S J Connelly CPP Pty Ltd v Byron Shire Council

The site 7The site is described as Lot 930 in DP 858909 and it fronts Federal Road on its eastern boundary and an unformed Crown 'paper road' along its southern boundary and a small section of the western boundary. There is an existing dwelling house located on the northern side of the lot and it obtains vehicular access from Federal Road. 8The site falls approximately 50 m from the highest point near the northern boundary near the house to the lowest near the southern boundary. A depression runs north - south approximately parallel to the western boundary.

Planning controls 9The site is subject to the following controls: .1Byron LEP 1988; under which the site is within the Rural 1(b2) zone and subdivision is permissible. The minimum lot size is 20 ha. The LEP contains the following relevant controls: 11 Subdivision in rural areas for agriculture etc (1)The council shall not consent to the subdivision of land for agriculture, forestry or a dwelling-house within the zones shown in Column 1 of the Table to this clause unless the area of each of the allotments to be created is not less than that shown opposite that zone in Column 2 of the Table and, in the opinion of the council, each allotment is of satisfactory shape and has a satisfactory frontage. .2Clause 9 provides: (3) Except as otherwise provided by this plan, the council shall not grant consent to the carrying out of development on land to which this plan applies unless the Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out. .3The zone No 1(b1) objectives are: (a) to protect and enhance the long term potential of the Shire of Byron through the preservation of the higher quality agricultural land within the zone and to restrict all forms of development within the zone which, in the opinion of the council, might prejudice such potential, (b) to prevent fragmentation of rural holdings and to encourage consolidation of lot sizes for the purposes of agricultural and horticultural production, (c) to enable agricultural support facilities to be carried out on land within the zone in a manner which does not significantly reduce the agricultural and horticultural production potential of land in the locality, (d) to permit subdivision only where it is considered by the council to be necessary to maintain or increase agricultural production or to allow the conduct of any use permitted in this zone other than residential buildings, or where proven demand for legitimate agricultural or horticultural holdings of a smaller size is established,... ... (f) to establish appropriate buffer zones between high quality agricultural land and other uses, particularly near the perimeter of such lands. 10The provisions of State Environmental Planning Policy (Rural Lands) 2008 (SEPP RL) also apply. The specific aims of the Policy are: (a) to facilitate the orderly and economic use and development of rural lands for rural and related purposes, (b) to identify the Rural Planning Principles and the Rural Subdivision Principles so as to assist in the proper management, development and protection of rural lands for the purpose of promoting the social, economic and environmental welfare of the State, (c) to implement measures designed to reduce land use conflicts, (d) to identify State significant agricultural land for the purpose of ensuring the ongoing viability of agriculture on that land, having regard to social, economic and environmental considerations, (e) to amend provisions of other environmental planning instruments relating to concessional lots in rural subdivisions. 11Part 2 contains the following rural planning principles: The Rural Planning Principles are as follows: (a) the promotion and protection of opportunities for current and potential productive and sustainable economic activities in rural areas, (b) recognition of the importance of rural lands and agriculture and the changing nature of agriculture and of trends, demands and issues in agriculture in the area, region or State, (c) recognition of the significance of rural land uses to the State and rural communities, including the social and economic benefits of rural land use and development, (d) in planning for rural lands, to balance the social, economic and environmental interests of the community, (e) the identification and protection of natural resources, having regard to maintaining biodiversity, the protection of native vegetation, the importance of water resources and avoiding constrained land, (f) the provision of opportunities for rural lifestyle, settlement and housing that contribute to the social and economic welfare of rural communities, (g) the consideration of impacts on services and infrastructure and appropriate location when providing for rural housing, (h) ensuring consistency with any applicable regional strategy of the Department of Planning or any applicable local strategy endorsed by the Director-General. 12Part 3 deals with rural subdivisions and dwellings on the following basis: The Rural Subdivision Principles are as follows: (a) the minimisation of rural land fragmentation, (b) the minimisation of rural land use conflicts, particularly between residential land uses and other rural land uses, (c) the consideration of the nature of existing agricultural holdings and the existing and planned future supply of rural residential land when considering lot sizes for rural lands, (d) the consideration of the natural and physical constraints and opportunities of land, (e) ensuring that planning for dwelling opportunities takes account of those constraints. 13Relevantly in this matter clause 9 provides: 9 Rural subdivision for agricultural purposes (1) The objective of this clause is to provide flexibility in the application of standards for subdivision in rural zones to allow land owners a greater chance to achieve the objectives for development in the relevant zone. (2) Land in a rural zone may, with consent, be subdivided for the purpose of primary production to create a lot of a size that is less than the minimum size otherwise permitted for that land. (3) However, such a lot cannot be created if an existing dwelling would, as the result of the subdivision, be situated on the lot. (4) A dwelling cannot be erected on such a lot. (5) State Environmental Planning Policy No 1-Development Standards does not apply to a development standard under this clause. 14Other relevant controls include:

• SEPP 1 Development Standards.
• North Coast REP (NCREP); Cl 9
• Byron DCP 2010 (BDCP); CH 1 Part B4
• Byron Rural Strategy

The evidence 15Detailed evidence was presented by:

• Mr J Allen;Agronomist for the applicant
• Mr M Ryan;Agronomist for the respondent
• Mr S Connelly;Consulting planner for applicant
• Mr P Dawson;Consulting planner for respondent 16The experts respectively addressed the question as to whether the proposed subdivision should be approved under the provisions of the SEPP RL, so as to allow the property owners a greater chance for achievement of the zone objectives. However, SEPP RL does not prescribe minimum lots sizes, whereas the minimum lot development standard under the BLEP is 20 ha. 17SEPP RL evolved from recommendations of the Central West Rural Lands Panel (CWRLP) after its review of rural land controls in the central west. One of the aims of the policy is to provide flexibility for subdivision standards to facilitate primary production. Insofar as the Panel focussed on issues in the Central West, its recommendations noted that they could be applied to similar issues in other rural areas, excluding coastal lands. Notwithstanding this, the SEPP RL applies to the subject land.

Agricultural potential 18A key component of the SEPP RL is to facilitate the economic use of good quality agricultural land. Accordingly, Mr Allen undertook an assessment of the subject land based on the Rural Land Evaluation Manual (RLEM) provisions and found that the site contains a combination of Special Class horticultural land (proposed Lot 2) and Class 4/5 land (proposed Lot 1). 19The RLEM description of these classes as: Class 4 Land suitable for grazing but not for cultivation. Agriculture is based on native pastures or improved pastures established using minimum tillage techniques. Production may be seasonally high but the overall production level is low as a result of major environmental constraints. Class 5 Land unsuitable for agriculture or at best suited only to light grazing. Agricultural production is very low or zero as a result of severe constraints, including economic factors, which preclude land improvement. Special Class Land which, because of a combination of climate and soil, is well suited to intensive production of a crop or a narrow range of crops whose special requirements limit their successful culture to such land. This class may include some lands formerly described as unique. 20Mr Allen says that the Special Class horticultural land has certain attributes such as 7 to 10% slope, inherently fertile soil type and favourable climate that makes the land highly suited to the production of a diverse range of horticultural tree crops and these type of enterprises are considered to be the highest and best agricultural use for this area of the site. 21Insofar as the agronomists jointly conferred, I understand Mr Ryan substantially agrees with this land classification. However, he does not consider it necessary to subdivide this land to achieve the desired planning outcomes. Based on the initial evidence concerning the coffee plantation, he says that the direct link between the present owners of the land and the future users of the land (Coffee Unity Pty Ltd), should enable some form of access/use by way of leasing, joint venture or share farming agreement, without subdivision. Such an agreement would recognise what each party provides, and then a share returns based on relative inputs. He says this is common practice.

Planning considerations 22From their joint conferencing, the planners agree that:

• The SEPP RL applies to the whole of the Shire of Byron;
• Part 3 of the SEPP does not exclude any particular property from the operation of the SEPP; and
• The SEPP allows any land in a rural zone to be subdivided for the purpose of primary production to create a primary production lot of a size that is less than the minimum size otherwise permitted for that land.

Non compliance with minimum lot size standard 23However, regarding the issue concerning compliance with the minimum lot development standard, they disagree about whether the SEPP applies to the residual part of the land that does not comprise the 'primary production' lot. Mr Dawson says that:

• the provisions of Part 3 of the Rural SEPP do not provide for the "over ride" of SEPP 1 in regard to the non primary production lot, or other lot, or residual lot created by a subdivision under the Rural SEPP. The Rural SEPP explicitly provides for the non-application of SEPP 1 in regard to the area of the primary production lot. It does not so provide in regard to the "other" lot, which in the subject matter contains an existing dwelling-house.
• The terms of cl 9(2), 9(3) and 9(4) establish that the permissibility for the creation of a lot that is less than the size otherwise permitted, i.e. in this case by clause 11 of the Byron LEP, is limited absolutely to the single lot created for primary production.
• The terms of cl 9(5) refer to the application of SEPP 1 to "a development standard under this clause." The provisions of the clause apply exclusively to the primary production lot
• Clause 10 of the Rural SEPP specifies matters for consideration in the case of subdivision of land Imposed to be used for the purposes of a dwelling. The proposed subdivision incorporates the subdivision of land for the purposes of a dwelling, i.e. the "other" lot. This clause does include any reference to the non-application of SEPP 1 whereas such non-application is stated in cl 9 in regard to the primary production lot.
• If it was intended that the non-application of SEPP 1 relate to the other lot, there was no inhibition in drafting the clause to state this.
• That clause 9 is otherwise silent as to its application to the '"other" lot has no consequence that the permissibility specifically allowed for the primary production lot is also allowed for the "other" lot which remains, after all, a rural lot. 24Against this, Mr Connelly says that the control should be applied on the basis of advice from the NSW Department of Planning and Infrastructure that the Part 3 provisions apply to the whole of a parcel and do not operate to exclude subdivision of the type by proposed Lot 1 in the subject application.

Whether subdivision necessary 25In considering this issue, the planners agree that insofar as Objective 1(c) seeks to enable agricultural support facilities to be carried out on land within the zone in a manner which does not significantly reduce the agricultural and horticultural production potential of land in the locality, this application does not involve development of the purposes of "agricultural support facilities " such as processing sheds or the like. 26However Mr Dawson says that this issue does concern Objective 1(d) dealing with the necessity to maintain or increase agricultural production. As stated by the applicant initially, the main objective of the subdivision is for the prospective use of the proposed primary production lot for coffee growing by the same coffee company, as is responsible for the coffee plantation on the opposite side of Federal Road to the subject land, then such use could be achieved by a consolidation of the subject site and the coffee plantation site. 27Furthermore, in these circumstances, it is also open to the coffee company to utilize the subject lot as a single entity by a leasing or some other arrangement and to minimize land use conflicts by having control of both any primary production use and of the dwelling house use. Mr Dawson does not consider the proposed subdivision is necessary to achieve Objective 1(d) outcomes. 28Against this, Mr Connelly says that an individual owner cannot "lease their land" to a person or a company for a period exceeding 5 years without a subdivision. As the production of coffee requires a minimum 12 year return on investment period, no commercial operator is likely to be interested in a five year lease arrangement. The subdivision as proposed allows for the sale or leasing of the production lot to a company with the capacity to utilise the land properly and thereby increase its agricultural production potential. Therefore, the proposed subdivision is entirely consistent with Objectives 1(c) and 1(d) of the Rural 1(b2) zone.

Fragmentation of rural land 29The planners agree that "land fragmentation" results when subdivision is undertaken that in some way results in a lessening of the likelihood of the land to achieve defined planning objectives such as the relevant Zone objectives and provisions of cl 2 and 8 of the Rural SEPP. . 30Mr Dawson does not agree with Mr Connelly that the proposed subdivision will free up land, which is currently effectively "sterilized" from agricultural use due to its rural lifestyle ownership/occupancy. Instead, he says that the subject lot is not of a sufficient size to allow for the freeing up of an agricultural use, without also generating an example of land fragmentation comprising the creation of a small residential lot that will, because of those very rural lifestyle interests to which Mr Connelly refers, likely create a circumstance of land use conflict/incompatible usage. It will also fragment the land by the creation of a lot that has value only as a rural residential type. 31Mr Dawson is also dissatisfied with the proposal because he does not consider the applicant has provided information confirming that the proposed primary production lot is suitable for coffee production, or that it is effectively tied to coffee production. 32Mr Connelly's response is that the subject lot is a "lifestyle" lot, which was effectively fragmented when it was subdivided off its parent lot in 1994. He says that: "This application, instead seeks to, in part, "repair" that past fragmentation putting the existing dwelling house onto a parcel of appropriate rural residential size and setting aside the residual agricultural land for purposeful agricultural production. At the moment 9.19 ha is fragmented. Pursuant to this application only 1.2 ha will be "fragmented" and the residual 7.98 ha used as a "production lot".

Land use conflict 33This issue concerns potential land use conflicts arising from the proximity of the existing dwelling on proposed Lot 1 to the future agricultural activities on Lot 2. Mr Dawson thinks such conflicts will increase because:

• If coffee, or any other use were to be undertaken on the site under the current ownership then the potential for land use conflict is minimized because of the capacity for the amicable control of impacts that might otherwise generate conflict between the residential use and the agricultural use.
• The creation of the separate, small parcel to contain the existing house has the potential for adverse amenity impacts. Such amenity must rely upon suitable buffers/attenuation distances. Further, while coffee is currently posited as intended for the use of the proposed primary production lot, this cannot be assumed.
• If the subdivision is approved, the boundaries of the proposed dwelling-house lot become a critical matter. Unless there can be a significant degree of certainty that the amenity of the dwelling-house can be assured, then the application unequivocally fails to satisfy the provisions of the Rural SEPP and the Byron LEP in regard to land use conflicts.
• The application proposes a 49 m dwelling setback from the proposed Lot 1 southern boundary and a 12 m shed setback from the proposed Lot 1 western boundary. Therefore an effective buffer should be created, which covers various agricultural activities. Such buffer should be in the order of 150 m.
• Various distances are recommended in various documents. Council's DCP 2010 provides for a 500 m buffer for Intensive horticulture. The NSW Department of Primary Industries document Living and Working in Rural Areas recommends a 300 m buffer for sugar cane, cropping and horticulture from residential areas and urban development and a 200 m buffer from rural dwellings. 34Against this, Mr Connelly says Mr Dawson's concerns are unreasonable considering the numerous rural subdivisions approved by council that are in similar circumstances. Notwithstanding this, he says that the most appropriate way to examine land use conflict is in accordance with best practice LUCRA guidelines.

Conclusion 35Having considered the evidence, the submissions and undertaken a view, I do not consider this subdivision application merits consent for the following reasons. 36In my assessment, the subject land is a relatively small 'rural/residential' type lot with an area of 9.18 ha, which is currently used for limited grazing. Based on the agronomist's assessment, I accept that this is not the optimum agricultural use of the land, because the proposed Lot 2 contains approximately 7 ha Specialist Class land, which potentially has a higher agricultural use. But, the overall utility of this area would be reduced because of the need to provide an appropriate buffer from potential agricultural uses. 37Nevertheless, I accept that SEPP RL applies to this land and that that it permits, subject to merit, a subdivision of the existing lot to create the new primary production Lot 2 and the residue 'rural residential' Lot 1 containing the existing dwelling. 38Obviously both these lots are below the minimum 20 ha development standard. In other circumstances a SEPP 1 Objection could have been lodged to support such variations to the development standard. But cl 9(5) of SEPP RL states that SEPP 1 does not apply to the development standard under this clause. 39In light of the apparent ambiguity in cl 9 (5) of SEPP RL and SEPP 1, Mr Eastman refers to the matter of Hastings Point Progress Association Inc v Tweed Shire Council [2009] NSWCA 285, which contains the following authority: 85 Thirdly, it is conceded that the provisions in the SEPP do not override the need to comply with s 79C of the EP & A Act. However, Mr McEwen SC for the second respondent made it clear that a consent authority's statutory obligation to take into consideration the provisions of any environmental planning instrument picks up only applicable environmental planning instruments. Thus, it will only pick up an LEP if it is applicable despite the SEPP... 94 However, I do not need to answer that question because it seems to me that Mr McEwen, in his submissions, put an unanswerable proposition. Clause 8(1)(c) of the TLEP says that the consent authority may grant consent to development only if it is satisfied that the development would not have an unacceptable cumulative impact on the locality etc [the italics are mine]. Cases such as Currey v Sutherland Shire Council (1998) 100 LGERA 365 and Franklins Ltd v Penrith City Council [1999] NSWCA 134 (especially at [23]) point out the significance of the sort of phraseology used in 8(1) and that is to deprive the consenting authority of any power to issue a consent unless the precondition is satisfied. 95 Accordingly, here, we have the situation where the SEPP contains an aim in cl 2 to encourage the provision of housing that will increase the supply and diversity of residences that meet the needs of seniors and make efficient use of existing infrastructure and services. There are detailed considerations to be given, for instance, in Part 3 of Chapter 3 of SEPP-SL recite analysis, there are provisions with respect to site area, height, landscaping etc, all of which can be set at nought if a council has no power to approve the development because an assessment of cumulative impact of existing and similar proposals to the one in the application has been carried out and the result found to be acceptable. 40Other submissions were made regarding the decision in Abret Pty Limited v Wingecarribbee Shire Council [2001] NSWCA 107, which states: 41The Council also relied upon LEP, cl 2(2)(a) which provides that one of the particular aims of the LEP is to achieve the objectives specified for land in the table to cl 9. The Council also referred to the aim in cl 2(2)(d), pointing out that the proposed development was on land which had prime crop and pasture potential. The Council submitted that having regard to the particular aims of cl 2 and the specific objectives of land zoned 1(a), the trial judge was correct in not being satisfied that the proposed development could not be subject of a grant of consent because it was inconsistent with various objectives that were prohibitory of development. ... 45It follows from what I have said that I reject the argument advanced by the Council on the first and second issue. Having said that, I am not to be taken as saying that the objectives are not relevant to the construction of other provisions in the LEP. A provision is to be construed within the statutory instrument as a whole: see Project Blue Sky (discussed further below). Thus a construction of a provision which was more conducive to the achievement of the objectives of the LEP is to be preferred to a construction that does not achieve those aims. That said, however, the difficulty to which I have referred about conflicting aims remains. 41Consequently, having considered the disparate opinions expressed by the planners regarding the ambiguity in the application of this cl 9(5) in light of these authorities, I am satisfied firstly that a smaller 'primary production lot' such as Lot 2 in the current matter is permissible under SEPP RL. 42However, I am not inclined to accept Mr Dawson's opinion that SEPP 1 applies to the residue lot. Instead it seems that the SEPP RL allows the excision of a smaller prime agricultural land lot, with a remaining residual lot being allowed, even if it is less than 20 ha. If it contains a dwelling as in the subject application, then a new smaller 'rural/residential' lot is created without any need of consideration of a SEPP 1 Objection. 43If the smaller residue lot is vacant, then I do not think that cl 9 (5) requires consideration of a SEPP 1 Objection to creation of the smaller residual lot. Any questions about future development of this vacant lot would be considered under the prevailing LEP provisions concerning minimum areas on which a dwelling could be erected in the rural/agricultural protection zones. That then may involve separate SEPP 1 considerations. Consequently, in some cases this may result in the residual lot being incapable of further development and remaining as an isolated lot. 44The next question in this case is whether the approval of the proposed subdivision under SEPP RL would provide the landowners a greater chance of achieving the zone objectives. In my assessment, the evidence is muddled because of the applicant's initial evidence 'connecting' the proposed Lot 2 to the coffee plantation use. I have some difficulty with this premise for the subdivision when no details were presented to the Court that effectively linked this suggested arrangement. As I have noted, the applicant backed away from this proposition during the hearing. 45Consequently, it seems the opinions of Mr Dawson and Mr Ryan have merit. They say that because persons that apparently have an interest in the coffee plantation own the subject land, then satisfactory arrangements should be possible for optimal use of the primary agricultural portion without the necessity for subdivision of lots with less than the minimum size. Such arrangements could involve the common practices of share-farming or leasing a portion of the land. Considering these circumstances, I am not convinced that the subdivision gives these landowners a greater chance to achieve the zone objectives. 46The relevant zone objectives are: (b) to prevent fragmentation of rural holdings and to encourage consolidation of lot sizes for the purposes of agricultural and horticultural production, ... (d) to permit subdivision only where it is considered by the council to be necessary to maintain or increase agricultural production or to allow the conduct of any use permitted in this zone other than residential buildings, or where proven demand for legitimate agricultural or horticultural holdings of a smaller size is established,... 47Objective (b) clearly seeks to prevent fragmentation of rural holdings and this is consistent with the Rural Subdivision Principles. I do not consider the overall subdivision proposal to create an additional small lot is consistent with this objective and consequently I am unable to accept Mr Connelly's opinion that the approval of the subdivision will "repair" the past fragmentation, putting the existing dwelling house onto a parcel of appropriate rural residential size and setting aside the residual agricultural land for purposeful agricultural production. 48In this regard, I note Mr Dawson's reference to the Department of Agriculture's comments in 1994 that: "The severance of the 8 ha lot is not significant as it contains barely 2.5 ha of Class 3 land. However its inclusion within the 8 ha lot could make it attractive for part-time horticultural pursuits." 49Accordingly, it seems to me that when considering the relatively small lot rural subdivision as proposed, then some substantive evidence is required from the applicant to demonstrate how the subdivision will maintain or increase agricultural production. Insofar as there was some inferences that the subdivision would enable a higher and more efficient use of the better 'special' class land, no substantive details were provided and I consider it a negative aspect. 50But in any case, the controls do not seem to be specifically directed at optimal use of the agricultural land. At present the land is used for grazing, which is common in the area and which can continue. The aims of SEPP RL include the facilitation of the orderly and economic use and development of rural lands for rural purposes, but the applicant provided no substantive evidence in this regard. I therefore conclude there is a real likelihood the approval of the subdivision will fragment the land without any economic benefit. 51I note that Mr Connelly provided some speculative evidence about the relative prices of rural/residential lots and how this made agricultural pursuits more difficult. But no valuation or other substantive evidence was presented which supports the application and demonstrates that the approval of this subdivision would satisfy Aim (a) of SEPP RL. 52In summary then, I am not satisfied the applicant has demonstrated that the approval of the proposed small lot rural subdivision will satisfy the aims and objectives of the relevant controls to merit consent. Instead, it appears that there is a real likelihood the approval would result in a smaller rural/residential lot with potentially compromised amenity because the use of the 'primary production' lot is unknown, therefore limiting the determination of appropriate buffers and determination of the remaining area of good agricultural land. This lack of evidence on the future use of the relatively small rural Lot 2 causes me concern as to whether the subdivision is necessary in the subject circumstances. 53In conjunction with this, the evidence confirmed to me considerable difficulties in addressing the provisions of cl 9(1) of the SEPP RL as to how much flexibility is to be allowed and what criteria applies to 'allowing land owners a greater chance to achieve the development objectives for the zone', so as to allow smaller, non-complying lot sizes. I note that CWRLRP stated that such flexibility could be based on exceptional circumstances that may include changes in technology, farming practices or family circumstances. But the applicant has not addressed any of these exceptional circumstances or produced substantive evidence showing that the subdivision approval would increase the probability of achieving the zone objectives. 54It seems to me from the evidence that the subject application is the type that falls into the category of coastal development, which the CWRLP indicated may not be suitable for resolution under SEPP RL. This finding is due to the existence of a majority of smaller rural lots in an area where the subdivision/excision of the better quality agricultural portions of smaller rural lots could result in considerable fragmentation and creation of smaller isolated, residue lots that do not constitute orderly development or a positive public interest outcome. 55For these reasons, my conclusion is that the application does not merit consent primarily because it does not satisfy the provisions of SEPP RL, particularly cl 9.

Court orders 56The Court orders that: (1)The appeal is dismissed. (2)The development application No 10.2011.368.1 for a 2 - lot subdivision of Lot 930 DP 858909, 335 Federal Road, Federal is refused. (3)The exhibits may be returned except 1, 4 (Tab 22), 6, 7, B and C. R Hussey Commissioner of the Court DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 August 2012