Reported Decision: 172 LGERA 338 New South Wales Court of Appeal CITATION: Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226 HEARING DATE(S): 30 June 2009 JUDGMENT DATE: 3 August 2009 JUDGMENT OF: Ipp JA at 1; Macfarlan JA at 2; Hoeben J at 39 (1) Leave to appeal granted. (2) Appeal allowed. (3) Set aside the orders dated 25 September 2008 made by Biscoe J of the Land and Environment Court. DECISION: (4) Set aside the decision dated 23 May 2008 of Commissioner Bly of the Land and Environment Court. (5) Order that the appeal of Botany Bay City Council to the Land and Environment Court pursuant to s 56A of the Land and Environment Court Act be remitted to a Commissioner of that Court for determination in accordance with the decision of this Court. (6) Order the respondent to pay the applicant's costs of the proceedings in this Court and in the Land and Environment Court. (7) The respondent is to have a certificate under the Suitors' Fund Act 1951, if qualified. CATCHWORDS: LAND AND ENVIRONMENT - development application - Environmental Planning and Assessment Act 1979, s 79C - requirement to take development control plan into consideration - whether decision maker entitled to reject general policy embodied in portion of plan - ADMINISTRATIVE LAW - statutory requirement to take development control plan into consideration in determining development application - whether decision maker entitled to reject general policy embodied in portion of plan Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Land and Environment Court Act 1979 Suitors' Fund Act 1951 CATEGORY: Principal judgment Anderson v Director General of the Department of Environmental and Climate Change [2008] NSWCA 337; (2008) 163 LGERA 400 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1985-1986) 162 CLR 24 CASES CITED: North Sydney Council v Ligon 302 Pty Ltd [No 2] (1996) LGERA 23 Stockland Development Pty Limited v Manly Council [2004] NSWLEC 472; (2004) 136 LGERA 254 Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589 PARTIES: Botany Bay City Council (Appellant) Premier Customs Services Pty Ltd (Respondent) FILE NUMBER(S): CA 40445/08 COUNSEL: T S Hale SC/G Shipway (Appellant) H P Irish/V Conomos (Respondent) SOLICITORS: Houston Dearn O'Connor (Appellant) Conomos Legal (Respondent) LOWER COURT JURISDICTION: Land & Environment Court LOWER COURT FILE NUMBER(S): 10487/07 LOWER COURT JUDICIAL OFFICER: Biscoe J LOWER COURT DATE OF DECISION: 25 September 2008 LOWER COURT MEDIUM NEUTRAL CITATION: Premier Customs Services Pty Ltd v Botany Bay City Council [2008] NSWLEC 1185 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40445/08 IPP JA MACFARLAN JA HOEBEN J MONDAY 3 AUGUST 2009 BOTANY BAY CITY COUNCIL v PREMIER CUSTOMS SERVICES PTY LTD Judgment 1 IPP JA: I agree with Macfarlan JA. 2 MACFARLAN JA: Nature of Case and Conclusion 3 This is an application for leave to appeal from a decision of Biscoe J of the Land and Environment Court dismissing an appeal against a decision of Commissioner Bly of that Court which reversed the refusal of the Botany Bay City Council ("the Council") of the respondent's Development Application ("the DA"). The application was argued upon the basis that the hearing of the application would constitute the hearing of the appeal if leave to appeal were granted. 4 The point at issue is whether the Commissioner took into consideration the terms of a Development Control Plan ("DCP") which applied to the land when determining the adequacy of the setbacks from the side boundaries provided for in the DA. He was required to do so by s 79C(1)(a)(iii) of the Environmental Planning and Assessment Act 1979 ("EPA Act"). 5 My conclusion is that he did not do so because, whilst he referred to the relevant provisions of the DCP and was entitled in the particular circumstances of the subject site to depart from them in his determination of the DA, he took a different view than that embodied in the DCP as to the applicable general policy. In so doing, he substituted his own approach for the "statutory standard" and thereby failed to treat it as a "fundamental element" in his determination (see Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589 at [72-77]). The Development Application 6 The DA was for consent to the erection of a two-storey industrial building in the City of Botany, not far from Sydney Airport. The proposed development was described as "offices and warehouse including on-site parking", with the building to be used for an air freight forwarding business. The business was to involve the import and export of small-scale cargo. The Commissioner described the development and site as follows: "2 The ground floor of the building will mainly comprise a loading dock and storage area and the first floor is to be used for associated office purposes. Three car parking spaces two of which are to be utilised by the delivery vehicles are provided in front of the loading bay with two of these spaces positioned within the building's undercroft. In front of these spaces is a turntable, to enable cars and delivery vehicles to enter and leave the site in a forward direction. Landscape areas of varying widths are provided adjacent to the turntable close to the site's frontage and along much of the eastern boundary. Because the building is positioned on the western boundary of the site, other than the landscaping adjacent to the turntable there is no landscaping along this boundary. 3 The vacant, rectangular shaped site at 21 Bay Street, Botany has an area of 214 square metres and a frontage of 9.29 m to Bay Street. The surrounding area consists of a mixture of older style residential dwellings and industrial/warehouse uses. Adjoining the site to the east is a single storey cottage that is positioned essentially on the common boundary. To the south is a one and two-storey office and warehouse building. To the west is a single storey cottage of heritage significance (on a 16 m wide site) that is positioned more than 10 m to the west of the common boundary". Relevant Planning Controls 7 Bly C referred as folllows to the relevant provisions of the Botany Local Environment Plan 1995: "5 The site is zoned 4(a) - Industrial under Botany Local Environmental Plan 1995. The 4(a) zone is the general industrial zone in the City of Botany Bay permitting a wide range of industrial style uses including bulk stores, car repair stations, container terminals, materials recycling yards, retail plant nurseries, road transport terminals, warehouses, distribution centres and the like together with a number of ancillary and other uses such as child-care centres, community and recreation facilities and convenience shops. The primary objective of the zone is to ensure that development for industrial purposes (presumably the industrial style purposes that are permissible in the zone) is carried out in a manner that contributes to the economic and employment growth of the area. Concurrently there is to be no adverse impact on the environment and amenity is to be improved. 6 Of particular relevance to this application is the fact that in the 4(a) zone an air freight forwarder is a form of development that is particularly identified as being permissible with development consent. Notwithstanding the existence of numerous dwelling houses in the zone residential development is prohibited." 8 Development Control Plan No. 33 – Industrial Development ("the DCP") also applied to the land. It was prepared in accordance with Division 6 of Part 3 of the EPA Act. Section 79C of the EPA Act required it to be taken into consideration in determining any development application in relation to the subject land. The relevant parts of s 79C(1) are in the following terms: "(1) Matters for Consideration - General In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: (a) The provisions of: … (iii) Any development control plan, and …" 9 In its introductory section, the DCP states that it was prepared in response to a number of issues which had arisen in connection with industrial development within the City of Botany Bay. These included: - "The interface between industrial and residential land uses; - The impact of the operations of industrial development – including noise, traffic, odour and pollution on residential development; - The design of new industrial development". 10 Table 1 in the DCP refers to the assessment of development applications against a number of General Design Elements. These include "controls" which are described as "the mandatory requirements that must be met by the development". 11 One of the Design Quality Principles referred to in s 2.1 of the DCP is "the need for a compatible and workable relationship between industrial and non-industrial uses". In this context it is said that "developments are to have a buffer zone where the site adjoins a residential land use in order to protect residential amenity" and that "developments are to protect the visual and environmental amenity of adjoining residential land uses". Table 1 shows that s 2.1 applies to "all DAs". 12 Section 3, which deals with General Design Elements, says that "setbacks enable landscaping and buffers to be provided" with objectives which include minimisation of "the impact of development and buildings on the surrounding area" and creation of "a pleasant environment within and external to the site". Under the heading "Controls", it is stated that "setbacks are to be in accordance with the following table". This table, (Table 2) specifies a side setback "adjoining a non-residential use/zone" of two metres and a side setback "adjoining a residential use/zone" of three metres. 13 A separate section under the heading "Landscape" states that "landscaping setbacks" are to be in accordance with Table 2, referred to by me in the preceding paragraph. In the same context, reference is made to "residential/non-residential interface" as one of the "major issues within the City of Botany Bay" and it is said that "consideration needs to be given to the interface alongside and near boundaries in terms of privacy and amenity … ". The Decision of Commissioner Bly 14 Under the heading "Amenity and Street Presentation" Bly C referred to the Design Quality Principles in the DCP and to one purpose of the setback requirements being to minimise the impact of a new development upon an adjoining non-industrial use. 15 After concluding that the front setback (or building alignment) provided for in the DA was satisfactory, he noted that the percentage of the site area available for landscaping was well in excess of what was required. In relation to side setbacks he said the following: "27 The side setback requirement is 2 metres but because the site adjoins a residential use (to the east) the requirement is 3 m. This requirement [is] not met because the actual set back of the building varies between 1.69 m (for just over about half of the rear part of the building) and 3.21 m. Taking into account the neighbour's objection it was submitted that the proposed two-storey building positioned close to the southwest corner of the site would adversely affect the existing residential property at 12 Erith Street. Whilst the building is set back slightly less than 1 m from the rear boundary, there is no set back from the western boundary resulting in the two-storey built form hemming in that property. 28 Mr Bas [the Council's town planning expert] essentially concluded that these setbacks [are] insufficient and cause unsatisfactory impacts on the residential neighbours to the south and the east. These impacts are compounded because there is insufficient landscaping and the scale of the building is excessive. 29 Mr. Betros [Premier Customs Pty Ltd's town planning expert] disagreed, explaining that the landscaped area far exceeds what is required and the proposed building, considering its low floor space ratio and its form and presentation would have an appropriately sympathetic relationship with its neighbours. This is to be a relatively benign land use, taking into account traffic generation and hours of operation. In his opinion there are no adverse consequences resulting from the non-compliance with the side setback requirement. 30 Any objective that seeks to protect the amenity of existing residential development must be considered in the light of the fact that the site and surrounding lands are zoned for industrial development. Whilst the site adjoins existing residential development, this is not (according to Map 6 Botany (West) Industrial Precinct ) a zone interface between industrial and residential zones. Hence the same level of amenity that existing residential development can expect in a residential zone cannot be expected in an industrial zone. In this context, I have been persuaded by the evidence of Mr Betros that no unreasonable impacts, particularly involving presentation, noise and privacy arise. 31 As for the zero setback on the western boundary I do not accept that this is a matter of concern. The building/site could, in time and if necessary, be consolidated with a possible redevelopment of the adjoining site that could include a new building that would abut/extend the proposed building. 32 In my opinion, taking into account that this is the general industrial zone, the proposed arrangement of built form, car parking and landscaping is a reasonable outcome and in terms of streetscape, the proposal will be appropriate". 16 He concluded by expressing his satisfaction that the development was responsive to the general objectives in the DCP including as to the "minimisation of impact from industrial development on residential development". The Decision of Biscoe J 17 The Council appealed against the decision of Bly C, the appeal being limited to questions of law in accordance with s 56A of the Land and Environment Court Act 1979. In his decision on the appeal, Biscoe J noted that "a commissioner's duty to give reasons is no less onerous than that of a judge" but that "it is wrong to examine a decision of a lay Commissioner as if it were written by a lawyer". He also noted that it was not appropriate to adopt a "fine-tooth comb" approach when examining the decisions of assessors (Judgment [16-17]). 18 His Honour recorded the Council's submission that, contrary to what was required by s 79C of the EPA Act, Bly C failed to "take into consideration" the DCP in so far as it provided for side setbacks. The Council's contention was that, contrary to the approach which Zhang v Canterbury City Council held to be appropriate, the Commissioner had "substituted for the statutory requirement a different approach" and had failed to treat the DCP as a "fundamental element or as a focal point" of his decision making. 19 The primary judge gave the following reasons for rejecting this submission: "25 The council's criticisms tend, I think, to read [30] and [31] of the Commissioner's judgment in isolation. In my view, they should be read in context adopting the approach described in [16] – [17] above. The judgment from [27] to [31] is concerned with the side and rear setbacks. The Commissioner considered the evidence of the council's planner Mr Bas and the evidence of Premier's planner Mr Betros and was persuaded by the latter. Mr Bas expressed concern about the impacts on residential neighbours to the south and east, but did not identify any impacts on the west. Mr Betros took a more holistic view of the proposed development, as did the Commissioner (including in his conclusions). Mr Betros explained that the landscaped area far exceeded what was required; the proposed building, considering its low floor space ratio and form and presentation, had an appropriately sympathetic relationship with its neighbours; and the land use was relatively benign (i.e. that of an air freight forwarder compared with many other industrial uses permitted in this zone by the DCP). In preferring Mr Betros' competing view, the Commissioner did not fall into an error of law. As to the council's criticism that the second sentence of [31] lacks clarity, that sentence is not inconsistent with DCP objective (O3 of B3 set out at [36] below [concerned with consolidation of small-sized allotments]) and, although it may not be particularly weighty, it shows no error of law. The council also criticises the third sentence of [30] but it seems to me to be factually correct and, in any event, to disclose no error of law. 26 The Commissioner did not forgive compliance with the DCP because he disagreed with it. The DCP was entitled to significant weight but its controls were not determinative. The Commissioner focused on the DCP side setback controls. He was entitled to have regard to the evidence as to actual effects of the proposed development and did not give determinative weight to the DCP side setback controls. Rather, he weighed up the DCP controls against other factors and concluded that the development was reasonable and should be approved notwithstanding that the DCP controls were not met. Unlike the Commissioner in Zhang , he did not resolve the issue on the basis that the development's adverse impact upon land had to be demonstrated. Nor can I see that in any other way he approached the issue as if his discretion was entirely at large. I can see no error of law." 20 His Honour also considered that other not presently relevant grounds of appeal failed. He accordingly dismissed the appeal. The Application for Leave to Appeal to this Court 21 The present application is an application pursuant to s 57(4)(c) of the Land and Environment Court Act for leave to appeal to this Court against the decision of Biscoe J. As his Honour's decision was one necessarily confined to consideration of points of law, any appeal to this Court pursuant to a grant of leave is also so confined. 22 The issue raised by the present application replicates that concerning side setbacks which was determined by Biscoe J. The Council contends, for substantially the same reasons as were advanced before Biscoe J, that the Commissioner failed to "take into consideration" the side setback requirements contained in the DCP, as he was required to do by s 79C(1)(a)(iii) of the EPA Act. Determination of the Leave Application 23 The issue involved in this application is thus a narrow one. Clearly, it is necessary for the Court to take care not to intrude into the area of merits review, under the guise of consideration of a question of law, and it is plain that a complaint as to the weight given by the decision maker to a matter he or she has taken into consideration does not constitute a complaint that an error of law has occurred (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1985-1986) 162 CLR 24 at 40-2). 24 The Council recognises, as did Biscoe J, that something more needs to be shown to demonstrate a relevant error of law. What is involved in a consent authority properly taking a matter into consideration in accordance with s 79C was authoritatively considered in the decision of this Court in Zhang v Canterbury City Council. The judicial review principles which were applied in Zhang in the context of s 79C of the EPA Act have been discussed in a number of subsequent decisions of this Court, including Anderson v Director General of the Department of Environmental and Climate Change [2008] NSWCA 337; (2008) 163 LGERA 400 (see [51-60]). 25 In Zhang, it was found that a Commissioner did not "take into consideration" provisions of a DCP as to where a brothel should not be located because he "substituted for the statutory requirement a different approach" (at [76]). Spigelman CJ (with whom Meagher and Beazley JJA agreed) expressed his conclusions as follows: "76 In my opinion, the Commissioner did not "take into consideration" the standard contained in cl 4.0 of DCP 23. Rather, he substituted for the statutory requirement a different approach. The Commissioner posed the "issue" for his determination to be: "The appropriateness of the location taking into account the proximity to the adjoining church, local schools and hotel". He resolved this issue on the basis that adverse impact upon land affected by the presence of a brothel had to be demonstrated in the legal proceedings before him. This approach could only be supported if the discretion was entirely at large, i.e. that there were no "standards" of any character which the decision maker had to take into account. By adopting this approach, the Commissioner, in my opinion, proceeded on an impermissible basis. 77 There was a relevant and applicable "standard" which he was obliged to "take into consideration". It ought to have served as a focal point for, or constituted a fundamental element in, his deliberations. The evidence, or rather the absence thereof, about actual effects, was not entitled to determinative weight, without regard to the presumptive 'standard' in this way." 26 His Honour had earlier referred to the decision of this Court in North Sydney Council v Ligon 302 Pty Ltd [No 2] (1996) 93 LGERA 23 where it was held that a judge of the Land and Environment Court had not taken a DCP into consideration because, as one reason, "he determined not to apply it" (Zhang at [28]). 27 The parties in the present case recognised, as they were bound to do in light of Zhang, that whilst it was necessary for the DCP to be considered as a "fundamental element" or a "focal point" of the decision making process, the DCP was not "determinative" (Zhang at [75]). The Council did not contend that Bly C was not entitled to take the view that, for reasons related to this particular site, it was not appropriate to compel compliance with the DCP side setback requirements. The Council however argued, in my view correctly (in light of Zhang and Ligon), that the Commissioner was not entitled to take the view that the standards set by the DCP were inappropriate for reasons of general policy. The question is, whether, as the Council contends, he did that, or, as the primary judge found, he did not. 28 The critical paragraph of Commissioner Bly's judgment as to the eastern side setback is [30] (see [15] above). I make the following comments about that paragraph. 29 The first sentence of the paragraph states a fact which is undoubtedly true. However the setback requirements contained in the DCP were formulated in the context of the relevant zoning being industrial with some existing residential uses being present. The distinction drawn in the side setback requirements between the distance required when there is an adjoining residential use, and that required when there is not, amply demonstrates this. The Commissioner referred to the existence of "numerous dwelling houses" within the zone (in which only industrial development is now permitted; [6] of his decision). 30 The second sentence states a fact which is also undoubtedly true. However the fact that some sites adjoin existing residential developments without constituting "a zone interface between industrial and residential zones" must be taken to have been known to the Council and therefore part of the context in which the DCP was formulated. The manner in which side setbacks are specified in the DCP (see [12] above) indicates that there was specific advertence to this fact and that these setbacks were intended to apply not only where the site constituted a "zone interface" but also where it otherwise abutted a "residential use". This is apparent from the specifications' reference to sides adjoining "a non-residential use/zone". These words are a reference to the two different categories. 31 The third sentence is unclear in its meaning. The word "hence" at its commencement seems to indicate that the Commissioner came to a conclusion in light of the earlier sentences. This was apparently not, as might have been expected in light of what I have said in [29, 30] above, that the policy in the DCP as to side setback distances took account of these matters, but something different. On balance, it seems to me that the third sentence was intended to express a view that the "level of amenity" provided for by the side setbacks specified in the DCP (at least in relation to residential sites not on the boundary of industrial and residential zones) is not appropriate and is beyond what can reasonably be expected. If this was not what was intended, it is not at all clear why Bly C would have said what he did. 32 I appreciate that it is not appropriate to approach reasons of a Commissioner with a "fine-tooth comb", but the Court must nonetheless attempt to ascertain as best it can what were the essential reasons for a decision. The first three sentences of [30], appearing as they do in what is undoubtedly the critical paragraph of the Commissioner's reasoning on side setbacks, only make sense to me as a statement that the Commissioner regards the DCP's side setback requirements as excessive where the proposed industrial development adjoins a "residential use" (at least where that residential use is not in an adjoining residential zone). Seen in this way, the first three sentences of the paragraph lead into a determination by the Commissioner in the fourth sentence, independently of the standard set by the DCP, of what was a reasonable eastern side setback in respect of this site. 33 My view is thus that the Commissioner, in respect of the eastern side setback, put aside the standard set by the DCP and applied his own standard of what is reasonable. Accordingly his decision did not conform with the principles stated in Zhang as he failed to "take into consideration" the DCP in the manner required by s 79C. He applied his own view as to the appropriate general policy, not that embodied in the DCP. He therefore committed an error of law (Zhang at [60]). 34 The Commissioner did not find the eastern side setback satisfactory because he thought that in the particular circumstances of this development it was not appropriate to apply the DCP standard but, rather, because he disagreed with the standard set by the DCP. My interpretation of the Commissioner's reasons thus differs from that of Biscoe J who took the view that "the Commissioner did not forgive compliance with the DCP because he disagreed with it" (at [26]). 35 I conclude on this aspect of the matter by indicating my respectful agreement with the views expressed by McClellan CJ, as he then was, in Stockland Development Pty Limited v Manly Council [2004] NSWLEC 472; (2004) 136 LGERA 254 that "consistency of decision-making must be a fundamental objective of those who make administrative decisions" and that "that objective is assisted by the adoption of development control plans and the making of decisions in individual cases which are consistent with them" (at [88]). The ability of an individual decision maker to reject the general policy underlying a development control plan would be antithetical to the achievement of the fundamental objective to which McClellan CJ referred. 36 The Commissioner's decision as to the western side setback was expressed more briefly (see [31] of his Judgment quoted in [15] above). The western boundary does not adjoin a residential development. Accordingly, the matters to which he referred in [30] of his Judgment cannot be assumed to have affected his reasoning in respect of the western boundary. In my view the Commissioner's reasons indicate that his view that the DCP side setback requirement need not be complied with on the western boundary was based upon matters relevant to this site rather than a rejection in this respect of the policy embodied in the DCP. There is thus nothing in his reasoning to indicate that he did not regard the DCP requirement as the "presumptive standard" (Zhang at [77]). Conclusion and Orders 37 As the Commissioner erred in law in the manner indicated in [33] above, leave to appeal should be granted and the appeal should be allowed. 38 The orders I propose are as follows: (1) Leave to appeal granted. (2) Appeal allowed. (3) Set aside the orders dated 25 September 2008 made by Biscoe J of the Land and Environment Court. (4) Set aside the decision dated 23 May 2008 of Commissioner Bly of the Land and Environment Court. (5) Order that the appeal of Botany Bay City Council to the Land and Environment Court pursuant to s 56A of the Land and Environment Court Act be remitted to a Commissioner of that Court for determination in accordance with the decision of this Court. (6) Order the respondent to pay the applicant's costs of the proceedings in this Court and in the Land and Environment Court. (7) The respondent is to have a certificate under the Suitors' Fund Act 1951, if qualified. 39 HOEBEN J: I agree with Macfarlan JA. ********** 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.