Land and Environment Court of New South Wales CITATION: Summer School Management Pty Ltd v Wingecarribee Shire Council [1999] NSWLEC 98 PARTIES APPLICANT Summer School Management Pty Ltd RESPONDENT Wingecarribee Shire Council NUMBER: 10095 of 1999 CORAM: Sheahan J KEY ISSUES: :- Preliminary Question of Law - fact/law distinction - separate occupation - strata subdivision LEGISLATION CITED: Preliminary Question of Law - fact/law distinction - separate occupation - strata subdivision DATES OF HEARING: 04/08/1999 DATE OF JUDGMENT DELIVERY: 04/28/1999 APPLICANT Mr D Wilson, Barrister SOLICITOR Mr D Brigdon, Freehill Hollingdale & Page LEGAL REPRESENTATIVES: RESPONDENT Mr P McClellan QC SOLICITOR Mr B Bilinsky of B. Bilinsky & Co JUDGMENT: IN THE LAND AND Matter No: 10095 of 1999 ENVIRONMENT COURT Coram: Sheahan J OF NEW SOUTH WALES 28 April 1999 SUMMER SCHOOL MANAGEMENT PTY LIMITED Applicant v WINGECARRIBEE SHIRE COUNCIL Respondent Introduction 1. This judgment deals with three preliminary questions of law which have been raised by way of Notice of Motion brought on behalf of the applicant company ("the company") in respect of its appeal against the Council's decision to refuse an application made in respect of lot 3 in DP 873240 ( Exhibit S1 ). 2. The land is situated in Suttor Road, Moss Vale, and forms part of the former "SCEGGS" school site. 3. The application seeks, firstly, a subdivision of lot 3 into lots 31 and 32, and then, secondly, the strata subdivision of lot 31. The " land use application " form annexed to the Class 1 application describes the proposal as " strata subdivision of proposed country hotel " into 66 strata lots and 1 residual lot. 4. The application was relevantly accompanied by a letter from the company dated 7 December 1998 ( Exhibit W1 ) headed " Proposed Argyle Park Country Hotel …" and by a " Draft Strata Plan " dated 28 October 1998 ( Exhibit S3 ). Background 5. Council earlier approved ( Exhibit S5 ) an amended subdivision application ( DA 251/96 ) referring to lots 1 and 2 in DP 613923 and lot 34 in DP 858150 in Macourt Road, Moss Vale to create 5 separate allotments in accordance with plans dated 17 June 1996. Lot 3 is one of those 5 lots, and comprises an area of 29.98 ha. 6. Among the conditions attached to the consent to DA 251/96, a restriction was to be placed on the titles of lots 3 and 4 precluding their use " for agriculture or the erection of a dwelling house in accordance with clause 12(6) [sic?] of Wingecarribee Local Environmental Plan 1989 " ("the LEP"). 7. Council subsequently approved DA 283/96 in respect of the development of a " tourist facility " on lot 3 ( Exhibits S4 and S6 ), comprising development of a country hotel of 58 accommodation suites plus conference, restaurant and other facilities, as a consequence of the adaptation, refurbishment and extension of the existing school buildings, and other buildings and facilities, and the construction of some new facilities. 8. Part of lot 3 is zoned 1(a) and part 7(b) under the LEP. The boundary between proposed lots 31 and 32 will coincide with the zonal boundary, such that lot 32 will be in zone 7(b) and lot 31 in zone 1(a). The substantial number of (school) buildings on lot 31 are to be strata subdivided into 66 lots. No change of use is envisaged from that of " tourist facility ". 9. On 6 January 1999, Council refused the application for the following stated reasons: 1. The proposed subdivision of Lot 3 DP 873240 to create allotments of less than 40 hectares is contrary to the provisions of Clause 12(2) of Wingecarribee Local Environmental Plan 1989, therefore, Council does not have the legal ability to approve of the development application. 2. The proposed strata subdivision of individual residential units on allotments less than the development standard is contrary to the provisions of Clause 12 of Wingecarribee Local Environmental Plan 1989, therefore, Council does not have the legal ability to approve of the development application. 3. Development consent has not been issued for the creating of strata units on the subject land. Such land uses are prohibited within both the Rural 1(a) zone and Environmental Protection (Landscape Conservation) 7(b) zone under the provisions of Wingecarribee Local Environmental Plan 1989. The Questions 10. The applicant's notice of motion seeks the following " orders ": 1. The proposed subdivision of Lot 3 DP 873240 under the application the subject of this appeal is permissible under clause 12(3) of Wingecarribee Local Environmental Plan 1989. 2. The proposed strata subdivision under the application the subject of this appeal is permissible under the provisions of Wingecarribee Local Environmental Plan 1989. 3. The proposed subdivision and proposed strata subdivision are otherwise permissible under the provisions of Wingecarribee Local Environmental Plan 1989 and the Environmental Planning [sic] Assessment Act 1979. 11. Posing them as questions, the applicant asks the Court to answer all three in the affirmative. Relevant provisions of the EPAA & LEP 12. In s 4 of the Environmental Planning & Assessment Act 1979 ("the EPAA") " development " means: Development in relation to land means: (a) the erection of a building on that land, (b) the carrying out of a work in, on, over or under that land, (c) the use of that land or of a building or work on that land, and (d) the subdivision of that land, but does not include any development of a class or description prescribed by the regulations for the purposes of this definition. 13. Pursuant to cl 9 of the LEP, the following relevant types of development are prohibited in Zone 1(a) (RURAL "A" ZONE): boarding-houses, cluster housing, residential flat buildings containing more than two dwellings (other than single-storey units for aged persons). Certain types of agriculture, dams, home occupations and recreation gardens are permissible without development consent, and any purpose other than those listed is permissible " only with development consent ". In Zone 7(b) (ENVIRONMENTAL PROTECTION (LANDSCAPE CONSERVATION) ZONE), some types of agriculture, home occupations and recreation gardens are permissible without consent. There is a list of uses which are permissible only with development consent, relevantly including " dwelling houses ". Any other purpose is prohibited . 14. The subdivision of lot 3 would, therefore, appear to be permissible unless it involves a proposal for residential flat buildings. Certainly subdivision itself is not prohibited within either relevant zone. 15. In the Model Provisions the term " residential flat buildings " is defined as meaning: " a building containing 2 or more dwellings ". The applicant denies that the proposal is for a residential flat building, and maintains that the use of a tourist facility will remain unchanged by the stratification of the cubic space. 16. Clause 12 of the LEP applies, inter alia, to both zones 1(a) and 7(b), and relevantly provides: (2) The council may consent to the subdivision of land to which this clause applies only if each allotment of land to be created by the subdivision will have - (a) an area of not less than 40 hectares; and (b) where the allotment has a frontage to a main or arterial road, a frontage to that road of not less than 200 metres. (3) The council may grant consent in respect of an application to subdivide land to which this clause applies so as to create an allotment of less than 40 hectares only if the council is satisfied that - (a) the allotment is intended to be used for a purpose (other than agriculture or a dwelling-house) for which it may be used without or only with the consent of the council; and (b) where the allotment has a frontage to a main road or an arterial road, the frontage is not less than 200 metres. The Proposed Subdivision(s) of Lot 3 17. As noted above, what is proposed in the single DA before the Court is actually two subdivisions - first the subdivision of lot 3 into lots 31 and 32, and then the strata subdivision of lot 31. 18. Several parcels of less than 40 ha were created by the earlier subdivision, and lot 3 is slightly less than 30 ha in area. Clause 12(3) refers to " an allotment " but s 8 of the Interpretation Act 1987 requires that expression to be construed as also including the plural. To construe it in any other way would produce an absurd result in view of the decision taken by the Council to approve the earlier subdivision. The applicant argues that subdivision includes strata subdivision and that " allotment " must include a lot in a strata plan. 19. The applicant argues that cl 12(3) establishes that the Council can consider the current development application, contrary to its stated grounds of refusal. Lots 31, 32 and each of the lots to be established by way of strata subdivision of lot 31, are " allotments " and Council must, therefore, have the power to consent to the proposed development, particularly as the subdivision is for only the tourist facility use, to which consent has already been given, and which will be unchanged by the stratification of the relevant cubic space. 20. In Christies Sands Pty Limited v City of Tee Tree Gully (1975) 37 LGRA 325 at 3356, Wells J emphasised the necessity in the context of " parcel of land " for there to be specificity in the definition of the limits of the area of land which forms the " parcel ". 21. In Personal Design Projects Pty Ltd v Hornsby Shire Council (No.10448 of 1990, 15 March 1991) Bignold J dealt with the definition of " an allotment of land ". His Honour noted that the term was not a technical term even though it frequently was employed in town planning context. He referred to judicial discussion of whether it meant " parcel of land " which is the term in common usage in conveyancing planning and rating contexts. Bignold J rejected the respondent's argument that the Court of Appeal's decision in Ku-ring-gai Council v Kuttner (1980) 41 LGRA 1 demonstrated a clear cut distinction between " allotment " and " parcel ". His Honour held that each of the 3 lots in the approved subdivision was an identifiable parcel or piece of land. His Honour rejected the respondent's narrow and particular construction of the expression. Bignold J preferred the definition of Brereton J in Peverley Place Pty Ltd v Mittagong Shire Council (1973) 28 LGRA 191 at 193 where he said: An allotment is a piece of land into which, with at least one other, land is proposed to be subdivided. 22. In Smith v Wollondilly Council (1995) 86 LGERA 437, Bignold J noted that the Strata Act defined " lot " to mean one or more cubic spaces forming part of the parcel to which the strata scheme relates. EPAA s 4(2)(d) defines subdivision to include a reference to any division of land into two or more parts which " after the division, would be obviously adapted for separate occupation, use or disposition ". 23. Bignold J determined that as the proposed strata subdivision was a subdivision of land for the purposes of the LEP, it was subject to the LEP's minimum area standards. The LEP authorised the erection of a dwelling-house " on an allotment of land that was in existence as a separate allotment " when the LEP came into force. 24. His Honour discussed the concept of lots and allotments and affirms the view he took in Personal Design that the word " allotment " in the Wollondilly LEP would be interpreted as " an identifiable piece or parcel of land ". I respectfully adopt his reasoning and the definition at which he arrived. 25. The applicant is clearly bound by cl 12 of the LEP. Mr McClellan argues that cl 12(2) is an absolute bar. If cl 12(2) is not an absolute prohibition, but a development standard, the development application should have been accompanied by an SEPP 1 objection. 26. In this case it does not fall to me to decide whether cl 12(2) is a development standard or a prohibition. A development standard must be within an environmental planning instrument and fixes or lays down requirements that should be complied with in carrying out a development or against which a proposed development should be measured. It is a constraint rather than a prohibition which would forbid the carrying out of a particular development on identified land except in certain circumstances. A DCP, for example, is not an environmental planning instrument, so it cannot contain development standards. Nor can it operate as a prohibition. 27. SEPP 1 provides for some flexibility in the application of planning controls where strict compliance would be unreasonable or unnecessary. The consent authority must be satisfied that strict compliance would either be unreasonable or unnecessary or " tend to hinder the attainment of the objects specified " in the Act. The SEPP 1 objection must be founded upon the underlying objective or purpose of the standard before one can satisfy the Court or the Council that compliance is unnecessary or unreasonable in the circumstances of the case. It is not sufficient merely to point to the absence of environmental harm or to urge that the standard is inappropriate to the zoning. If the development is otherwise meritorious under s 90, a consent authority may be favourably disposed to consider an SEPP 1 objection ( North Sydney v P D Mayoh (No.2) (1990) 71 LGRA 222). 28. However, the applicant now puts its argument in terms of cl 12(3) rather than cl 12(2). McClellan argues that in order to achieve its objectives, the applicant should apply for a rezoning for the specific purpose it has in mind, as it is impossible to secure the Council's approval under either arm of cl 12 and that, in any event, a determination of whether or not the proposal could come within cl 12(3) would require a factual exercise, upon which the Court cannot embark when considering a preliminary point of law. 29. The first question posed revolves around cl 12(3) and I accept Mr McClellan's submission on this point. The subdivision of lot 3 is not prohibited within either relevant zone, but the Court cannot at this stage determine the question of permissibility under cl 12(3) without exploring the relevant questions of fact. The Proposed Strata Subdivision of Lot 31 30. Mr McClellan also argues that the Council cannot deal with the strata subdivision component of the development application, pursuant to the provisions of the EPAA and the LEP, until the requirements of the Strata Schemes (Freehold Development) Act 1973 ("Strata Act") have been complied with. 31. The relevant provision is s 37(1), which provides as follows: (1) Subject to this Division, a local council shall, on application made to it for a certificate of approval of a proposed strata plan that does not include a development lot or lots, issue to the applicant a certificate of approval of that plan if it is satisfied as to the matters specified in either of the following paragraphs: (a) that: (i) the provisions of Part 1 of Chapter 7 of the Local Government Act 1993 have been complied with with respect to the erection of any building containing any proposed lots to which that plan relates or that any departure from those provisions is such as need not be rectified, (ii) the proposed lots illustrated by that plan substantially correspond with parts of any such building shown in the building plans accompanying the application made to the local council for its approval of the erection of any such building and designated in those building plans as being intended for separate occupation, and (iii) any such building was completed not more than twelve months, or such longer period as the local council may in any particular case fix, before the application for the certificate of approval under this subsection was lodged with the local council, or (b) that: (i) separate occupation of the proposed lots illustrated by that plan will not contravene the provisions of the Environmental Planning and Assessment Act 1979 or of any environmental planning instrument within the meaning of that Act, and (ii) any consent required under that Act or instrument has been given in relation to the separate occupation of the proposed lots illustrated by that plan, and (iii) having regard to the circumstances of the case and the public interest, the subdivision to which the plan relates will not interfere with the existing or likely future amenity of the neighbourhood, and (iv) the land proposed to be subdivided is not the subject of any outstanding order, requirement or notice of a kind referred to in, or given under, a provision referred to in subsection (1B), and (v) if the local council has made an order of the kind referred to in Order No 4 in the Table to section 124 of the Local Government Act 1993 in relation to the land proposed to be subdivided - the order has been complied with or an appeal against the order has been made under section 180 of that Act and the Land and Environment Court has refused to confirm the order. 32. The term " separate occupation " is not defined in the Strata Act and must be construed in the context of what the Act proposes. Mr McClellan argues that it connotes a right to occupy to the exclusion of all the world. Because the strata subdivision creates a right of exclusive occupation, it becomes necessary to obtain the relevant consents first, and, in order to do so, the proposal must comply with either s 37(1)(a) or 37(1)(b). The Applicant's letter 33. The applicant is aware of the provisions of s 37(1), but Mr McClellan submits that it has misconstrued their effect. He relies in this connection on the contents of the applicant's letter of 7 December 1998 ( Exhibit W1 ), which asserts that the proponent has had difficulty obtaining the necessary finance to take advantage of development consent 283/96, and wishes to strata subdivide the project to enable more expeditious funding and commencement. Strata title subdivision and funding of hotel projects is stated in the letter to now be a recognised common method of the development of such projects in Australia. 34. The letter includes the following relevant comments/assertions: The strata subdivision of the site does not in any way impact on the use or amenity of the project and indeed the decisions of the courts have reinforced the notion that matters of title do not of themselves impact on planning requirements. Indeed, Council has established a number of precedents for strata subdivision of hotel properties in the Shire. Consent to the proposed strata plan is sought to enable the fundraising necessary to permit this important tourist and economic project to proceed in the Shire. The proposed strata plan creates a total 66 strata lots comprising the 58 accommodation suites, 8 lots representing the proposed conference, restaurant, function and sporting facilities in the approved development, all contained in the 1A zoned area and leaves the residue of the existing lot 3. … There are no provisions in the LEP or other instruments which affect the strata subdivision of the land . [emphasis added] 35. It is the Council's central argument that the last assertion is incorrect . The Council relies on s 37(1)(b)(ii) of the Strata Act, maintaining that it makes, in these circumstances, approval for " separate occupation " of allotments a prerequisite to obtaining approval of the proposed strata plan. Mr Wilson for the applicant stands by the letter. 36. The applicant's clear contention in the letter is that its DA complies with 37(1)(b). In this respect the letter makes the following comments: The proposed strata plan does not include a development lot or lots. The other matters referred to in Section 37(1)(b) are addressed below: (i) Separate occupation of the proposed lots illustrated by that plan will not contravene the provisions of the Environmental Planning & Assessment Act 1979, or any environmental planning instrument within the meaning of that Act, and Council has considered the proposed occupation of the proposed lots in development application 283/96. Occupation of the lots will be permissible as accommodation units in a country hotel and for associated conference, restaurant, function, support and other facilities. (ii) Any consent required under that Act or instrument has been given in relation to the separate occupation of the proposed lots illustrated by that plan, and See development approval number 283/96. (iii) Having regard to the circumstances of the case and the public interest, the subdivision to which the plan relates will not interfere with the existing or likely future amenity of the neighbourhood, and The proposed strata subdivision does not in any way alter the character or usage of the proposed hotel project. Rather the proposed strata subdivision merely permits separate ownership of lots within the development which must then be used for the purposes of the hotel and the spreading of management and other expenses." [The letter then refers to other similar developments both within the Council area and elsewhere, and continues:] "(iv) The land proposed to be subdivided is not the subject of any outstanding order, requirement or notice of a kind referred to in, or given under, a provision referred to in sub-section (1B), and No such orders are in force. (v) (Refers to any order number 4 in the table to section 124 of the Local Government Act 1993). Not applicable. (vi) If the land proposed to be subdivided is situated within a water supply authority's area of operations - the water supply authority has issued a certificate of compliance for the proposed subdivision. Council is the appropriate water authority. Water supply is a relevant condition of the existing development approval and Council's certificate will be sought as a condition of the strata subdivision approval. The effect of s 37 of the Strata Act 37. Mr McClellan asserts that the applicant, contrary to what it says in its letter, in no way complies with s 37(1)(b). Tourism is contemplated for the relevant zone, not medium density residential, such as would be implicit in a separate occupation arrangement. Development consent was granted for a tourist facility, so " occupation " will be by the owner or manager of the hotel. 38. While the applicant may intend that the subdivision not affect the hotel, subdivision will indeed make its future use and occupation subject to the controls and limitations in the Strata legislation. The applicant must show that it has approval for " separate occupation " of its proposed lots pursuant to s37(1) of the Strata Act. A licence to occupy, e.g. a hotel room or even Judge's chambers, as a licensee, is a different thing from ownership or a right of separate occupation. Section 37(b)(i) and (ii) follow the structure of the EPAA - it is envisaged that there might be a case where separate occupation does not require consent. 39. Support for Mr McClellan's interpretation of "separate occupation" may be found in Pearce v Woollahra Municipal Council (1929) 9 LGR 74 , where Cohen J of the NSW Supreme Court came to the conclusion, in the context of s307(c) of the Local Government Act 1919, that a separate occupation must mean exclusive occupation . In Delonga Constructions Pty Ltd v Landsborough Shire Council (1986) 21 APA 234 at 238 the Local Government Court of Queensland found that " the notion of 'separate occupation' involves a degree of independence and self-sufficiency beyond that normally encountered in respect of a small area of land set aside as a parking place for a caravan in a caravan park ". 40. In accordance with Mr McClellan's submissions and the above authorities, I have concluded that that separate occupation is akin to exclusive occupation, and therefore separate occupation is not encompassed within DA 283/96. Subsequently, the applicant does not satisfy s37(1)(b)(ii), as it does not as yet have consent for separate occupation . Conclusions 41. Accordingly, I answer the preliminary questions of law as follows: Question 1: Is the proposed subdivision of Lot 3 DP 873240 under the application the subject of this appeal permissible under clause 12(3) of Wingecarribee Local Environmental Plan 1989? Answer: This question cannot be answered until the factual position is made clear. Question 2: Is the proposed strata subdivision under the application the subject of this appeal permissible under the provisions of Wingecarribee Local Environmental Plan 1989? Answer: Not at this stage. Question 3: Are the proposed subdivision and proposed strata subdivision otherwise permissible under the provisions of Wingecarribee Local Environmental Plan 1989 and the Environmental Planning Assessment Act 1979? Answer: See answers to Questions 1 and 2. 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.