and had been conceded) or involved construing the LEP in a manner that would enable its provisions to derogate from existing use rights, contrary to s 108(3) of the Environmental Planning and Assessment Act 1979 (the EPA Act). The LEP should not be construed so as to offend s 108(3) if possible. The applicants' arguments, if accepted, would lead to absurd results.

17 A local environmental plan must be construed recognising its function within the scheme established by the EPA Act. For this case it is sufficient to note that a local environmental plan is an environmental planning instrument. Under Div 1 of Pt 4 of the EPA Act all classes of development as defined in s 4(1) of the EPA Act may be regulated if specified in the instrument. Development is defined in a manner that includes more than the use of land. Hence, there is no requirement that an environmental planning instrument regulate development by reference only to the purpose of a use. Under Div 10 of Pt 4, however, existing uses are defined by reference to "the use of a building, work or land for a lawful purpose" (s 106(a)). Section 107 provides that nothing in an environmental planning instrument prevents the continuance of an existing use. Section 108 authorises the regulations to deal with existing uses, including the change of one use to another use (defined as the "incorporated provisions"). By s 108(2) the incorporated provisions are "taken to be incorporated in every environmental planning instrument". Section 108(3) provides that while provisions of an environmental planning instrument may extend, expand or supplement the incorporated provisions, any provision that would have the effect of derogating from them has no force or effect.

18 Accordingly, the LEP must be construed as if the incorporated provisions formed part of its text. The incorporated provisions are contained in Pt 5 of the Environmental Planning and Assessment Regulation 2000 (the EPA Regulation), which deals with existing uses. Where the EPA Regulation refers to an existing use, it must be given the same meaning as in s 106 of the EPA Act (that is, a use for a lawful purpose). Insofar as relevant, under cl 41(1)(d) an existing use may be changed to another use, but only if that other use is a use that may be carried out with or without development consent under the EPA Act. Clause 45 provides that development consent is required for any change of an existing use to another use and in the case of a building, work or land that is used for different existing uses, for any change in the proportions in which the various parts of the building, work or land are used for those purposes.

19 Once the LEP is construed as required by s 108(2) of the EPA Act (that is, as if the LEP contained the incorporated provisions) the reasons that necessitate rejection of the applicants' arguments on this first ground become apparent. The applicants conceded that the use of the land (including the cottage) was an existing use for the purpose of a dwelling house. That purpose incudes many "activities, transactions and processes" (to adopt the language in Royal Agricultural Society). The LEP itself referred to various examples of activities, transactions and processes that may form part of use for this purpose, including separately defined activities (such as swimming enclosure and tennis court (private)) and activities that have their ordinary meaning (such as boat sheds, swimming pools, landscaping and barbecues as referred to in cl 20(4)). Ancillary development, also separately defined, may involve a building, work or use. In all cases, however, the purpose of any such ancillary development (being the end or object it serves) is to be identified by reference to established principles (as identified in, for example, Foodbarn Pty Limited v Solicitor-General (1975) 32 LGRA 157 at 160 - 161 and Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 at 409) rather than an erroneous assumption that the fact of separate definition constitutes ancillary development as a use for a separate purpose.

20 The provisions of the LEP make this clear. First, the definition of ancillary development referred to buildings, works or uses used in conjunction with a primary legal use. This should be understood as an attempt to articulate in the LEP recognition of the principles established in cases such as Foodbarn and O'Donnell. Hence, the purpose of ancillary development would generally be the purpose of the "primary legal use". Secondly, examination of the development control tables reinforces this understanding. "Ancillary development" did not appear in isolation in any of the tables. When it appeared it was qualified by words referring to development included in another item of the table. Hence, in zone 2(e2) the development permissible with consent was "ancillary development not included in item 2" not ancillary development per se. This implicitly recognised that ancillary development is not a separate development purpose. Moreover, ancillary development, when it appeared in a table, was not described by reference to a purpose of development. Again, take zone 2(e2) as an example. There were five classes of development set out in that zone as permissible with consent grouped as "ancillary development not included in item 2", "development for the purpose of …", "demolition not included in item 2", "development below the foreshore building line allowed by clause 20" and "subdivision". Each of the five classes began with a capital letter, ended with a full stop and had a space dividing it from the next class. The second class only concerned development for purposes. These nominated purposes did not begin with a capital letter, ended with a comma not a full stop and did not have a space dividing each purpose. In other words, the table treated ancillary development as a class of regulated activity (that is, specified development for the purposes of s 76A(1) of the EPA Act) but not as a purpose of development. The 7(a) zone adopted a similar structure but had only three classes, the first of which concerned development for nominated purposes, with the others being "demolition not included in item 2" and "subdivision".

21 The LEP thus ensured that ancillary development in and of itself required consent in certain zones. The LEP did not, however, constitute ancillary development as a separate development purpose. To the contrary, it took care not to do so as indicated above.

22 Further, if it were otherwise, the LEP would have derogated from the incorporated provisions. The use of the land for the purpose of a dwelling house is an existing use. Accordingly, and consistent with the incorporated provisions, each and every part of the land may be the subject of an application for consent to enlarge, expand, and intensify that existing use. On the applicants' argument, the LEP would have made it necessary to test every activity the subject of such an application for consent to determine whether the purpose was "dwelling house" or "ancillary development". If the former, no change of use would be involved. If the latter, a change of use would be involved and be prohibited by the combined operation of cl 41(1)(d) of the incorporated provisions and the table to the 7(a) zone. For example, on the applicants' approach, the Council could have confined the use of the cottage to a bedroom or kitchen (the applicants having correctly accepted that a single dwelling and a single dwelling house may involve more than a single structure). This would not involve "ancillary development" (and thus any change of use) because a bedroom or kitchen is part and parcel of the "primary legal use" of dwelling house. However, the Council could not confine the use of the cottage to an ancillary outbuilding (such as a garage, boat shed or storage area) because those activities are ancillary development and thus involve a change of use to a use prohibited in zone 7(a). These surprising consequences are avoided by recognising that an attempt by an environmental planning instrument to constitute activities, transactions and processes ordinarily associated with use for the purpose of dwelling house as a different purpose altogether must confront s 108(3) of the EPA Act. The LEP in this case, properly construed, does not make that attempt. Nevertheless, as the respondents submitted, s 108(3) of the EPA Act is a further reason to reject the applicants' arguments.

23 In this case, the use of the land for the purpose of a dwelling house was an existing use. The owners sought consent to erect a new dwelling house and to retain the cottage for uses ancillary to that dwelling. The consent granted by the Council allowed the new dwelling house to be erected but confined the use of the cottage to activities, transactions and processes ancillary to the dwelling (presumably, so that the purpose of the use could not be dual occupancy housing). This confining of the range of activities able to be carried out in the cottage did not authorise any change of the existing use. The cottage was used for the purpose of a dwelling house. It will continue to be used for the purpose of a dwelling house, albeit not for the full complement of activities that such a use ordinarily entails. The more general purpose of "dwelling house", in this case, embraced the more restricted activities associated with use of the cottage as an ancillary outbuilding. The applicants' first ground of challenge must be rejected.

D. Lack of finality and uncertainty? 24 The source of the alleged lack of finality and uncertainty is condition 7. The first step must be to construe the consent including condition 7. It emerged in argument that the applicants construed condition 7 as a condition which, on the one hand, failed to identify what ancillary activities would be carried out in the cottage and, on the other hand, purported to authorise physical works unknown in nature, quality or extent to render the cottage suitable for those unidentified ancillary activities.

25 Consents should be construed subject to the ordinary principles of statutory construction (Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379 at [36]). One important principle is that instruments should be construed within power if possible (Westfield Management Limited v Perpetual Trustee Company Limited & Anor [2006] NSWCA 245 at [40] - [41], referring to the submissions at [33] - [36])). Provided that it is not read on the basis of a misunderstanding that everything not expressly prohibited is implicitly authorised, condition 7 is reasonably clear. Construed in context the condition contains four elements: - (i) the cottage cannot be used as a separate dwelling, (ii) the owners must ensure the cottage is not capable of use as a separate dwelling, (iii) the cottage can be used as an ancillary outbuilding to the new dwelling, and (iv) the condition specifies the timing and mechanisms to ensure these three requirements are achieved.

26 I accept that condition 7 does not specify the steps the owners must take to ensure the cottage is not capable of use as a separate domicile. To that extent it might be said the condition involves some uncertainty. But when the condition is reasonably construed in context, the extent of the uncertainty can be readily characterised as minor. It does not place the condition outside the powers to impose conditions in s 80A of the EPA Act or constitute the consent as something other than consent to the development application within the meaning of s 80(1)(a) of that Act.

27 First, nothing in the development application suggested that the conversion the owners intended involved any physical alteration to the structure or exterior of the cottage (the conversion being distinct from the owners' intention to carry out minor external works to the cottage for aesthetic reasons as shown in the drawing referred to in the letter dated 30 October 2006). Properly understood the conversion referred to in the application was a mere confining of the use of the cottage to a more limited class of activities. Secondly, nothing in conditions 1 or 7 of the consent refers in terms to any physical alteration to the structure or exterior of the cottage by reason of the proposed conversion (unsurprisingly when the true nature of the proposed conversion is understood). Thirdly, the procedure adopted in condition 7 to ensure the cottage was not capable of being used as a separate domicile is inconsistent with construing the condition as authorising any such alteration. The condition is to be understood and given meaning in this context. The context discloses that the "making" or "conversion" of the cottage so that it is not capable of being used as a separate dwelling as required by the condition does not purport to authorise any physical works altering the structure or the exterior of the cottage but may involve minor internal works that would not ordinarily be seen as within the meaning of "development". On this basis, the scope of action left open by the condition is within a narrow compass.

28 The applicants' concern that use of the cottage as a separate dwelling may not cease because the works necessary to ensure cessation are not specified is not valid. Condition 7 requires use of the cottage as a separate dwelling to cease in accordance with the temporal and procedural requirements nominated. Failure to comply would be a breach of the condition and thus of the EPA Act. It was not necessary for the Council to specify the precise steps required to ensure the result was achieved. The condition achieves the result by requiring the cottage to be used as an ancillary outbuilding only, so that there is one dwelling house on the land.

29 The applicants' concern that the consent leaves open the precise activities to take place within the cottage as an ancillary outbuilding and the physical works that may be necessary to accommodate those activities is also misconceived. First, condition 1 requires the development to be carried out in accordance with various documents that represented the cottage would be used for storage and related activities in connection with the water. Secondly, condition 7 requires the activities within the cottage to be ancillary to the new dwelling. Thirdly, condition 7 does not authorise any physical works to make the cottage suitable for use as an ancillary outbuilding. The reference to works in the second paragraph of the condition is to the activities contemplated by the first sentence of the first paragraph of the condition, namely, ensuring the cottage cannot be used as a separate dwelling. The other sentences in the first paragraph are concerned only with the use of the cottage not its physical form. The applicants' approach to the consent, as noted, incorrectly assumed that the consent purports to authorise everything that it does not expressly prohibit. I do not accept this approach. The consent does not identify any physical works to accommodate these ancillary activities. Hence, it authorises no such works. The further question raised by the applicants about the cottage not being physically suitable for the activities the owners wish to carry out therein, if correct, is a problem for the owners, not for the validity of the consent.

30 It follows that condition 7, properly construed, does not involve any impermissible uncertainty or lack of finality. In particular, and if it be necessary to say so, it does not offend any requirement in s 80A(4) of the EPA Act or any principle discernible from decisions such as Kindimindi Investments Pty Ltd v Lane Cove Council and Another (2006) 143 LGERA 277. The applicants' second ground of challenge must also be rejected. E. Conclusion and orders 31 Neither of the applicants' grounds of challenge to the validity of this consent has been made out. It follows that the Class 4 application should be dismissed. Costs follow the event in the ordinary course.

32 Accordingly, the Court's orders are as follows: (1) The Class 4 application is dismissed. (2) The applicants are to pay the respondents' costs as agreed or assessed. (3) Order 2 is stayed for a period of 28 days during which the applicants may notify the Court if they wish to be heard about costs, in which event order 2 is set aside and the proceedings are to be listed before the Registrar within 7 days of such notice to obtain a hearing date and directions for argument on costs. (4) The exhibits are returned.

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