Land and Environment Court New South Wales Medium Neutral Citation: DAA Holdings Pty Ltd v Kiama Municipal Council [2011] NSWLEC 183 Hearing dates: 11 October 2011 Decision date: 21 October 2011 Jurisdiction: Class 1 Before: Biscoe J Decision: Appeal dismissed Catchwords: DEVELOPMENT APPLICATION:- appeal against commissioner's refusal of development application - whether commissioner made inconsistent findings and therefore erred in law in his consideration of the application - whether commissioner's conclusion that a matter should be given no weight constituted failing to take account of a mandatory relevant matter - whether commissioner took into account an irrelevant matter. Legislation Cited: Draft Kiama Local Environmental Plan 2010 Environmental Planning and Assessment Act 1979 s 79C Kiama Local Environmental Plan No 5 Kiama Local Environmental Plan 1996 Land and Environment Court Act 1979 s 56A Cases Cited: Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 Capital Airports Group Pty Ltd v Director-General of the NSW Department of Planning (No 2) [2011] NSWLEC 83 Coles v Woollahra Municipal Council (1986) 59 LGRA 133 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40, 162 CLR 24 Minister for Immigration & Citizenship v SZJSS [2010] HCA 48, 273 ALR 122 Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30, 206 CLR 323 Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289, 129 LGERA 195 Category: Principal judgment Parties: DAA Holdings Pty Ltd (Appellant) Kiama Municipal Council (Respondent) Representation: COUNSEL: Mr I Hemmings (Applicant) Mr P Clay SC (Respondent) SOLICITORS: Blake Dawson (Applicant) RMB Lawyers (Respondent) File Number(s): 10426 of 2011 and 10577 of 2010 Judgment 1This is an appeal against a decision of a commissioner of this Court. Such an appeal is available only on a question of law: s 56A Land and Environment Court Act 1979 2The respondent, Kiama Municipal Council, refused the development application of the appellant, DAA Holdings Pty Ltd, for use of land for a manufactured homes estate, caravan park and camping ground on Lot 11 DP 1045242, Campbell Street, Gerringong, with road access over Lot 10. Lot 11 has an area of 25.63 hectares. DAA Holdings appealed on the merits to this Court. The commissioner heard and dismissed the appeal and refused the development application. DAA Holdings now appeals under s 56A. 3Consideration of the judgment of a commissioner who is not a lawyer (as in the present case) exercising a merits review jurisdiction should not be examined as if it were written by a lawyer: Brimbella Pty Ltd v Mosman Municipal Council (1985) 79GERA 367 at 368 (NSWCA). Consideration of such a judgment should not be pernickety nor should the judgment be examined with a fine tooth comb, against the prospect that a verbal slip will be found warranting the inference of an error of law: Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30, 206 CLR 323 at [153]; Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 291; Coles v Woollahra Municipal Council (1986) 59 LGRA 133 at 138 (which has often been cited in decisions of this Court). Nevertheless, it is necessary to consider the judgment in some detail in order to ascertain the commissioner's reasoning. RELEVANT PLANNING DOCUMENTS 4The commissioner considered a number of Council and State planning documents including the following: (a)Kiama Local Environmental Plan No 5 ( LEP 5 ). Under LEP 5, Lots 10 and 11, except for a relatively narrow band around the southern and western boundaries of Lot 11, are zoned 1(a) Rural, in which a caravan park is a permissible use with consent. (b)Kiama Local Environmental Plan 1996 ( LEP 1996 ). Under LEP 1996, the said narrow band on Lot 11 is zoned 1(a), in which a caravan park is permissible with consent. Clause 9(3) of LEP 1996 provides that consent shall not be granted unless Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone. The balance, being the great bulk of Lot 11 and the road over lot 10, is identified as "Deferred matters" with LEP 5 as the applicable planning instrument. (c)Draft Kiama Local Environmental Plan 2010 ( draft LEP ). The draft LEP contains no provision equivalent to cl 9(3) of LEP 1996 but provides that the consent authority must have regard to its objectives: cl 2.3(2). Under the draft LEP, the whole of Lots 10 and 11 are within zone RU2 Rural Landscape in which caravan parks are a prohibited use. However, there is a savings provision in cl 1.8A as follows: " 1 .8A If a development application has been made before the commencement of this Plan in relation to land to which this Plan applies and the application has not been finally determined before that commencement, the application must be determined as if this Plan had been exhibited but had not commenced. " (d)the Council's Kiama Urban Strategy ( the Strategy ). The Strategy recommends that planning proposals be undertaken for Lots 10 and 11 but considering the flooding constraints. Part of the site is identified within the Strategy and forms part of the southern expansion of Gerringong. The Strategy was exhibited with the draft LEP at the direction of the Department of Planning. During the course of the hearing before the commissioner, the Council resolved to defer the Strategy for further discussion with the Department of Planning and landowners. (e)the State governments' Illawarra Regional Strategy ( Regional Strategy ). The Regional Strategy states that it "will guide sustainable growth and economic development within the Illawarra over the next 25 years". Chapter 6 addresses Housing and Settlement and states: " A n appropriate urban growth area for the southern expansion of Gerringong will be determined by Kiama council in consultation with the Department of Planning. Key factors that will influence the location of urban development at South Gerringong will include its extensive coastal landscape values, and the importance of maintaining Gerringong and Gerroa as separate urban areas. " (f)the State Government's Illawarra Urban Development Program: An Explanation ( IUDP ). The IUDP is a program for managing land and housing supply in Illawarra. Lots 10 and 11 are included in the IUDP where it states (at p 3): "South Gerringong (retained in part-short/medium term): Full development of the original area is not supported because of its coastal landscape values and the importance of retaining separation between the Gerringong and Gerroa urban areas. An appropriate southern boundary for the expansion of Gerringong is under investigation by Kiama Council. " THE COMMISSIONER'S REASONS 5The Council contended before the commissioner that consent to the development would be contrary to LEP 1996 and the draft LEP. It made no such contention in relation to LEP 5. Two of the Council's specific contentions before the commissioner (at [2]) were that the development application should be refused because the development: (a)will be inappropriately located on prime crop and pasture land; and (b)will have unacceptable visual impacts on surrounding areas. 6The commissioner found that the draft LEP is certain and should be given considerable weight: at [51], [58] and [61]. 7The commissioner's two reasons for dismissing the appeal are succinctly expressed at [61] and [73] where each is identified as being adequate to refuse the application "for this reason alone": " 61 Given the considerable weight that should be attributed to the certainty of the draft LEP, that the proposed use will be prohibited and that the proposed development will be so inconsistent with the desired future character envisaged by the draft LEP, I am satisfied that the application should be refused for this reason alone. 73 I am satisfied that effects of the proposed development on the orderly and economic use and development of land is so unacceptable that it could support the refusal of the application [sic: for] this reason alone. " THIS APPEAL 8The appeal against the commissioner's decision is on three grounds. The appellant submits on the basis of Ground 1 that the first of the commissioner's reasons is flawed, and on the basis of Grounds 2 and 3 that the second reason is flawed. It is common ground that in order to succeed on this appeal the appellant must succeed on Ground 1 and, as well, on either Ground 2 or Ground 3. 9I do not accept any of the grounds and propose to dismiss the appeal. GROUND 1 - THE DRAFT LEP 10Ground 1 is as follows: " The commissioner erred in law in his consideration, and application, of the draft LEP as required by s 79C(1)(a)(ii) of the Environmental Planning and Assessment Act 1979. " 11Under s 79C(1)(a) of the Environmental Planning and Assessment Act ( EPA Act ) the draft LEP, LEP 5 and LEP 1996 were mandatory considerations. 12The thrust of Ground 1 as argued by the applicant is that: (a)the commissioner found the proposed development consistent with the zone objectives of LEP 2006 (at [40]) but inconsistent with the desired future character envisaged by the draft LEP: at [61]; (b)the difference in the findings is unexplained and does not appear to be explained by the objectives themselves; (c)both LEPs required consideration of the same matters. That is, the protection of agricultural land and the maintenance of the rural landscape; (d)the commissioner found consistency with the current rural zone in LEP 1996 (by specific assessment against its objectives, a general s 79C EPA Act assessment, and also against clauses 12 and 13). To then find inconsistency with the draft LEP indicates that the commissioner must have: (i)misinformed himself as to the correct legal test to be applied; and/or (ii)misconstrued and misapplied the draft LEP by applying a test of "inconsistency" when the draft LEP only requires that regard must be had to the relevant zone objectives; (e)this part of the commissioner's reasoning falls into the category identified by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 at 360: " If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant consideration, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function accor ding to law. " (f)the commissioner did not correctly apply the rules of law. Even if that cannot be precisely particularised, it is not possible for the commissioner to have found consistency with the current rural zone in LEP 1996, and yet found the development to be inconsistent with the future rural zone in the draft LEP. Therefore, the commissioner failed in the discharge of his function. 13The commissioner's analysis of consistency of the proposed development with LEP 1996 was as follows and included quoting the objectives of the relevant zone: " 35 Clause 9(3) of LEP 1996 requires a finding of consistency with the relevant zone objectives. If a finding of consistency cannot be made, the development application must be refused. The relevant objectives are: (a) to provide suitable land for agricultural use, (b) to protect the agricultural potential of rural land, (c) to prevent the fragmentation of rural land of prime crop and pasture potential (d) to enable uses that are compatible with the rural use of the land (e) to protect the landscape quality of the rural area, 36 The provisions of cl 9(3) strictly apply only to that part of the development covered by LEP 1996. This area covers a relatively narrow band around the southern and western boundaries of the proposal. LEP 5 controls the majority of the proposed development, where there are no requirements similar to cl 9(3). LEP 5 and LEP 1996 have different requirements that apply to different parts of the proposed development and each much [sic] be considered in the way prescribed by their respective provisions. The absence of specific controls however does [sic: not] preclude consideration of the matters such as the potential agricultural use of the land and landscape qualities under the more general considerations provided by s 79C(1) of [the EPA Act]. 37 As I understand, the boundary of the "Deferred matter" land on the southern and western boundaries reflected the appropriate flood level at the time LEP 1996 came into effect. The western boundary of the "Deferred mater" is not specifically identified in relation to the proposed development as it includes land further to the east, that is currently subdivided or being subdivided (Elambra Estate). The extent of the proposed development on the western, southern and eastern boundaries generally, but not exactly, follows the boundary identified for urban development in the Strategy. 38 The difference between the boundary of the "Deferred matter" land in 1996 and the extent of urban development identified in the Strategy in 2005 is the difference between two different flood studies... 39 Given that there was general agreement by Mr Rollinson [the applicant's planner] and Mr Williams [the Council's planner] that the land was likely, at some time in the future, is [sic] to be used for urban purposes, the argument that the land should be protected, both in terms of agricultural use and scenic quality, could not be seen to be a strong or supportable argument for the refusal of the application even if Mr Williams timeframe of 5 to 10 years was adopted. In my view, the test of consistency with the zone objectives is appropriately considered in the context of the likely future of land rather than in a planning void where the likely use of the land is ignored. For this reason, I do not accept that it can reasonably be argued that the land needs protecting to ensure the agricultural potential of the land or its fragmentation given its undisputed long term urban use. Similarly, I do not accept that it can reasonably be argued that the proposed use will unacceptably impacts [sic] on the scenic quality of the area for the same reason. 40 In this context, I am satisfied that the proposed development is consistent with zone objectives ( a), (b), (c) and (d) [sic: and (e) ]. " (emphasis added) 14The parties agree, and I accept, that there are typographical omissions in [36] and [40] of the judgment. In [36] the word "not" should appear before "preclude"; [40] should conclude with the words "and (e)". I have included the omitted words above in parentheses. 15The commissioner's analysis of inconsistency with the draft LEP was as follows and included quoting the objectives of the relevant zone: " 59 The next question is whether the proposed development will... in general terms be inconsistent with the expressed future planning objectives for the area . As a caravan park is a prohibited development within the zone, I accept that there is a potential inconsistency although this by itself is not a reason to refuse the application because of the savings provisions in cl 1.8A. Further guidance on this question can be obtained from the zone objectives, which are: o To encourage sustainable primary industry production by maintaining and enhancing the natural resource base. o To maintain the rural landscape character of the land. o To provide for a range of compatible land uses, including extensive agriculture. o To protect agricultural land for long-term agricultural production. o To provide opportunities for employment generating development that adds value to local agricultural production through food and beverage processing and integrates with tourism. 60 If the objectives for Zone RU2 are considered collectively, the clear focus of the objectives is to sustain and protect agriculture land and maintain the rural landscape character of the land while allowing for compatible land uses. In my view, this anticipated character is inconsistent with the dense urban character of the proposed development because of its density, design and form. 61 Given the considerable weight that should be attributed to the certainty of the draft LEP, that the proposed use will be prohibited and that the proposed development will be so inconsistent with the desired future character envisaged by the draft LEP , I am satisfied that the application should be refused for this reason alone. " (emphasis added) 16I am not satisfied that the commissioner made an error of law in concluding that the development was inconsistent with the desired future character envisaged by the draft LEP. 17There is no suggestion of any error in the commissioner's finding of inconsistency with the desired future character envisaged by the draft LEP viewed in isolation from his finding of consistency with the zone objectives of LEP 1996. Rather, legal error - perhaps unidentified (under the Avon Downs principle) - is sought to be inferred by contrasting those two findings. The major premise of the appellant's submission is that there is no relevant significant difference between the two LEPs which could account for the commissioner's different conclusions. I do not accept that this is so for the following reasons: (a)there is a contextual difference. The LEP 1996 only applies to a relatively narrow band on the southern and western boundaries of Lot 11 upon which very little development is proposed, as the commissioner noted at [36]. The development is acceptable on the overwhelming majority of the site pursuant to LEP 5, as the commissioner noted at [36]. The draft LEP applies to the whole of the land not just a small part of it; (b)unlike LEP 1996, the draft LEP contains a prohibition of a caravan park, as the commissioner noted at [61]; (c)the fourth objective of the draft LEP is to protect agricultural land for "long-term" agricultural production. There is no such "long term" protection in the objectives of the 1996 LEP. 18I therefore do not accept the appellant's submission that the commissioner did not correctly apply the rules of law or that the commissioner must have failed in the discharge of his function in some unparticularised way. 19Accordingly, I do not accept Ground 1. GROUND 2 20Ground 2 is as follows: " The Commissioner erred in law in failing to take into account a relevant matter, being the significant length of time that is being taken to finally determine the southern boundary of Gerringong, which includes the Respondent's recent resolution to defer the draft Kiama Urban Strategy. " 21In the context of the impact on future planning, the commissioner accepted that the land was likely, at some future time, to be used for urban purposes; that the land should be protected so that it may ultimately be put to a similar residential purpose as land directly to the east; and that it was best suited to Zone R2 low density residential: at [62], [63]. 22The commissioner concluded at [73]: " I am satisfied that effects of the proposed development on the orderly and economic use and development of land is so unacceptable that it could support the refusal of the application [sic: for] this reason alone. " 23The fourth reason that the commissioner gave for that conclusion was stated at [72]: " Fourth, and while the evidence of Mr Rollinson and the submissions of Mr Hemmings, for the applicant, may seem reasonable on the time taken for the Council to determine the southern boundary of Gerringong, it is not a matter that should be given any weight in the determination of the development application. It is a matter for the Council and the State government to determine and not a matter that should be pre-empted by the decision of the Court based on a single development application. " (emphasis added) 24The appellant submits that because the commissioner said that the time taken for the Council to determine the southern boundary of Gerringong should not be given "any weight", the commissioner has not taken it into account. Therefore, the appellant submits, the commissioner has not taken into account a relevant matter and so has erred in law. 25I do not accept the submission. 26"The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration he is bound to take into account in making that decision": Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40, 162 CLR 24 at 39. However, a mandatory consideration might be so insignificant that the failure to take it into account could not have materially affected the decision: Peko-Wallsend at 40. That is because such a consideration is of no real weight. In Capital Airports Group Pty Ltd v Director-General of the NSW Department of Planning (No 2) [2011] NSWLEC 83, after reviewing the authorities, I concluded at [134]: " A decision-maker may take account of or consider a matter in a range of ways. They might consider it to be so insignificant that it is not worth exploring in any detail. They might consider it to be of some significance but find it is outweighed by other considerations. They might think it to be of such importance that it warrants thorough investigation. " 27It is generally for the decision-maker (in this case the commissioner exercising on a merit appeal the function of the Council) to determine the appropriate weight to be given to a mandatory relevant consideration: Peko-Wallsend at 41. The appropriate weight may be nil. If in fact a decision-maker takes into account a matter, that fact cannot be negated by the decision-maker's conclusion that the matter should be given no weight: Minister for Immigration & Citizenship v SZJSS [2010] HCA 48, 273 ALR 122. In that case the Refugee Review Tribunal, in deciding to refuse a protection visa, said that it gave "no weight" to certain letters: at [13]. On appeal the Federal Court held that when the Tribunal said it had given no weight to the letters, it simply recited that it had considered them only to discard them and that this was not a proper genuine or realistic evaluation of the material: at [27]. The High Court disagreed and allowed an appeal from the Federal Court's decision. The High Court held that no error by the Tribunal was disclosed as "the weighing of various pieces of evidence is a matter for the Tribunal": at [33]. Giving no weight did not constitute a failure to take into account a relevant consideration as canvassed in Peko-Wallsend : at [35]. 28Section 79C(1) of the EPA Act sets out the matters that the decision-maker in this case was bound to take into account. One of the matters is the "public interest": s 79C(1)(e). There is a question whether the time taken to determine the southern boundary of Gerringong constitutes a component of the public interest which the commissioner was bound to take into account. However, it is unnecessary to answer that question because, in any event, the commissioner at [72] did take into account that time consideration. Having done so, the commissioner concluded that it should not be given any weight. In my opinion, in accordance with the principles discussed above, no error of law is disclosed. 29Accordingly, I do not accept Ground 2. GROUND 3 - LIKELY FUTURE HOUSING TYPE 30Ground 3 is that the commissioner erred in law by taking into account an irrelevant matter, being the likely future housing type, not being a housing type anticipated by the draft LEP. 31Again in the context of the impact on the future planning, the commissioner at [70] said he was satisfied that the approval of the proposed development: " will effectively sterilise the land for its likely intended use of providing traditional housing such as detached housing or medium density terraced [sic: terraces] and villages [sic: villas] or high-density units and apartments, consistent with the IUDP. " 32Considered against the terms of the draft LEP, the appellant submits that this is an irrelevant consideration because pursuant to the draft LEP the land is zoned rural and the draft LEP does not anticipate such housing types in that rural zone. 33The IUDP has been referred to at [4(f)] above. The IUDP refers to future State government housing targets comprising "detached housing", "medium density terraces and villas" and "high density units and apartments". They are precisely the types of housing referred to at [70] of the commissioner's judgment where he characterises them as "traditional housing". 34The commissioner determined that the IUDP should be given "considerable weight" because it was an "important" planning policy for the expansion of the Illawarra: at [64], [65]. 35The commissioner considered the future housing types discussed within the IUDP under the umbrella of the "public interest" (a mandatory relevant consideration under s 79C(1)(e) of the EPA Act). He did so by reference to the Court of Appeal's decision in Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289, 129 LGERA 195 at [81] in which Mason P (Ipp JA agreeing) said (omitting citations): " In any event, matters relevant to the public interest touching a particular application are not confined to those appearing in published environmental planning instruments, draft or final. Obviously such instruments carry great and at times determinative weight, but they are not the only source of information concerning the public interest in planning matters...Nothing in the Environmental Planning and Assessment Act stipulates that environmental planning instruments are the only means of discerning planning policies or the "public interest". For one thing, the government is not the only source of wisdom in this area. A consent authority may range widely in the search for material as to the public interest. " 36The commissioner continued at [66] that "land that is potentially able to be used for urban purposes is a valuable and scarce resource and should not be given over to other uses that do not have the same level of strategic importance. Clearly the policy framework for the release of land for urban purposes must have a structure approach and this is correctly found in... the IUDP." The commissioner acknowledged that the use was permissible within the zone, but concluded that the zoning did not suggest that "all" caravan parks would be appropriate development: at [69]. Having regard to the fact that there was no evidence to suggest that the proposed caravan park would operate on anything but a permanent basis, the commissioner concluded that the development would "effectively sterilise" the land for the likely intended uses discussed in the IUDP: at [70]. Read in context the commissioner considered the IUDP to be a "source of information concerning the public interest in planning matters" of the kind discussed by Mason P in Terrace Tower . The commissioner's findings concerning the future likely uses detailed in the IUDP were part of his consideration of the public interest. 37Accordingly, the commissioner's consideration of the IUDP housing types did not constitute taking into account an irrelevant consideration. The Commissioner was entitled to take the IUDP into account in considering the public interest pursuant to s 79C(1)(e). 38Accordingly, I do not accept Ground 3. ORDERS 39The orders of the Court are as follows: (1)The appeal is dismissed. (2)The appellant is to pay the respondent's costs of the appeal. (3)The exhibits may be returned. 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. Decision last updated: 21 October 2011