Land and Environment Court of New South Wales CITATION : Shoalhaven City Council v Mitchell & Anor [1987] NSWLEC 1 APPLICANT Shoalhaven City Council PARTIES : RESPONDENT Mitchell & Anor FILE NUMBER(S) : 40176; 10573; 10506 of 1987 CORAM: Stein J KEY ISSUES: :- LEGISLATION CITED: Shoalhaven Local Environmental Plan 1985 Environmental Planning and Assessment Act Sydney City Council v. Ilenace Pty. Ltd. ((1984) 54 LGRA 217) John Bruce & Partners v. North Sydney Municipal Council ((1984) 55 LGRA 228); CASES CITED: Foodbarn Pty. Ltd. v. The Solicitor-General ((1975) 32 LGRA 157); ACR Trading Pty. Ltd. v. Fat-Sel Pty. Ltd., Unreported Court of Appeal 17 November 1987). DATES OF HEARING: DATE OF JUDGMENT: 03/23/1988 LEGAL REPRESENTATIVES: JUDGMENT: HIS HONOUR: These three applications were, with the consent of the parties, heard together. The Class 4 application seeks declarations that Mr. & Mrs. Mitchell are using certain land at the corner of Princes Highway and Pierce Lane, Milton, for the purposes of a retail garden and plant nursery without the consent of the Council and that such a use is prohibited under the Shoalhaven Local Environmental Plan 1985. Council seeks an order restraining the Mitchells from using the subject land for the purpose of a retail garden and/or plant nursery. The 1985 Class 1 appeal is against the refusal of the Council to permit a change of use from wholesale nursery to retail and wholesale nursery. The application was refused by Council on the basis that a retail plant nursery is prohibited in the Rural l(b) zone and in the Special Use 5(d) zone which comprise the subject land. The 1987 Class 1 appeal is against the refusal of the Council to modify a consent pursuant to section 102 of the Environmental Planning and Assessment Act. The 'modification' sought is the deletion of the words "no retailing to the general public shall be permitted" from condition 3 of a consent granted on 15 April 1982 and the substitution therefor of a limitation of retailing activity to 20% of the gross turnover of the business. This application was also refused by the Council principally on the basis that a retail plant nursery is prohibited on the land pursuant to the Shoalhaven LEP 1985. The subject land, which may be described as lot 5 Deposited Plan 6l7853, is triangular in shape having an area of 7748m2 with a frontage of 206.88m along the Princes Highway, its south-western boundary. The land is partly zoned Rural l(b) and partly Special Uses - Arterial Road widening 5(d) under the Shoalhaven LEP 1985. The site was part of a dairy farm some 20 years ago. In February 1980 the Mitchells applied for consent to use the land for horticultural purposes, including the erection of greenhouses and a dwelling. In June 1980 the Council granted consent under clause 15 of Interim Development Order No. 1 (the IDO) to the erection of a country dwelling, greenhouses and agricultural machinery and agricultural storage shed subject to conditions. Condition 3 provided:- "This approval is for use of the greenhouses and machinery shed for horticultural purposes and no retailing to the general public shall be permitted from the subject land." (My emphasis) In September 1981 the Mitchells purchased the land while continuing to carry on a wholesale landscaping supply business thereon. In late 1981 they applied to Council to relocate produce bins and this application was refused in January 1982. In February a further application was made which was consented to on 15 April 1982. This consent was to the use of the land for a country dwelling, two greenhouses, two shade houses, machinery and agricultural storage sheds, and 7 product storage bins subject to conditions. Condition 3 is in the following terms:- "This approval is for use of the greenhouses and machinery shed for horticultural purposes and no retailing to the general public shall be permitted from the subject land." (My emphasis) In late 1983 the Mitchells applied to Council to erect a workshop and store on the land. By letter dated 9 March 1984 Council responded as follows:- "The application was considered by Council at its Meeting of the 6th March, 1984 and Council resolved that you be advised that retail sales are prohibited in the location of the subject land and that the present operation is contrary to the approval, in that retail sales are being made and access to the Highway has been provided. Council further resolved to approve your application providing that you give an undertaking that no further retail sales will be made from the site." (My emphasis added) By letter dated 18 May 1984 Council notified Mr. Mitchell that a written complaint had been received that retail sales were being made from the premises. Council indicated that if this was so then the Mitchells were in breach of the development consent and were directed to cease such sales. If that did not occur legal action was threatened by Council. Mr. Mitchell's response was to claim that his prices were 'wholesale' and to demand the name of the complainant. By letter dated 17 August 1984 Mr. Mitchell wrote to Council in the following terms:- "Since our application for a Wholesale Nursery was submitted three years ago, we find it impossible financially to make a go of it as wholesale only. We are now applying for a Wholesale and Retail Nursery for consideration by Council." (My emphasis) Council replied that retail sales were prohibited in the non-urban zoning and therefore could not be approved. Council added:- "As previously advised if the property is being used for the purpose of selling, exposing or offering for sale by retail, goods merchandise or materials then you are in breach of the Council's interim development order and the planning consent granted by Council by letter dated 10th June 1980. You are hereby directed to cease such sales if they are being carried out. If sales are being carried out and you continue to carry on selling, Council will have no option but to take legal action." On 17 May 1985 the Shoalhaven LEP 1985 was gazetted and retail plant nurseries are prohibited in the Rural B zone and also in the 5D Special Uses zone which zones comprise the subject land. In September 1985 the Mitchells applied for consent for a retail and wholesale nursery and this was refused on 26 September 1985 principally because Council perceived the use as prohibited. By letter dated l8 June 1986 Mr. Turnbull, a planning consultant acting on behalf of the Mitchells, lodged a section 102 application seeking to modify condition 3 of the April 1982 consent. This was refused by letter dated 7 October 1987 mainly because of the prohibition on retail plant nurseries in the 1985 LEP. In the meantime, Council had sought a written undertaking that certain buildings on the land not be utilised for retail sales. In reply an undertaking was given by the Mitchells limited to the proposed buildings. On the basis of that undertaking the Council consented in April 1987 to the erection of a storage shed and three bulk storage bins for wholesale display. It is appropriate to consider the Class l appeals prior to consideration of the Class 4 application. Coming firstly to the refusal to consent to the application for a retail plant nursery Mr. Schofield, who appeared on behalf of the Mitchells, acknowledged that retail plant nurseries are prohibited in the Rural B zone but submits that the LEP is flexible enough to permit the use provided the objectives of the zone are satisfied. This "novel argument", to use Mr. Schofield's expression, is premised on clause 9(2) and (3) of the LEP. These clauses provide as follows:- "(2) Except as otherwise provided by this plan, in relation to land within a zone specified in the Table to this clause, the purposes (if any) for which- (a) development may be carried out without development consent; (b) development may be carried out only with development consent; and (c) development is prohibited, are specified under the headings "Without development consent", "Only with development consent" and "Prohibited", respectively, appearing in the matter relating to the zone. (3) Except as otherwise provided by this plan, the Council shall not grant consent to the carrying out of development on land to which this plan applies unless the Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out." Mr. Schofield relies particularly on subclause (3) and the introductory words in subclause (2), "Except as otherwise provided by this plan", and the interplay between the subclauses. He submits that the objectives of the Rural B zone are met by the development, therefore it follows that the use is a permitted one with consent. However, it seems to me that if there is any substance in Mr. Schofield's submission it is pointless to have Tables within clause 9 which list uses which do not require development consent, uses which may be carried out only with consent and uses which are prohibited. Clause 9(2) and (3) mean what they say. "Except as otherwise provided by this plan" means that the plan may permit development outside the Tables if the plan otherwise provides. However, while the plan does otherwise provide in certain respects, e.g., clauses 27, 34, 38 and 39, no provision of the plan exists which assists the Mitchells to make permissible what is plainly prohibited. In my opinion the Class l appeal (10573 /85) must fail. Next to consider is the Class 1 appeal concerned with the section 102 application. It must be pointed out that the condition in question was not appealed against and it may be said that the application under section 102 is being used as an impermissible means of challenging the condition. However, Sydney City Council v. Ilenace Pty. Ltd. ((1984) 54 LGRA 217) and John Bruce & Partners v. North Sydney Municipal Council ((1984) 55 LGRA 228) are authority for the proposition that section 102 may be used to modify a condition of a consent provided that a fundamental condition is not deleted or altered in such a way as to constitute a substantially different development. Since the 1985 amendment to the Environmental Planning and Assessment Act eliminated reference to modifying 'details' of the consent, it is my opinion that the section may empower a Council (or the Court), in appropriate circumstances, to delete a condition entirely or substitute a completely new condition provided the tests in section 102(1) are s atisfied. The modification here sought is to eliminate a condition prohibiting retailing to the general public and substitute therefor a condition permitting retailing provided that the extent of the retail activity be limited to 20% of the gross turnover of the business. Bearing in mind that retail plant nurseries are prohibited uses on the subject land, I do not see how the condition can be altered as the Mitchells seek. To do so would be to permit, via the amended condition, a prohibited use to be carried out on the land. I cannot accept that section 102 may be utilised to permit prohibited uses to flourish. In any event, and bearing in mind the nature of the permitted use as contrasted with retailing to the general public, it cannot be said to be "substantially the same development". In fact the uses are quite disparate. The suggested substituted condition is substantially different from the original condition in the consent and leads to a different development. Accordingly, for the above reasons the Class 1 appeal (10506/87) must also be dismissed. Having dismissed the two Class 1 appeals I turn to the Council's Class 4 application. As I understand Mr. Schofield's submission no breach of the law has been proven in that the retailing activity is ancillary or incidental to the dominant purpose of wholesale landscaping. He submits that the Mitchells run a "single" business which involves a number of uses associated with the landscaping activity. The retail sales are so intertwined with and subordinate to the landscape business so as not to constitute a separate and distinct use. On the other hand Mr. Webster submits, on behalf of the Council, that there are two distinct activities being carried out on the land - landscaping and retailing. He does not quibble with the small amount of sales truely incidental to landscaping contracts. These may be seen as part of the landscaping activity. However, he submits that retailing directly to the public, and not as incidental to a landscaping contract with the business, is a separate and distinct activity and not ancillary to the dominant use, see Foodbarn Pty. Ltd. v. The Solicitor-General ((1975) 32 LGRA 157). I accept the Council's submission. On a reasonable examination of the evidence I am unable to conclude that sales by retail are ancillary to the dominant purpose. Because retail sales are habitually made to the general public and constitute around 20% of the gross takings of the business, I am driven to the conclusion that the retailing use is independent of any other use and not merely incidental to the landscaping activity. That the latter use may have spawned the retail sales is, in my opinion, immaterial. The retailing to the public is manifestly a separate and distinct activity except in so far as it may properly be seen as incidental to a landscaping contract of a customer with the business. The Council does not seek to attack that latter category and in my view this is the correct legal position to adopt. It follows that the retail sales to the public constitute a breach of planning laws these activities being prohibited by the LEP. It is therefore necessary to consider the exercise of the Court's discretion. Mr. Schofield submits that in the exercise of the Court's discretion no order should be made. In summary the points he relies on are - * A technical breach only is involved with no evidence of environmental harm emanating from the already existing retailing operation. * The retail sales are low key with no advertising other than in the yellow pages of the telephone book. * The retail sales are intertwined with the other uses and part of a conglomerate of landscape related activities. In other words the retailing is part of a single business and subordinate to the permitted use. * The Council has resolved to amend its LEP to permit retail plant nurseries in Rural zones. * There have been no complaints other than from business competitors. * Hardship considerations - the Mitchells are hardworking "battlers" and losing the retail component will upset the balance of their business and do financial harm to it to the extent that the business will become uneconomic. As against these matters the Council maintains - * That since 1980 the consents issued to the Mitchells have included specific conditions banning retail sales and the use was and still is a prohibited one. * Furthermore, the Mitchells have always known of the condition that retail sales were not permitted but have chosen to continue to retail to the public, and have declined to give any reasonable undertaking to cease to do so. * The retailing component of the overall business is significant. * While there is little or no evidence of environmental harm resulting from the illegal use the Council fears that this may not be so in the future, especially if the business is sold. * If an order is refused then the Court will be allowing an unlawful use to continue and Council will be powerless to enforce the consent. * The breach of the law is serious and Council is seeking to carry out its public duty to ensure that planning laws are obeyed. * The Council resolution of 1 September 1987, "That wherever nursery is mentioned in the Rural Schedule, that this be amended to allow retail plant nurseries" may not assist the Mitchells since 'nursery' is not mentioned in the subject Rural zone except that retail plant nurseries are prohibited. In any event, whether or not such an LEP will be made is a matter for conjecture and in the future. Upon a consideration of the evidence and submissions I have arrived at the conclusion that the discretion ought not to be exercised to refuse to grant injunctive relief. I do not accept that "to grant such relief would work such an injustice as to be disproportionate to the ends secured by the enforcement of the legislation". (Kirby P. in ACR Trading Pty. Ltd. v. Fat-Sel Pty. Ltd., Unreported Court of Appeal 17 November 1987). It is inevitable that in balancing up all of the relevant factors for and against the exercise of the discretion some will assume a greater significance than others. So it is here. In my opinion when one has regard to the consistent attitude and attempts of the Council to ensure that the prohibited retailing use cease and the continued defiance of the owners to cease that use, these factors weigh heavily against refusing an order. Further, I cannot agree that the breach is a purely technical one. On the contrary I regard the breach as both serious and blatant. It may not, at this time, have any adverse effect on the environment, but I must also take account of the public interest which exists in the orderly development and use of the environment and the potential damage to it, (see Kirby P. in Warringah Shire Council v. Sedevic, Unreported Court of Appeal 18 September 1987, and cases there collected). I have already found that, for the very most part, the retail sales are a separate and distinct use from the landscaping business and therefore Mr. Schofield's submission of the "intertwining" of the retail use with the other uses does not, in my opinion, assume great importance in the exercise of the discretion. I take account of the Mitchells' hardship should the injunction be made but as against this it has to be said that it is a situation of their own making. Nevertheless, the hardship can be softened by a postponing of the order for a reasonable time to enable alternative arrangements to be pursued. Such a suspension will also allow time for the Council to pursue, if it so chooses, the matter of possible amendment of the LEP concerning retail plant nurseries in Rural zones. Taking account of all the circumstances as disclosed by the evidence, I am of the opinion that injunctive relief should not be refused in the exercise of the discretion. However, since it is conceded by the Council that some of the selling activities are in fact ancillary or incidental to the permitted use, I am not disposed to make the declarations and injunction in the terms set forth in the application. I stand the matter out of the list to enable the legal representatives to bring in draft minutes of orders to take account of the situation and to allow them the opportunity to address the Court, if they desire, on an appropriate postponement of the orders. It is proper in the circumstances of the three applications being heard together and of my decisions thereon, that the Mitchells pay the Council's costs of each application, including the costs reserved by me on 16 October 1987. The two Class l applications are dismissed. 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.