Land and Environment Court of New South Wales CITATION : AUSTEXX DEVELOPMENTS PTY LTD v. PENRITH COUNCIL [1998] NSWLEC 219 (14 September 1998) [1998] NSWLEC 15 PARTIES : AUSTEXX DEVELOPMENTS PTY LTD v. PENRITH COUNCIL [1998] NSWLEC 219 (14 September 1998) FILE NUMBER(S) : 10181 of 1998 CORAM: Lloyd J KEY ISSUES: :- LEGISLATION CITED: Environmental Planning and Assessment Act 1979 ss 106, 107, 109B Earle Cameron Constructions Pty Ltd v Parramatta City Council (1981) 46 LGRA ; Hudak v Waverley Municipal Council (1990) 70 LGRA 130 (CA) ; In Woollahra MC v TAJJ Investments (1982) 49 LGRA 123; CASES CITED: Auburn Council v Nehme (Land and Environment Court of NSW, Bignold J, 15 April 1998, unreported; Londish v Knox Grammar School (Land and Environment Court of NSW, Talbot J, 13 May 1997, unreported; Londish v Knox Grammar; Auburn v Nehme DATES OF HEARING: 17, 18 August 1998 DATE OF JUDGMENT: 09/14/1998 D P Wilson LEGAL REPRESENTATIVES: D H Officer QC JUDGMENT: 12 JUDGMENT HIS HONOUR: In this proceeding the parties have raised some preliminary questions of law, pursuant to the Land and Environment Court Act 1979, s 36(5). Austexx Developments Pty Ltd ("the applicant") have appealed against the deemed refusal by the Council of development application 98006, which was submitted in relation to land being part lot 1 in DP 656838 and located at 574 Great Western Highway, Werrington (also known as Putland Street, Werrington, St Mary's or Claremont Meadows) ("the subject property"). The development application relates to a proposed subdivision and integrated housing development on the rear portion of the subject property by the applicant. There are eleven separate points raised for consideration in the statement of issues filed on behalf of the Council, however it is only necessary to refer to Nos 2-4, because the remaining points only arise for determination if those points are determined in the applicant's favour, and during the hearing the applicant abandoned ground number 1. The questions for the Court's consideration in this proceeding are as follows: "2. Whether the subject property currently enjoys any existing use rights. In particular: (a) did the subject property enjoy any existing use rights prior to the issue of development consent in 1995? (b) were any existing use rights enjoyed by the property prior to the issue of the 1995 consent extinguished by the issue of that consent? (c) were any existing use rights, enjoyed by the subject property after the issue of the 1995 consent, abandoned prior to the lodgement of the development application for the proposed development? 3. If the subject property currently enjoys any existing use rights, whether those existing use rights are existing use rights for the proposed development. 4. If the subject property does not currently enjoy existing use rights for the proposed development, whether a change and expansion of the existing use rights so as to permit the proposed development should be approved". The question before me is essentially whether the proposed development on the subject property can be approved pursuant to any existing use rights with respect to the rear portion of the subject property. Background The facts may be briefly stated, and are largely agreed upon by the parties. Prior to 3 September 1981 existing use rights pertained to the subject property for the purpose of a service station/car repair station. On 27 August 1982 the Council granted development consent for the conversion of the then service station into a fruit market ("the 1982 consent"). That consent was issued pursuant to the existing use regulations and was a change from an existing use which did not conform with the planning controls to another non-conforming use in relation to the whole of the subject property. The use of the subject property as a fruit market commenced in or around 1983. The rear of the subject property, as at June 1994, was used informally for car parking, the storage of pallets, a garbage collection area, and access for deliveries and customers. After entering into a contract for the purchase of the land on 25 August 1994, the applicant liaised with the Council regarding the use of the subject property, and on 27 September 1994 Council received a development application to develop the front portion of the subject property as a service station, convenience store, carwash and McDonald's restaurant, which application was granted (in respect of the applicant) by the Council on 6 July 1995. Any actual use of any portion of the subject property as a fruit market also ceased in July 1995 and has never been resumed. The fruit market is demolished. The contract for the purchase of the subject property was formally completed on 21 July 1995. The Council has changed the zoning of the subject property from the 5(d) Corridors Zone to the 1(d) Rural (Future Urban) Zone through amendment 7 to the Penrith Local Environmental Plan No 201. On 5 January 1998 the applicant lodged a development application for the development the subject of this proceeding and on 11 May 1998 the Council proffered reasons for refusal of such development application, which included, inter alia , the fact that the development was prohibited under the relevant zoning and that the applicant had not demonstrated that the site enjoyed any existing use rights. There is no doubt that the zoning of the land as 1(d) Rural (Future Urban) Zone) through amendment 7 to the Penrith Local Environmental Plan prohibits the proposed development of the rear portion of the subject property in the absence of any existing use rights for such development. Mr D P Wilson, who appears for the applicant, submits that existing use rights still attach to the rear portion of the subject property. He submits that although there is no intention on the part of the applicant to use that portion of the subject property as a fruit barn (being the use permitted by the 1982 consent), there is and has been since the acquisition of the land an intention on the part of the applicant to sell the rear portion of the land with its existing use rights. There was no intention on the part of the applicant to 'trade in' the existing use rights over the whole of the subject property in the development application which resulted in the 1995 development consent, and hence the existing use rights over the rear portion of the subject property have not been abandoned. There is no dispute between the parties that the existing use rights in relation to the 1982 consent related to the whole of the subject property, which includes the rear portion of the subject property. Mr D H Officer QC, who appears for the Council, submits that the intention of the applicant was to sell the rear portion of the subject property after using the existing use rights afforded by the 1982 consent to obtain development consent for the development of the front portion of the subject property. He further submits that there are inconsistencies in the applicant's evidence of its intention to retain the existing use rights over the rear of the subject property. Mr Officer submits that the circumstances of the case, along with these contradictions in the applicant's evidence, would convince the Court that there has been an abandonment of the existing use rights over the rear portion of the subject property by the applicant, and moreover that the applicant has not discharged the onus which is placed on it by the Environmental Planning and Assessment Act 1979. The Relevant Principles Section 107 of the Environmental Planning and Assessment Act 1979 ("the Act") states, inter alia , that: "(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: ... (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". Subsection (3) indicates that there is a presumption of abandonment where the existing use has been discontinued for a continuous period of twelve months, and that the onus is on the party asserting the continuance of the use to prove it. Section 109B relates to existing consents, and states, inter alia , that: "(1) Nothing in an environmental planning instrument prohibits, or requires a further development consent to authorise, the carrying out of development in accordance with a consent that has been granted and is in force". It is apparent that this section is not directly relevant and does not require direct consideration because the fruit barn has been demolished and the applicant has no intention of reverting to the use of the rear of the subject property as a fruit barn. In Earle Cameron Constructions Pty Ltd v Parramatta City Council (1981) 46 LGRA 130 McClelland J said that: "The fact that...[the development company] may have had some intention of preserving existing use rights is insufficient to preserve them. The question of abandonment is a question of fact for each case" (at 137). In Hudak v Waverley Municipal Council (1990) 70 LGRA 130 (CA) Hope AJA (with whom Kirby P agreed- note so too did Mahoney but separate judgment ) referred to a two part test for whether existing use rights over land had been abandoned: the first part of this test is the actual use to which the land is put, and the second part is the question of any subjective intention on the part of the land owner/controller to use that land pursuant to its existing use (at 137). Hope AJA held that, where the physical use is discontinued, the subjective intention of the land owner/controller is a relevant factor in determining whether the existing use has been abandoned, but that "the existence of an intention based on some such factor [in this case a delaying factor in resuming the existing use] should and does not necessarily continue the existing use" (at 137). Hope AJA concluded that: "It is necessary to have regard to the whole of the circumstances, including the subjective intention of the relevant person, and to determine whether in the light of all those matters the cessation of actual use proved by the facts is outweighed by an asserted subjective intention to continue the use" (at 137). It is clear that in cases where existing use rights are not currently being exploited, the subjective intention of the land owner/occupier is a relevant factor. In Woollahra MC v TAJJ Investments (1982) 49 LGRA 123, Hutley JA held that "where existing use rights are not being exploited, [the] intention [of the land owner/controller] is vital" (at 125). The Parties' Submissions Mr Wilson refers to the evidence of Mr W Paterson, the agent and development manager of the subject property on behalf of the applicant; and to the evidence of Mr G G Porz, a director of the applicant and at the material times an investment manager for Two Gables Pty Ltd. (For the purposes of this proceeding Two Gables Pty Ltd can be considered to be the predecessor of the applicant. I shall refer to it and the applicant as being one in the same). Mr Paterson stated that it was always the intention of the applicant to develop the whole of the subject property. Mr Porz also stated that the intention of the applicant since it entered into the contract to purchase the subject property has been to use the whole of the land pursuant to its existing use rights emanating from the 1982 consent, and moreover that there has never been any intention on the part of the applicant to abandon any existing use rights over the rear portion of the subject property. He conceded that one option of the applicant was to subdivide and sell the rear portion of the subject property, but stated that this was the worst case scenario. Mr Porz stated that it was never the intention of the applicant to sell the rear portion of the subject property exclusive of its existing use rights. Mr Wilson further submits that there remains a valid extant consent (the 1982 consent) for the use of a fruit market on the whole of the land and that nothing has been done to alter this. He refers to the decision in Auburn Council v Nehme (Land and Environment Court of NSW, Bignold J, 15 April 1998, unreported) and the decision of Talbot J at first instance in Londish v Knox Grammar School (Land and Environment Court of NSW, Talbot J, 13 May 1997, unreported). (Note that Talbot J's decision was largely confirmed on appeal, and the point on which it was cited in this proceeding was a point that was not taken on appeal). Although these cases concerned s 109B of the Act, Mr Wilson submits that they are relevant to this proceeding, not by virtue of the fact that s 109B is a relevant provision in this proceeding, but rather by way of analogy. In Londish v Knox Grammar , the respondent at no stage had an intention of using the property for its existing use, yet Talbot J held that this did not preclude it from asserting that existing use rights still attached to the land (at 7). His Honour also held that "no bar was created to prevent a reversion to the laboratory use or the commencement of an alternative use" (at 7). Mr Wilson similarly relies on Auburn v Nehme for the proposition that the abandonment of a specific use which has been undertaken pursuant to an existing use right will not be a relevant consideration to the question of whether the consent remains valid, and submits that the 1982 consent is therefore still valid. The currency of this consent is a relevant factor, in Mr Wilson's submission, to the question of whether the existing use rights as regards the rear of the subject property have been abandoned. Mr Officer submits that the applicant's assertion that it never intended to abandon any existing use rights over the rear of the subject property is contradicted by the evidence. He refers to the fact that prior to the letter of 14 September 1995 there is no evidence of an intention on the part of the applicant to retain the existing use rights over the rear of the subject property. In Mr Officer's submission, the applicant's assertion is inconsistent with, inter alia , the following material: ?. A letter of offer for the subject property from Mr W Paterson to Stanton Hillier Parker Pty Ltd of 20 June 1994. ?. A letter from Mr Porz to Mr R S Adler of 9 August 1994 which refers to the intention of the applicant for the rear of the subject property as being: "McDonalds and us to subdivide off rear of each lot, amalgamate into one title and sell sharing the proceeds 50/50". ?. A fax from Mr Porz to Mr J Peters of Barker Gosling of 9 August 1995 which suggests an intention of the applicant to sell the rear portion of the subject property. There is an inconsistency between the affidavit evidence and oral evidence of Mr Porz and the documentary material. Mr Porz in his affidavit twice refers to an intention of the applicant to use the whole of the subject property in a manner permitted by the existing use rights afforded by the 1982 consent. However, Mr Porz conceded under cross examination by Mr Officer that it had never been the intention of the applicant to use the subject property as a fruit barn. It is important to refer to three questions put to Mr Porz by Mr Officer and the answers given thereto: "Q. Of course it was never the company's intention was it, to own the property and run it as a fruit barn? A. That was a possibility. Not to run it as a fruit barn, I wouldn't operate a fruit barn. Q. Thank you, I didn't think you would, that's why I asked you the question. It was never the company's intention once it owned the land to run it as a fruit barn was it? A. No Q. The company was only interested in the fruit barn for what it represented as existing use rights, correct? A. Yes". Mr Officer submits that the intention to amalgamate the site and sell the rear portion remained constant until September 1995, and that therefore once the 1995 development consent was granted the applicant abandoned any existing use rights over the rear portion of the land. The only purpose for which the applicant was going to use the 1982 consent was used in obtaining the 1995 consent for the development on the front portion of the subject property. Mr Officer further submits that the applicant has therefore not discharged the onus of proof required by s 107(3). That subsection places an onus on a party in the position of the applicant in the present proceeding. The subsection presumes an abandonment of the use where physical use has ceased for twelve months, unless the contrary is demonstrated. Mr Officer finally submits that Mr Wilson's reference to s 109B is misconceived because it is not relevant to the present proceeding. Conclusions The contention raised by Mr Wilson for the applicant is that the applicant did not abandon the existing use rights which attach to that land, which may include a use different to that envisaged by the 1982 consent (with the obvious example being the 1995 development consent granted over the front portion of the subject property pursuant to existing use rights). The use proposed by the development application refused by the Council in 1998, the catalyst of this proceeding, would also be such a use, in Mr Wilson's submission. This contention must, according to the authority of Hudak v Waverley , rely on the applicant demonstrating a subjective intention to use the rear of the subject property pursuant to its existing use rights, because the use of the subject property as a fruit market has been ceased. It will be recalled that Hope AJA in that case concluded that: "It is necessary to have regard to the whole of the circumstances, including the subjective intention of the relevant person, and to determine whether in the light of all those matters the cessation of actual use proved by the facts is outweighed by an asserted subjective intention to continue the use" (at 137). It is useful to briefly recount the relevant chronology in this proceeding. In July 1995 the following events took place: ?. Council granted development consent for the development of the front portion of the subject property as a service station/car wash/convenience store. ?. The applicant completed the purchase of the subject property. ?. The existing fruit barn on the subject property was demolished. In a letter of 9 August 1995 the applicant advised its solicitor that its intention with regard to that part of the subject property which was not developed in accordance with the July 1995 development consent, would be sold. There is and was no intention on the part of the applicant to use the rear portion of the subject property for the purpose of a fruit barn, its existing use pursuant to the 1982 consent. That, however, is not the end of the matter. The whole circumstances of the case must be taken into account when deciding the question of whether there has been an abandonment of the existing use. The evidence of intention on the part of the applicant to continue the existing use rights for any other use which may be referable to the existing use rights pursuant to the 1982 consent is mainly found in the letter of 14 September 1995 and other correspondence between the applicant and the Council, and also in the affidavit of Mr Porz. However, this evidence was contradicted by both the oral evidence of Mr Porz and the weight of documentary evidence. In terms of this inconsistency, I prefer the oral evidence of Mr Porz and a corollary of this finding is that I find those parts of his affidavit which assert an intention prior to 14 September 1995 to reserve any existing use rights over the rear portion of the land to be false. There is therefore no reliable intention of the applicant to do anything with the rear portion of that land apart from subdividing and selling it prior to 14 September 1995. There is therefore evidence which indicates a subjective intention of the applicant to retain the existing use rights over the rear portion of the subject property, and also evidence which indicates that those existing use rights were abandoned. The authority suggests that the test in a case such as the present is whether "the cessation of actual use proved by the facts is outweighed by an asserted subjective intention to continue the use" ( Hudak v Waverley at 137). No analysis of the evidence could suggest that the slight evidence of intention to reserve existing use rights outweighs the significant evidence the other way, which includes the three vital pieces of correspondence and the oral evidence of Mr Porz. The subjective intention to reserve existing use rights which has been proven is unable to outweigh the cessation of the continued use and the significant evidence of intention to abandon the 1982 use. The applicant has certainly expressed an intention to discontinue the physical fruit market use, and also its intention to sell the rear portion of the subject property. The onus is placed on the applicant by s 107(3) of the Act. The applicant has not discharged that onus on it presented by the presumption of abandonment under s 107(3). The weight of the evidence is in fact the other way. I therefore accept Mr Officer's submission that the applicant has abandoned the use and hence the existing use rights to use the rear portion of the subject property. The final point to consider is Mr Wilson's submission that the s 109B cases show that the validity of the 1982 consent for the operation of the subject property a fruit market is relevant. The currency of the 1982 consent is a different issue to that with which we are concerned in this proceeding. However, Mr Wilson does not put it on that basis. Rather, he submits that it is relevant insofar as it is a circumstance of the case. I accept Mr Wilson's submission and concomitantly reject Mr Officer's submission on this point. However, in terms of its persuasive power as a circumstance of the case, it goes way little toward establishing an intention of the applicant to reserve its existing use rights because this consent only allows the use of the subject property as a fruit market, and this is a use expressly disavowed by Mr Porz. The currency (or otherwise) of the 1982 consent has been considered, but it does not outweigh the other factors to which I have already referred. A further question which is raised is whether any existing use rights remain over the rear of the subject property which are referable to the 1995 development consent. A different way of framing this question is whether all of the existing use rights over the subject property have been 'used up' in the grant of development consent in 1995. Mr Officer submits that the applicant, in receiving the grant of the 1995 consent and its subsequent development of the front portion of the subject property, effectively 'traded in' its existing use rights over the whole of the subject property, and that the fruit market use is now extinguished because it is effectively converted to its current use. A more helpful way to examine this issue is to examine the applicant's intention with regard to the portion of the land in question. The applicant at no stage has demonstrated an intention to use the rear of the land pursuant to its existing use rights, and the answer to this question in these circumstances is the same as that reached above, which is that the applicant has abandoned its existing use rights over the rear of the subject property. It is relevant to ask what the applicant could do in terms of development to the rear of property. It clearly cannot use it as a fruit barn (pursuant to existing use rights) because it has abandoned that use. It clearly cannot use it for a use related to the use of the land as a fruit barn because of its abandonment of existing use rights. It clearly cannot use it as a further part of the service station/car wash/convenience store because there are no existing use rights due to its abandonment of them. However, it is not necessarily a matter of those rights being 'traded in' through the 1995 consent, but rather the question should be referable to the applicant's intention with regard to the land in question. It is appropriate that I return to and answer the questions of law posed by the parties: "2. Whether the subject property currently enjoys any existing use rights. In particular: (a) did the subject property enjoy any existing use rights prior to the issue of development consent in 1995? Yes . (b) were any existing use rights enjoyed by the property prior to the issue of the 1995 consent extinguished by the issue of that consent? Not relevant . (c) were any existing use rights, enjoyed by the subject property after the issue of the 1995 consent, abandoned prior to the lodgement of the development application for the proposed development? Yes 3. If the subject property currently enjoys any existing use rights, whether those existing use rights are existing use rights for the proposed development? The property does not enjoy any existing use rights . 4. If the subject property does not currently enjoy existing use rights for the proposed development, whether a change and expansion of the existing use rights so as to permit the proposed development should be approved?" Not sufficiently argued to decide . Accordingly, I propose the following orders: (1) The application is dismissed. (2) The exhibits may be returned. 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