Land and Environment Court of New South Wales CITATION : 1643 Pittwater Road Pty Ltd v Pittwater Council 11 Elvina Avenue Pty Ltd v Pittwater Council Doering v Pittwater Council 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685 1643 Pittwater Road Pty Ltd (Appl) 11 Elvina Avenue Pty Ltd (Appl) PARTIES : Joe Doering & Diane Doering (Appl) 1643 Pittwater Road Pty Ltd (Appl) Pittwater Council (Resp) FILE NUMBER(S) : 11306/04; 11307/04; 11308/04; 40905 of 2004 CORAM: McClellan CJ Development Consent :- Dual occupancy subject to conditions Appeal of modification application New condition imposed by council Modification involving minimal environmental impact Modification by consent authorities of consents granted by the Court Extent of the power to modify and impose new conditions KEY ISSUES: Matters which can be taken into account when determining a modfiication application Dual Occupancy: Controls imposed by environmental planning instruments Whether council motivated by a legitimate planning purpose Whether council imposed condition for an improper purpose Company title schemes as a means of promoting dual occupancies Whether compamy title creates a subdivison LEGISLATION CITED: Environmental Planning & Assessment Act 1979 Land and Environment Court Act 1979 Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490; Benalup Holdings Pty Limited v Lismore City Council (1993) 81 LGERA 257; Captain Cook Cruise Pty Limited v North Sydney Council (2002) 126 LGERA 233; Johns v Australian Securities Commission (1993) 178 CLR 408; Masterton Homes Pty Ltd v Pittwater Council (2003) 124 LGERA 216; Monnock v Pittwater Council (2003) 127 LGERA 66; CASES CITED: Newbury District Council v Secretary of State for the Environment [1981] AC 578; North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 97 LGERA 433; Parramatta City Council v Peterson (1987) 61 LGRA 285; Seaforth Services Pty Ltd v Byron Shire Council (No 2) (1991) 72 LGRA 44; Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472; Valhalla Cinemas Pty Ltd v Leichhardt Municipal Council (1986) 60 LGRA 240; Woolworths Limited v The Warehouse Group (Australia) Pty Ltd & Anor [2003] NSWLEC 350 DATES OF HEARING: 18 November 2004 DATE OF JUDGMENT: 12/15/2004 J Simpkins SC/I Hemmings (Appls) Hones Lawyers (Appls) LEGAL REPRESENTATIVES: B J Preston SC/A Galasso (Resp) Mallesons Stephen Jaques (Resp) JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES McCLELLAN J WEDNESDAY, 15 DECEMBER 2004 11306/04 1643 PITTWATER ROAD PTY LTD v PITTWATER COUNCIL 11307/04 11 ELVINA AVENUE PTY LTD v PITTWATER COUNCIL 11308/04 DOERING v PITTWATER COUNCIL 40905/04 1643 PITTWATER ROAD PTY LTD v PITTWATER COUNCIL JUDGMENT 1 HIS HONOUR: There are three Class 1 proceedings before the Court in which the same issues are raised. They have, by agreement, been heard together. There is also a class 4 application in one matter. 2 The three properties are known as 1643 Pittwater Road, Mona Vale, 11 Elvina Avenue, Avalon and 3 George Street, Avalon. All of the properties are within the area of Pittwater Council. The Class 4 proceedings relate to 1643 Pittwater Road. 3 By notice of determination dated 9 January 2004, the Council granted development consent for the construction of a new dwelling to create a detached dual occupancy upon 1643 Pittwater Road subject to certain conditions. Condition E3 of the consent is in the following terms: "Prior to occupation, the applicant is to create, at its own expense, a covenant on the title of the land to which the consent relates that: (a) creates a restriction on user; and (b) states that, pursuant to clause 21F of the Pittwater LEP, the separate occupation, use or disposition of the land by way of agreement, instrument or dealing, including an agreement, instrument or dealing evidenced by a company's constitution or articles of association, is prohibited." 4 1643 Pittwater Road is located in Area 3 of the Pittwater Local Environmental Plan 1993. Within that area, development for dual occupancy is permissible with the consent of the Council. 5 The applicant subsequently lodged an application pursuant to s 96 of the Environmental Planning & Assessment Act 1979 seeking to modify the consent by the deletion of condition E3. The Council determined the application by deleting the condition but imposing a further condition in the following terms: "Prior to the issue of an Occupation Certificate, the applicant is to create, at its own expense, a covenant on the title of the land, the terms of which state that the exclusive right to use, enjoy and occupy the individual dwellings to be constructed on the land cannot be based upon, (including attached to), the ownership of shares in a company." 6 The applicant has appealed against this decision pursuant to s 96(6) of the Act. 7 An appeal pursuant to s 97 has also been lodged against the original condition. 8 In relation to 11 Elvina Avenue, the Council originally granted consent on 27 November 2002. The subject land is within Area 2 of the Pittwater Local Environmental Plan so that two attached dwellings may be approved if there are not more than two dwellings on the allotment after the development has been carried out. 9 When granting consent, the Council imposed condition E59 in the following terms: "Prior to occupation a covenant is to be created on the title of the land, at the applicant's expense, that creates a restriction on the use of the land and the terms of which state that the ownership of the individual dwelling to be constructed on the property cannot be individually assigned by any agreement, dealing or instrument based on the ownership of company shares." 10 An application was lodged pursuant to s 96 of the Act seeking to modify the consent by deletion of the condition. The Council determined the application by deleting the condition and imposing a further condition which is in the same terms as the new condition imposed in relation to 1643 Pittwater Road. 11 The position in relation to 3 George Street is similar to 11 Elvina Street. The consent was granted by this Court on 13 March 2003 and included the same original condition. An application was made to modify the consent and was determined by the Council by deleting the condition and imposing a further condition, which is in the same terms as the new condition in the other two matters. 12 The Class 4 proceedings have been commenced in 1643 Pittwater Road and challenge the validity of the conditions. However, the matters presently before the Court are the appeals lodged by the applicants with respect to the Council's decisions in relation to the proposed modifications. As I have indicated, there is also a Class 1 appeal in relation to the original condition E3 imposed on the consent for 1643 Pittwater Road. Because that consent was only granted in January 2004, an appeal is still available. That opportunity has been lost in relation to the other matters (see s 97(1)). 13 In most cases, the power of the Council to approve an application to modify a consent is to be found in s 96 of the Act. In the present case, there being minimal environmental impact, the power in s 96(1A) is relied on. That section is in the following terms: "(1A) A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if: (a) it is satisfied that the proposed modification is of minimal environmental impact, and (b) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all), and (c) it has notified the application in accordance with: (i) the regulations, if the regulations so require, or (ii) a development control plan, if the consent authority is a council that has made a development control plan under section 72 that requires the notification or advertising of applications for modification of a development consent, and (d) it has considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be. Subsections (1), (2) and (5) do not apply to such a modification." 14 As the consent for 3 George St was granted by the Court, the application for modification is made pursuant to s 96AA. That section is in the following terms: "(1) A consent authority may, on application being made by the applicant or any other person entitled to act on a consent granted by the Court and subject to and in accordance with the regulations, modify the development consent if: (a) it is satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent as originally granted was modified (if at all), and (b) it has notified the application in accordance with: (i) the regulations, if the regulations so require, and (ii) a development control plan, if the consent authority is a council that has made a development control plan under section 72 that requires the notification or advertising of applications for modification of a development consent, and (c) it has notified, or made reasonable attempts to notify, each person who made a submission in respect of the relevant development application of the proposed modification by sending written notice to the last address known to the consent authority of the objector or other person, and (d) it has considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be. (1A) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 79C (1) as are of relevance to the development the subject of the application. (1B) Development consent of the kind referred to in section 79B (3) is not to be modified unless the requirements of section 79B (3)–(7) have been complied with in relation to the proposed modification as if the application for the proposed modification were an application for development consent. (1C) The modification of a development consent in accordance with this section is taken not to be the granting of development consent under this Part, but a reference in this or any other Act to a development consent includes a reference to a development consent as so modified. (2) After determining an application for modification of a consent under this section, the consent authority must send a notice of its determination to each person who made a submission in respect of the application for modification. (3) An applicant who is dissatisfied with the determination of the application or the failure of the consent authority to determine the application within 40 days after the application is made may appeal to the Court and the Court may determine the appeal. (4) A person who made a submission in respect of the application for modification and who is dissatisfied with the determination of the application by the consent authority may, in accordance with rules of court, apply to the Court for leave to appeal against the determination within 28 days after the date on which notice of the determination was given to the person and the Court may grant or refuse leave to appeal." 15 There can be no doubt that under either section the Council had the power to deal with the modification applications by deleting the original condition. The question is whether it could, when determining the applications, impose the new condition. The applicant submits that it could not do so, either because the Council's power was confined to dealing with the modification which had been applied for and did not extend to making some other modification, or because both the original conditions and the new conditions, being for other than a planning purpose, were beyond power. It is further submitted that because the Council has determined to delete the original conditions, if the present appeals are upheld, the result will be that the new condition is removed, leaving the consents without any condition with respect to exclusive occupation. Background 16 Dual occupancy, however defined, has been a familiar form of development for many years. Adjoining semi-detached dwellings, duplexes and other physical arrangements have existed since the urbanisation of Sydney began. 17 Because of the identified need for increased housing in the Sydney metropolitan region to accommodate the growing population, planning controls have been required to develop innovative means of providing further dwellings. One means has been to encourage the development of dual occupancies. For this purpose the Sydney Regional Environmental Plan No 12 - Dual Occupancy was made on 1 June 1987. The policy generally allowed dual occupancy development where single dwellings were already permissible. 18 By 1991 it was believed that there was a need to further encourage dual occupancy by making provision in a planning instrument which would allow separate title (as opposed to strata title) to be created for each dwelling in a dual occupancy development. The mechanism chosen to effect this was the amendment of SEPP 25. The identified purpose of the change was to promote an increase in density and housing type to further the government objectives of urban consolidation. The aims of the Policy included: "To encourage dual occupancy development by broadening its application and usefulness to the community." 19 The changes made were not universally popular. In response to community reaction, the Minister amended SEPP 25 in 1995 to impose restrictions on dual occupancy development, including restrictions on subdivision. 20 However, dual occupancy continued to be permissible if provided for in a local environmental planning instrument, which could also allow for a subdivision to be created. In addition, SREP 12 remained in force. 21 The need for increased density in many areas of Sydney continued to be a priority for planners. As a consequence, in 1997 the Minister again attempted to address the need to increase the availability and diversity of housing in some parts of the Sydney region. This was done by making SEPP 53 - Metropolitan Residential Development, which was applicable to certain local government areas, one of which was Pittwater. SEPP 53 was designed to encourage development in local government areas which did not have effective housing strategies. Although providing for dual occupancy, cl 21 made clear that SEPP 53 would not itself permit subdivision of an allotment, although this could be permitted under a local environmental planning instrument. Pittwater was later exempted from SEPP 53 after the Minister was satisfied that it had responded effectively to the community need for new development opportunities. Part of that response was the effective provision for dual occupancy. 22 Pittwater LEP was made in 1993. Mr O'Donnell, a strategic planner for the Council, gave evidence in which he provided a review of the history of dual occupancy development and its subdivision in Pittwater. Because of a concern that dual occupancy developments were too numerous, the Council decided in 1996 to amend the LEP to prohibit subdivision of dual occupancy development. This was intended to make dual occupancy a less desirable form of development. The Plan was gazetted in February 1996 as Pittwater LEP 1993 (Amendment No 1) and inserted cl 21F. That clause is in the following terms: "(1) On and after the day on which Pittwater Local Environmental Plan 1993 (Amendment No 11 ) commences, consent must not be granted for a subdivision which creates separate allotments for each of the two dwellings resulting from dual occupancy development carried out in accordance with this Division. (2) The separate occupation of the proposed lots illustrated by a proposed strata plan relating to the two dwellings resulting from any such dual occupancy development is prohibited. …" 23 Following the amendment, without the capacity to provide separate title for each dwelling, there was a significant decline in the number of dual occupancies approved annually in Pittwater. 24 However, from 1998 the Council became aware that company title schemes were being promoted for dual occupancies as a way of giving rights of exclusive occupation to the separate dwellings and thereby enhancing the attractiveness of dual occupancy in the market place. After consideration of the matter and following two decisions of this Court, Masterton Homes Pty Ltd v Pittwater Council (2003) 124 LGERA 216, and Monnock v Pittwater Council (2003) 127 LGERA 66, to which I shall return, the Council resolved to amend the LEP to deal with company title arrangements. The amendment has not yet been accepted by the Director and has not been made. 25 The purpose for which cl 21F was inserted into the LEP and for which the original and subsequent conditions have been imposed is plain. Mr O'Donnell indicated that although the Council encourages dual occupancy, which provides for "granny flat" or other intra-family arrangements, it does not wish to encourage conventional multiple dwelling facilities made commercially attractive because of a capacity for separate disposition of the individual dwellings. Because company title is a familiar, and commercially acceptable form of providing rights of exclusive occupation, which can be used as security or transferred, in the absence of amendment of its LEP, the Council has sought to exclude such arrangements by imposing conditions intended to prohibit company title arrangements and thereby confine the number of dual occupancy developments. Mr O'Donnell describes the purpose of the conditions in the following terms: "These conditions have been placed on the consents to ensure that the planning intention of Clause 21F of Pittwater LEP 1993 is not subverted by a legal arrangement which seeks to achieve the effect of subdivision, ie separate 'ownership' of dwellings in a form for which: (a) finance to purchase can be obtained; (b) the accommodation provided by the second dwelling need not be occupied by family members in granny flat stye or by tenants in a rental situation; and (c) properties are treated by occupants, the real estate agent, and rating provisions of the Local Government Act 1993 as another form of separate ownership. The practice of Council including such conditions in dual occupancy consents commenced in about June 2002. In accordance with Council's resolution of 18 August 2003, such a condition will continue to be applied to dual occupancy consents. The intention of the conditions is that they would operate as an interim measure to clarify to applicants the full extent of the prohibition until such time as draft Pittwater LEP 1993 (Amendment No 68) was gazetted as a final plan or the judicial authority of the questions of law was settled beyond doubt, such as by judgment from the NSW Court of Appeal. The planning purpose of the conditions is to prevent a development approved and constructed prima facie as a dual occupancy being subsequently marketed and sold on completion with company title subdivision, either individually or together, as de facto multi-unit housing/group building development such as a town house, villa home or group house. Such a transformation would be contrary to the methodology and findings of the Pittwater Residential Development Strategy which identify suitably located multi-unit housing sites in Area 3 on the Dual Occupancy Map close to appropriate commercial centres and would remove from the range of housing choice available in Pittwater the granny flat or rental accommodation sought to be provided by dual occupancy development. The sites which are subject to this appeal do not satisfy these locational criteria; in fact, two of the sites (11 Elvina Avenue, Avalon and 3 George Street, Avalon) are located on environmentally sensitive land within Area 2 of the Dual Occupancy Map. If the proponents of these developments intended the finished product to operate as a traditional form of dual occupancy, there would be no need to incorporate. It is also considered that the sole purpose of the company title scheme is to defeat the prohibition of dual occupancy subdivision by clause 21F of Pittwater LEP 1993 and in turn the regional planning strategies of the State Government with respect to dual occupancy, urban consolidation and wider housing choice. It would also compromise the implementation of the Pittwater Residential Development Strategy which was prepared by Pittwater Council in partnership with the State Government and was instrumental in excluding Pittwater from the provisions of SEPP 53 - Metropolitan Residential Development. It is concluded that these so called dual occupancies are speculative developments dependent on company title subdivision and have minimal consideration for the concerns of the local community who have indicated little or no interest in dual occupancy as evidenced by the market research of the Pittwater Housing Preferences Study." 26 Mr O'Donnell's evidence was not challenged and I accept it. The extent of the power to modify - the power to impose conditions 27 The nature and extent of the powers of a council, or the Court on appeal, when dealing with an application to modify a development consent are in some respects uncertain. In Benalup Holdings Pty Limited v Lismore City Council (1993) 81 LGERA 257, Stein J considered these questions in the context of s 102 of the Act, which was the predecessor of s 96. Section 102 was in the following terms: "(1) Upon application being made in the prescribed form by the applicant or any other person entitled to act upon the consent, a consent authority which has granted development consent under this Division may modify the consent where: (a) it is satisfied that the development to which the consent as modified relates is substantially the same development; (b) it is satisfied that no prejudice will be caused to any person who objected to the development application the subject of that consent; (3A) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 90 as are of relevance to the development the subject of the application. (4) Modification of a development consent in accordance with this section shall not be construed as the granting of development consent under this Division but a reference in this or any other Act to a development consent shall be a reference to the development consent so modified. (5) A person making an application under subsection (1), and dissatisfied with the determination of the application or the failure of the consent authority to determine the application within 40 days of the application being made, may, except where the application is made in relation to a consent granted by the Minister under section 101, or except as may otherwise be provided by this section, appeal to the Court, and the Court may determine the appeal. (5A) Nothing in subsection (5) enables an appeal to be made against the determination of, or the failure to determine, an application to modify a development consent, being a development consent granted by the Court. (6) Nothing in this Act prevents the making and determination of a development application where the development to which the application relates is the subject of a development consent, and the foregoing provisions of this subsection apply whether or not that consent could be modified under this section." 28 The question which it was necessary for Stein J to determine was whether when granting consent to an application to modify a consent, conditions could be imposed by the Council. Stein J took a confined view of the power afforded a council by s 102. Having identified that both Cripps J in Valhalla Cinemas Pty Ltd v Leichhardt Municipal Council (1986) 60 LGRA 240 at 246 and Hemmings J in Seaforth Services Pty Ltd v Byron Shire Council (No 2) (1991) 72 LGRA 44 at 47 had said that the power of the council was not unlimited, his Honour said (at LGERA 260): "In my opinion the question posed in the amended notice of motion can best be answered by saying that the Court, as consent authority, (and the Council when it is the consent authority) does not have the jurisdiction or power, when determining an application under s 102 of the Act, to modify a development consent other than in the terms applied for by the applicant unless with the consent of the applicant. The Court cannot modify the consent by imposing conditions not sought by the applicant or in a form other than sought by the applicant. The discretion in s 102 does not extend to such situations. The discretion in the section is confined to s 102(1) as amplified by subs (3A)." 29 In effect his Honour said the response by a council to an application was to say "yes" or "no". It could not say "yes" to only part of the application or say "yes" subject to conditions. 30 Benalup and other issues were considered by the Court of Appeal in North Sydney Council v Michael Standley & Associates Pty Ltd (1998) 97 LGERA 433 when, as it happens, Stein JA, as he had become, was a member of the Court. The case concerned an application to modify a consent granted by the Council for a large building containing retail space and residential units with basement car parking. One issue with which the case was concerned was, when considering whether development with the proposed modification would be "substantially the same", the starting point was the original form of the consent or the form to which it had altered by the approval of previous modification applications. That question was answered by requiring comparison with the previously modified consent. The question which then required answering was the approach to consideration of the merits of the proposed modification - was the Council limited to considering only the elements of the proposed modification itself or could it consider the environmental impacts of the total development as proposed to be modified? 31 Although the question of the power of a council to impose conditions when granting an approval to an application to modify did not directly arise, the matter was considered. The learned President, with whom Sheppard AJA agreed, doubted the correctness of Benalup. Mason P said (at LGERA 440-441): "In Benalup Holdings , Stein J held that a consent authority exercising the discretion under s 102 does not have power to modify a development consent other than in the terms applied for by the applicant unless with the consent of the applicant. Neither party to the present appeal challenged the correctness of this decision, although the appellant contended that a close analysis of Benalup reveals that it is authority for the narrower proposition that a consent authority may not make a modification subject to conditions other than those touching those aspects of the development actually modified. I find it unnecessary to resolve this issue in the present appeal. However, I must not be taken to be approving Benalup . I would wish to reserve the point whether as a general principle the power to approve conditionally needs to be conferred expressly where there is a true discretion. In Southern Pacific Co v Olympian Dredging Co 260 US 205 (1922) at 208 Sutherland J, delivering the opinion of the Supreme Court of the United States, said that: 'The power to approve implies the power to disapprove and the power to disapprove necessarily includes the lesser power to condition an approval'; see also Johns v Australian Securities Commission (1993) 178 CLR 408 at 428-429, 469-470; cf R v Windsor Licensing Justices; Ex parte Hodes [1983] 1 WLR 685; [1983] 2 All ER 551. It is true that s 102 does not contain a provision similar to that found elsewhere which expressly arms the Court with power to approve conditionally: see, eg, ss 79(1), 91(1), 92(4) and 101(8). However, given the dangers of applying the expressio unius maxim, this may be insufficient to displace any general principle concerning the conditional exercise of discretionary powers. Of course, any conditions must be reasonably capable of being regarded as related to the purpose for which the discretion is being exercised: Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490 at 499-500; Johns (at 469-470)." 32 Stein JA responded to the President, saying (at LGERA 446): "The judgment of Mason P has raised the issue of the breadth of my decision in Benalup Holdings Pty Ltd v Lismore City Council (1993) 81 LGERA 257. I accept that the question of whether there is implied in the power to refuse a modification, a power to conditionally approve, should be reserved for another day." 33 In Captain Cook Cruise Pty Limited v North Sydney Council (2002) 126 LGERA 233, Bignold J observed, although it was unnecessary for his decision, that he would follow the position tentatively put forward by Mason P in Michael Standley. In Woolworths Limited v The Warehouse Group (Australia) Pty Ltd & Anor [2003] NSWLEC 350, Talbot J acknowledged the doubt raised by Mason P in Michael Standley but did not have to decide the point. 34 It would seem that Stein J decided Benalup without the benefit of submissions which addressed the conventional principles that operate when a discretion to exercise an authority is given by statute. In Johns v Australian Securities Commission (1993) 178 CLR 408, to which the President refers, that conventional position was expressed by Brennan J in the following terms (at CLR 429): "An authority conferred by statute is construed as authorising everything which can fairly be regarded as incidental to or consequential upon the authority itself." 35 In the same case, although McHugh J recognised that unlike other provisions of the legislation, the relevant provision did not contain a power to impose conditions, his Honour found that the power to impose conditions was nevertheless available. His Honour said (at CLR 469-470): "The scope of a statutory power is ascertained 'by the character of the statute and the nature of the provisions it contains' [ Morton v Union Steamship Co of New Zealand Ltd (1951) 88 CLR 402 at 410]. When the exercise of a power is left to the discretion of some person, the scope for implementing the power is fettered only by the necessity to maintain consistency with the purpose or purposes of the legislation. Consequently, the repository of the power may impose conditions on those affected by the exercise of the power as long as the conditions are not inconsistent with the purpose for which the power is granted." 36 Stein J was apparently concerned that because approval of an application to modify will operate in its terms, subject to any change as a result of an appeal, it may be undesirable to construe the section to allow the consent authority to impose conditions not sought or consented to by the applicant. A party which seeks a modification that may improve the environmental outcome, may be deterred from making an application by the risk of other changes to the consent which it did not anticipate and finds unacceptable. To my mind, this should not be seen as a reason to confine the Court's power. After all, when the original development application is lodged, the consent authority may approve it with conditions which may be completely unacceptable to the applicant. The only remedy is to ask for a review by the Court, which is the same right available to a person who is dissatisfied with the decision with respect to an application to modify an existing consent. Although some applicants may be deterred, I doubt that the number would be of significance. 37 Furthermore, to my mind there is a difference between s 102 and s 96 which is of significance when reconsidering whether the decision in Benalup should continue to be followed. Section 102 only permitted modification when the consent authority was satisfied "that no prejudice will be caused to any person who objected" to the development application. Section 96 provides for modification both in circumstances where the modification involves "minimal environmental impact" and otherwise, clearly contemplating that modification which brings adverse impacts may be approved. The only constraint on the breadth of the power is that the modified development must be "substantially the same" as that which was originally approved. It would be surprising if, although there is a more liberal capacity to approve an application for modification, there was no capacity, without the agreement of the applicant, to impose conditions on that approval. 38 Both considerations of judicial comity and the time which has elapsed since Benalup was decided would normally cause me to follow it unless persuaded that the decision was clearly wrong. However, the strength of the reservation expressed in Michael Standley by the President, with which Sheppard AJA agreed, together with the acceptance by Stein JA that the issue may require reconsideration, relieves me of the conventional obligation. 39 When considering a development application, a consent authority is expressly given a power to impose conditions (s 80 and subsequent subsections). The complexity of the issues which require consideration and resolution with most development applications make it inevitable that consent can only properly be granted if conditions which control the construction or future use of the development can be imposed if the application is approved. I doubt whether any consent, even one which permits the demolition of a building, would be granted without some conditions designed to protect the environment. 40 As a consequence, when an application is made to modify an existing consent, it will almost always be a request to modify a consent which has been granted subject to conditions. In these circumstances it would be impossible to consider the impact of the modification without an understanding of the effect of the existing conditions upon the modified consent. For the same reason it would be unreal to require a consent authority to evaluate an application to modify a consent without considering whether conditions made necessary by the modifications should be imposed. 41 To my mind, the discretion of a consent authority to impose conditions should only be confined if the parliament has provided for it in clear terms. Otherwise, the conventional approach to the exercise of a power to approve or refuse consent should be adopted. In the present case, the statute contains no suggestion that the discretion is confined and, accordingly, I am of the opinion that conditions may be imposed by a consent authority when determining an application for modification. The extent of the power to modify - what may be considered 42 Although the Court of Appeal in Michael Standley did not decide the question of whether there was a power to impose conditions when approving an application to modify a consent, the members of the Court did not disagree about it. However, there was division over the approach to be taken to the matters which can be taken into account when determining the application. That division is significant in the resolution of the present matter. 43 In Michael Standley the Court was concerned with s 102(3A), since replaced by s 96(3). The new section is not materially different and is in the following terms: "In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 79C(1) as are of relevant to the development the subject of the application." 44 Mason P was of the view that when determining an application to modify a consent, the consent authority "is directed to consider any s 90 matter relevant to the whole development as modified" (at LGERA 441). This, his Honour held, included an opportunity "to repent of an earlier decision in the light of a political change of will" (at LGERA 442). Although not stated, I do not understand the President to be suggesting an unconfined capacity to repent. The constraint is, of course, found in the nature of the application being considered. That application, being for approval for a modified consent, could be refused in which event the original consent remains. If approved, the project must still be a development which is "substantially the same" as the original approved development. 45 Mason P said (at LGERA 441-442): "The respondent submitted that s 102(3A) cannot mean that the whole of the original development is opened up for re-assessment under s 90. This submission appears to adopt the prevailing view of the subsection in the Land and Environment Court: see United Church in Australia (NSW) v Woollahra Municipal Council (unreported, Land and Environment Court of New South Wales, Stein J, 25 May 1995): Crawley v Sydney City Council (unreported, Land and Environment Court of New South Wales, Bignold J, 4 October 1995). In my respectful view, s 102(3A) is not so confined. The critical words are 'such of the matters referred to in section 90 as are of relevance to the development the subject of the application' (emphasis added). Had the subsection used the word 'modification' in place of the word 'development' then it would have been quite different. But, with respect to those who see it otherwise, I find this to be a very plain subsection. The consent authority is directed to consider any s 90 matter relevant to the whole development as modified. This is the plain meaning of the provision, and it offers a principled way for limiting the dangers of the 'creep factor' to which reference has already been made. The contrary argument seems to treat the existing consent, whether original or modified, as if there were some issue estoppel with respect to those portions which are not directly affected by the modification application. But there is no justification for such a cramped approach, which is capable of producing an unrealistic and potentially unreasonable outcome. A consent authority is not to be equated with an administrative tribunal deciding a dispute inter partes: cf Lambidis v Commissioner of Police (1995) 37 NSWLR 320. In my view the respondent's approach to s 102(3A) is cramped because of the textual and contextual reasons offered in the previous paragraph. And it is unrealistic and potentially unreasonable because a particular development may have to be viewed as a whole before its impact upon the amenity of a neighbourhood can possibly be gauged. For example, a modification which introduces greater usage of a high rise development may necessitate additional lift facilities. It would be unrealistic to consider the modification if hamstrung by the existing consent's provision for lifts." 46 The construction which the learned President gives to s 102(3A) is obviously apposite to s 96(3). The same formulation - such matters "as are of relevance to the development" - has been used in the replacement section. Accordingly, although obiter, the reasoning of Mason P, with which Sheppard AJA agreed should, in my opinion, be followed unless I am persuaded that it would be erroneous to take this course. 47 Stein JA took a different view to Mason P. On an initial reading it may appear that there is a marked difference, not only between their reasoning, but also in the likely practical outcome when the respective views are applied to consideration of an application to modify. However, on further analysis the differences may not be so great. 48 Because, as I have indicated, Mason P must be understood as defining the powers of a consent authority when dealing with a modification application, the power to refuse must be confined to the power to refuse that modification application. It could not extend to a power to refuse the original application, which is a matter not raised for consideration. Although the power to approve would include a capacity to approve the modification application, including the imposition of any conditions, it must nevertheless continue, although modified, to be "substantially the same development." 49 In his reasons for judgment in Michael Standley, Stein JA said (at LGERA 447-449): "The issue upon which I differ from Mason P is the proper approach to the application of s 102(3A) of the Act. This provision was inserted in 1992. It followed earlier decisions in the Land and Environment Court to the effect that relevant s 90 considerations had to be taken into consideration when determining modification applications. The amendment confirmed this approach and was passed, as I understand it, for more abundant caution and to make it plain to decision-makers their responsibility in assessing such applications. Mason P has concluded that s 102(3A) directs the decision-maker to consider any s 90 matter relevant to the whole development as modified. His Honour accepts that this may give a consent authority the opportunity to reverse an earlier decision in the light of a change in political will. In Benalup (at 259) I noted that the discretion in s 102 was confined by subs (1)(a), (b) and (c) of s 102 'together with the s 90 heads of consideration of relevance to the development the subject of the modification application (subs(3A))'. In Uniting Church in Australia (NSW) v Woollahra Council (unreported, Land and Environment Court of NSW, Stein J, 25 May 1995) I opined that s 102(3A) did not mean that the whole of the original development is opened up to reassessment under s90. This has been the prevailing view in the Land and Environment Court. It is clear that s 102(3A) requires the decision-maker to address the s 90 heads of consideration relevant to the modification application. That is the application before the consent authority. To the extent that the application seeks to modify the previously approved development, s 90 must be applied. But where the modification has no impact on any aspect of the already approved development, s 90 considerations have no role to play. Let me illustrate the matter by using the President's example of a modification which introduced greater usage of lifts in a high-rise building. The need for additional lift facilities would, in my opinion, undoubtedly arise for consideration under s 102(3A). The modification application would seek to increase the population of the high-rise building and any consequence of the amendment, such as the need for additional lift facilities, would have to be assessed under the relevant s 90 head. Another illustration would be whether the increase in population necessitated consideration of the adequacy of on-site parking. On the other hand, there would be aspects of the development which may be quite unaffected by the amendment. For example, the landscaping and the bulk, size, shape and external appearance of the development. An increase in the population of the building may have no impact on these issues, which will remain the same and unaltered by the modification. One of the reasons why I favour the narrower construction of s 102(3A) is the need for a degree of certainty in project development. A broader construction would mean that a minor and perhaps beneficial (for the environment) modification application could open up the whole of the development for a complete re-assessment under s 90. This could happen on successive minor amendment applications. This would be inconvenient to say the least. I do not think that this was the intention of the legislature when it inserted s 102(3A) in s 102 in 1992 [sic]. It seems to me that it may be no answer to say that the developer can fall back on the original development consent. This may not be in the interests of objectors or in the general public interest. For example, an amendment may seek to address, in a positive and beneficial fashion, an adverse impact on neighbours which was apparent when the original consent was granted. If the whole of the original consent may be revisited on such a modification application, then not only will certainty be eroded but developers will be less likely to make amendment applications which seek to improve environmental amenity and satisfy objections by affected persons. It follows from what I have said that it is my opinion that the correct approach to s 102(3A) is to assess the impact and effect of the modification on that already approved and take into account any s 90 considerations relevant to that effect or impact. Lloyd J approached the issue correctly. On some occasions the cumulative effect of impacts will have to be assessed under the relevant s 90 heads of consideration. This will depend upon the modification application and its implications for the development. 50 Although Stein JA takes the view that the original development application having been approved, all that can be evaluated with respect to the application to modify are the impacts of the modification, those impacts are unlikely to be separate from the impacts of the original consent. The impacts of the already approved development must at least be considered, even if it is concluded that the modification will not exacerbate or diminish some or all of them. With respect, even the example given by Stein JA, of an increase in the population density of a building, may give rise to the need to reconsider external impacts, including the adequacy and appropriateness of landscaped areas. 51 Ultimately the limits of the discretion which may be exercised by a consent authority will be defined by the matters raised for consideration by the application. Accordingly, when an application to modify one aspect of a development is lodged, the consent authority must consider the matters under s 79C(1) relevant to the aspects of the development to which the application relates. Accordingly, if an application is made to modify the height of a building, consideration of any matter which is either directly or indirectly related to height will arise for consideration. If an application is made to change the approved colour of a building, matters relevant to colour must be considered. This could, in an unusual case, extend to the apparent height or bulk of the building. However, an application to change the colour of a building could not provide a basis to reconsider the provision of car parking for the development. The matter of car parking simply does not arise. I do not understand the President to be suggesting otherwise. 52 It would follow that when an application is made to modify a consent by deleting or varying a condition of consent, the application must be evaluated as required by s 96(3) and relevant matters referred to in s 79C(1) must be considered. Provided there is a power to impose conditions in respect of a consent to a modification application, the consent authority must be able to determine the application by granting it and deleting the original condition, but also by imposing some other condition relating to the same planning matter. 53 In the matters before this Court, the applications for modification lodged with the Council sought the deletion of the relevant condition or conditions. Following the approach of both the majority and Stein JA in Michael Standley, the lodgement of that application had the consequence that, not only was the Council required to consider whether the condition or conditions could be deleted, but could consider all matters relevant to that issue. It would follow that it could agree to the deletion of the original conditions, but, having concluded that control on subdivision was nevertheless required, impose new conditions. Once the matter of the control of the separate occupation of the dwellings was raised by the lodgement of the application to modify, the Council was empowered to grant the application, in whole or in part, and if it so decided, apply conditions as part of its determination. 54 It is apparent that the reasoning of the President in Michael Standley would more readily provide for the power which the Council exercised in the present matters. An application to modify the consent having been made, the Council, when considering that application, could reconsider, at least relevant elements of the original consent and, if it perceived a need to cure a problem, which may not have been apparent previously but now is, impose a new condition. The present appeals 55 The applications which were lodged with the Council sought the modification of the consents pursuant to s 96(1A) or s 96AA of the Act. These applications were determined by the deletion of the original condition or conditions and the imposition of the new one. The right of appeal is provided by s 96(6) or s 96AA(3) and is available to an applicant who "is dissatisfied with the determination of the application." With respect to the appeal against the original condition imposed on 1643 Pittwater Road, the right of appeal is provided by s 97 of the Act. 56 The Land and Environment Court Act 1979 provides this Court with jurisdiction to determine the appeal. For that purpose, the Court is given the "functions and discretions" of the Council in respect of the matter the subject of the appeal (s 39(2)). Section 39(3) of the Court Act provides that an appeal in respect of a decision shall be by way of rehearing. The decision of the Court upon appeal is deemed to be the final decision of the Council (s 39(5)). 57 The applicant submits that the proper characterisation of the Council's determination in the present cases is that the applications were approved and the conditions deleted. A second decision was then made whereby the new condition was imposed. 58 It is then argued that the new condition is invalid or unreasonable and, accordingly, the consent now stands without any condition relating to subdivision. 59 In my opinion this analysis cannot be accepted. The determination of an application to modify, just as the determination of an application for consent, does not involve multiple decisions. The determination is a single decision which may have multiple consequences. If there was no power to impose the condition, the result must be that the decision was beyond power and the application has been refused, with the consequence that the original condition remains. 60 The applicant points to s 83 of the Environmental Planning and Assessment Act which makes express provision in relation to the operation of a development consent. It provides that in the event of an appeal, the consent does not operate until the appeal is determined. The applicant submits that because a similar provision has not been included with respect to an application to modify a consent, which operates when the application is determined, the consents must now be understood as being devoid of the original conditions, the appeal being only in relation to the new conditions. 61 The different regime for original consents is no doubt made necessary because, for a grant of a new consent, there is a requirement to define its operative date to provide for its commencement and lapse. These matters are not relevant when all that is taking place is that the original consent is being modified, because the original consent continues to operate in its modified form until the determination of the appeal. However, the appeal, being founded upon dissatisfaction with the determination of the modification application, must be decided upon the assumption that the original consent remains and the Court, exercising the powers of the Council, is to consider whether it should be allowed to be modified. Planning Purpose 62 Mr O'Donnell indicates that cl 21F of the Pittwater LEP and the conditions which the Council now seeks to impose in relation to company title arrangements are designed to strike a balance. The balance sought is between making available dual occupancy to meet the needs of family groups, particularly across generations (eg in-laws, parents, grandparents) and the perceived need to constrain the proliferation of dual occupancy that might occur, particularly in an area with the recreational attributes of Pittwater, if there was no constraint on separate occupation. The planning control is like that adopted by SEPP 5 (now the Seniors Living Policy), which confines the occupants of those facilities, which are in reality medium density housing, to particular age groups. 63 The applicant submits that by seeking to confine subdivision in the manner proposed by the conditions, the Council is not only motivated by a purpose which is not a legitimate planning purpose, but is acting contrary to s 81A(1), which operates to authorise a building to be used for the purpose for which it has been approved. Here, that purpose is dual occupancy and accordingly, it is submitted the right to separate occupation and disposition of each dwelling is protected. 64 I do not find the applicant's submissions persuasive. In my opinion, the purpose behind both cl 21F of the LEP and the conditions, which is to confine the likely occupants and, more importantly, to diminish the desirability of dual occupancies, is a legitimate planning purpose. As Stein J said in Parramatta City Council v Peterson (1987) 61 LGRA 286, in order to be valid, a condition must have a planning purpose which relates to the development. See also Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490 and Newbury District Council v Secretary of State for the Environment [1981] AC 578. Just as the Council may condition a development to ensure that a property is used in a particular manner, or by an appropriately defined and limited class of persons, it may also control the manner of disposition of individual dwellings. Both because of the desire to provide for family groupings to reside in the one building, although in separate dwellings, and the desire to limit the number of such buildings, the Council's conditions serve a legitimate planning purpose. 65 It is self evident that when making provision for the planning of development in its area, a council may provide that particular types of development are permissible and, in addition, impose controls designed to limit the intensity of that form of development. Controls with this purpose are at the very essence of planning. Condition for an improper purpose 66 It is submitted by the applicants that as the basis upon which Pittwater was ultimately exempted from SEPP 53 was because it had an effective dual occupancy strategy, which will now be compromised by prohibiting company title arrangements, the true intention of the Council is to circumvent the basis for its exemption from the operation of SEPP 53. Defined in this way, it is said that the purpose is improper. 67 In my opinion, this submission should be rejected. 68 The exemption from SEPP 53 was given after cl 21F had been incorporated into the LEP. Accordingly, the Minister was aware that the Pittwater LEP provided controls on the subdivision of dual occupancy development. In any event, at that time the use of company title arrangements had not emerged and there is no reason to believe that the Minister assumed that company title arrangements would be utilised to overcome any other limitations on subdivision. The Minister must always have contemplated dual occupancy without a right to subdivide. The fate of the appeals - merit considerations 69 With respect to 11 Elvina Parade and 3 George Street, Avalon, the time for appeal with respect to the original consent has expired. Accordingly, if there is no power to impose the new condition when considering the s 96 application, the original condition must either remain or be deleted. This may leave for consideration in Class 4 proceedings whether the original conditions were beyond power. Certainly they were not well expressed. If beyond power, questions of severability would arise. It would seem likely from the material before me that the Council would not have granted consent without a power to prohibit "company title" arrangements. 70 With respect to 1643 Pittwater Road, the time for an appeal has not expired and the applicant has lodged an appeal in relation to the original consent, in addition to the appeal with respect to the application for modification. 71 I have already indicated that the conditions which the Council imposed were for a legitimate planning purpose. It is plain that not only has the Council sought to apply policies to limit the subdivision of dual occupancy developments, but they have been expressed in cl 21F of the LEP. I am satisfied that the approach adopted by the Council is one which this Court on appeal should accept to be appropriate and, unless it is enforced, the intention of allowing modest levels of dual occupancy development throughout the Council's area could be seriously compromised. Most conventional dwelling sites would be capable of being developed for dual occupancy which, unless constrained in the manner suggested, may be so commercially attractive to developers they could become a dominant built form resulting in significant change to the built form in Pittwater. 72 The policy objective adopted by the Council and expressed in cl 21F of the LEP has been endorsed by the Minister. If, as the evidence demonstrates, the restriction on subdivision can be effectively circumvented by the use of "company title" arrangements, it is appropriate that conditions be imposed which ensure the integrity of the planning objective is not compromised. I have previously commented on the approach this Court will take to appeals where a challenge is made to a policy which has been adopted and consistently applied by a consent authority (see Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472). In the present case, the Council's adopted policy is plain and has, so far as I am aware, been consistently applied. That policy not being inherently flawed, it is appropriate for the Court to apply it. Does "company title" create a subdivision? 73 When these matters were fixed for hearing, it was suggested that the resolution of the dispute may require an analysis of the apparently differing decisions in Masterton Homes v Pittwater Council, decided by Bignold J, and Monnock v Pittwater Council, decided by Talbot J. The relevant issue was believed to be whether cl 21F of the LEP could be a source of power for the condition or conditions imposed. Because I am of the opinion that a council may impose conditions which limit the capacity for separate occupation including company title arrangements, the question of whether or not company title arrangements without a specific power in the LEP fall within the definition of a subdivision does not arise. 74 The argument in both Masterton and Monnock appears to have been limited to whether the disputed condition could be justified having regard to the provisions of cl 21F of the LEP. However, cl 21F in terms expresses a prohibition on the grant of a consent for subdivision and does not purport to provide the foundation for any condition. The matter does not appear to have been addressed in either case by reference to the ordinary principles which are relevant when a condition of consent is challenged. For this reason, if there be a difference between the reasoning in each case, it is unnecessary for me to resolve it. Section 149 certificates 75 The Council has taken to giving notice of the disputed conditions in s 149 certificates, which it issues for properties where dual occupancy has been permitted subject to those conditions. As I am of the opinion that the conditions are within power and reasonable, no further issue arises with respect to the appropriateness of the Council's actions. Orders 76 I invite the parties to bring in short minutes which provide orders that are appropriate to my reasons and provide for the disposition of matter no 40905/04. Costs may be argued. ********** 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.