Reported Decision : 103 LGERA 94 New South Wales Court of Appeal CITATION : FAST BUCK$ v BYRON SHIRE COUNCIL [1999] NSWCA 19 FILE NUMBER(S) : CA 40723/97 HEARING DATE(S) : 3 February; 1999 JUDGMENT DATE : 19 February 1999 FAST BUCK$ PARTIES : v BYRON SHIRE COUNCIL JUDGMENT OF : Handley JA at 1; Giles JA at 29; Sheppard AJA at 34 LOWER COURT JURISDICTION : Land & Environment Court LOWER COURT FILE NUMBER(S) : 96/10436A LOWER COURT JUDICIAL OFFICER : Bignold J COUNSEL : J B Maston (Appellant) D P Wilson (Respondent) SOLICITORS : In person (Appellant) Wilshire Webb (Respondent) CATCHWORDS : ADMINISTRATIVE LAW - error of law - whether irrelevant considerations taken into account; ENVIRONMENTAL PLANNING - State Environmental Planning Policy No 1 - development standard alleged to be unreasonable or unnecessary - factors relevant to determining an objection Byron Local Environmental Plan 1988 State Environmental Planning Policy No 1 ACTS CITED : Land and Environment Court Act 1979 Environmental Planning and Assessment Act 1979 Court Act 1979 DECISION : Dismissed with costs 15 THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40723/97 96/10436A HANDLEY JA GILES JA SHEPPARD AJA Friday 19 February 1999 FAST BUCK$ v BYRON SHIRE COUNCIL ADMINISTRATIVE LAW - error of law - whether irrelevant considerations taken into account ENVIRONMENTAL PLANNING - State Environmental Planning Policy No 1 - development standard alleged to be unreasonable or unnecessary - factors relevant to determining an objection The appellant lodged an application with the Council for the subdivision of his land. The Council refused the application for non-compliance with a development standard in the Byron LEP despite an objection to compliance lodged under SEPP No 1. This refusal was appealed unsuccessfully to a Senior Assessor of the Land and Environment Court and then to a Judge of that Court. On further appeal by leave. HELD, dismissing the appeal: (1) There was no error of law in the assessor's finding on the appellant's objection under SEPP 1. The objectives of the zoning and the perceived purposes of the development standard were relevant considerations in determining whether compliance would be unreasonable or unnecessary. Legal and General Life of Australia Ltd v North Sydney Municipal Council (1989) 68 LGRA 192 applied. (2) The assessor did not err in law in considering the appellant's case that the development standard in its application to this land was unreasonable or unnecessary. Legal and General Life of Australia Ltd v North Sydney Municipal Council (1990) 69 LGRA 201 CA applied. (3) The appellant's claim that the assessor had failed to determine the SEPP 1 objection failed. The assessor had determined the SEPP 1 objection and had found that compliance with the development standard was not unreasonable or unnecessary. Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 CA applied. (4) The appellant's claim that the assessor had erred in taking into account Council's pending rural residential study, which was an irrelevant consideration, also failed. Legal and General Life of Australia Ltd v North Sydney Municipal Council (1989) 68 LGRA 192; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 applied. ORDER Appeal dismissed with costs. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40723/97 96/10436A HANDLEY JA GILES JA SHEPPARD AJA Friday 19 February 1999 FAST BUCK$ v BYRON SHIRE COUNCIL JUDGMENT 1 HANDLEY JA: The appellant owns an area of 40.75 hectares of land at Coorabell situated north west of Byron Bay. It is zoned 1(a) Rural under the Byron Local Environment Plan 1988, cl 11 of which prohibits subdivision unless each of the proposed allotments will have a minimum area of 40 hectares. In April 1995 the appellant lodged a subdivision application with the Council seeking consent for the creation of three new lots containing 2.5, 1.5 and 36.75 hectares respectively. In support he lodged an objection under State Environmental Planning Policy No 1 (SEPP 1) to compliance with the development control standard requiring a minimum area of 40 hectares for each lot in a subdivision in the zone. 2 Council refused the application and the appellant lodged a Class 1 merits appeal to the Land and Environment Court which was dismissed by Senior Assessor Jensen on 9 April 1997. A further appeal to the Court constituted by a Judge, which was limited to questions of law (Land and Environment Court Act, s 56A), was dismissed by Bignold J. The appellant has again appealed, by leave, to this Court. 3 The appeal turns on the provisions of SEPP 1, the more relevant clauses of which are: "(3) This policy provides flexibility in the application of planning controls operating by virtue of development standards in circumstances where strict compliance with those standards would, in any particular case, be unreasonable or unnecessary or tend to hinder the attainment of the objects specified in s 5 (a)(i) and (ii) of the Act. (6) Where development could, but for any development standard, be carried out under the Act (either with or without the necessity for consent under the Act being obtained therefor) the person intending to carry out that development may make a development application in respect of that development, supported by a written objection that compliance with that development standard is unreasonable or unnecessary in the circumstances of the case, and specifying the grounds of that objection. (7) Where the consent authority is satisfied that the objection is well founded and is also of the opinion that granting of consent to that development application is consistent with the aims of this policy as set out in clause 3, it may, with the concurrence of the Director, grant consent to that development application notwithstanding the development standard the subject of the objection referred to in clause 6". 4 Mr Maston for the appellant submitted that the reasons of the assessor demonstrated error of law in the application of SEPP 1 in that he asked himself the wrong questions and took into account irrelevant considerations. The assessor's reasons comprise an analysis of the evidence for 24 pages, followed by a statement of his conclusions in the remaining 3½ pages. Mr Maston submitted that the assessor erred in failing to make a finding on whether the SEPP 1 objection was "well founded", in asking himself whether the development standard in cl 11 was "unreasonable or unnecessary", instead of whether compliance with it would be so, that he misconstrued the objectives of the Rural 1(a) zone in the LEP, and took into account Council's pending rural residential study which was an irrelevant consideration. 5 Bignold J noted that the assessor's reasons do not contain "a specific finding" on the appellant's objection, and Mr Maston submitted that there was no implicit finding either. In the course of stating his conclusions, the assessor said: "Considerable time was spent … on the topic of agricultural uses and the potential impact of rural residential uses on such uses. In the ultimate I am quite satisfied that while that notion of protecting agricultural activities from the impact of antipathetic new rural residential owners still remains a significant objective in the Rural 1 (a) zone, the notion of controlling the extent and location of rural residential development is just as potent and relevant an issue". 6 The objectives of the zoning, and the perceived purposes of the relevant development standard, are relevant considerations in determining whether compliance with that standard would be unreasonable or unnecessary. The relevant principles were stated by Cripps J in Legal and General Life of Australia Ltd v North Sydney Municipal Council (1989) 68 LGRA 192 (Legal & General Life) in the course of a judgment which was upheld by this Court on appeal. He said (202): "To date the Court has had no occasion to attempt to define the limits of the dispensing power based upon an objection that compliance with the standard is unnecessary or unreasonable in the circumstances of a case. It has expressed the opinion that the objection is well founded if it is shown that the underlying purpose of the development standard is satisfied by the particular development proposed … But later cases have demonstrated that the identification of the 'underlying purpose or object' of the standard and an examination as to whether that purpose or object is satisfied by the proposed development is only one of the tests". 7 Mr Maston submitted that the assessor erred in the passage cited in identifying the underlying purposes of the development standard and this error of law vitiated his consideration of the objection. The Court was satisfied after hearing Mr Maston's submissions on this question that the assessor was correct, and we did not wish to hear Mr Wilson for the Council on this point. The objectives of this zone in the LEP include: "(b) to encourage a pattern of settlement which maintains the rural character of land within the zone, and (d) to allow the use of land within the zone for agricultural purposes and avoid conflict between other uses and intensive agriculture". 8 The assessor's finding that control of rural residential development was a significant purpose of this zoning was amply supported by these objectives but others also pointed to the same conclusion. 9 Before the assessor the appellant attempted to establish that compliance with the development standard was unreasonable or unnecessary because the standard itself was unreasonable or unnecessary. There were other ways in which an objector under SEPP 1 might present his case. He might accept that the standard was both reasonable and necessary, but seek to establish that enforcing compliance in his case would be unreasonable or unnecessary. This would be a sensible approach where the departure from the standard was modest, where its underlying purpose would not be prejudiced, or where it would be fulfilled in another way. However in this case the size of the smallest lots might have suggested that this approach would have little prospects of success. The appellant's best chance may have been an attack on the reasonableness of the zoning and the standard as applied to this land. 10 If the zoning of particular land was found to be unreasonable or inappropriate a Council or the Court might conclude that a development standard appropriate for that zoning was also unreasonable or unnecessary as it applied to that land. Such a finding could lead to further findings that compliance with the standard in that case would also be unreasonable or unnecessary and an SEPP 1 objection should be upheld. 11 This was the course undertaken by the appellant before the assessor, and in my judgment this approach was available under cl 6 of SEPP 1, and the assessor did not err in law in considering the appellant's case on that basis. 12 Indeed in Legal & General Life (1990) 69 LGRA 201, in the appeal from the judgment of Cripps J, Priestley JA, who delivered the principal judgment, seemed to adopt the process of reasoning which is challenged for error of law in this case. Those were Class 4 proceedings attacking a development consent granted by the Council after it had upheld an objection under SEPP 1. Priestley JA said, at 209-10: " … the argument was … that to grant a consent permitting such a very large increase over the development standards for floor space ratio and height necessarily involved an abuse of power. I would not exclude the possibility that such a submission could succeed in some circumstances. If for example in the present case the Minteyville land stood in a zoning which had a two storey height limitation with which every building within a mile's radius conformed, and a consent were granted … the submission might succeed … However the facts of the present case are almost the reverse of the example I have given. Development in the vicinity of the Minteyville land had been such that it is difficult to see that the two development standards relied on by L & G were, when Minteyville made its application, anything other than unreasonable or unnecessary. It is not merely that the L & G building and the Comrealty building when completed, the immediate neighbours of the Minteyville land, will be taller than the proposed Minteyville building, but that many other buildings in the immediate vicinity combine with the first two mentioned to make maintenance of the two development standards, … in the case of the Minteyville land, quite pointless". (emphasis supplied) 13 Although the present question was not then in issue, the reasoning of Priestley JA is persuasive and confirms the view I have independently formed. In my opinion this alleged error of law on the part of the assessor has not been established. 14 Mr Maston's submission that the assessor determined the appeal without ever deciding whether the appellant's objection under SEPP 1 should be upheld or dismissed requires an examination of his reasons to determine whether there was an implicit decision on this question. This enquiry should be approached bearing in mind his findings, relevant to that question, as to the underlying purpose of the development standard and the appropriateness of the Rural 1 (a) zoning for this land. The critical passage in the assessor's reasons reads: "At the end of this review, I am quite satisfied, that there was nothing presented to the Court during the course of the proceedings which could be seen as demonstrating the fundamental unreasonableness or lack of necessity of a space standard of the sort that applies". (emphasis supplied) 15 Immediately before this passage the assessor referred to the appellant's attack on the zoning "applying to his land" as inappropriate, and the excessive nature of the subdivision standard. In considering whether the assessor impliedly determined the SEPP 1 objection, the Court should not examine the language of his reasons "too narrowly" as if they were written by a lawyer. Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 CA. In the passage quoted the assessor held that the appellant had failed to establish that the development standard was fundamentally unreasonable, or that there was no necessity for it. In my judgment these findings addressed the issues under cl 6 of SEPP 1 and dealt with the appellant's argument that compliance with the standard in his case would be unreasonable or unnecessary. 16 In Brimbella Pty Ltd v Mosman Municipal Council (above) at 372 Priestley JA, dealing with a similar argument said: "The assessor's reasons were responses to the argument advanced and explains why she was not persuaded by those arguments". 17 The same can be said of the appellant's criticisms of the assessor's reasons in this case. The assessor does not state, in terms, that he has confined his attention to "the circumstances of the case", but in my view that is what he did. He refers to the evidence and argument "presented to the Court" which must have been focussed on the objection in relation to the subject land. In the previous paragraph he had referred to the appellant's attack on the zoning applying to "his land". Although he referred to wider issues and was concerned with the precedent effect of a decision in favour of the appellant, these matters were part of the circumstances of the case. 18 It follows in my judgment that the assessor did determine the SEPP 1 objection and found that compliance with the development standard was not unreasonable or unnecessary in the circumstances of the case. 19 Mr Maston also submitted that the assessor took into account irrelevant considerations when he said that the "use" of SEPP 1 sought by the appellant would be "an inappropriate pre-empting" of the results of the current study being undertaken by the Council for a strategic approach to development for rural residential accommodation in the Shire, and that the appropriateness of the use of the land for this purpose should be left to be determined by "conventional Local Environment Planning process" and not by the Court. Mr Maston also challenged on the same basis the assessor's further conclusion that the "use" of SEPP 1 "at this time" to sanction a departure from the standard would be "entirely inappropriate" because it would be "tantamount to a rezoning … on an entirely ad hoc basis". The assessor concluded by stating that he considered that approval of the application would be quite inappropriate. 20 In Legal & General Life (above) at 201-2 Cripps J said: "In a number of cases in the Land and Environment Court it has been stated that although the dispensing power under SEPP No 1 should not be given a limited operation, generally speaking it ought not to be used as a means to effect 'general planning changes' throughout the municipality … It was said, correctly in my respectful opinion … that SEPP No 1 is not a 'general planning power' to be used as an alternative to the plan making power conferred by Part III of the Environmental Planning and Assessment Act. However it must be clearly borne in mind that the cases referred to … were concerned with whether the Court, in the exercise of its planning discretion, considered it appropriate to uphold an objection under SEPP No 1. No questions of law were involved". 21 Cripps J later referred (203) to the width of the discretion under SEPP 1, and applied to it the statement by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40: "… this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except insofar as there may found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard". 22 The conclusions of Cripps J, as to the width of the discretion under SEPP 1, were endorsed by this Court (ibid 69 LGERA at 210). The assessor was hearing a merits appeal and was called upon to exercise the Court's "planning discretion". In my judgment the matters under consideration were relevant to the exercise of that discretion on a merits appeal both on principle and on the authority of Legal & General Life. Wider considerations also lead to the same conclusion. 23 Clause 7 of SEPP 1 provides that a consent authority which is minded to allow an objection and grant consent may do so only with the concurrence of the Director of Planning, this provision being authorised by s 30 (2) of the Environmental Planning and Assessment Act. The Director was not called upon to consider the question in this case because the Council refused consent. The appeal was from this refusal but under s 39 (6) of the Land and Environment Court Act the Court could grant consent although the Director has not concurred, and even if he has refused his concurrence. This provision reverses the effect of this Court's decision in Parramatta City Council v Palmyra Freeholds Pty Ltd (1974) 2 NSWLR 83, decided under the earlier legislation. 24 Clause 8 of SEPP 1 provides: "The matters which shall be taken into consideration in deciding whether concurrence shall be granted are - (a) whether non-compliance with the development standard raises any matter of significance for State or Regional environmental planning; and (b) the public benefit of maintaining the planning controls adopted by the environmental planning instrument". 25 This provision was authorised by s 30 (3) of the Environmental Planning and Assessment Act and s 79 (2) provided that in cases such as this the Director may grant consent, unconditionally or subject to conditions, or may refuse consent. Section 79 (3) provided that in exercising this power the Director shall take into consideration the matters stated pursuant to s 30 (3), and only those matters, and shall give reasons. 26 The review being undertaken by the Council to develop a strategic approach to the distribution of rural residential accommodation, and the desirability of maintaining the development standard in the meantime, were circumstances of the case and aspects of the public interest within s 90 (1)(q) and (r) of the Environmental Planning and Assessment Act as it stood at the relevant time which the Council, as the consent authority, was bound to consider. 27 These matters were also relevant when the Court was considering exercising its power under s 39 (6) of the Court Act to grant consent although the concurrence of the Director had not been obtained. This section prevents the Court's appellate jurisdiction being stultified by the existence or exercise by another person of a power to veto a favourable decision by the consent authority. On a merits appeal the Court would be bound to take into account any reasons given by such a person pursuant to s 79 (3) of the Court Act. Where the power has not been exercised, and reasons have not been given, the Court would also be bound to take into account any consideration that would be relevant to the exercise of the Director's power to grant or withhold his concurrence. The matters relied upon by Mr Maston in my judgment were relevant under cl 8 (b) of SEPP 1 in assessing the public benefit of maintaining the planning controls adopted by the LEP. 28 All grounds of appeal so ably argued by Mr Maston have therefore failed and the appeal should be dismissed with costs. 29 GILES JA: I have had the advantage of reading the reasons of Handley JA. I agree that the grounds of appeal concerning error in failing to find whether the SEPP 1 objection was well founded, in asking whether the development standard in cl 11 was unreasonable or unnecessary instead of whether compliance with it would be so, and in misapprehension of the objectives of the Rural 1(a) zone in the LEP, fail for the reasons given by his Honour. As to the ground of appeal concerning error in taking into account the irrelevant consideration of Council's pending rural residential study, I prefer not to find relevance in part via cl 8(b) of SEPP 1, but rather to find relevance as described in the two following paragraphs. 30 In determining whether to grant consent pursuant to cl 7 of SEPP 1 the Council must form the opinion that granting consent to the development application is consistent with the aims of the Policy as set out in cl 3. The aims so set out include the flexible application of planning controls operating by virtue of development standards where strict compliance with those standards would in the particular case tend to hinder the attainment of the objects specified in s 5(a)(i) and (ii) of the Environmental Planning and Assessment Act 1979. The last-mentioned objects are - "… to encourage: (i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment, (ii) the promotion and co-ordination of the orderly and economic use and development of land …" 31 In my opinion, in the result, it is relevant for the Council to consider whether consent to the particular development application encourages what may be summarised as considered and planned development. I consider that it is therefore relevant to take into account whether the particular development, as an ad hoc departure from current development standards, should be denied pending the Council's study, and possibly establishment, of a strategic approach to development for rural residential accommodation. Without going further, the ground of appeal fails for that reason. 32 In the course of the hearing of the appeal Mr Maston also submitted that Bignold J had erred in what he said about onus of proof and error of law. Having concluded that the assessor was not in error in the respects for which the appellant contended, it is unnecessary to say anything about these grounds of appeal concerning error by Bignold J in these respects. 33 I agree that the appeal should be dismissed with costs. 34 SHEPPARD AJA: In this matter I have had the advantage of reading the judgment to be delivered by Handley JA. I am in agreement with his Honour's reasons and conclusions, and with the orders which he proposes. 35 I have also had the advantage of reading the judgment to be delivered by Giles JA. I agree with his alternative approach to the treatment of the ground of appeal concerning error in taking into account the irrelevant consideration of Council's pending rural residential study. In my view both the approaches taken by Handley JA and by Giles JA are correct. In that sense they are not, in my opinion, alternatives but together provide cumulatively independent reasons why the ground should be rejected. 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.