Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Toner Design Pty Ltd v Newcastle City Council [2013] NSWCA 410 Hearing dates: 15 October 2013 Decision date: 05 December 2013 Before: Basten JA at [1]; Gleeson JA at [28]; Preston CJ of LEC at [29] Decision: (1) Dismiss the appeal. (2) Order the appellant to pay the respondent's costs in this Court. (3) Remit the matter to the Land and Environment Court to deal with the costs of the proceedings before it. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: APPEAL - determination on a separate question by primary judge - whether primary judge erred in construction of statutory provision - whether primary judge erred in law in application of the provision ENVIRONMENT and PLANNING - whether development classified as designated development - exception where development ancillary to and not proposed to be carried out independently of other development WORDS and PHRASES - "ancillary to" - "not proposed to be carried out independently of" - Environmental Planning and Assessment Regulation 2000 (NSW), Sch 3 cl 37A Legislation Cited: Environmental Planning and Assessment Act 1979 (NSW), ss 77A, 78A, 79, 80 Environmental Planning and Assessment Regulation 2000 (NSW), Sch 3 cll 4, 15, 29, 37A; Land and Environment Court Act 1979 (NSW), s 57 Cases Cited: Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 Residents Against Improper Development v Chase Property Investments Pty Ltd [2006] NSWCA 323; (2006) 149 LGERA 360 Category: Principal judgment Parties: Toner Design Pty Ltd (Appellant) Newcastle City Council (Respondent) Representation: Counsel: Mr R P L Lancaster SC with Mr T G Howard SC (Appellant) Mr P W Larkin SC with Ms S L Ross (Respondent) Solicitors: Mallik Rees (Appellant) Legal Government Legal (Respondent) File Number(s): 2012/363982 Decision under appeal Citation: [2012] NSWLEC 248 Date of Decision: 2012-11-07 00:00:00 Before: Sheahan J File Number(s): 2011/10961 Judgment 1BASTEN JA: On 20 December 2010 the appellant, Toner Design Pty Ltd, submitted to the respondent Council a development application with respect to land at Sandgate Road, Wallsend. The proposal described a "46 unit seniors living development, recreation shed & community hall in three stages". The appellant sought to remove a considerable volume of contaminated soil from one area of the land where the residential development was to take place and to store the contaminated soil in two capped mounds on another area of the land. The sole question addressed by the primary judge in the Land and Environment Court was whether the application was "in respect of designated development", in which event the application was required to be accompanied by an environmental impact statement, pursuant to s 78A(8) of the Environmental Planning and Assessment Act 1979 (NSW). 2One category of designated development is characterised as "contaminated soil treatment works": Environmental Planning and Assessment Regulation 2000 (NSW), Sch 3, cl 15. That description is satisfied if it is proposed to "treat ... and store" more than 30,000 cubic metres of contaminated soil (cl 15(c)(ii)), or disturb more than an aggregate area of 3 hectares of contaminated soil: cl 15(c)(iii). The volume of contaminated soil to be removed in this case was less than 30,000 cubic metres and the area of disturbance was less than 3 hectares. However, once account was taken of the further volume of contaminated material to be retained on the area on which the excavated soil was to be deposited, the total volume exceeded 30,000 cubic metres. Further, when the additional area on which the mounds were to be created was taken into account, the 3 hectare threshold was also exceeded. Accordingly, for the purposes of both paragraphs (ii) and (iii) of cl 15(c), the development application was in respect of contaminated soil treatment works. 3The remaining question, which was central to the resolution of the case, was whether the proposed development fell within an exception. Critically, that question turned on the construction and application of cl 37A in Sch 3, which reads as follows: 37A Ancillary development (1) Development of a kind specified in Part 1 [in which cl 15 is to be found] is not designated development if: (a) it is ancillary to other development, and (b) it is not proposed to be carried out independently of that other development. (2) Subclause (1) does not apply to development of a kind specified in clause 29(1)(a). 4Although cl 29(1)(a) is not concerned with contaminated soil, the reference is significant in understanding the scope and operation of cl 37A. Thus, cl 29(1)(a) refers to sewerage systems or works that have an intended processing capacity of more than 2,500 persons equivalent, or 750 kilolitres per day. Thus sub-cl (2) indicates that a sewerage system or sewerage works (exceeding the volume threshold) included on the land could fall within sub-cl 37A(1). 5The primary judge (Sheahan J) held that the proposed treatment and storage of the contaminated soil did not fall within the exception provided by cl 37A and the development application was, therefore, in respect of designated development: Toner Design Pty Ltd v Newcastle City Council [2012] NSWLEC 248. 6An appeal lay from that judgment, being "an order or decision (including an interlocutory order or decision) of the Court on a question of law": Land and Environment Court Act 1979 (NSW), s 57(1). However, being an interlocutory decision, an appeal lay only by leave of this Court: s 57(4)(d). On 2 May 2013 leave was granted (by Meagher JA and me), limited to the construction and operation of cl 37A. 7The development of land, whether involving the carrying out of works or merely the use of land, frequently involves a range of activities, which may need to be characterised for various purposes under the Environmental Planning and Assessment Act. That may be necessary not merely to determine whether a development application is "in respect of" designated development, but also to determine whether the proposed development is a complying, permissible or prohibited development, or whether it constitutes the continuation of an existing use. It has long been accepted that the exercise of characterisation in such circumstances is one of fact, often involving an evaluative judgment: see, eg, Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 at 409 (Meagher JA). Thus, a conclusion reached by a judge of the Land and Environment Court will not be open to appellate review unless it can be shown that in some way the judge misconstrued the legislative test or otherwise made a decision which was not open on the facts. Where, as in this case, the reasons for judgment do not clearly disclose the approach adopted, the former category (error in interpreting legislation) may only be capable of inference from a judgment falling into the latter category (the conclusion not being open in all the circumstances). The exception - clause 37A 8Clause 37A involves a dual test, each part of which must be satisfied for the exception to operate. That which qualifies as a designated development (in this case the contaminated soil treatment works) must be "ancillary to other development" (paragraph (a)) and "not proposed to be carried out independently of that other development" (paragraph (b)). It is necessary to explore further the nature of this dual test. First, it should be noted that there can be no exception available under cl 37A unless the development for which consent is sought includes what might be described as separate elements. That follows because development which would otherwise be designated development must bear the prescribed relationships to "other development". 9Secondly, although each paragraph envisages interdependence of the respective developments, the tests are different in kind and must be addressed separately. paragraph (a) - "ancillary to" 10Paragraph (a) requires more than interdependence; it requires a dominant and subservient relationship. Thus, for a development to be "ancillary to" another development, it must not merely coexist with, but must serve the purposes of, the other development. If a sewerage treatment plant were proposed for land involving a residential development, it might well be ancillary to that development if it took and processed sewerage emanating from the use of the residential development. On the other hand, if the plant were designed to assist in meeting the needs of other buildings in the area, although its construction might be subservient to the dominant purpose of residential development, its wider function might mean it was not ancillary to that particular development. It might not qualify as ancillary if it had a not insignificant extraneous purpose. 11Secondly, the concept of "ancillary to" involves matters of size and scale. Thus, two developments each of which was of significant scale in its own right might not demonstrate the relevant relationship of one being dominant and the other being subservient thereto. Examples are not necessarily helpful because the factors to be taken into account will vary as between cases. Broadly speaking, however, the factors to be taken into account will depend on planning considerations and not, for example, relative financial returns to the owner or occupier of the site. paragraph (b) - "not proposed to be carried out independently" 12The question raised by the language of paragraph (b) is in what sense are the respective developments not proposed to be carried out independently? The following possibilities may not cover the field, but they indicate that different approaches may be available. For example, dependence or independence may be viewed (i) temporally, (ii) geographically, or (iii) purposively. Indeed, more than one characterization may apply. 13Temporal independence may be involved where, for example, development includes both the use of land (an on-going activity) and the erection of a building (a temporally limited activity). It is possible that the reference in paragraph (b) to development which is "proposed to be carried out" independently of other development reflects the temporal element involved in, for example, carrying out works. If that were the case, it might be arguable in the present case that paragraph (b) could not be satisfied because the disturbance and treatment of the soil involved works to be carried out prior to the construction of the proposed retirement village. On the other hand, it could be argued that because one relevant element in cl 15(c)(ii) includes the storage of contaminated soil on the land, which will continue during the use of the land for residential purposes, that distinction would not avail the respondent Council. 14Geographic or spatial independence may arise where the putative designated development takes place on a different part of the land from the other development. The distinction is illustrated on the facts of the present case in so far as the storage of contaminated soil was intended to take place on an area separate from the residential development. On the other hand, the land from which contaminated soil was to be removed was the area on which the residential development was to be erected. 15The third possibility, which was treated by the appellant as the only relevant construction, is to look to the purpose of the applicant seeking the development consent to determine whether it proposed that the two parts of the development be carried out independently of each other. This may be described as purposive independence. 16Thus the appellant submitted that, although the contaminated soil treatment works could be carried out, in a physical sense, without the residential development, that was not what was proposed. Rather, the proposed manner of dealing with the contaminated soil was closely interrelated with the identification of particular areas on which residential buildings could be erected and the exclusion of other areas which would be used for storage. In other words, what was proposed was not an independent exercise in remediation intended, for example, to render the land more readily saleable to a third party. 17As a matter of construction, the appellant's submission should be accepted. That is not to say that there must be some investigation into the subjective intentions of the applicant, but only that the development application must not propose that the respective developments are to be carried out independently of each other. Nevertheless, there may still be an issue as to the sense in which independence is to be assessed. Determination 18The resolution of this case is not assisted by the absence of a clear statement of the reasoning by which the primary judge concluded that the exception did not apply. While the grant of leave did not permit the inadequacy of the reasons to be raised as an independent error of law, the fact remains that this Court has not been assisted by a clear statement of reasons. 19Whilst recognising the danger of reassessing a factual finding on the basis that it was not "open" on a proper construction of the legislation, the appellant's submissions are not without force. One reason, however, for hesitating in accepting them is the vagueness inherent in the language of cl 37A. It invites a level of evaluative judgment without indicating whether the exception should be leniently applied (in favour of persons proposing other forms of development) or strictly applied (because the development includes works which could have an adverse impact on the environment). That difficulty arises, at least in part, from lack of clarity as to the purpose of the exception. Thus, for example, if a sewerage treatment plant, or the treatment and storage of contaminated soil, may adversely affect the environment so as to warrant the requirement of an environmental impact statement, why should that protection be foregone in cases where the "other development" involves bringing numbers of people into closer proximity with the dangerous use than would otherwise occur? The Court was taken to no legislative or extrinsic material which would help resolve that inherent uncertainty. 20So far as paragraph (b) is concerned, the appellant's submissions as to the correct approach should be accepted. The language of the regulation is consistent only with a consideration of whether the putative designated development is proposed (by the applicant) to be carried out independently of the other development. If not, paragraph (b) does not apply. 21In applying that approach, it may still be necessary to consider whether what the applicant proposed was that the contaminated soil treatment works be carried out at a different time from other aspects of the development, or that they occur only in a different area. For example, it might be open to conclude on the facts that the category of designated development involving the disturbance of contaminated soil (cl 15(c)(iii)), would be carried out before the residential development occurred and therefore independently of it, in a temporal sense. Further, it might be argued that the removal and storage of contaminated soil was either to occur prior to the construction of the residential development or, in the case of storage, on land set apart from that required for the residential development, for the purposes of cl 15(c)(ii). These will be matters for factual determination and it cannot be said in the present case that the primary judge could not properly be satisfied that these were proposed to be carried out independently of the other development. (More accurately, it was open to the trial judge not to be satisfied that the designated development was not proposed to be carried out independently of that other development.) 22So far as paragraph (a) is concerned, whilst it should be accepted that the appellant only intended to carry out the contaminated soil treatment works in order to enable its proposed residential development to go ahead, the works themselves were quite substantial in terms of the volume of soil to be removed and treated and the area to be used for storage of the contaminated soil. 23Further, the proposed works are not to be equated with landscaping or the planting of a garden around a residential area. Even if such activities were properly designated as "other development", rather than as an inherent part of the residential development, their purpose would be to provide access to or improve the amenity of the residential development, as used by the residents. The proposed storage of contaminated soil serves no such purpose. Far from being wanted as a part of the use of residential premises, the intention is to remove it so that it does not affect the amenity of the area. That purpose could no doubt be served by removing the soil entirely from the area to be used by the residents. (In a sense that is what is proposed.) 24As a matter of fact, it was open to the primary judge to hold that the contaminated soil treatment works had a purpose which was not "ancillary to" the residential development. Conclusions 25For these reasons, the appeal should be dismissed. Although there was agreement between the parties that the Court should make no order as to the costs of the appeal if the appellant were successful, it was also common ground that costs should follow the event if the appeal were dismissed. That order should be made. 26There remains a question as to the costs in the Land and Environment Court in relation to the separate question, such costs having been reserved by the primary judge. Although the appellant originally sought an order that the costs of those proceedings be paid by the respondent, that order would not be appropriate. The appellant conceded at the hearing that, this Court not having heard submissions relevant to the issue, the matter could appropriately be remitted for the Land and Environment Court to deal with the costs of the proceedings before it. That order should be made. 27The following orders should be made: (1) Dismiss the appeal; (2) Order the appellant to pay the respondent's costs in this Court; (3) Remit the matter to the Land and Environment Court to deal with the costs of the proceedings before it. 28GLEESON JA: I agree with Preston CJ of LEC and the orders proposed by his Honour. 29PRESTON CJ of LEC: Toner Design Pty Ltd ('Toner Design') appeals under s 57 of the Land and Environment Court Act 1979 ('the Court Act') against a decision of a Judge of the Land and Environment Court (Sheahan J), on a separate question in a development appeal, on a question of law. As the primary judge's decision was interlocutory in nature, leave to appeal was required (s 57(4)(d) of the Court Act). This Court granted leave to appeal on 2 May 2013 but limited to the issue of whether the primary judge erred on a question of law in determining that the earthworks component of the development proposed in the appeal before the Land and Environment Court was designated development. 30Toner Design contended that the primary judge erred in the construction and the application of cl 37A(1) of Sch 3 to the Environmental Planning and Assessment Regulation 2000 ('the EPA Regulation'). The separate question and its determination 31Toner Design appealed against the refusal by Newcastle City Council ('the Council') of a development application for a staged seniors living development in Newcastle. As a result of the former uses of the land as a scrap metal/recycling operation with associated petroleum storage and usage, there were contaminated soils present on the land. In order to develop the land for the purpose of the proposed seniors living development, Toner Design sought to remediate various parts of the land. The primary judge summarised the development for which the development application sought consent as being to: a. remediate a portion of the site to a standard suitable to support residential use; (Area A or 1 - for simplicity referred to herein as the RED area) b. use another portion of the site for the containment of contaminated soils excavated from the site in 2 capped mounds of contaminated material. Approximately 27,480 cubic metres of soil are proposed to be excavated and placed in the capped mounds; (on Areas B1/B2, to which I will refer as the WHITE areas) c. refill the excavated area with clean fill to the required flood level; (Areas 2, 3, and 4, to which I will refer as the GREEN area) d. erect a Seniors Living Development including 29 x 2 bed, 17 x 3 bed dwellings and community hall (staged development) on the remediated portion of the site. (the RED area) 32The Council sought and the Court ordered that a separate question be tried of whether or not the development application was in respect of designated development (at [23] of the judgment). 33"Designated development" is the term used to describe particular kinds of development that are subject to statutory provisions requiring more detailed environmental impact assessment in the form of an environmental impact statement (see s 78A(8)(a) of the Environmental Planning and Assessment Act 1979 ('EPA Act')) and a process that involves public notification, exhibition and comment regarding the development application and accompanying environmental impact statement for the designated development involved (s 79 of the EPA Act). Compliance with these statutory provisions is a precondition to the exercise of the power to grant development consent to designated development under s 80 of the EPA Act. 34The Council contended that Toner Design's development application was in respect of designated development and hence compliance with these procedural statutory provisions was required. Toner Design contended to the contrary. 35Section 77A(1) of the EPA Act provides that: Designated development is development that is declared to be designated development by an environmental planning instrument or the regulations. 36Clause 4(1) of the EPA Regulation provides that: Development described in Part 1 of Schedule 3 is declared to be designated development for the purposes of the Act unless it is declared not to be designated development by a provision of Part 2 or 3 of that Schedule. 37Amongst the development described in Pt 1 of Sch 3 is "contaminated soil treatment works" in cl 15, being: Contaminated soil treatment works (being works for on-site or off-site treatment of contaminated soil, including incineration or storage of contaminated soil, but excluding excavation for treatment at another site): ... (c) that treat contaminated soil originating exclusively from the site on which the development is located and: (i) incinerate more than 1,000 cubic metres per year of contaminated soil, or (ii) treat otherwise than by incineration and store more than 30,000 cubic metres of contaminated soil, or (iii) disturb more than an aggregate area of 3 hectares of contaminated soil. 38The primary judge found that the earthworks proposed (being the works described in (a), (b) and (c) in the summary of the development proposed in the development application set out above) fell within cl 15(c) (see [48]-[53] of the judgment). In particular, the primary judge held: The creation of the mounds is a "storage" measure but the compaction of the materials, and their "capping", and their "shaping" to ensure "free drainage", amount to "treatment", and, contrary to Mr Howard's submissions, I believe that their establishment on top of existing contamination amounts to a "treatment" of that material as well, as it adds to the safety of humans and the environment. True it is that all of the earthworks proposed are being undertaken to make the site suitable for development of the proposed seniors living project, but, although they vary in intensity across the various sectors of the site, and in the areas of land affected, they are collectively substantial, none of them could be regarded as de minimis, and, they will "disturb" the whole of the site. 39Toner Design has not been granted leave to appeal against this finding that the development was of a kind specified in cl 15 of Pt 1 of Sch 3. 40Amongst the development that is declared not to be designated development by a provision of Pt 3 of Sch 3 is development described in cl 37A: (1) Development of a kind specified in Part 1 is not designated development if: (a) it is ancillary to other development, and (b) it is not proposed to be carried out independently of that other development. (2) Subclause (1) does not apply to development of a kind specified in clause 29 (1)(a). 41Hence, development of contaminated soil treatment works, although being of a kind specified in cl 15 of Pt 1 of Sch 3, will nonetheless not be designated development if it is both ancillary to other development and not proposed to be carried out independently of that other development. 42The primary judge recognised that if the earthworks component of the proposed development was of a kind specified in cl 15, cl 37A could still operate to cause the earthworks component not to be designated development. He stated at [47]: The real contest revolves around whether cl 37A provides, as Mr Howard argues, a "complete answer" to Mr Larkin's case that cl 15 is engaged by the DA before the Court. 43The primary judge dealt with the cl 37A issue at [54] - [56]: 54. The insertion of cl 37A in Schedule 3, on 1 March 2007, followed the Court of Appeal's decision in Residents Against Improper Development Inc v Chase Property Investments Pty Ltd [2006] NSWCA 323, 149 LGERA 360, which dealt with some conflicting authorities in this Court, following Pain J's decision in Maxwell v Hornsby Council [2002] NSWLEC 92, 120 LGERA 386, in the context of sewerage systems forming part of development proposals. 55. That line of authority reviewed leading decisions on the characterisation of development, dating back to Glass JA's seminal decision in Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157, and including CB Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270, Macquarie International Health Clinic Pty Ltd v University of Sydney, (1998) 98 LGERA 218, Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404, and others, many of which I also surveyed at length, in Bardsley-Smith v Penrith City Council [2012] NSWLEC 79, especially at [229] - [248]. 56. Mr Larkin submits, and I accept, that cl 37A abrogated the decision in Chase, and reinstated and reinforced the appropriateness of the principles laid down in, particularly, O'Donnell, namely that the test of the concepts of "ancillary" and "independent" development/use (including any allegation that one might "subserve" another) is objective in character, is a question of fact and degree in all the circumstances, and is to be applied from a town planning perspective. 44Having found that the earthworks component was within cl 15, but not excluded by cl 37A, the primary judge held in [57] that the earthworks component was designated development: The earthworks component of the proposal before the Court is "designated development". Toner Design's submissions on the appeal 45Toner Design contended that the primary judge erred on a question of law in two respects: (a) the primary judge did not address the questions posed by cl 37A(1); and (b) the primary judge erred in his construction of cl 37A(1). 46As to the first respect, Toner Design submitted that the primary judge was required to consider both of the requirements in paras (a) and (b) of cl 37A but only considered para (a) and not para (b). Toner Design submitted that if the primary judge's finding (in [53]) that "all of the earthworks proposed are being undertaken to make the site suitable for development of the proposed seniors living project" shows a tacit recognition by the primary judge that the earthworks component of the development was "ancillary" to the proposed seniors living development (within para (a) of cl 37A(1)), the primary judge was required also to consider the question posed by cl 37A(1)(b) but the primary judge did not do so (at [32] of the appellant's written submissions). 47Toner Design further submitted that the primary judge's conclusion at [57] that the earthworks component of the proposal was designated development, notwithstanding the primary judge's findings of fact that the earthworks were being undertaken to make the site suitable for the proposed seniors living project (at [53] of judgment) and the circumstances of the case that the residential proposal cannot proceed on the site in its present contaminated state (at [5] of the judgment), was not open to the primary judge and was consistent only with the primary judge having applied some test other than that which is proposed by cl 37A(1)) (at [34] of appellant's written submissions). 48As to the second respect, Toner Design contended that the primary judge treated the two requirements in paras (a) and (b) of cl 37A(1) as "two sides of the same coin, that coin being previous authorities' consideration of when is a use ancillary and when is a use independent of another use that's carried out on land" (T2). Toner Design submitted that the primary judge's error was indicated in [56] of his reasons. Toner Design submitted that this passage revealed that the primary judge had proceeded on the basis that the issue in the case involved the "question of ancillary use on the one hand, or an independent use on the other" (T5), rather than the statutory tests in cl 37A(1)(a) and (b). 49Toner Design submitted that the principles laid down in Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 (O'Donnell) involve a different test to the statutory test in cl 37A(1)(a) and (b). It submitted that the principles in O'Donnell may be taken to be "that a use of land which can be said to be ancillary to another use of land may nevertheless constitute an independent use of the land and that whether it does constitute an independent use of the land is an objective question of fact and degree in all the circumstances" (at [36] of the appellant's written submissions). 50In contrast to these principles, Toner Design submitted that even if the proposed earthworks were considered to be ancillary to the proposed seniors living development within the meaning of cl 37A(1)(a), the question posed by cl 37A(1)(a) and (b) was not whether the proposed earthworks could nonetheless be said to constitute an independent use of the land (the O'Donnell test) but rather whether the proposed earthworks were proposed to be carried out independently of the proposed seniors living development (at [36] of the appellant's written submissions). Toner Design submitted that the primary judge erred by not asking himself the question posed by cl 37A(1)(b) but instead asking himself whether, as a matter of fact and degree in all of the circumstances, the proposed earthworks constituted an independent use of the land (at [38] and [41] of the appellant's written submissions). 51Toner Design also submitted that the work "proposed" in cl 37A(1)(b) referred to the subjective intention of the applicant for development consent. In this case, Toner Design did not propose to carry out the earthworks independently of the seniors living development but rather the earthworks were proposed to be carried out only in order to permit the seniors living development to be carried out. This subjective intention is different to the objective test noted in O'Donnell and earlier authorities. 52Toner Design also submitted that the primary judge's conclusion at [57] that "the earthworks component of the proposal before the Court is designated development" was not an expression of the relevant test in determining whether or not development is designated development (T6). The Council's submissions on the appeal 53The Council submitted that the primary judge did not err in the two respects contended for by Toner Design: the primary judge did address both of the questions posed by cl 37A(1) and did not err in construing cl 37A(1). 54As to the first respect, the Council submitted that the primary judge did not find that the earthworks component was ancillary to the proposed seniors living development (so as to fall within cl 37A(1)(a)). The Council submitted that the primary judge's finding at [53] that "all of the earthworks proposed are being undertaken to make the site suitable for development of the proposed seniors living project" is neither a finding nor a tacit recognition that the earthworks component was ancillary to the proposed seniors living development (at [37] of the respondent's written submissions). To the contrary, the primary judge found, and the Council submitted that it was open on the evidence for the primary judge to find, that the earthworks component was of such of scale and nature as not to be ancillary to the proposed seniors living development (at [35] of the respondent's written submissions). 55Further, the Council submitted that the primary judge did answer the question posed by cl 37A(1)(b) in a manner which was open to him and he did so adversely to Toner Design (at [38] of respondent's written submissions). 56The Council submitted that the primary judge's finding in [56] (following on from the discussion in [54] and [55]) revealed that the primary judge did in fact consider cl 37A(1)(b) and that he did not misconstrue cl 37A(1)(b) or ask himself the wrong question. 57As to the second respect, the Council contended the primary judge was correct to say in [56] that cl 37A abrogated the decision in Residents Against Improper Development v Chase Property Investments Pty Ltd [2006] NSWCA 323; (2006) 149 LGERA 360 ('Chase'), and reinstated and reinforced the appropriateness of the principles in O'Donnell, namely that the test of the concepts of "ancillary" and "independent" development/use is objective in character, a question of fact and degree in all the circumstances, and to be applied from a town planning perspective. 58The Council submitted that it was common ground between the parties that cl 37A was introduced to overcome the decision of the Court of Appeal in Chase. The explanatory note to the Environmental Planning and Assessment Amendment (Designated Development) Regulation 2007 which introduced cl 37A stated that one of the objects of the regulation was: (b) to make it clear that (apart from some sewerage systems or works) ancillary development (which would otherwise be considered to be designated development) is not designated development if it is ancillary to other development and is not proposed to be carried out independently of that other development. 59The Council submitted that the primary judge was correct in his construction and application of cl 37A(1)(b) to ask the question of whether the earthworks component described in paras (a) - (c) set out at [8] of the judgment (which was development of a kind specified in Pt 1 of Sch 3, being contaminated soil treatment works within cl 15) was not proposed to be carried out independently of the erection and use of the seniors living development described in para (d) set out at [8] of the judgment (which was the "other development"). 60The Council submitted the primary judge's task in answering that question was a factual one. The Council submitted that it was entirely open to the primary judge on the evidence to find that the earthworks component was proposed to be carried out independently of the seniors living development. The Council submitted that Toner Design bore the onus of satisfying the primary judge that the earthworks component was not proposed to be carried out independently of the seniors living development. Toner Design did not satisfy the primary judge. The primary judge found that the use of the land for the earthworks treatment and containment was independent of the use for seniors living in the sense used in O'Donnell. 61In O'Donnell, it was held that when a use of land is by reason of its nature and extent capable of being an independent use, it is not deprived of that quality because it is ancillary to another use (at 409-410). The Council submitted that the primary judge's consideration of the evidence as to the nature and the extent of the earthworks component led him to conclude that it was independent of the seniors living development. That conclusion was factually open to the primary judge. The primary judge also found that the proposed seniors living project cannot proceed on the site in its contaminated state and hence that the earthworks proposed (the contaminated soil treatment works) must be undertaken to make the site suitable for the seniors living project (at [5] and [53] of the judgment). Hence, in a temporal sense, the carrying out of the earthworks component must occur prior to and independently of the carrying out of the seniors living development. 62The Council next submitted that cl 37A(1)(a) and (b) do reinstate and reinforce the principles in O'Donnell and do not impose a different test. O'Donnell is authority that a use of land for one purpose will not be subsumed into use of land for a second purpose if the first use is ancillary to the second use (the ancillary use test) or, even if the first use can be said to be ancillary, by reason of its nature and extent, it is capable of being an independent use (the independent use test). These two tests are reflected in cl 37A(1)(a) and (b) which respectively pose a form of ancillary use test (in (a)) and an independent use test (in para (b)). 63Furthermore, the Council submitted, the manner in which the independent use test was formulated in O'Donnell was not relevantly different to the formulation in cl 37A(1)(b). In O'Donnell, Meagher JA referred to not "conducting an independent use" (at 409); cl 37A(1)(b) refers to a use not being "carried out independently". There is no relevant distinction between "conducting" and "carrying out" or between "conducting an independent use" and "carrying out independently a use". 64The Council also submitted that the primary judge was correct in stating that the test of the independence of the use is objective in character. The authorities referred to by the primary judge in [55] and [56] establish that the subjective intention of a developer is not relevant in characterising the proposed use. The word "proposed" in cl 37A(1)(b) does not introduce an inquiry into the subjective intention of the applicant for development content as to whether a use would be carried out independently of another use. Rather, it simply means what is proposed in the development application looked at objectively (see T18-19). The primary judge did not err in law 65Toner Design has not established that the primary judge erred on a question of law in either of the two respects for which it contended. First, Toner Design has not established that the primary judge did not consider both paragraphs (a) and (b) of cl 37A(1). The primary judge quoted cl 37A(1) and emphasised in bold the critical words in paras (a) and (b) (at [34] of the judgment). This shows an engagement with the actual terms of the provision. The primary judge noted that the real contest in the case was whether cl 37A provided the answer to the Council's case that cl 15 was engaged by the development application (at [47]). That is to say, the primary judge appreciated that the real contest was whether, although the earthworks proposed were found to be development of a kind specified by cl 15 in Pt 1 of Sch 3 as being designated development, they were nevertheless not designated development because cl 37A(1) applied to the earthworks. 66The primary judge referred to the fact that the insertion of cl 37A on 1 March 2007 (by the Environmental Planning and Assessment Amendment (Designated Development) Regulation 2007) followed the Court of Appeal's decision in Chase (at [54]). He noted that cl 37A had abrogated the decision in Chase (at [56]). The primary judge's reference to the concepts of "ancillary" and "independent" development/use in [56] echoes the reference to "ancillary" use and carrying out a use "independently" of other development in (a) and (b) of cl 37A(1) respectively. 67In these circumstances, the inference should not be drawn that the primary judge failed to address the questions posed by cl 37A(1)(a) and (b). 68Moreover the primary judge's findings in [53] and [57] are not consistent only with the primary judge having applied some test other than those posed by cl 37A(1), as contended for by Toner Design. 69The primary judge's findings in [53], in terms and in context, related to the earlier question of whether the development was of a kind specified in cl 15 of Pt 1 of Sch 3. The primary judge in the preceding paras [48] to [52] dealt with various elements of the description of contaminated soil treatment works in cl 15, in particular that the proposed earthworks were "works" involving "treatment" and "storage" within the chapeau to cl 15 and to para (c) as well as within cl 15(c)(ii). Paragraph 53 of the judgment then addressed the requirement in cl 15(c)(iii) concerning the area of contaminated soil disturbed by the works. The primary judge found that the earthworks proposed "will "disturb" the whole of the site", which the primary judge found (based on the joint report of the experts) to be at least 4.4 ha (at [39]), which is greater than the three hectares required by cl 15(c)(iii). 70Of course, the primary judge's factual findings concerning cl 15 could also be applied in answering the questions posed by cl 37A. But the manner in which the primary judge expressed himself in [53] of his reasons was directed to answering the questions posed by cl 15, not by cl 37A(1). Hence, the primary judge's expression in [53] does not reveal that the primary judge did not ask himself the questions posed by cl 37A(1). 71I also reject Toner Design's contention that the primary judge's finding in [53] that "all of the earthworks proposed are to being undertaken to make the site suitable for development of the proposed seniors living project" is a tacit recognition that the former is ancillary to the latter. Such an inference should not be drawn for three reasons. 72First, the paragraph was directed to the questions under cl 15, rather than under cl 37A(1), including the question of whether the earthworks were ancillary to the seniors living developments. 73Secondly, the primary judge did not use the word "ancillary" in this paragraph of his reasons, but chose to do so later in [56] of his reasons, suggesting a deliberate choice of words. It is not appropriate to draw an inference that the primary judge found that the earthworks were ancillary when he expressly did not say so. 74Thirdly, the balance of the paragraph supports the opposite conclusion to that contended for by Toner Design, namely that the primary judge in fact found that the earthworks were not ancillary to the seniors living development. The facts that the earthworks "are collectively substantial", "none of them could be regarded as de minimis" and "will "disturb" the whole of the site" all speak against recognition of the earthworks being "ancillary" to the seniors living development. 75As to second respect, Toner Design has not established that the primary judge erred in his construction of cl 37A(1). Central to this contention is that the primary judge applied the principles laid down in O'Donnell and that those principles are different to the statutory tests in cl 37A(1), particularly para (b). The differences, Toner Design contended, were twofold: first, that the test in O'Donnell is whether there is an independent use while the test in cl 37A(1)(b) is whether the use is carried out independently, and secondly, that test in O'Donnell is objective while the test in cl 37A(1) is subjective. 76I do not consider that the primary judge's expression of his reasons for concluding that cl 37A(1) did not apply to the earthworks proposed, particularly in [56] and [57], demonstrated that he erred in constructing cl 37A(1). 77First, the primary judge in [56] was not stating that he was applying the principles in O'Donnell in substitution for the tests in cl 37A(1). To the contrary, the primary judge was describing the object of the introduction of cl 37A and the operation of cl 37A. As I have explained earlier, the primary judge was well aware of the terms and effect of cl 37A(1). He understood that cl 37A operated to cause development of a kind specified in Pt 1 of Sch 3 not to be designated development if the development met both of the requirements of paras (a) and (b) of cl 37A(1). 78The primary judge observed that cl 37A "reinstated and reinforced" the appropriateness of the three aspects of the principles laid down in O'Donnell which he specified in [56]. I will deal with these three aspects in a moment. For now, the point is that the primary judge's observation that cl 37A had this effect demonstrated that the primary judge was applying cl 37A(1) and was not applying the principles in O'Donnell in substitution for cl 37A(1). 79Secondly, the primary judge only stated that cl 37A reinstates and reinforces the three particular aspects of the principles in O'Donnell that he specified in [56] and no other aspects. This is of importance to Toner Design's contention that the test in O'Donnell concerned whether a use was an "independent use" while cl 37A(1)(b) concerned whether the use was "carried out" independently from any other use and that the primary judge applied the former not the latter. However, the primary judge did not state in [56] that he did what Toner Design contended he did. The primary judge simply stated that: "the concepts of "ancillary" and "independent" development/use ... is objective in character". On a fair reading, the primary judge was saying that the tests in cl 37A(1)(a) (of whether the development is "ancillary" to other development) and in cl 37A(1)(b) (of whether the development is not proposed to be carried out "independently" of that other development) were objective in character. This is quite different to saying that the tests in O'Donnell are to be applied in substitution for the tests in cl 37A(1)(a) and (b). 80Thirdly, the primary judge did not err in construing the tests in cl 37A(1) as being objective in character. The requirement in cl 37A(1)(a) is stated in objective terms: that the development of a kind specified in Pt 1 is "ancillary to other development". Although cl 37A(1)(b) does use the word "proposed", this not does not demand an inquiry of the subjective intentions of the applicant for development consent. The "it" in the phrase "it is not proposed" in para (b) refers to "the development of a kind specified in Pt 1". The inquiry required by para (b) is whether that development is not proposed to be carried out independently of other development. 81The answer to that inquiry is to be found in the development application and any accompanying documents. The development application is the statutory means by which a person applies for consent to carry out development (s 78A(1) of the EPA Act). A single application may be made in respect of one or more types of development (s 78A(2) of the EPA Act). The requirement for a development application to be accompanied by an environmental impact statement is triggered "if the application is in respect of designated development" (s 78A(8)(a) of the EPA Act). 82In this context, it is the development application and accompanying documents to which one must turn to determine the development proposed and whether it is proposed to be carried out independently of other development. The task involves consideration of the nature, extent and other features of the development of the kind specified in Pt 1 of Sch 3 and of any other development proposed in the development application. It involves construction of the development application and accompanying documents. It does not involve an inquiry outside of the development application and accompanying documents of the subjective intention of the applicant for development consent. 83On a fair reading, the primary judge's observation that the test of whether a development is ancillary or independent is "objective in character" does not involve a construction of cl 37A(1)(b) that is antithetical to this construction of cl 37A(1)(b). 84Moreover, the primary judge's factual findings to the effect that the earthworks proposed were to be carried out independently of the seniors living development was based upon the developments proposed in the development application and accompanying documents and reports as summarised in the evidence. Hence, the primary judge did not err in application of the test in cl 37A(1)(b) to the developments proposed. 85Fourthly, the two other aspects of the principles in O'Donnell specified by the primary judge in [56], namely that the test of the concepts of "ancillary" and "independent" development/use is a question of fact and degree and is to be applied from a town planning perspective, were not challenged as involving error by Toner Design. Appeal should be dismissed with costs 86For these reasons, Toner Design has not established that the primary judge erred on questions of law in his construction or application of cl 37A(1) and hence in the determination of the separate question. The appeal should therefore be dismissed. 87The parties agreed that if Toner Design's appeal is unsuccessful, costs should follow the event. The costs of the proceedings below were reserved by the primary judge. This Court is not in a position to determine those costs. The question of the costs of the proceedings below should be remitted to the Land and Environment Court for determination by that Court. 88The orders I propose are: (1) Dismiss the appeal; (2) Order the appellant to pay the respondent's costs in this Court; (3) Remit the matter to the Land and Environment Court to deal with the costs of the proceedings before it. ********** 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: 05 December 2013