HEALESVILLE HOLDINGS PTY LTD v PITTWATER COUNCIL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, POWELL and STEIN JJA 17 November 1997, 27 November 1997 [1997] NSWCA 142 CONSTRUCTION OF LOCAL ENVIRONMENT PLAN — The appellant commenced class 1 proceedings in the Land and Environment Court appealing against a decision of the respondent to refuse the appellant's application for development consent to a subdivision of land at Ingleside. The appellant had made the development application for subdivision with a view to erecting dwelling houses on fourteen one hectare lots. During the hearing of the appeal, a question arose as to whether it would in fact be permissible to erect dwelling houses on one hectare lots. By agreement between the parties, the appellant was given leave to serve a class four application seeking a declaration that it would be permissible, under cl17(2) of the Pittwater Local Environment Plan 1993 (the LEP), to erect dwelling houses on the one hectare lots without council permission. Talbot J dismissed the class 4 application. On appeal The appellant submitted: 1. The five paragraphs of cl17(2) of the LEP are alternatives to and independent of each other ("the disjunctive submission"), and the appellant was entitled to the declaration as its land fell within either para(1) or para(d) or para(e) of cl17(2); or alternatively; 2. If the development application for subdivision were successful then the allotments so created would have been "created by a subdivision... not prohibited under cl12" within the meaning of cl17(2)(a). Held: 1. When the whole statutory context is considered, Talbot J's rejection of the disjunctive submission was correct and the meaning of cl17(2) is that accepted by him. 1. Although the appellant might obtain the desired subdivision by virtue of the overriding capacity of State Environment Planning Policy No 1, the possibility of that result did not alter the position that the words of cll2 were clear words within the meaning of cl17(2)(a). Vaniga Pty Ltd v South Sydney Council (1989) 74 LGRA 86 North Sydney Municipal Council v P D Mayoh Pty Ltd [No 2] (1990) 71 LGRA 222. Priestley JA Introduction Healesville Holdings Pty Ltd (the appellant) applied to the Pittwater Council (the Council) for development consent to subdivide land in the Council's area at Ingleside into fourteen one hectare lots and a residue lot of approximately fourteen hectares. The zoning of the land was such that, prima facie at least, the minimum area for lots was two hectares. The Council refused the application. The appellant appealed, in class 1 proceedings, to the Land & Environment Court. The class | proceedings came for hearing before Talbot J. He did not in the end decide them but instead an application for a declaration in class 4 proceedings. This came about in the following way. 2 UNREPORTED JUDGMENTS It was clear from the materials before Talbot J that the subdivision development application had been made by the appellant with a view to erecting dwelling houses on the one hectare lots. As Talbot J noted in his eventual reasons for judgment, after the class 1 proceedings had taken two days a question arose whether even if development approval were given to the proposed subdivision, it would be permissible to erect dwelling houses on the one hectare lots; it was then agreed by the appellant and the Council that if dwelling houses might not be erected on the land following subdivision, a determination in the class 1 proceedings would be futile. Accordingly, and by agreement between the parties, the appellant was given leave to file and serve a class 4 application instanter. In that application the appellant claimed a declaration "... that a person may, without the consent of the Council, erect a dwelling house on a one hectare allotment of land within Zone No 1(a) under Pittwater Local Environment Plan 1993 ('the LEP') pursuant to cl17(2) of the LEP." Talbot J dismissed the class 4 application. Because of an agreement between the parties, he made no order for costs. He left the class 1 proceedings formally on foot. The appellant then appealed to this court against the dismissal of its class 4 proceedings. The facts The land in respect of which the appellant made the application to the Council was zoned 1(a)(Non-Urban "A") under the Pittwater Local Environmental Plan 1993 (the LEP). C19 of the LEP said, so far as relevant: "9. Except as otherwise provided by this Plan, in relation to land within a zone specified in the Table to this clause, the purposes (if any) for which - (a) development may be carried out without development consent, (b) development may be carried out only with development consent; and (c) development is prohibited, are specified under the headings 'Without development consent', 'Only with development consent' and 'Prohibited', respectively, appearing in the matter relating to the zone. TABLE ZONE No I (a) (NON-URBAN 'A') 1. Without development consent Agriculture (other than pig-keeping or poultry farming); forestry. 2. Only with development consent Any purpose other than a purpose for which development may be carried out without development consent or a purpose for which development is prohibited. 3. Prohibited Attached dwellings;...dwelling-houses;..." "Development" is defined in s4 of the Environmental Planning and Assessment Act 1979 (the EPAA) as meaning, in relation to land "(a) the erection of a building on that land,... and (d) the subdivision of that land....". So far as presently relevant, cl12 of the LEP provided: "(2) A person shall not subdivide land within a Zone specified in column IC of the Table to this clause unless the area of each allotment to be created by the subdivision within the Zone will not be less than the area specified opposite that Zone in Column II of that Table." URJ HEALESVILLE HOLDINGS PTY LTD v PITTWATER COUNCIL (Priestley JA) 3 The minimum area specified in the Table in Column II opposite Zone 1(a) was two hectares. C113 of the LEP applied to six specified lots at Bayview Heights. The clause permitted a person, with the consent of the Council to subdivide any of those allotments into not more than three allotments, each allotment so created being not less than 4,000 square metres in area C114 of the LEP applied to six further lots of land at Bayview Heights and provided, notwithstanding any other provision of the LEP, a person might with the consent of the Council subdivide any of the specified lots so as to create allotments not exceeding a density of one allotment for each 6,000 square metres of the area of the land and each of which would not be less than 4,000 square metres in area Cl7 of the LEP was as follows: "Dwelling Houses in Zone No I(a), 1(al), 1(b) or 1(c) 17.(1) Except as provided by this clause, the erection of a dwelling-house on land within Zone No 1(a), 1(al1), 1(b) or 1(c) is prohibited. (2) A person may, without the consent of the Council, erect a dwelling-house on an allotment of land within Zone No 1(a), (b) or 1(c) where the allotment - (a) was created by a subdivision which was not prohibited under cl12; (b) is 4000 square metres or more in area and was lawfully created prior to 13 August 1982; (c) was otherwise lawfully created before the commencement of this clause; (d) is not within that part of Zone No 1(a) hatched blue on the map, except as provided for in cl17A; or (e) is not land to which cl13 or cll4 applies. (3) A person may, but only with the consent of the council, erect a dwelling-house on a parcel of land within Zone No 1(al) which has an area of at least 20 hectares. (4) A person may, but only with the consent of the council, erect a dwelling-house on an existing parcel of land within Zone No 1(al) having an area of less than 20 hectares but not less than 2 hectares. (5) Except as provided by subcl(6), for the purposes of subcl(4), 'existing parcel of land" includes all adjacent or adjoining land held in the same ownership on 8 March 1974. (6) Subcl(5) does not apply with respect to any parcel of land within that land known as Portion 80, Parish of Narrabeen, and in existence on 8 March 1974. (7) A person may, but only with the consent of the council, erect a dwelling-house on an allotment created as a result of a subdivision referred to in cl13 or cll4." The words "except as provided for in cl17A" were added to para(d) of subcl(2) when cl17A was inserted in the LEP in 1993. Subcl(1) and subcl(2) of cl17A are as follows: *Dwelling-houses on certain land at Ingleside 17A(1) This clause applies to that land at Ingleside within that part of Zone No 1(a) shown hatched blue on the map and identified in Schedule 12. (2) Notwithstanding any other provision in this plan, a person may, with the consent of the council, erect a dwelling house on land to which this clause applies." 4 UNREPORTED JUDGMENTS Subcl(3) and subcl(4) of cll17A provided that consent to development for the purposes of a dwelling-house should not be granted unless satisfactory provision had been made for specified amenities and unless a condition ensuring satisfactory arrangements for water, sewerage and stormwater were imposed. The appellant's land did not form any part of the kind identified in cll13 and cl14 of the LEP nor was it within the land shown hatched blue on the map nor did it form any part of the tend identified in Schedule 12. The appellant's arguments at first instance Before Talbot J the appellant submitted that its land fell within para(a), para(d) and para(e) of cl17(2). The appellant argued, as to para(a), that its construction had to be approached on the footing that it contemplated a subdivision already having been made of land within, inter alia, Zone No l(a), that such a subdivision could be made pursuant to cl12 if the consent authority (that is the Council), taking into account the provisions of State Environmental Planning Policy No | (SEPP No 1), had permitted the subdivision of land into lots with an area of less than two hectares; the fact that such a subdivision could lawfully be achieved by application to the Council necessarily meant, it was submitted, that the subdivision was not prohibited under cl12. The reference to SEPP No | is important to the appellant's argument. Cl6 of SEPP No | provided: "Where development could, but for any development standard, be carried out... the person intending to carry out that development may make a development application... supported by a written objection that compliance with that development standard is unreasonable or unnecessary... specifying the grounds of that objection." CI7 provided that if the consent authority were satisfied the objection was well founded and some other stated matters were satisfied it could grant consent to the development application notwithstanding the development _ standard. "Development standard" is defined in the EPAA, in a way which sometimes causes difficulty. However, there was no such difficulty in the hearing of the present appeal, because Mr Preston, for the Council, conceded, for the purposes of the argument here, that cll2 imported a development standard. Thus, in the appellant's submission, its land fell within either para(a) or para(d) or para(e) of cl17(2) and it was entitled to the declaration sought on the basis of the land being within any one of these three paragraphs. The submission in regard to para(d) and para(e) (the disjunctive submission) depended upon reading each of the five paragraphs in cl17(2) as independent of each of the others. Of this submission Talbot J said: "As a first superficial approach, this may appear to be attractive. However, when an analysis of the effect of construing subcl(2) in that way is undertaken, the argument cannot be supported. The result would be that (d) and (e) have a conflicting effect which cannot be reconciled in planning terms and which could not have been intended by the craftsman. If (d) or (e) are allowed to stand alone, the effect would be that (d) would include the land excluded by (e) and vice versa. Clearly the subject land is not within that part of the One shown hatched blue or to which cl13 or cll4 applies. Mr O'Rourke [then for the appellant] recognises that if (d) and (e) are allowed to stand alone the literal effect would be that a dwelling house may be erected without the consent of council in any URJ HEALESVILLE HOLDINGS PTY LTD v PITTWATER COUNCIL (Priestley JA) 5 part of zone 1(b) or 1(c) irrespective of (a), (b) and (c) of cl17(2). He suggests that the words 'If the land is within Zone 1(a)' should be read in at the commencement of (d). However, he declined to make the same submission in "relation to (e) although recognising that some qualification is nevertheless required. It is important to appreciate that cl17(2)(a), cl17(2)(b) and cl17(2)(c) are all expressed in the positive whereas (d) and (e) are in the negative. In response Mr Preston [for the Council] submits that if it is correct that each of para(a) to para(e) are truly in the alternative and satisfaction of any one of them is sufficient to invoke the operation of the exception in cl17(2) to the prohibitions in cl9 and cl17(1), then para(d) and para(e) would have no work to do. He points out that the restrictions on dwelling houses in the areas identified in Sch 12 and in cl13 and cl14 that para(d) and para(e) seek to establish could be bypassed by subdividing the land into lots of an area permitted by cl12. I agree that the craftsman could not have intended this consequence. I am satisfied that the proper construction of cl17(2) is that the allotment upon which the dwelling house is sought to be erected must be an allotment meeting one of the descriptions in cl17(2)(a), cl17(b) or cl17(c). It also must not be an allotment in the land described in cl17(2)(d) or cl17(2)(e)." Talbot J did not accept the appellant's para(a) argument either, because he thought the subdivision, if permitted, would nevertheless still be "prohibited under cl12". The appellant's submissions on appeal The disjunctive submission. In this court Mr McLelland QC for the appellant repeated the disjunctive construction argument that had been put at first instance. He was not however able to reduce the force of the Council's criticism of such a construction, as recorded by Talbot J and as repeated in this court. It was submitted for the appellant that the peculiar consequences of the construction should not stand in the way of acceptance of what at first sight appeared to be the literal meaning of the words. However, it does not seem to me that even the "literal" argument is particularly strong. In my view, when the words relied on by the appellant are considered in the light of the other provisions of the LEP most relevant to the question of the meaning of cl17(2), they do not convey the meaning asserted on the appellant's behalf. In my opinion, when the whole context is considered, the meaning conveyed is that contended for by the Council and accepted by Talbot J. This opinion is reinforced when purposive considerations are taken into account. The para(a) submissions. Counsel for the appellant recognised the court might not accept the disjunctive construction and placed the greater emphasis in his argument on the contention that if the development application for subdivision were successful then the allotments so created would have been "created by a subdivision... not prohibited under cl12" within the meaning of para(a) of s17(2). Cl12, looked at in its place in the LEP, in my opinion prohibited the subdivision of the appellant's land for which the appellant applied. For the appellant however it was said that cl12 should not be looked at simply in this way; SEPP No | had also to be considered in deciding whether cll2 created a relevant prohibition. On the basis of the Council's concession that cl12 imported a development standard, it was submitted that it was possible in law for the Council to grant the subdivision development application, and the subdivision thus could not be prohibited. (As to the concession about the development 6 UNREPORTED JUDGMENTS standard, in view of the conclusion I have arrived at, it is not necessary to consider whether this concession was well founded. I will simply assume that it was, bearing in mind, as Mr Preston made clear, that the assumption is made for the purposes of the present argument only.) Stating it slightly more fully, the argument for the appellant thus became that since the Council as consent authority had power under cl7 of SEPP No 1, if satisfied that the objection under cl6 was well founded, to permit the development application for subdivision into lots with areas less than two hectares, it could not be said that cl12 of the LEP prohibited subdivision into lots with an area of less than two hectares. This argument does not seem to me to take sufficient account of the words "under cl12" at the end of para(a) of cl17(2). Although it may be that when cl12 is read together with the dispensing power created by SEPP No 1, it would not be accurate to say that subdivision of land zoned 1(a) into lots having an area of less than two hectares is legally impossible, that is, that the law as a whole does not prohibit the subdivision of such land into lots having areas less than two hectares, such a conclusion, if correct, would not seem to me to answer the question whether such a subdivision was prohibited under cl12. As already indicated, cl12 in its own terms seems to me plainly to prohibit such a subdivision. SEPP No | may, in suitable circumstances, provide a method whereby the prohibition referred to in para(a) no longer applies so that a consent authority may grant the subdivision development application. It was agreed by counsel for the appellant, in my opinion correctly, that para(a) does not itself import a development standard and is not thus directly subject to the possibilities of a SEPP No | objection. From the point of view of the appellant the result seems to me to be that although SEPP No | could, in suitable circumstances, help it in obtaining its desired subdivision notwithstanding the prohibition under cl12, it does not assist the appellant in overcoming the prohibition "under cl12" referred to in cl17(2)(a). The approach I have adopted is substantially similar to the way Clarke JA dealt with an analogous question in Vaniga Pty Ltd v South Sydney Council (1989) 74 LGRA 86 (at 90) where, after saying that recognition that a consent authority has power under SEPP No | to grant consents in the face of relevant provisions of an LEP did not mean that provisions of that particular LEP did not effect prohibitions, he continued: "All that it means is that the consent authority is vested with power under the State Environmental Planning Policy No | to grant consents despite those provisions of and prohibitions in, planning instruments concerning development standards." For the appellant it was said that this passage in Clarke JA's reasons could not be binding on this court as a matter of strict precedent, because it was not part of the ratio decidendi of the case, and further, because in any event the provisions of the LEP here in question were not in the same form as those in Vaniga. I think these submissions were correct, that is, I think this court is not bound to follow the line of reasoning of Clarke JA. Nevertheless, it seems to me to be sound and I would approach the question of construction in the present case in the same way. It was also submitted mat observations made by Clarke JA in the later case North Sydney Municipal Council v P D Mayoh Pty Ltd [No 2] (1990) 71 LGRA 222, especially at 236, were inconsistent with what he had earlier said in Vaniga and undermined the persuasiveness of what he had said in that earlier case. It URJ = HEALESVILLE HOLDINGS PTY LTD v PITTWATER COUNCIL (Stein JA) 7 does not seem to me that what Clarke JA said in the two cases contained any inconsistency. In Vaniga the question was whether provisions in an LEP should be construed as prohibitions; in Mayoh whether a particular provision constituted a development standard. Counsel for the appellant acknowledged this, but submitted that in considering the two separate questions Clarke JA had had to consider an underlying question which was identical in the two cases and had dealt with that underlying question in different and inconsistent ways in the two cases. I do not agree with this. It was not necessary for Clarke JA to explore the asserted underlying question in full in either case, nor in the later case of Mayoh was it necessary for him to consider what he had said in Vaniga. I have not myself been able to see the inconsistency asserted by the appellant. Conclusion In my opinion Talbot J was right to dismiss the appellant's class 4 proceedings and the appeal to this court should be dismissed with costs. Powell JA I agree with Priestley JA and with the further observations of Stein JA. Stein JA I agree with Priestley JA. I would wish only to add some brief observations. C112 of the Pittwater Local Environmental Plan (the LEP) clearly contains a prohibition on the subdivision of land within the 1(a) zone containing any allotment of less than 2ha. The fact that State Environmental Planning Policy No | (SEPP 1) may provide a means whereby the prohibition may be set aside, does not make it any less a prohibition. In my opinion, SEPP | does not assist the appellant in overriding the plain prohibition in cl17(2)(a) of the LEP. Although the observations of Clarke JA in Vaniga Pty Ltd v South Sydney City Council (1989) 74 LGRA 86 at 90 may not form part of the ratio of the decision, I respectfully agree and adopt his Honour's approach in this case. I also agree with Priestley JA that, properly understood, what Clarke JA said in North Sydney Municipal Council v P D Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222 at 236, is not inconsistent with Vaniga. The questions were different. I would dismiss the appeal. Appeal dismissed with costs. Counsel for the appellant: P McLellan QC Solicitors for the appellant: Deacons Graham & James Counsel for the respondent: B J Preston Solicitors for the respondent: Mallesons Stephen Jaques