Sealark P/L v Shoalhaven City Council

COUNSEL : A: J Rares SC with J Robson R: J Webster SOLICITORS : A: Blake Dawson Waldron R: Morton & Harris CATCHWORDS : Development application - approval sought for subdivision of land - whether council had power to grant application - appeal dismissed. DECISION : Appeal dismissed with costs.

• 4 -IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40680 of 2000 LEC 10769 of 1999 MEAGHER JA IPP JA FOSTER AJA Thursday, 28 February 2002 SEALARK PTY LIMITED v SHOALHAVEN CITY COUNCIL

The appellant lodged a development application with Shoalhaven City Council proposing the excision of five concessional allotments out of two holdings. The Council refused the application on the basis that it had no power to grant such a subdivision. At trial, the Council's decision was affirmed. In this appeal, the appellant contended that Council did not relevantly lack power and because of the decision reached by both the trial judge and Council, it had been denied consideration of its application on the merits.

HELD: Per Foster AJA (Ipp JA agreeing) (i) The Council was correct in deciding that it had no power to approve the subdivision and the trial judge did not err in upholding that decision. (ii) The trial judge was wholly entitled to hold that clause 11 could not apply in circumstances where the land, the subject of the subdivision application, was partly rural and partly residential.

(iii) The trial judge was correct in regarding the development application as totally artificial since it would be inconsistent with the previous approved subdivision, S/F 6415. Clauses 10 and 11 were not intended to have the operation of re-establishing a boundary line.

(iv) The concept of "existing holdings" is confined to land contemplated by clause 11, being land in respect of which concessional holdings may be granted. The Wandandian and Neale holdings which appear, at all relevant times, to have consisted predominantly of land zoned 'residential', could not relevantly, be regarded as "existing holdings" within the meaning of clause 11 of the Plan.

(i) While the trial judge rightly held that the appellant's land is a single unit with two different zonings, such an observation should not have affected his Honour's decision to allow the development application. The power to subdivide conferred by clause 11(4)(b) is a power to subdivide "land" within a 1(d) zoning, not a power to subdivide land units which are wholly zoned 1(d). Furthermore, clause 11 clearly permits the subdivision of each parcel of land which is "wholly or partly" an "existing holding". (ii) It was the duty of the trial judge to construe the ordinance, not to evaluate its artificiality.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40680 of 2000 LEC 10769 of 1999 MEAGHER JA IPP JA FOSTER AJA Thursday, 28 February 2002 SEALARK PTY LIMITED v SHOALHAVEN CITY COUNCIL Judgment 1 MEAGHER JA: This is an appeal by Sealark Pty Limited from a decision of Bignold J in the Land and Environment Court. It seeks to reverse the refusal, both by the Council and Bignold J, to approve a subdivision of certain land known as Lot 8 D8880060 situated at St Georges Basin of Wandandian and having an area of approximately 33.63 hectares. For ease of understanding, I append a sketch of the proposed subdivision:

2 The total land falls into 2 sections: that comprised in Lots 1 to 7 (above), which is zoned Rural 1(d) under the Local Environment Plan and consists of about 15.63 hectares, and that comprising Lot 8 which is zoned Residential 2 (c) and which consists of some 18 hectares. 3 The critical law governing the proposed subdivision is clause 11 of the LEP. Subject to specific exceptions referral to therein, consent may not be granted to a subdivision of lands within, inter alia, a Rural 1(d) zoning unless each lot has a minimum area of 40 hectares. The proposed lots in the appellant's subdivision obviously have minimum areas of land less than that. 4 In the proposed application, lots 1,2,3,5 and 6 (each comprising an area of between 1 and 2 hectares) are designated as "concessional allotments", as defined by clause 11(2), and the proposed lots 4 and 7 are each designated as "residue" lots within the meaning of clause 11(5). 5 The questions raised by this case depend largely on the interpretation of clause 11 of the LEP, a clause which would have few rivals in the density of its legal jargon. Before I set out any portion of it, one should note that it refers to the concept of "existing holdings" - a misnomer if ever there was one, since it refers to land holding patterns which existed at 28 February 1964 but which no longer exist. Without plunging further into the mysteries of "existing holdings", it should be noted that, in terms of the instant case, the parties agree that the land consisting of the proposed lots 1, 2 and 3 together with the land to the south of these areas together with lot 4 and the land to the south of it in aggregate form part of an "existing holding" called the "Wandandian existing holding", and the land comprising lots 5, 6 and 7 together with the land to the south of them, form part of an "existing holding" called the "Neale existing holding". The area of the entire Wandandian Existing Holding is about 78 hectares; the area of the Neale Existing Holding is about 22 hectares. Mercifully, there is no dispute about this. 6 In clause 11(2) "concessional allotment" is defined as meaning, inter alia, "(d) the allotment referred to in sub clause (4)(b)". For the purposes of the present case, the pivotal provision is clause 11(4)(b). It provides as follows: (4) Subject to subclauses (5) and (6), the Council may consent to an application to subdivide land within Zone No. 1 (a), 1 (b) or 1 (d) (not being land which forms the whole or part of an existing holding of less than 10 hectares in area) for any one or more of the following purposes: (b) to create an allotment of not more than 2 hectares but not less than 1 hectare if - and there follows a series of conditions which are of no present relevance. 7 Clauses 11(5) and (6) provide: "(5) In any subdivision made under this clause there may be one residue from the whole of an existing holding and such residue shall not be less than the area and frontage required for a concessional allotment. (6) The total number of concessional allotments that may be created (whether by one or more subdivisions made at any time on or after 28th February, 1964) from an existing holding is - (a) where the area of the existing holding is less than 20 hectares but not less than 10 hectares - 1; (b) where the area of the existing holding is less than 30 hectares but not less than 20 hectares - 2; and (c) where the area of the existing holding is not less than 30 hectares - 3." 8 The Council is prohibited by clause 11(10) from granting consent to a subdivision other than pursuant to subclauses (3), (4), (7) or (10). Subclauses (3), (7) and (10) do not apply in the present case. It follows that clause 11(4) is the sole possible source of power. 9 Clause 11(6) limits the number of "concessional allotments" which may be created, and it is to be noted that it does so in terms of the area of an "existing holding" - not, as one might expect, in terms of the area of the proposed sub-division; nor conditionally on the applicant's owning the whole of the relevant "existing holding". 10 Thus, applying clause 11(6)(b) to the Neale "existing holding", which is 22 hectares, one can have two concessional allotments. Hence, lots 5 and 6 of the proposed subdivisions. Moreover, clause 11(5) also operates to allow one to have one residue lot for each "existing holding", after extracting the concessional allotments. Hence, lot 7. And clause 11(6)(c) applies to the Wandandian "existing holding" (of 78 hectares, a number greater than 30) so as to permit 3 "concessional allotments"; hence lots 1, 2 and 3. And, again, clause 11(5) operates to give another "residue lot". Hence lot 4. 11 I think it follows from the above that the Council could have approved the subdivision; whether or not it should have is, of course, an entirely different question. 12 It remains to consider why Bignold J considered correct the Council's conclusion that no power existed to be correct. His Honour advanced a number of reasons, all of which seem to me to be less than convincing. The two principal ones can be deduced from paragraphs 21 and 22 of his Honour's reasons: 21. In my judgment, it is manifestly clear that the Applicant has not demonstrated that cl 11(4) of the LEP empowers the Council to grant consent to the Applicant's proposed subdivison. There are a number of reasons for so concluding which are essentially founded upon two factors indisputably established in the present case - (i) the fact that the land to be subdivided comprises a single land unit situate partly within the Rural 1(d) zone and partly within the Residential 2C zone, and forming a small part of two existing holdings; and (ii ) the fact that the vast majority of the area of land comprising each of the "Wandandian" and "Neale" existing holdings is zoned Residential 2C (having been so zoned since the LEP came into force in 1985). 22. Factor (i) creates, in my judgment, insuperable difficulties for the Applicant's proposed subdivision. Firstly, it means that the Applicant's development application is not the subdivision of land within Zone No 1(d) (as it obviously includes land within the Residential 2C zone). Secondly, it means that it is wholly artificial to say at the present time that the land to be subdivided is part of two existing holdings, even though it is possible by tracing back to the historical date, 28 February 1964, to identify part of the land as forming part of the "Wandandian" existing holding and part of the "Neale" existing holding. As far as the first reason is concerned, it is of course true that the appellant's land is a single unit with two different zonings affecting it, but why that should matter I cannot see. The power to subdivide conferred by clause 11(4)(b) is a power to subdivide "land".. within a 1(d) zoning, not a power to subdivide land units which are wholly zoned 1(d). In other words, his Honour is reading into clause 11 a requirement which does not exist. The second reason is equally untenable: clause 11 clearly permits the subdivison of each parcel of land which is "wholly or partly" an "existing holding". 13 Attention should be diverted to his Honour's observation that "it is wholly artificial to say at the present time that the land to be subdivided in part of two existing holdings". In giving prominence to this observation his Honour was concentrating on an irrelevance. It was his duty to construe the ordinance, not to evaluate its artificiality. 14 To some minds the operation of cl 11(4) may indeed be artificial. This is so far at least three reasons: (a) it takes as a criterion for subdivision not any characteristic which is inherent in the land, but the characteristic of the ownership of the land; (b) and in determining ownership, one has regard, not to the ownership as it existed at the date of the subdivision, but as it existed at 28 February 1964; and (c) it is not restricted to land units which have a uniform zoning. 15 To other minds, these considerations may be of little or no importance. 16 But these philosophic speculations must not deflect one from the primary duty of construing the words actually used. 17 In my opinion the following orders should be made: (a) the appeal be allowed with costs;

(b) the answers in order 1 made by Bignold J on 2 August 2000 be set aside and in lieu thereof the following answers given:

Q1: Answer: "Yes" Q2: Answer: "No" Q3: Answer: "No"

(c) the Respondent pay the Appellant's costs. 18 FOSTER AJA: This appeal is bought from the judgment and orders of Bignold J given in the Land and Environment Court of New South Wales on 2 August 2000. By that judgment his Honour refused an appeal brought by the appellant Sealark Pty Limited ("Sealark") against the refusal by Shoalhaven City Council ("the Council") of a development application brought by Sealark in respect of land owned by it, being Lot 8 in DP 880060 situate in the St. Georges Basin. The council refused the application on the basis that it had no power to grant it. His Honour held that it was correct in doing so. In this appeal Sealark claims that his Honour erred in so holding. It asserts that the council had the relevant power and that, because of its decision, affirmed by his Honour, it has been denied consideration of its application on the merits. The appeal has been brought by leave. 19 The argument of the appeal and its decision have not been assisted by the fact that the appeal papers contain considerable duplication of material. Relevant plans relating to the subject land are repeated in various parts of the books, with the result that counsel, in argument, referred to the same plan in various places, which was the occasion of some confusion at the hearing and difficulty in consideration of the transcript. I have found it necessary to piece together what appears to be the relevant history of the subject land from various parts of the appeal papers, the judgment, the written submissions and the transcript of oral argument. I shall refer to this history shortly. Before I do so, it is necessary to make brief reference to the relevant provisions of the Shoalhaven Local Environmental Plan 1985 ("the Plan") which provide the juristic framework for this dispute. 20 Division 1 of Part III deals with the subdivision of land in the Shoalhaven Council area. Under the heading "Subdivision generally" provision is made for the requirement of council consent to a subdivision of land to which the Plan applies. Special provision is made in Clause 11 for the subdivision of land in particular zones established by the Plan. The relevant zone for present purposes is designated as 1(d). This is a particular zoning of rural land within the council area. The other zoning involved in the case is designated 2(c). It applies to residential land and is not the subject of the provisions of Clause 11. Clause 11, so far as relevant, provides as follows:- "11. (1) This clause applies to land within Zone No. 1(d)…. (2) In this clause - "concessional allotment" means - (a) …… (b) …… (c) …… (d) an allotment referred to in subclause (4)(b); (e) ….. "existing holding" means - (a) except as provided by paragraph (b) - the area of a lot, portion or parcel of land as it was at 28th February, 1964; or (b) where, as at the 28th February, 1964, a person owned 2 or more adjoining or adjacent lots, portions or parcels of land, the aggregation of the areas of those lots, portions or parcels as they were at the 28th February, 1964. (3) ……… (4) Subject to subclauses (5) and (6), the Council may consent to an application to subdivide land within Zone No…..1(d) (not being land which forms the whole or part of an existing holding of less than 10 hectares in area) for any one or more of the following purposes: (a) ……. (b) to create an allotment of not more than 2 hectares but not less than 1 hectare if - (i) the Council is satisfied that the creation of allotment will not significantly reduce the agricultural viability of the land from which it is subdivided; (ii) the ratio of depth to frontage is satisfactory in the opinion of the Council;

(iii) where the allotment has a frontage to a main road, access is not direct from the main road where alternative access is available;

(iv) adequate access and services are available;

(v) the development of the allotment will not have a significantly adverse visual impact on the surrounding area; (vi) the creation of the allotment will not lead to undue hazard from bush fires to life and property; (c) ……. (5) In any subdivision made under this clause there may be one residue from the whole of an existing holding and such residue shall not be less than the area and frontage required for a concessional allotment. (6) The total number of concessional allotments that may be created (whether by one or more subdivisions made at any time on or after 28th February, 1964) from an existing holding is - (a) where the area of the existing holding is less than 20 hectares but not less than 10 hectares - 1; (b) where the area of the existing holding is less than 30 hectares but not less than 20 hectares - 2; and

(c) where the area of the existing holding is not less than 30 hectares - 3. (6A) ………. (7) ………. (8) ………. (9) The Council shall not grant consent in respect of an application to subdivide land to which this clause applies so as to create an allotment other than an allotment referred to in subclause…(4)… (10) …….." 21 It seems clear that these provisions were promulgated in order to ameliorate, to some extent, the rigour of restrictions imposed upon the subdivision of rural land through town planning controls implemented by Interim Development Order No. 1 - Shire of Shoalhaven, which came into force on 28 February 1964. As counsel submitted, these provisions were analogous to "existing use" provisions in other parts of this and similar Instruments. The word "concessional" conveys this concept. 22 The appellant made its Development Application No. SF8633 on 6 October 1998. It was refused on 25 June 1999. The application proposed the excision of "five concessional allotments out of the two 1964 holdings..consisting of "an area of 36.16 ha held by Wandandian Pty Limited being Lots E and G in DP17698 and an area of 22.73 ha held by I. A. Neale being Lot F in DP17698". The objectives of the proposal were stated to be: "(a) to excise the three concessional allotments ranging in size from 1.2 ha to 1.9 ha (lots 1, 2 and 3 on the attached sketch fronting The Wool Lane) out of the 1964 holding, held by Wandandian Pty Limited, from what is the residue of Lot G, DP17698, with the residue of this part of the 1964 holding being the remainder of the original Lot E, in DP 17698 (Lot 4 on the attached sketch); and (b) to create the two concessional allotments, both of about 1.4 hectares in area (lots 5 and 6) from the original 1964 holding, held by I.A. Neale, with a residue Lot 7 being the remainder of original lot F, DP 17698. (c) to create a residue lot containing all of the land presently zoned Residential 2(c) in accordance with S/F 6415. (d) to site the proposed concessional allotments so that they will all have legal and practical access to defined public roads, so as not to frustrate the future use of the land for potential development. 23 The subdivisional proposal, so described, related, as already indicated to Lot 8 in DP 880060. At the time of the proposal that lot consisted of a northern portion containing land zoned 1(d) and a southern portion containing land zoned 2(c). This southern land had previously been the subject of Development Consent S/F 6415 to which I shall make reference later. The 1964 holdings have been referred to in the appeal as the Wandandian and Neale Holdings respectively. It is agreed that they constitute existing holdings within the meaning of the provision set out above. It is convenient that I now set out the history of Lot 8 DP 880060 and its constitution, as I understand it to be, from his Honour's judgment, the appeal papers and information provided by counsel in argument. 24 As at 28 February 1964 the Wandandian land consisted of approximately 78 hectares and was in the shape of a large "U" with the base of the "U" to the south. It consequently formed an existing holding within the meaning of the 1964 IDO, which corresponded with the same concept in the 1985 Plan. The Neale land fitted in to the open area of the "U" and consisted of approximately 22 hectares. This combined landholding, which, apparently, at some later stage, came into the ownership of the applicant, forms the basis of Sealark's present claim to an entitlement to its proposed subdivision. 25 The evidence does not appear to indicate what the zoning of these areas was before the 28 February 1964 IDO. It seems clear, however, that, when the 1985 Plan came into effect the present zoning was introduced and resulted in the present rural land zoned 1(d), now sought to be subdivided into seven lots, with the remaining land of the previous existing holdings, to the south of the zoning line, being zoned as Residential 2(c). 26 Since the inception of that zoning, Sealark has sought and obtained approval for various subdivisions of the Wandandian and Neale existing holdings, the last being S/F 6415, in respect of which the council gave development consent on 31 March 1989. 27 The earlier subdivision approvals, granted prior to 31 March 1989, had been acted upon by Sealark. It had undertaken what has been referred to as "Staged Development". From time to time, pursuant to the relevant council consents, it had effected registration of plans of portions of the approved subdivisions. This was effected, as appears from information provided by counsel, by the production to the Council of registerable plans for the relevant parts of the approved subdivision, their stamping by the Council to signify approval, and their registration by the Land Titles Office. Upon such registration, the residential lots comprehended in the plan could be sold and title given to the purchasers. 28 Pursuant to this process of staged development, Sealark had effected, in this way, registration of parts of the subdivision S/F 6415 which, as indicated, had been approved by the Council on 31 March 1989. The effect of the excision of these approved portions from the S/F 6415 subdivision, was to leave an area of land south of the zoning line in respect of which an approved subdivision existed but which had not been implemented by the registering of appropriate Plans. The area to the north of the zoning land, which was rural 1(d), had not been the subject of any subdivision application. Its northern boundary corresponded with the northern boundaries of the Wandandian and Neale land. This northern boundary formed a frontage to a road that travelled roughly east to west called Wool Road. 29 On 16 September 1998, Sealark caused to be registered Lot 8 in DP 880060. This registration, according to counsel's information to the Court, resulted in the issue of a separate Certificate of Title. Lot 8, as so registered, consisted of the rural 1(d) land to the north of the 1985 zoning land and that part of the zoned 2(c) residential land to the south of the line, which had not been excised from the land the subject of Development Consent S/F 6415. This land was, therefore, the subject of that residential development approval on 31 March 1989, although not yet implemented by registration. 30 Shortly after the registration of Lot 8, Sealark lodged the subject application. The application, as already seen, seeks the subdivision of the rural 1(d) land into seven lots consisting of five concessional allotments and two residue lots together with an eighth lot which consists of the residential 2(c) land south of the zoning line, being the remainder of the land in the S/F 6415 approval, which had not been the subject of staged development. 31 Sealark asserted entitlement to approval of this subdivision, on the basis that, pursuant to clause 11 of the Plan, the areas of the Wandandian and Neale existing holdings entitled it to excise three concessional allotments and one residue allotment from those parts of the Wandandian land falling within the Zone 1(d) to the north of the zoning line and to excise two concessional allotments from the Neale land together with one residue from the land lying to the north of the zoning line. The area of each allotment has been referred to earlier in these reasons. It is clear that the areas of proposed allotments and residue lots in the northern section can comply with the requirements of clause 11.4(d) and 11.5. 32 As already indicated the council refused consent to this subdivision proposal on the basis that it had no power to do so. 33 The appellant contends that the council did not relevantly lack power. It relies on an argument which, so far as I can see, was not advanced before his Honour. It is to the effect that the council could take power to deal with the proposed subdivision by a combination of its powers under clause 10 and clause 11 of the Plan. 34 As I understand this argument, it asserts that the council should, in effect, regard Lot 8 DP 880060 as being totally unaffected by the previous approved subdivision S/F 6415. That subdivision had created residential allotments in the whole of the residential 2(c) land south of the zone line which had not been taken up in previous approved subdivisions. The northern boundary of the northernmost of these allotments, all of which came from the Wandandian and Neale existing holdings, was, in fact, the zone line itself. The area to the north up to the Wool Road, being the balance of the land of the existing holding and being, of course, zoned 1(d), was described in the Plan accompanying S/F 6415 as "Future Residential Area". 35 The subject application seeks to subdivide the northern area into the allotments and residues already described. It makes no attempt to subdivide the southern area into allotments. It merely shows the allotments provided for in S/F 6415 and describes the whole of that area as Lot 8 of the proposed subdivision. The subdivision, then, proposes that Lot 8 of DP 880060 be subdivided into eight allotments, seven in the rural land, which include two residue allotments of the type contemplated by clause 11 of the Plan and a further allotment, described as Lot 8, being the whole of the subdivided land covered by approval S/F 6415, not yet the subject of final registration. 36 It may be noted that it would, apparently, be open to Sealark to complete the staged development of the S/F 6415 subdivision by registering an appropriate plan or plans. As I understand what has been put in argument, this would have the result that the southern land would be taken out of Lot 8 DP 880060, with the result that a fresh lot would come into existence which would comprise the whole of the zoned 1(d) land north of the zoning line. Subject to what I say below this land could then be made the subject of a subdivision application which would not have the difficulty involved in the current application which seeks to subdivide lands of different zonings. The Court has been informed, however, that recent changes to the Plan prevent this course being taken. The result is that Sealark can subdivide the northern land in the way it wishes only if its present application is capable of being approved and achieves approval. 37 As I have said, it does not appear that the present argument, namely that the council has a sort of composite power to approve, based upon clauses 10 and 11 of the Plan, was, in fact, put to the trial judge. However, his Honour appears, inferentially, to have dealt with it by his primary holding that clause 11 could not apply in circumstances where the land, the subject of the subdivision application was partly rural and partly residential. 38 I find myself in agreement with his Honour. The present application appears to be totally artificial. The previous approved subdivision S/F 6415 established the zoning line as being the northern boundary of its northernmost lots. The present application, as I understand the appellant's argument, seeks to re-establish the boundary line by calling afresh upon the power provided to the Council by clause 10. It seeks to do so as a preliminary step to the subdivision of the northern part of Lot 8 in purported reliance upon clause 11. I am satisfied that the clauses were not intended to have this operation. Furthermore, the present application is quite inconsistent with the previous approval of S/F 6415. While S/F 6415 stands, the present application is, in my view, a nonsense. 39 Moreover, in my view, the provisions of clause 11 apply only to lands having the zonings referred to in the clause itself. I am also satisfied that the concept of "existing holdings" is confined to land contemplated by clause 11, being land in respect of which concessional holdings may be granted. This being so, the Wandandian and Neale holdings which appear, at all relevant times, to have consisted predominantly of land zoned 'residential', could not relevantly, be regarded as existing holdings within the meaning of clause 11 of the Plan. I acknowledge, however, that in the present case, having regard to the parties' agreement that the Wandandian and Neale lands were "existing holdings", this cannot form the basis of decision. 40 However, even if the Wandandian and Neale holdings could be regarded as "existing holdings", the proposed subdivision, having regard to the areas of those holdings, could be productive of only two residue lots, conformable with clause 11(5) of the Plan. This subdivision provides for three residue lots, in so far as it creates Lot 8, being the whole of the land south of the zone line. 41 I am satisfied that the council was correct in deciding that it had no power to approve the subdivision and that the trial judge did not err in upholding that decision. 42 In my opinion this appeal should be dismissed with costs. 43 IPP AJA: I agree with Foster AJA

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.