This is an appeal under s 56A of the Land and Environment Court Act 1979 ("the Act") against a decision of Assessor Watts delivered on 11 May 1993. The case before the Assessor involved an appeal under s 97 of the Environmental Planning and Assessment Act 1979, against the refusal of a development application for a tourist lodge on lot 1, DP 601305, MR 286 ("the subject land") situated to the east of the village of East Jindabyne, and having an area of 101.2 ha. The Assessor dismissed the appeal.

Mr Marks, for the respondent, took a preliminary point in relation to the appeal. He submitted that the appellant was in effect estopped from bringing the appeal as it had agreed that there was no question of law involved in the application of the Kosciusko Regional Environmental Plan (the "KREP").

It was apparent early in the proceedings before the Assessor, when Mr Marks opened on behalf of the council, that there was an issue as to whether cl 44(2) of the KREP applied to permit the council to consent to the proposed development. The hearing proceeded for two days, but on the third day, the Assessor expressed the opinion that the question of whether or not the proposed development would be permissible under cl 44(2) of the KREP involved a question of the interpretation of cl 44(2), which was a question of law which should be referred to the Chief Judge under s 36(5) of the Act. The matter was discussed on several more occasions. The Assessor's initial approach was to direct the parties to prepare written submissions on the question of law for referral to the Chief Judge, and to proceed to hear the merits of the case. Ultimately, on the fourth day of the hearing, the following exchange took place between Mr Gerathy, on behalf of the applicant, Mr Marks and the Assessor:

"GERATHY: Well perhaps rather than waste the time of the Court I have prepared a submission in relation to the matters you referred us to in relation to the rules and the Act and I think following a short conversation with Mr Marks this morning that submission is not necessary to the intent that I think we both believe that this Court can without feeling (sic) determine this matter. I prepared a submission in relation to that to you but I understand - we take the view that the matters are within - if anyone's not particularly happy then and there's a question of law arising out of it, well there are other rights but -

ASSESSOR: So you both agree that it's a matter of fact that the Court needs to determine in relation to --

MARKS: And (sic) application of the law rather than interpretation.

ASSESSOR: Well I'm happy to leave it on the basis. I was thinking that the words in conjunction with are probably something that lawyers could play around with for quite some time but I'm happy to leave it on the basis that this Assessor's in a position to decide the matter. I think it's probably more expeditious in terms of the Court's time and if the parties agree to that, then I see no reason to refer the matter ..."

Mr Marks endeavoured to show from this and other parts of the transcript that the real question for the Assessor was one of fact, that is, it involved a determination of whether, on the facts, the proposed development fell within cl 44(2) of the KREP. He submitted that it was agreed that no question of law was involved, and that the appellant was now precluded from raising the interpretation of cl 44(2) as a point of law in the appeal. For this proposition he relied on Page v Parkes Shire Council [1991] NSWLEC 4; (1991) 72 LGRA 97. In that case, Cripps J held that questions of law not raised in the proceedings cannot, save in the most exceptional circumstances, be permitted to be raised on appeal.

I do not agree with Mr Marks' submission. This is not a case such as Page in which a new point of law was sought to be argued by the appellant during the appeal. The proper construction of cl 44(2) is a question of law (Edwards (Inspector of Taxes) v Bairstow and Anor [1955] UKHL 3; [1955] 3 All ER 48 at 54) about which the appellant now claims on appeal that the Assessor took an erroneous view. The question of the interpretation of cl 44(2) of the KREP was squarely raised. The application of cl 44(2) was the first ground for the council's refusal of the development application. It was repeated in the statement of issues filed in response to the Registrar's direction. The respondent pressed the view that the only question for the Assessor was the application of cl 44(2), which was a question only of fact. This view was never conceded by the applicant nor was it accepted by the Assessor. Mr Gerathy, for the applicant, squarely faced the question of construction, and submitted that "a literal interpretation" of cl 44(2) was required. In the end, both parties made written submissions on the question of law, which are annexures "D" and "E" to the Assessor's judgment. In my opinion, the question of law was raised in the proceedings and is properly the subject of appeal.

The decision of the Assessor was twofold. The Assessor found primarily that the proposed development was not permissible under cl 44(2) of the KREP. Alternatively, the Assessor held that the proposed development was prohibited under cl 55 of the KREP. To reach these conclusions, the Assessor found the relevant facts, determined the meaning of the relevant provisions of the relevant environmental planning instruments, and applied those provisions to the facts as found. The appellant claims that the Assessor erred in law in interpreting those planning instruments; that he misdirected himself by defining otherwise than in accordance with law the questions of fact which he had to answer (Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156).

In order to deal with the appellant's claim that the Assessor erred, it is necessary to recite in some detail those provisions of the relevant environmental planning instruments which affect the subject land, and in respect of which the challenge to the correctness of the Assessor's decision is based.

The subject land is within zone 7(c) Rural Environment Protection (Water Catchment Areas) under the provisions of the Snowy River Local Environmental Plan No 4 (the LEP). Under that zoning, the proposed development is prohibited.

The KREP also applies to the subject land. Its relationship with the LEP is dealt with in cl 4 (2) which provides as follows:

"4(2) Except as provided by subclause (3) and subject to section 74(1) of the Act, in the event of any inconsistency between this plan and any other environmental planning instrument (other than a State environmental planning policy) applying to land to which this plan applies, this plan shall, to the extent of the inconsistency prevail." [sub-cl(3) and s 74(1) are not material to the questions which arise in this case].

The effect of this clause becomes relevant, as will be seen later, because although the proposed development is prohibited under the LEP, it might nevertheless be approved if it satisfies the criteria set out in cl 44 (2) of the KREP. Clause 44 of the KREP is in the following terms:

"44(1) This clause applies to all land shown on the map other than -

(c) an allotment created under this plan for the purpose of agriculture and which has an area of less than 800 hectares.

(2) The Council may consent to the carrying out of development (other than subdivision) for the purpose of providing accommodation for tourists, where the council is satisfied that any accommodation is provided in conjunction with the use of the land for the purpose of agriculture."

There was no issue that the subject land was land to which cl 44 applied.

Clause 44(2) must be interpreted keeping in mind the objectives of that part of the KREP in which the clause appears.

The objectives of Pt 4 of the KREP, which part is entitled "Provisions Relating to Economic Activity", are contained in cl 38, which relevantly provides as follows:

"38 The objectives of this plan in relation to economic activity are -

(b) to provide opportunities for on-farm accommodation for tourists in conjunction with the farming of a property;

(c) to promote year-round recreation and tourism opportunities in the region;

(e) to ensure that agricultural development remains part of the ongoing economic base of the region; and

On the question of inconsistency between the two instruments, Mr Lloyd QC, for the appellant, submitted that, although the LEP prohibits the proposed development, cl 44 of the KREP, interpreted in the manner for which the appellant contended, would allow the proposed development with consent, and accordingly, the provisions of cl 44 prevail and consent may be granted. Mr Marks submitted that there was no inconsistency, that the two instruments could stand together, and that therefore the prohibition in the LEP should stand. I do not see how the two planning instruments can be consistent. The LEP prohibits certain development within a certain zone and the KREP allows for consent to be given to the development on land in the region which contains that zone. As the clauses are inconsistent to this extent, it is open for the council, or the Court as consent authority, to override the prohibition contained in the LEP and to grant consent to such a development in the particular zone, provided the proposed development satisfies the criteria set out in cl 44(2).

This raises the fundamental question of interpretation in this case. What criteria must be satisfied for the council to grant consent pursuant to cl 44(2)? In other words, what is the meaning of the words "... in conjunction with the use of the land for the purpose of agriculture"?

The Assessor's finding on this point (pp 23 - 24 of his judgment) was as follows:

"It is not sufficient in the Court's opinion, for the proposed tourist accommodation to be physically located within the land presently used for agriculture, in this case the grazing of sheep, in order for the terms of cl.44(2) to be satisfied. A functional relationship is also required. The fact that the manager of the proposed tourist accommodation centre will also manage the grazing goes some way to providing the functional relationship, however it is not far enough.

Ideally, and as the clause is interpreted by the Court, the tourist accommodation should provide lodging for visitors who are interested in agricultural pursuits being undertaken on the subject land."

The appellant's contention was that the Assessor had erred in law in finding that this clause required a "functional relationship" between the tourist accommodation and the agriculture carried out on the land. Mr Lloyd submitted that clause 44(2) requires two criteria to be met - first, that the development must be for the purpose of providing accommodation for tourists; and, secondly, that this use must be in conjunction with the use of the land for the purpose of agriculture.

The first criterion is clearly met, because the proposed development is undoubtedly for the purpose of tourist accommodation. What is proposed is a two-storey residential building, comprising 20 units, a manager's residence, communal dining room, games room, spa and sauna, lounge and swimming pool.

Mr Lloyd submitted that the second criterion is also met, that is, that the proposed development will be provided in conjunction with the use of the subject land for agriculture. He submitted that the objectives of that section of the KREP of which cl 44 is a part require no functional nexus between the tourist accommodation use and the agricultural use, and that the language of the KREP supports this proposition. It is sufficient "conjunction", so this argument went, that the proposed development will be provided physically upon the subject land; or, in other words, the tourist accommodation is provided on the land and the use for agriculture continues.

In his submission on this point, Mr Lloyd emphasised that Pt 4, in which cl 44 appears, deals with economic activity. The objectives of Pt 4 are directed to economic activity, as the heading shows, and economic activity is expressly referred to in the opening words of cl 38. He contended that the proposed development would meet the relevant objectives, being cl 38(b), (c) and (e), taking into account that they are directed to economic activity. It would, as a matter of economic activity, provide on-farm accommodation for tourists in conjunction with the farming of a property (cl 38(b)); it would promote tourism opportunities in the region (cl 38(c)); and it would ensure that agricultural development remains part of the ongoing economic base of the region (cl 38(e)). In order to fulfil those objectives, interpreted in the light of economic activity, the tourist accommodation need not, in Mr Lloyd's submission, be functionally associated with the agricultural use. The economic activity of tourism would be provided and the economic activity of agriculture would be preserved.

In my opinion, however, the difficulty with Mr Lloyd's submission lies in the language which is used in the KREP. What is critical is the meaning of the word "agriculture" and the meaning of the words "in conjunction with" in cl 44(2).

The KREP imports into its provisions the definitions which appear in the Environmental Planning and Assessment Model Provisions 1980 ("the model provisions"), under which it is stipulated that the word "agriculture" has the meaning ascribed to it in s 514A of the Local Government Act 1919. Section 514A relevantly defines "agriculture" as follows:

"'Agriculture' and 'Cultivation' include horticulture and the use of land for any purpose of husbandry, including the keeping or breeding of live stock, poultry, or bees ..."

Mr Marks contended that this definition was inapplicable, because it appears in Div 1 of Pt XXIIIA of the Local Government Act 1919, which part applies to the "acquisition of land for small holdings", the latter being defined as an agricultural holding not exceeding 20 ha in area, an area smaller than the subject land. His contention was that, accordingly, the word "agriculture" is not defined in the KREP. However, in my opinion, this contention proceeds on an erroneous basis. The KREP employs a commonly used "shorthand" method of defining terms simply by adopting the definitions in the model provisions. The model provisions, at least with respect to the definition of "agriculture", compound the awkwardness of the "shorthand" method by simply adopting the relevant definition in the Local Government Act 1919. The KREP must accordingly be read as if the words appearing in the definition of "agriculture" in s 514A actually appeared in the KREP, and it is irrelevant that that definition has a limited use in the Local Government Act itself.

The Assessor found that the subject land was used for the agistment or grazing of 120 head of sheep. That finding of fact, which is not, and could not, be challenged on appeal, demonstrates that the subject land is used for the "keeping of livestock" and hence the subject land is being used, for the purpose of applying cl 44(2) of the KREP, "for the purpose of agriculture".

But a much more difficult question arises when one turns to consider whether the accommodation is being provided "in conjunction with" the use of the subject land for agriculture.

The Macquarie Dictionary defines the word "conjunction" as "1. the act of conjoining; combination" or "2. the state of being conjoined; union; association". Similarly, the definition of "conjoin" is "1. to join together; unite; combine; associate". Mr Lloyd emphasised "conjoining" and "associate". The Macquarie Dictionary defines the word "associate" as "1. to connect by some relation, as in thought".

Mr Lloyd contended that, in the light of these definitions, the phrase "in conjunction with" should be interpreted as requiring two activities to be carried on in association one with the other, but not necessarily in an interdependent way. The provision of the two activities in the same location was sufficient, therefore, for them to be described as "conjoined".

Mr Lloyd submitted that the interpretation for which he contended is supported by two other matters. First, he pointed to a draft version of the KREP in which the second limb of what is now cl 44(2) adopted the words: "in conjunction with the principal and continuing use of the land for the purposes of agriculture". He submitted that the removal of the words "principal and continuing" from the clause as finally promulgated affected the way in which the clause should be interpreted. His argument, as I understood it, was that whereas in the draft clause there may have been some need for a functional nexus, the final draft by removing those words made clear that such nexus was not required. I reject this argument as a basis for the interpretation of the phrase "in conjunction with". There is, in my opinion, no assistance to be derived on the question of construction of these words by comparing the phrase "in conjunction with the use" with the phrase "in conjunction with the principal and continuing use".

Secondly, Mr Lloyd pointed to cl 43(1) of the KREP which allows for consent to be granted in certain circumstances to "tourist recreation facilities". The definition of "tourist recreation facilities" in cl 6 of the KREP states that these facilities "may include associated refreshment rooms and accommodation". The use of the word "associated", according to Mr Lloyd, requires a functional nexus which the phrase "in conjunction with" does not. I note, however, that the word "associate" is contained as part of the very definition of the word "conjunction" upon which Mr Lloyd relies. I cannot see any material difference in the use of each word in its context. In my opinion, the words "associate" and "conjunction" are used synonymously in these two clauses.

In my opinion, the phrase "in conjunction with" connotes a connection or relationship or association, a quality which it is convenient to refer to as a "nexus". In cl 44(2), the phrase requires a nexus between, on the one hand, the tourist accommodation to be provided, and on the other hand, the use for agriculture. In the context of the clause in question, that nexus is not demonstrated by mere physical location or by the fact that these are both "economic activities". The clause requires the nexus to be between two uses. It is a question of function and accordingly, it is a functional nexus which is required.

That same quality of connection, relationship or association also applies, in my opinion, to cl 38(b), where the identical phrase is used. Therefore, the objective which cl 38(b) enunciates also involves a functional nexus between on-farm accommodation for tourists and the farming of a property.

Mr Marks submitted that the word "agriculture" as used in the clause, should be read down, as seems to have been done by the Assessor, so that it involves a question of the scale and degree of the agricultural use. I agree with this submission. If there is required to be a functional nexus between the accommodation use and the agricultural use, then each use must be, in comparison, of such size as to make that nexus feasible. Clearly this involves weighing up both the size and intensity of the agricultural use and the size of the tourist accommodation proposed. The Assessor was correct in holding that in order to fall within cl 44(2) the accommodation use on the subject land must be of a scale and degree commensurate with the agricultural use.

I have concluded, for the reasons outlined, that the Assessor was correct in his interpretation of cl 44(2) of the KREP. It follows that it is unnecessary to decide whether or not the Assessor erred in his alternative ground for decision, that is, that the proposed development is prohibited pursuant to cl 55(2) of the KREP.

2. The appellant shall pay the respondent's costs of the appeal as agreed or as taxed by the Registrar.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 9 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.