Land and Environment Court of New South Wales CITATION : Durable Building Products Pty Ltd v Sutherland Shire Council [2000] NSWLEC 233 APPLICANT Durable Building Products Pty Ltd PARTIES : RESPONDENT Sutherland Shire Council FILE NUMBER(S) : 10438 of 2000 CORAM: Pearlman J KEY ISSUES: Question of Law :- preliminary question of law - existing use rights - whether development consent granted - operation of State and Commonwealth laws - whether use for a lawful purpose Australian Postal Corporation Act 1989 (Cth) s 14, s 16, s 17, s 90A, s 90B, s 90 C, s 90D, s 91 Australian Postal Corporation Regulations 1989 (Cth) Commonwealth Places (Application of Laws) Act 1970 (Cth) s 4(2)(b) Constitution (Cth) s 109 County of Cumberland Planning Scheme Ordinance LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 106, s 107 Postal Services Act 1975 (Cth) s 5, s 9 Sutherland Local Environmental Plan 1992 Sutherland Local Environmental Plan 1993 Sutherland Planning Scheme Ordinance Telecommunications and Postal Services (Transitional Provisions and Consequential Amendments) Act 1989 (Cth) Auburn Municipal Council v Szabo and Anor (1971) 67 LGRA 427; Halglide Pty Ltd v PT Ltd and Ors (1990) 71 LGRA 215; CASES CITED: Northern Territory Planning Authority v Murray Meats (N.T.) Pty Ltd and Ors (1983) 51 LGRA 158; Steedman and Anor v Baulkham Hills Shire Council [No 2] (1993) 80 LGERA 323; Sydney City Council v Ke-Su Investments Pty Ltd and Ors (1983) 51 LGRA 186; The Commonwealth of Australia v The State of Western Australia and Ors (1999) 196 CLR 392 DATES OF HEARING: 10/10/2000 DATE OF JUDGMENT: 11/07/2000 APPLICANT Mr J B Maston (Barrister) SOLICITORS Forshaws Neill LEGAL REPRESENTATIVES: RESPONDENT Mr W R Davison SC SOLICITORS Abbott Tout JUDGMENT: IN THE LAND AND 10438 of 2000 ENVIRONMENT COURT Pearlman J OF NEW SOUTH WALES 7 November 2000 DURABLE BUILDING PRODUCTS PTY LTD Applicant v SUTHERLAND SHIRE COUNCIL Respondent JUDGMENT Introduction 1. Two preliminary questions of law have arisen for determination in this class 1 appeal. They are as follows: (1) Does the subject premises have the benefit of existing use rights? (2) Is the proposed development prohibited development? 2. The subject premises are known as 96 - 100 Railway Crescent, Jannali ("the site"). The class 1 proceedings involve an appeal from the deemed refusal of Sutherland Shire Council to grant development consent in respect of two development applications made by the applicant. The first, numbered 00/1551, sought approval for "Change of Use - vacated mail sorting and motor cycle storage rooms to use for retail and storage of external cladding for buildings … new storage shed". The second, numbered DA00/2367, sought approval for "Additions and alterations to existing building" . 3. The site falls within zone 2(a1) Residential under the Sutherland Shire Local Environmental Plan 1993 ("the 1993 LEP"), and the development for which approval was sought in each of the development applications falls within an innominate class of development which is prohibited within that zone. However, the applicant claims that the site has the benefit of existing use rights. The planning and development history 4. In 1957, the council granted consent to the use of the site as a service station, that use being permissible with consent under the zoning which then applied, which was "living area" under the County of Cumberland Planning Scheme Ordinance. There is no dispute that the service station use of the site was abandoned in 1982, and that is confirmed by a letter dated 15 September 1983 from Mobil Oil Australia Ltd to the council. 5. On 24 April 1980, the Sutherland Planning Scheme Ordinance ("the PSO") was gazetted. The site was zoned Residential 2(a1), and development for the purpose of a service station was prohibited in that zone, as was development for the purpose of commercial premises or shops, but development for the purpose of public buildings was permissible with consent. 6. The council issued two consecutive development consents for the conversion of the use of the site from a service station to a fruit market. The first, dated 25 July 1983, was granted for a limited period terminating on 30 June 1986. The second, dated 7 October 1983, was expressed to supersede the first consent, and was also granted for a limited period terminating on the same date in 1986. 7. In September 1983, Australia Post became interested in the site. The following steps took place, which are of critical importance in the determination of the preliminary question of law: (1) On 30 September 1983, Australia Post wrote to the council stating that "it would be appreciated if Council would give a formal expression of opinion on the development of the site for Post Office purposes". (2) On 9 December 1983, the council responded in the following relevant terms: By letter of 23rd December, 1980, Council advised Australia Post that it would support an application to erect a Post Office … [on the site] … subject to certain considerations. This would require the submission of a formal Development Application … (3) Australia Post pressed again on 23 May 1984 for an expression of the council's opinion, and on the same date, it furnished a development application to the council, seeking consent for use of the site as a post office. (4) The council's response, on 24 May 1984, was that the development application was "incomplete" and it sought the payment of certain fees in connection with the development application. (5) On 16 July 1984, Australia Post wrote to the council, stating, amongst other things, that "As a Commonwealth Statutory Authority, Australia Post is not required to submit formal development applications or pay the associated fees, to Local Government Authorities". It reiterated its request for an expression of opinion. (6) On 30 July 1984, the council replied as follows: With reference to the attached Development Consent, it is advised that the Development Control Unit at its meeting held on 25th July, 1984 decided that this be issued as advice only (my emphasis). (7) Annexed to that letter was a document headed " Development Consent" which I will call "the 1984 document" . It bore the reference "Consent No. 0205/84" and it was expressed to have been issued by the council "under the provisions of sec. 92 of the Environmental Planning and Assessment Act, 1979". It was also expressed to relate to "development of Jannali Post Office" and a number of conditions were specified. The penultimate paragraph stated as follows: This decision has been made by council as the authority responsible in respect of development within a residential A1 zone under Sutherland Planning Scheme Ordinance. 8. The evidence does not disclose precisely when the use of the site for a post office commenced. I infer, from the dates of the correspondence to which I have referred, that the use commenced in 1984, although the site was actually acquired by Australia Post in 1983. 9. On 27 March 1992, the Sutherland Local Environmental Plan ("the 1992 LEP") was made. The site was zoned 2(a1) Residential, and in that zone development for the purposes of shops, commercial premises or public buildings fell within an innominate category of development which was prohibited. 10. On 12 November 1993, the 1993 LEP was made. As I have earlier pointed out, the site was zoned 2(a1) Residential, and development for the purposes of shops, commercial premises, or public buildings remained prohibited. 11. On 2 November 1999, Australia Post transferred the site to the applicant. The existing use question 12. The applicant claims that it is entitled to the benefit of existing use rights pursuant to s 107 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") which provides that nothing in an environmental planning instrument prevents the continuance of "an existing use". The expression "existing use" is relevantly defined in s 106 (a) of the EP&A Act as follows: 106 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 Division 4 of this Part, have the effect of prohibiting that use … 13. There is a side issue, as it were, concerning the actual date upon which an environmental planning instrument prohibiting the use came into force. Under the PSO, which was in force when the use commenced in 1984, development for the purpose of commercial premises or shops was prohibited, but development for the purpose of a public building was permissible with consent. The term "public building" was defined as "a building used as offices or for administrative or other like purposes by the Crown, a statutory body, a council or an organisation established for public purposes". The PSO contained definitions of "commercial premises" and "shops", but each of those definitions expressly provided that a purpose elsewhere specifically defined was not included within the ambit of those definitions. It would be appropriate, in these circumstances, to characterise the use of the site as being for the purpose of a "public building" , and, accordingly, it was a use permissible with consent when it commenced in 1984. The 1992 LEP prohibited development for the purpose of a public building, as well as shops and commercial premises, and the 1993 LEP continued that prohibition. The relevant date when the use of the site for the purpose of a post office became prohibited was therefore the date of the coming into force of the 1992 LEP, which was 27 March 1992. I will refer to that date as "the relevant date" throughout this judgment. 14. In the context of determining if the use of the site by Australia Post immediately before the relevant date was an "existing use" within the meaning of s 106(a) and therefore protected by s 107, two questions arise. The first is the legal effect of the 1984 document - did it constitute a development consent for the use of the site for the purpose of a post office? The second question is the effect of the relevant Commonwealth and State laws on the use of the site as a post office. That is, did the EP&A Act apply to the use of the site by Australia Post for the purpose of a post office, and if it did not, was that use nevertheless a use "for a lawful purpose" because it was authorised by Commonwealth legislation? I deal with each of these questions in turn. The effect of the 1984 document 15. Mr Maston, for the applicant, submitted that the 1984 document had force and effect as a development consent for the use of the site for the purpose of a post office, and, consequently, immediately before the relevant date, the site was used, within the terms of s 106(a) "for a lawful purpose", and hence the use was an existing use protected by s 107. 16. Mr Maston submitted that the 1984 document must be regarded as constituting a development consent under the EP&A Act. It is expressed to be a development consent, and it must operate according to its terms. The use of the words "as advice only" in the covering letter cannot, in his submission, alter the consequence that the council granted development consent. That follows, first, from the principle that a development consent must be construed only by reference to its terms and any other documents expressly incorporated in it, and any extraneous documents, of which the letter is one, must be ignored. For that proposition Mr Maston cited Auburn Municipal Council v Szabo and Anor (1971) 67 LGRA 427 and Halglide Pty Ltd v PT Ltd and Ors (1990) 71 LGRA 215. Secondly, he said, the terms of the letter are inconsistent with the 1984 document itself. The 1984 document states clearly and unequivocally that it is a development consent for the use of the site as a post office, and that statement is inconsistent with the statement that it is for "advice only". Thirdly, he submitted that the letter itself is unclear. It states that the council decided that the attached development consent "be issued" and yet it also states that it is issued "as advice only". 17. Mr Davison SC, appearing for the council, contended that the 1984 document was not a development consent. The circumstances in which it was issued show, he submitted, that it was not a development consent, but an expression of opinion of the council on the permissibility of the proposed use of the site by Australia Post as a post office. 18. I accept Mr Davison's submission. On three occasions, in September 1983, in May 1984 and in July 1984, Australia Post had asked for an expression of opinion from the council "on the development of the site for Post Office purposes". Moreover, although Australia Post actually lodged a development application, it made it abundantly clear, in its letter of 16 July 1984 to the council, that it was not bound to do so. Furthermore, the council itself regarded the development application as incomplete until the appropriate fees were paid, which never occurred because Australia Post refused to pay them. Having regard to those circumstances, the covering letter and the 1984 document cannot, I think, be regarded as a development consent. They constituted the council's expression of opinion, by way of advice to Australia Post, that the proposed use was permissible with consent. The circumstances show that there is no inconsistency or ambiguity in the covering letter and the 1984 document. No doubt the council's opinion could have been more clearly expressed, but it was an opinion nevertheless, and not a formal grant of development consent. 19. Mr Maston cannot, I think, draw any comfort from Auburn v Szabo or Halglide v PT. In the first of those cases, the Supreme Court was concerned to determine what was authorised by certain development consents, that is, it was necessary to construe the development consents rather than to decide whether or not they had in fact been granted. The principle enunciated by Hope J was that, in undertaking the task of construing a development consent, regard must be had to the consent itself and any documents expressly or by implication incorporated in it, and it is impermissible to have regard to any extraneous documents. The second of those cases was concerned with an identical task of construing a development consent, and the Court applied the principle enunciated in the first case. But this present case is not concerned with construing a development consent. It is, instead, concerned to determine if development consent was granted at all, and that determination depends upon the whole of the surrounding facts and circumstances, including the terms of the covering letter. 20. For these reasons, I have concluded that no development consent was granted for the use of the site as a post office, and the applicant cannot rely upon any development consent as establishing a use for a "lawful purpose" in terms of s 106(a). The State and Commonwealth laws 21. There is no issue that the use of the site by Australia Post for the purpose of a post office was authorised by Commonwealth legislation from the time when it commenced in 1984 until the site was sold in 1999 to the applicant. Accordingly, the applicant contends that the use of the site was for "a lawful purpose" immediately before the relevant date, and accordingly that the use was an "existing use" within the definition in s 106(a). The council, on the other hand, contends that the EP&A Act ceased to have any force and effect from the time that Australia Post commenced to use the site as a post office in 1984 until it was sold to the applicant in 1999, and, accordingly, ss 106 and 107 of the EP&A Act did not operate to protect the use of the site as an existing use. The council also contends that, in any event, the use of the site for the purpose of a post office was not a use for "a lawful purpose" in a planning sense and accordingly the use was not an "existing use" within the meaning of s 106 (a). 22. To understand these competing arguments, it is necessary to have regard to a somewhat complex set of Commonwealth legislation. In 1984, when the use of the site as a post office commenced, the Postal Services Act 1975 (Cth) applied. Section 9 of that Act gave plenary powers to the Australian Postal Commission to do all things necessary and convenient in connection with the carrying out of its functions under that Act, which included, pursuant to s 5, the operation of postal services. As part of a suite of legislation relating to telecommunications and postal services, the Postal Services Act was repealed in 1989 (by the Telecommunications and Postal Services (Transitional Provisions and Consequential Amendments) Act 1989 (Cth)) and replaced by the Australian Postal Corporation Act 1989 (Cth). That Act, which continues in force to the present, also conferred plenary powers upon the Australian Postal Corporation (the Commission having become a corporation by a 1988 amendment to the Postal Services Act) to do all things necessary in connection with the carrying out of its functions under that Act, which again included the operation of postal services (ss 14, 16 and 17). Accordingly, the Postal Services Act and later the Australian Postal Corporation Act authorised the use of the site as a post office. 23. However, in 1984, when, as I have said, the use of the site as a post office commenced, the EP&A Act applied to the site. It controlled the use of the site by providing that a person shall not carry out development that is prohibited or shall not carry out development that is permissible with consent except in accordance with a consent. Such a provision, in purporting to control the use of the site, was inconsistent with the authority conferred upon Australia Post under the Postal Services Act to use the site as a post office. The Postal Services Act was silent as to the application of State laws, but s 4 of the Commonwealth Places (Application of Laws) Act 1970 (Cth) applied. It provided that State laws applied according to their tenor, except, relevantly, where State laws were invalid or inoperative by reason of Commonwealth legislation (s 4(2)(b)). Section 109 of the Constitution of the Commonwealth provides that, when a State law is inconsistent with a Commonwealth law, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. Section 109 renders a State law inoperative only to the extent of that inconsistency and only for so long as the inconsistency remains ( The Commonwealth of Australia v The State of Western Australia and Ors (1999) 196 CLR 392 per Gleeson CJ and Gaudron J at 417). 24. When the Australian Postal Corporation Act was enacted in 1989, it did contain a provision (s 91) which related to the application of State laws, and which provided that Australia Post was not subject to any requirement or obligation under a State law until 31 December 1990. From 1 January 1991, the position changed slightly. The Australian Postal Corporation Regulations were amended from that date to provide that a State law relating to, amongst other things, the use of a building, did not apply to a building that was the property of Australia Post if the building was in use before 1 January 1991. Commencing on 5 December 1994, a provision in similar terms was incorporated into the Australian Postal Corporation Act as part of an amendment which inserted a new pt 7A containing ss 90A, 90B, 90C and 90D. 25. The effect of this analysis of somewhat convoluted provisions demonstrates that Australia Post was authorised by Commonwealth legislation to use the site as a post office, and the EP&A Act did not apply, at least until such time as the site was no longer the property of Australia Post. The site ceased to be owned by Australia Post when it was sold to the applicant in November 1999. In the light of these circumstances, I return, then, to the question of whether or not the applicant has the benefit of existing use rights. 26. The council's case, in the circumstances I have set out, is that the site was not being used "for a lawful purpose" at the relevant date. Mr Davison put forward two bases for that contention. First, at the relevant date, State law did not apply, and, in particular, ss 106 and 107 of the EP&A Act did not operate at the relevant date in relation to the site. It could not be said, therefore, that, immediately before the relevant date, the site was being used for a lawful purpose within the terms of s 106(a), since s 106 had no application to the site. Secondly, the expression "lawful purpose" must in its context be construed as a "planning purpose". The site was not used for a planning purpose immediately before the relevant date because no State planning law applied at that date. Hence, in Mr Davison's submission, when, in 1999, the site was transferred out of the ownership of Australia Post and the application of the EP&A Act was thereby restored, the use of the site for the purpose of a post office was prohibited under the 1993 LEP and ss 106 and 107 did not operate as an exception to that prohibition. 27. Mr Davison relied upon Sydney City Council v Ke-Su Investments Pty Ltd and Ors (No 2) (1983) 51 LGRA 186 and Northern Territory Planning Authority v Murray Meats (N.T.) Pty Ltd and Ors (1983) 51 LGRA 158 as authority for the proposition that the phrase "for a lawful purpose" must be construed within the scope and operation of the EP&A Act as "lawful for planning purposes". Mr Davison drew the Court's attention to the fact that Sydney City Council v Ke-Su had never been overruled, and indeed was referred to with approval by Kirby P (as he then was) in Steedman and Anor v Baulkham Hills Shire Council [No 2] (1993) 80 LGERA 323. 28. In Sydney City Council v Ke-Su the issue was whether certain premises used as a brothel had the benefit of existing use rights when under the law existing at the time conducting a brothel was a criminal offence. The respondent claimed that the use was "for a lawful purpose" within the meaning of s 106(a) of the EP&A Act, on the ground that the word "lawful" does not mean "lawful" under the general law, but is to be given the limited meaning of "not prohibited by planning law". In accepting this claim, McClelland J said at pp 204 - 205: The implicit invitation to the court in the present proceedings to step outside the confines of planning law to determine what is a lawful existing use is an invitation to exceed its function…It is no part of the task allocated to this Court by the legislature, in considering whether an existing use is "lawful" for the purposes of the Environmental Planning and Assessment Act, to inquire or determine whether such use infringes any of those other Acts … 29. In Northern Territory v Murray Meats, a similar issue arose. The question was whether, if the use of premises was rendered illegal by any law, that use gained no protection from existing use rights provisions. Lockhart J in the Federal Court said at p 176: Neither the research of counsel, nor my own research, revealed any case in which existing use provisions were held to be unavailable by reference to laws other than planning laws. His Honour held that a contravention of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) was not "within the scope or operation" of the existing use provisions of the Planning Act 1979 (NT). 30. In my opinion, however, neither of these authorities is determinative of the issue raised in this case. They were each concerned with an issue as to whether the protection of existing use rights was unavailable because of a breach of the general law. That is not the issue here. There is no doubt that the use of the site as a post office was lawful, not unlawful. It derived its lawfulness from the operation of Commonwealth legislation. Accordingly, the issue in this case is rather whether that use was "for a lawful purpose" within the meaning of s 106(a). 31. On that issue, Mr Maston submitted that the interaction of the Commonwealth and State law was such as to render the use lawful. The paramount Commonwealth law was intended to operate, and if the use was prohibited under the State law, then the State law was invalidated to the extent necessary to render lawful the purpose for which the site was used by Australia Post. 32. I agree with Mr Maston's submission. As I have pointed out, both Sydney City Council v Ke-Su and Northern Territory v Murray Meats are distinguishable, but, insofar as those cases are of any assistance, neither of them is authority for so wide a proposition that the phrase "for a lawful purpose" must be construed without regard for any other laws whatsoever. It would artificial to ignore the effect of the Commonwealth law in relation to the site, or to ignore the fact that, to the extent of any inconsistency, the State law was invalid. Having regard to the fact that the Commonwealth law authorised the use of the site for a post office, and the State law did not apply to that use, the use of the site for the purpose of a post office was lawful for all purposes. That was the effect of s 109 of the Constitution and ss 90A - 90D of the Australian Postal Services Act and the regulation which preceded those sections. Those provisions removed the operation of State law which would have rendered the use of the site unlawful, and, logically, the corollary must flow, that is, that the use was lawful for all purposes. To use the words of the submission made to and accepted by McClelland J in Sydney City Council v Ke-Su (at p 203) , the use of the site was not a use which was "prohibited by planning law ", since no planning law applied to it. It is in that sense, I think, that Kirby P, in Steedman v Baulkham Hills Shire Council at p 331, referred to the decision of McClelland J. His Honour was saying, as I respectfully understand him, that a previous use must be a lawful use in the sense that its purpose was not a prohibited one. 33. If the use of the site at the relevant date was not prohibited by planning law, and yet the use was lawful for all purposes, then it must follow, in my opinion, that the use of the site at the relevant date was "for a lawful purpose" within the meaning of s 106(a). It follows, then, that the use of the site for a post office is an existing use protected by the operation of s 107. 34. In coming to this conclusion, I have rejected Mr Davison's submission that the use of the site as a post office cannot be regarded as an "existing use" within the meaning of s 106(a) because neither s 106 nor s 107 applied at the relevant date. That is because the inquiry as to whether or not the site has the benefit of existing use rights is an inquiry undertaken at the present time, for the applicant asserts that it has that benefit under the EP&A Act as it now applies. The applicant's claim, with which I agree, is that s 107 preserves the continuance of the use of the site as a post office because that use is properly regarded at the present time as an "existing use" . As s 106(a) provides, that use is an "existing use" if the site was used for a lawful purpose immediately before the relevant date. The claim is not that the use of the site as a post office is an "existing use" because s 106(a) applied at the relevant date. The claim is, rather, that the use is an "existing use" because it meets the description in s 106(a). 35. Although I have, for the reasons set out in par 13, referred to the relevant date as being 27 March 1992, there is the possibility of an argument that the relevant date is instead the date upon which the site was transferred out of the ownership of Australia Post. That is because s 106(a) refers to an environmental planning instrument "coming into force" . As I have explained, State law was invalid in relation to the site whilst the site was under the ownership of Australia Post. The restoration of State law had the effect of bringing the 1993 LEP "into force" so far as concerns the site. Neither party raised this argument at the hearing, but, in any event, my conclusion would remain the same if the relevant date was 2 November 1999. That is because, immediately before that date, the site was used for the purpose of a post office (characterised as a "public building" ), a use which was for "a lawful purpose" , as I have found, and therefore an existing use. Conclusion 36. In accordance with the foregoing, I answer the preliminary questions of law as follows: Question 1: Does the subject premises have the benefit of existing use rights? Answer: Yes. 37. Having determined that the subject premises have the benefit of existing use rights, it is unnecessary to answer the second question. 38. The class 1 proceedings should proceed to a hearing upon the basis of the answers I have given to the preliminary questions of law. 39. The exhibits may be returned. 40. I make no order as to costs. 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.