Land and Environment Court of New South Wales CITATION: Sericott Pty Ltd V Snowy River Shire Council [1999] NSWLEC 80 PARTIES Applicant Sericott Pty Limited Respondent Snowy River Shire Council NUMBER: 10522 of 1997 CORAM: Sheahan J KEY ISSUES: :- Existing use - prohibited use - preliminary Question of Law LEGISLATION CITED: Existing use - prohibited use - preliminary Question of Law DATES OF HEARING: 02/01/1999 DATE OF JUDGMENT DELIVERY: 04/01/1999 Applicant Mr G Newport (Barrister) Mr A McGuirk (Solicitor) of Dobes & Andrews LEGAL REPRESENTATIVES: Respondent Mr Alan Bradbury (Solicitor) of Deacons Graham & James JUDGMENT: IN THE LAND AND Matter Nos: 10522 of 1997 ENVIRONMENT COURT Coram: Sheahan J OF NEW SOUTH WALES 1 April 1999 SERICOTT PTY LIMITED Applicant v SNOWY RIVER SHIRE COUNCIL Respondent JUDGMENT Introduction 1. These Class 1 proceedings, and also those in matter No.10672 of 1998, which was heard on the same day, concern the uses that can be made of various parcels of land, which comprise parts of the land holdings which were the subject of my judgments of 24 July 1998 and 26 November 1998. Those two judgments dealt mainly with matters Nos. 40170 and 40299 of 1997 between these same parties. The complex factual background to all these proceedings is set out in some detail in those earlier judgments and need not be repeated here. 2. The precise issues involved at this stage in the two current Class 1 proceedings are not identical, and the parties and the Court agreed that they could conveniently be dealt with on the same day, but not actually heard together. This judgment primarily deals with questions of law raised in matter No. 10522 of 1997. This matter was before the Court during the earlier Class 4 litigation, but the "final" orders made in my judgment of 26 November 1998 have impact upon the substantive issues which remain outstanding in this Class 1 matter, only insofar as they sought to identify those areas of the subject lands which have the benefit of "existing use" rights. 3. For clarity I should set out the declarations made on 26 November 1998 in the Class 4 proceedings: " 1. A declaration that the works carried out upon the lands described in the Schedule to these declarations ("the lands"), and relating to Development Consent 55/92 ("the works"), have been "physically commenced" within the meaning of s 99 of the EPAA. 2. A declaration that the works constitute an "existing use", within the meaning of s 106 of the EPAA, for the purpose of the subdivision of some of the lands into 14 freehold lots for the purpose of an integrated tourist resort, as referred to in development consent 55/92, granted by the respondent on 3 December 1992. 3. A declaration that the lands have the benefit of "existing use" rights, pursuant to Part 4 Division 2 of the EPAA, for the purpose of the subdivision of some of the lands into 14 freehold lots for the purpose of an integrated tourist resort, as referred to in development consent 55/92, granted by the respondent on 3 December 1992. Schedule "The lands" comprise the whole of the land described and referred to in: (a) Lot 13 and lot 14 in DP 868116; (b) Lots 1-3 inclusive in DP 868117; (c) Lot 1 in DP 270133." These Proceedings 4. These proceedings concern a development application ("DA"), made on about 30 May 1997 ( Exhibit S2 ) by Sericott to construct a new entry gatehouse and sign structure, and perform associated roadworks, on Lot 1 of DP270133 ("lot 1"), known throughout the earlier litigation as the community association block. The applicant informed the Court that if the matter proceeds it will seek leave to amend the DA to include also lot 2 of DP 868117 ("lot 2"). The Council expressed no opposition to this course. 5. Both lots 1 and 2 are now zoned "7 Environment Protection" under Snowy River Local Environmental Plan 1997 ("LEP 1997" - Exhibit C1 tab 2), and both lots are included in the lands declared in my judgment of 26 November 1998 to have existing use rights. The overall intentions of the original proponent were for the staged development of an integrated tourist resort (see development consent 55/92, 3 December 1992 - Exhibit C1 tab 8). 6. The effect of my judgments in the Class 4 proceedings was to confine the existing use rights to permitting the completion of stage 1 of that development, and I defined that stage to comprise the subdivision of some of the lands into 14 freehold lots for the purpose of the proposed resort. 7. The preliminary questions of law raised in this matter (by the amended Notice of Motion dated 7 December 1998) are as follows: (a) Must the DA be refused on the grounds that the proposed development may not be carried out under the provisions of the Snowy River LEP 1997 or otherwise? (b) Having regard to my earlier decisions and orders, does the land (other than land shown as "road" on plan A03, prepared by Peter Burns and dated 21 September 1992) have the benefit of any existing use rights which would enable the DA to be approved? (c) If the land to which the DA relates has the benefit of existing use rights for the purpose of the subdivision of the land into 14 freehold lots for the purpose of an integrated tourist resort, do the "existing use" provisions of the Environmental Planning & Assessment Act 1979 ("EPAA") and/or the EPA Regulations enable the DA to be approved? 8. In the event that the Court finds that the DA can be legally approved, the respondent Council seeks leave to amend its Statement of Issues to add the following additional issue: "Whether the development application should be approved in isolation from the development of an integrated all year round tourist resort on the land of which the land the subject of this application forms part". 9. Before the Court there is also an outstanding Notice of Motion from the applicant seeking the expedition of the appeal and its listing before a Commissioner of the Court in Sydney . The Council has no opposition to such orders if the Court is satisfied they should be made. The relevant provisions 10. Regard must be had to the following relevant sections of the EPAA: Section 4 " 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. Section 106 Definition of "existing use" In this Division, existing use means: (a) the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would, but for Division 4A of Part 3 or sections 100A and 101, have the effect of prohibiting that use, and (b) the use of a building, work or land: (i) for which development consent was granted before the commencement of a provision of an environmental planning instrument having the effect of prohibiting the use, and (ii) that has been carried out, within one year after the date on which that provision commenced, in accordance with the terms of the consent and to such an extent as to ensure (apart from that provision) that the development consent would not lapse. Section 107 Continuance of and limitations on existing use (1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use. (2) Nothing in subsection (1) authorises: (a) any alteration or extension to or rebuilding of a building or work, (b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned, (b1) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of an existing use, (c) the continuance of the use therein mentioned in breach of any consent in force under this Act in relation to that use or any condition imposed or applicable to that consent or in breach of any condition referred to in section 91(3)(b), or (d) the continuance of the use therein mentioned where that use is abandoned. (3) Without limiting the generality of subsection (2)(d), a use shall be presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months. Section 109 Existing consent (1) Nothing in an environmental planning instrument operates so as to require consent to be obtained under this Act for the continuance of a use of a building, work or land for a lawful purpose for which it was being used immediately before the coming into force of the instrument or so as to prevent the continuance of that use except with consent under this Act being obtained. (2) Nothing in subsection (1) authorises: (a) any alteration or extension to or rebuilding of a building or work, (b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned, (c) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of the use therein mentioned, (d) the continuance of the use therein mentioned in breach of any consent in force under this Act in relation to that use or any condition imposed or applicable to that consent or in breach of any condition referred to in section 91(3)(b), or (e) the continuance of the use therein mentioned where that use is abandoned. (3) Without limiting the generality of subsection (2)(e), a use shall be presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months." 11. Regard must also be had to Clause 39 of the Environmental Planning & Assessment Regulation 1994 ("the Regulation") as follows: "39(1) An existing use may, in accordance with this Division, be: (a) enlarged, expanded or intensified; or (b) altered or extended; or (c) rebuilt; or (d) changed to another use, including a use that would otherwise be prohibited under the Act. (2) A use to which an existing use is changed is itself taken to be an existing use for the purposes of the Act and may, subject to this Division, be changed to another use." The Applicant's Submissions 12. Mr Newport for Sericott submits that what the respondent Council argues in this case would constitute an abrogation of the findings and orders made in the earlier Class 4 proceedings on 26 November 1998, a course of action which would be precluded by issue estoppel or res judicata , in view of the fact that my judgment of 26 November 1998 would operate as a judgment in rem which affects the lands, and so applies to the subject land. Mr Newport said of Mr Bradbury's (Counsel for the Council) submissions (T.19. L11-13) " he is in fact saying your declaration of existing use rights in some way is limited only to what was proposed by part of that development ". 13. Mr Newport submits that to test res judicata I should begin with the declaration as the official Court record, not with all the documentation in Exhibit C1 that was before the Court on the earlier occasion. I should then go to the current DA and associated documents. He submits that all of the earlier plans, etc. and the Statement of Environmental Effects have now merged into the November judgment. He relies on Russo v Kogarah Municipal Council (10774 of 1997, Sheahan J, 14 August 1998); Egri & Anor v DRG Australia (1988) 19 NSWLR 600 at 606-608), and Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. 14. Mr Newport submits that Lot 2 has the benefit of existing use rights. It has an area of 4.28 ha and that is the location of the proposed gatehouse. He relies on s 107 to say that what is here proposed is a continuation of lawful uses. Regulation 39 allows a change to another use. If you cannot go from a subdivision to a different form of development, you are reading down the statutory provision, particularly cl 39(d). By way of analogy, you cannot go from a shop to an office, but you can go from a shop to another shop. See Caltex Oil (Aust) Pty Ltd v Warringah Shire Council [1988] NSW LEC 74 and cases referred to therein. The Council's contentions 15. The Council, in reply to the res judicata /issue estoppel submission, asserts that applying the outcome of the Class 4 proceedings to the current DA does not involve at all any "quibbling" with the earlier proceedings. Mr Bradbury submits that it is clear from my judgment of November 1998 that the existing use rights are confined to permitting the completion of stage 1. I did not say that all the lands had existing use rights - indeed, the answer to that question was the key to the Class 4 proceedings. There is no issue of res judicata or issue estoppel in taking the earlier decision and applying it to the facts now before the Court. 16. The Council acknowledges that the development proposed in the current DA was contemplated as "Rush's Resort Development", but says that it is, in effect, the carrying out of a new development which was not authorised by DC 55/92, nor by the existing use provisions of the EPAA or the Regulation. 17. The proposed development is not permissible under LEP 1997, which was only in draft form at the time of the hearing of the Class 4 proceedings. 18. In so far as the development proposed in this matter comprises the carrying out of roadworks required to complete stage 1 of the subdivision, the Council does not contest that those works enjoy the benefit of my earlier declarations. However, the Council contends that those parts of the development which comprise the proposed gatehouse and sign structure do not form part of stage 1 of the development. The Council asserts that that land was " simply held in reserve for some future activity ", presumably in either the next or subsequent stages of the development of the proposed resort. 19. Council contends that DC 55/92 (see Exhibit C1 tab 8) included the 14 lot subdivision and, outside of those lots, only some narrowly specified aspects of the development in stage 1, namely, the development of tennis courts and clubhouse on lot 1(b), some limited roadworks on lot 1(k), and the development of a bush walk trail on lot 1(j) between the tennis courts and lot 12. Those recreational components of the proposed resort were included in stage 1 with a view to all 50 lots eventually having the benefit of them. The tennis courts and the relevant roadworks are confined, by paragraph 3.21 of document 6 in Exhibit C1 , to those coloured brown on plan A.02. 20. The tennis courts and clubhouse were substituted for the originally intended golf course. They were clearly intended as part of stage 1, but were the subject of their own development application. 21. The recreational lots were expressed in the original DA to have a range of purposes and document 6 in Exhibit C1 says: "3.15 The recreation lots are shown on amended plan of subdivision A.02, and identify indicative land uses, pending separate development applications to confirm the recreational nature of the developments intended. 3.16 These lots are all part of Lot 1, the first Lot of the Association Lots in the Community Plan, and are successively numbered 1' a' to 1' n'." 22. Mr Bradbury submits that the gatehouse was shown as part of stage 2 on the relevant plan (Plan AO3 dated 21 September 1992), and the Statement of Environmental Effects submitted with DA 55/92 did not specify the gatehouse area of lot 1 as being included in stage 1. Hence, the development of the proposed gatehouse is not development which is required to complete stage 1 of the development and it is, therefore, not authorised by the Court's earlier decision. 23. To the extent that land the subject of the DA has the benefit of existing use rights, the existing use may be continued pursuant to s 107 without the need for development consent. However, the only existing use which may be so continued in this case, in Council's submission, is the subdivision, and several other limited works. 24. The completion of stage 1 still requires the creation of residential lots 1-4 out of "old" lot 2, and 5-9 out of "old" lot 1, and 10-12 out of "old" lot 3. Lots 13 and 14 have already been created. Lot 13 belongs to Blackstock (an inactive respondent in the earlier Class 4 proceedings), and lot 14 is the subject of matter No. 10672 . 25. The Council further submits that the EPAA draws a clear distinction between the various activities which may be caught by the definition of "development" for the purposes of the EPAA in s 4. On the other hand, s 106 in defining "existing use" refers to the "use of a building, work or land". The erection of a building such as the proposed gatehouse is not the continuance of an existing use defined as subdivision of land into freehold lots. 26. Section 107(2) limits the benefits of "existing use" and does not authorise any alteration or extension or rebuilding of a building or work, or any increase in the area of the use made of any building, work or land, beyond the area actually physically and lawfully used immediately before the coming into operation of the environmental planning instrument which had the effect of prohibiting the use. 27. Council submits that if s 107(2) does not enable even the alteration or extension of an existing building, it could surely not establish a right to continue an existing use by the erection of an entirely new building. The proposed new entry gatehouse and sign structure have no impact on the subdivision. It is the carrying out on the subject land of a different type of development altogether. 28. Clause 39(1) of the Regulation provides that consent may be given for an existing use to be enlarged, expanded, intensified, altered or extended, rebuilt or changed to another use. 29. In respect of the Regulation, Mr Bradbury submits that you simply cannot change a subdivision into a building. He accepts that you can change use A into use A + B, but there is no authority for a subdivision that has been changed into a building or another type of work. The 14 lots had been only partly created at the time of the original decision, and the original decision enables that work to be completed. It cannot be extended to changing that existing use of subdivision into approval of buildings and works. 30. The Council contends that that part of the proposed development which comprises the gatehouse and the sign structure is not a continuation of the existing use (subdivision), nor its enlargement, expansion or intensification, nor its alteration or extension, nor its rebuilding, nor a change to another use within the meaning of Clause 39(1). 31. Among the conditions attaching to DC 55/92, only one of which was subsequently amended (as referred to in my earlier judgment), there remained unamended condition 56 which provided as follows: "No advertising signs or structures are to be displayed or erected without a separate application being submitted and approved by Council." 32. The Council says this makes clear that the advertising structure was not part of the 14 lot subdivision, nor otherwise included in Stage 1. 33. The Council submits that " the gatehouse as it's now proposed was in the developer's mind at the time that all this was going on, was shown as a future gatehouse but not as part of stage 1 of the development " (T.12 L.54-58). The only parts of the community plan that were part of stage 1 were the tennis courts and clubhouse, the road coloured brown on plan A.03, and the bush walking trail. "[A]ll of the other development proposed on the community land was not included in stage 1. There's nothing in any of the documents to say that the gatehouse was part of stage 1 of the development. To the contrary, the plans indicate that it was part of stage 2". (T.13.L.8-12). Conclusions 34. I agree with the Council's submission that these proceedings do not infringe the principles of res judicata or issue estoppel. Indeed, to accede to Sericott's submissions would constitute such an infringement. The Court is asked here to rule whether particular works come within the declaration and cannot revisit the making of that declaration. 35. The "existing use" identified in my judgment of 26 November 1998 extends only to Stage 1 - namely the subdivision of specified lands into 14 freehold lots, plus the development of certain other specifically identified and narrowly defined items covered by DC 55/92, namely tennis courts and clubhouse, walking trail, and some roadworks. 36. The development proposed in this application is part of Stage 2 of the original masterplan for the resort complex and is not protected by the "existing use" provisions as it is not embraced by the subdivision to which they are limited. 37. I accordingly answer the three questions of law as follows: Question (a) "must the development application be refused on the grounds that the development proposed is development which may not be carried out under the provisions of the Snowy River Local Environmental Plan 1997 or otherwise?" Answer Yes Question (b) "having regard to the decision of this Honourable Court on 24 July 1998 in proceedings between the parties (No.40170 of 1997) and the Orders made by his Honour, Sheahan J on 26 November 1998, whether the land to which the application relates (other than land shown as ' road ' on Plan A03 prepared by Peter Burns dated 21/9/92) has the benefit of any existing use rights which would enable the development application to be determined by the grant of approval? Answer No Question (c) "if the land to which the application relates has the benefit of existing use rights for the purpose of the subdivision of the land into 14 freehold lots for the purpose of an integrated tourist resort, whether the ' existing use' provisions of the EPA Act and/or EPA Regulation enable the development application to be determined by the grant of approval. Answer No 38. These answers may well dispose of the proceedings but, if not, for completeness, I grant leave to the applicant to amend its DA to include "lot 2", and leave to the respondent to amend its Statement of Issues as outlined, if it still wishes to do so. The hearing should be expedited and listed before a Commissioner in Sydney. I direct that the appeal be listed for callover by the Registrar on Friday 9 April. 39. Exhibit S1 has already been returned. Exhibits S2 and S3 should remain in the file. All other exhibits may be returned and there will be no order as to costs. I HEREBY CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE T.W. SHEAHAN. Associate: Dated: 1 April 1999 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.