Land and Environment Court New South Wales Medium Neutral Citation: EPS Constructions Pty Ltd v Holroyd City Council (No 2) [2014] NSWLEC 126 Hearing dates: 27 February 2014 Decision date: 25 August 2014 Jurisdiction: Class 1 Before: Sheahan J Decision: The remaining separated question is answered in the affirmative, the question of costs is reserved, and Exhibits A1 and A3 are returned. Catchwords: CONSTRUCTION AND INTERPRETATION: Separate question - characterisation and permissibility of a development proposal in terms of the application of a SEPP to the operation of a LEP - principles to apply. Legislation Cited: Environmental Planning and Assessment Act 1979 Heritage Act 1977 Holroyd Local Environmental Plan 1991 Holroyd Local Environmental Plan 2013 Interpretation Act 1987 Local Government Act 1993 Standard Instrument (Local Environmental Plans) Amendment Order 2011 Standard Instrument (Local Environmental Plans) Order 2006 State Environmental Planning Policy (Affordable Rental Housing) 2009 Cases Cited: Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343 Botany Municipal Council v Feneck (1987) 61 LGRA 299 Calleja v Botany Bay City Council [2005] NSWCA 337; (2005) 142 LGERA 104 Caltex Oil (Australia) Pty Ltd v Canterbury Municipal Council (1983) 50 LGRA 1 Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297 Cranbrook School v Woollahra Municipal Council [2006] NSWCA 155; (2006) 66 NSWLR 379; (2006) 146 LGERA 313 EPS Constructions Pty Ltd v Holroyd City Council [2013] NSWLEC 224 Hrsto v Canterbury City Council (No 2) [2014] NSWLEC 121 Nguyen v Marrrickville Municipal Council (1988) 64 LGRA 391 Project Blue Sky v Australian Broadcasting Association [1998] HCA 28; (1998) 194 CLR 355 Woollahra Municipal Council v Ageitos (1979) 38 LGRA 365 Category: Separate question Parties: EPS Constructions Pty Ltd (Applicant) Holroyd City Council (Respondent) Representation: Mr P Tomasetti, SC (Applicant) Mr C McEwen, SC (Respondent) Storey & Gough (Applicant) HWL Ebsworth (Respondent) File Number(s): 10887 of 2013 Judgment Introduction 1These class 1 proceedings involve an appeal against the Council's refusal of a development application ("DA"), and this judgment deals with a separated question. The Proposal 2The DA proposed a three/four-storey building at 1 - 7 Elvina St, Greystanes, on the corner of Gozo Rd, with basement carparking and service areas, two retail units on part of the ground floor, and residential flats on the ground floor and on the two upper floors. (See plans in Exhibit A1, tab 1). 3The applicant describes the development (applicant's primary subs pars 6 and 11) as "a residential flat building [("RFB")] attached to shops", permissible with consent, and the DA was made pursuant to State Environmental Planning Policy (Affordable Rental Housing) 2009 (the "ARH SEPP"), on the basis that the development was for the purpose of a RFB, which (par 15) it proposes be used for affordable housing, but the applicant says (subs par 7) that the Council characterises it as "mixed use development", as defined in the Holroyd Local Environment Plan 1991 ("the HLEP"). 4Council confirmed its refusal decision, following a review under s 82A of the Environmental Planning and Assessment Act 1979 ("EPAA"). Its reasons were stated as follows: (a)The proposed development is not permissible under the provisions of Part 2, Division 1, Clause 10 of the ARH SEPP. ... the proposed development is not for the purposes of dual occupancies, multi dwelling housing or [RFBs]. (b)The proposed development is not permissible under the [HLEP]. ... The proposed development is defined as a mixed use development. The Question Emerges 5On 20 December 2013, Biscoe J ordered ([2013] NSWLEC 224) the separation of two questions, to be determined by the Court in advance of any other questions arising in the proceedings. The two questions the subject of his Honour's order were: (1)Whether the applicant's development application is an application for "prohibited development" within the meaning of s 4(1) of the [EPAA] by reason of cl 9 of the [HLEP]. (2)If the proposed development is not prohibited, whether the applicant's development application is an application to which cl 10(1) of [the ARH SEPP] ... applies. 6At the time of his Honour's orders, the Council was contending (1) that the DA proposed a "mixed used development" which was prohibited in the relevant zone under the HLEP, and, further, (2) that, on proper construction of the ARH SEPP, the proposed development did not serve the purpose of "RFB". 7After the applicant had provided to the respondent its written submissions on the two separated questions, the respondent conceded that, on reconsideration, it had come to the view that the proposal was not prohibited, and that the first question should, therefore, be answered in the negative (Council subs pars 5 - 7). 8That being the case, the only question now being addressed by the Court in this judgment is: ... whether the applicant's development application is an application to which cl 10(1) of [the ARH SEPP] ... applies. 9The abandonment of the first separated question has some implications for the question of costs (Tp40, L42 - p42, L9, and p48, L1 - p49, L21). 10The question of what, if any, costs order ought be made will turn on the fact that the Council's concession was made only after it had come to its attention that the relevant amendment in 2005 of its HLEP ("Amendment 49") included a statement of "aims", which was not replicated, or reflected, in the published HLEP, as amended. 11I believe that the question of costs should await the parties' consideration of the matter in the light of this judgment, and so will reserve it. The Agreed Facts 12The Court's consideration of the (remaining) question about the ARH SEPP has been informed and assisted by the agreement between the parties on a Statement of Facts ("ASF" - Exhibit A2), which I now set out, in full, for convenience (emphasis in original): 1. The property, the subject of these Class 1 proceedings is legally identified as Lots 11-14 in Deposited Plan 236829 and is known as 1-7 Elvina Street, Greystanes (the subject property). The subject property is located on the corner of Elvina Street and Gozo Road and has a site area of 742.8m². 2. The subject property is currently vacant. 3. The subject property is located in Zone No 3 (b) (Neighbourhood Business Zone) pursuant to ... [the HLEP]. 4. On 3 August 2012 the applicant lodged with the respondent development application No. DA2012/315 ... 5. On 15 January 2013 the respondent refused the [DA]. 6. On 27 February 2013 the applicant lodged an application for review pursuant to s.82A of the [EPAA] (Review Application). The plans accompanying the review application depict the following: (a) A part 3 and part 4 storey building. (b) A basement level consisting of parking for 10 vehicles and bicycles, bin enclosure and storage areas. (c) A ground floor consisting of 2 retail units and 2 residential units. (d) A first floor consisting of 4 residential units. (e) A second floor consisting of 2 residential units. 7. On 16 May 2013 the respondent refused the review application, which resulted in the applicant commencing the subject proceedings. 8. The development application and review application were made pursuant to Division 1 of Part 2 of [the ARH SEPP]. 9. On 5 August 2013 the Holroyd Local Environmental Plan 2013 (LEP 2013) commenced. 10. By operation of clause 1.8A of LEP 2013 the [DA] and Review Application must be determined as if LEP 2013 had not commenced. 11. The HLEP is the applicable Local Environmental Plan to the [DA] and Review Application. The Relevant Instruments 13The Court was also assisted by agreement on a series of relevant planning documents, largely in Exhibits A1 and A3, but also including the Standard Instrument (Local Environmental Plans) Order 2006 ("the Standard Instrument"). 14The HLEP was made in 1991. Its relevant amendment (Amendment 49) occurred in 2005. The Standard Instrument was promulgated in 2006, and the ARH SEPP (hereafter "the SEPP") was made in 2009. However, as noted in the ASF (par 10 in [12] above), the replacement of the LEP in 2013 is not relevant to these proceedings. Amendment 49 15The most relevant amendment to the HLEP, was made by Amendment 49 (Exhibit A3, tab 1), which affected the 3(b) zone in several ways. 16The aims of the amendment were stated as follows (cl 2 - emphasis mine): (1) ...: (a) to prohibit apartment buildings and mixed use development on land within Zone ... 3 (b) (the Neighbourhood Business Zone) ... under the [HLEP], and (b) to clarify that while dwellings and residential flat buildings are prohibited on land within Zone ... 3 (b), ... under the [HLEP]: (i) a single dwelling or a residential flat building attached to or used in conjunction with a shop or commercial premises is permissible on land within Zone ... 3 (b), ... ... (2) The aim referred to in subclause (1)(a) was intended to have been given effect by amendments to be included in a plan that has since been made, being Holroyd Local Environmental Plan 1991 (Amendment No 42). 17The actual amendments which Amendment 49 made to the HLEP, as it then stood, were set out in Schedule 1. Most concerned residential development of various types. Those items relevant to the 3(b) zone are: [1] Clause 9 Zone objectives and development control table Insert "apartment buildings;" and "mixed use development;" in alphabetical order in the Table to the clause in Item 4 of the matter relating to Zone ... 3 (b) ... ... [6] Clause 9, Table Omit "dwellings and residential flat buildings (other than those attached to or used in conjunction with shops or commercial premises);" from Item 4 of the matter relating to Zone No 3 (b). Insert instead "dwellings other than a single dwelling attached to or used in conjunction with shops or commercial premises);". [7] Clause 9, Table Insert "residential flat buildings (other than a residential flat building attached to or used in conjunction with shops or commercial premises);" in alphabetical order in Item 4 of the matter relating to Zone No 3 (b). ... The amended HLEP 18The HLEP, as it stood at the time of the DA (Exhibit A3, tab 2), included the following relevant provisions: 19Clause 5 included these definitions: mixed use development means one or more dwellings attached to, or on the same parcel of land as, a building intended to be used for non-residential purposes (being non-residential purposes that are permissible on the land on which the building is located). residential flat building means a building containing 2 or more dwellings that has not more than 3 residential storeys, whether above parking or not, and includes buildings that have not more than 3 residential storeys commonly known as walk-up flats or home units. 20Clause 6 dealt with adoption of the Model Provisions in these terms: (1) The Environmental Planning and Assessment Model Provisions 1980 (except for the definitions of child care centre, general store, map, professional consulting rooms, residential flat building, rural industry and rural workers dwelling in clause 4 (1) and clauses 5 (2), 5 (3) and 5 (5), 6, 8, 14-17, 19-28, 32 and 33 (2)) are adopted for the purposes of this plan. (2) If a definition adopted by subclause (1) is expressed so as not to include a building or place (or a building or place used for a purpose) separately defined in those provisions then, for the purposes of Part 2, the definition does not include a building or place (or a building or place used for a purpose) separately defined in this clause. 21Clause 9 included the zone objectives and development control table. In respect of the 3(b) zone, it provided (some emphasis added to item 4): Zone No 3 (b) (Neighbourhood Business Zone) 1 Objectives of zone The objective of this zone is to provide for the establishment of retail, commercial and professional services for local residents in convenient locations within residential neighbourhoods so that the scale and type of development is compatible with the character and amenity of the surrounding residential areas. 2 Without development consent Nil. 3 Only with development consent Any purpose other than a purpose included in Item 4. 4 Prohibited Abattoirs; animal establishments; apartment buildings; boarding houses; brothels; bulk stores; bus depots; car repair stations; clubs; dual occupancies; dwellings (other than a single dwelling attached to or used in conjunction with shops or commercial premises); extractive industries; gas holders or generating works; hazardous industries; hazardous storage establishments; heliports; hospitals; industries; institutions; integrated housing; junk yards; liquid fuel depots; medium density housing; mines; mixed use development; motels; motor showrooms; offensive industries; offensive storage establishments; recreation establishments; recreation facilities; residential flat buildings (other than a residential flat building attached to or used in conjunction with shops or commercial premises); restricted premises; roadside stalls; road transport terminals; sawmills; stock and sale yards; taverns; warehouses. 22Other clauses of the HLEP to which the Court was referred were (some emphasis mine): 32 Development for the purpose of residential flat buildings on certain land within Zone No 3 (a) The Council may consent to the carrying out of development for the purpose of a residential flat building, whether or not the building also contains a commercial component, on land within Zone No 3 (a) directly adjoining and contiguous with Guildford, Pendle Hill, Wentworthville and Toongabbie railway stations. 35 Development standards-floor space ratios (1) This clause imposes development standards in the form of floor space ratios for certain development within Zone No 2 (a), 2 (c), 2 (d), 3 (a) or 3 (b). ... (6) A building shall not be erected on land within Zone No 3 (b) where the building will have a floor space ratio in excess of 1:1. ... The SEPP 23The SEPP (Exhibit A3, tab 3) includes the following relevant provisions (emphasis mine): 24Clause 3 sets out its aims as: (a) to provide a consistent planning regime for the provision of affordable rental housing, (b) to facilitate the effective delivery of new affordable rental housing by providing incentives by way of expanded zoning permissibility, floor space ratio bonuses and non-discretionary development standards, (c) to facilitate the retention and mitigate the loss of existing affordable rental housing, (d) to employ a balanced approach between obligations for retaining and mitigating the loss of existing affordable rental housing, and incentives for the development of new affordable rental housing, (e) to facilitate an expanded role for not-for-profit-providers of affordable rental housing, (f) to support local business centres by providing affordable rental housing for workers close to places of work, (g) to facilitate the development of housing for the homeless and other disadvantaged people who may require support services, including group homes and supportive accommodation. 25Clause 4(2) provides: A word or expression used in this Policy (other than Schedule 1 or 2) has the same meaning as it has in the standard instrument (as in force immediately before the commencement of the Standard Instrument (Local Environmental Plans) Amendment Order 2011) unless it is otherwise defined in this Policy. 26Clause 8 provides: If there is an inconsistency between this Policy and any other environmental planning instrument, whether made before or after the commencement of this Policy, this Policy prevails to the extent of the inconsistency. 27Part 2 of this SEPP (commencing at cl 10) deals in detail with "New affordable rental housing". It contains seven divisions, each dealing with its own category of housing. 28Clause 10 is the first provision in Div 1, which deals with "In-fill affordable housing", and provides: (1) This Division applies to development for the purposes of dual occupancies, multi dwelling housing or residential flat buildings if: (a) the development concerned is permitted with consent under another environmental planning instrument, and (b) the development is on land that does not contain a heritage item that is identified in an environmental planning instrument, or an interim heritage order or on the State Heritage Register under the Heritage Act 1977. (2) Despite subclause (1), this Division does not apply to development on land in the Sydney region unless all or part of the development is within an accessible area. (3) Despite subclause (1), this Division does not apply to development on land that is not in the Sydney region unless all or part of the development is within 400 metres walking distance of land within Zone B2 Local Centre or Zone B4 Mixed Use, or within a land use zone that is equivalent to any of those zones. 29Division 1 also includes special provisions, for example cl 13, which provides: Floor space ratios (1) This clause applies to development to which this Division applies if the percentage of the gross floor area of the development that is to be used for the purposes of affordable housing is at least 20 per cent. (2) The maximum floor space ratio for the development to which this clause applies is the existing maximum floor space ratio for any form of residential accommodation permitted on the land on which the development is to occur, plus: (a) if the existing maximum floor space ratio is 2.5:1 or less: (i) 0.5:1-if the percentage of the gross floor area of the development that is used for affordable housing is 50 per cent or higher, or (ii) Y:1-if the percentage of the gross floor area of the development that is used for affordable housing is less than 50 per cent, where: AH is the percentage of the gross floor area of the development that is used for affordable housing. Y = AH ÷ 100 or (b) if the existing maximum floor space ratio is greater than 2.5:1: (i) 20 per cent of the existing maximum floor space ratio-if the percentage of the gross floor area of the development that is used for affordable housing is 50 per cent or higher, or (ii) Z per cent of the existing maximum floor space ratio-if the percentage of the gross floor area of the development that is used for affordable housing is less than 50 per cent, where: AH is the percentage of the gross floor area of the development that is used for affordable housing. Z = AH ÷ 2.5 .... 30Clause 14 defines some "Standards that cannot be used to refuse consent", and cl 15 & 16A stipulate design requirements which must be taken into consideration before consent is granted. 31Division 2 deals with "Secondary dwellings", Div 3 with "Boarding houses", Div 4 with "Supportive accommodation", Div 5 with "Residential flat buildings-social housing providers, public authorities and joint ventures", Div 6 with the Land and Housing Corporation, and Div 7 with "Group Homes". 32Each division defines the land and/or development to which it applies. I have already set out cl 10 (for Div 1); but cls 20 and 21 fill that role for Div 2, cls 26 and 27 for Div 3, cls 31 and 32 for Div 4, cl 40 for Div 6, and cls 43 - 5 for Div 7. All are division-specific. 33Relevant provisions in Division 5 (Residential flat buildings-social housing providers , public authorities and joint ventures) are: 34 Land to which Division applies This Division applies to the following land, but not if development for the purposes of a residential flat building is permissible on the land under another environmental planning instrument: (a) land in the Sydney region that is within 800 metres of: (i) a public entrance to a railway station or light rail station, or (ii) in the case of a light rail station with no entrance-a platform of the light rail station, ... 35 Development to which Division applies (1) This Division applies to development, on land to which this Division applies, for the purposes of a residential flat building: (a) by or on behalf of a public authority or social housing provider, or (b) by a person who is undertaking the development with the Land and Housing Corporation. (2) Despite subclause (1), this Division does not apply to development to which Division 1 applies. 36 Development may be carried out with consent (1) Development to which this Division applies may be carried out with consent. (2) A consent authority must not consent to development to which this Division applies unless it is satisfied that: (a) the Director-General has certified in a site compatibility certificate that, in the Director-General's opinion, the development is compatible with the surrounding land uses, and (b) if the development is in respect of a building on land zoned primarily for commercial purposes, no part of the ground floor of the building that fronts a street will be used for residential purposes unless another environmental planning instrument permits such a use. ... (4) Car parking is not required to be provided in relation to development to which this Division applies. The Model Provisions 34The Environmental Planning and Assessment Model Provisions 1990 (Exhibit A1, tab 5) include the following relevant definitions: dwelling means a room or suite or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile. dwelling-house means a building containing 1 but not more than 1 dwelling. The EPAA 35The EPAA (Exhibit A1, tab 6, s 4) defines the word "building" to include, "except in so far as the context or subject matter otherwise indicates or requires": part of a building, and also includes any structure or part of a structure (including any temporary structure or part of a temporary structure), but does not include a manufactured home, moveable dwelling or associated structure or part of a manufactured home, moveable dwelling or associated structure. The Standard Instrument 36Under the Standard Instrument, in Zone R4 High Density Residential, the following are permitted with consent: Boarding houses; Child care centres; Community facilities; Neighbourhood shops; Places of public worship; RFBs; Respite day care centres; Shop top housing 37In the Neighbourhood Centre Zone (B1), the following are permitted with consent: Boarding houses; Business premises; Child care centres; Community facilities; Medical centres; Neighbourhood shops; Respite day care centres; Shop top housing 38Under the instrument: (i)the word "building" has the same meaning as it has in the EPAA; (ii)"dwelling" means "a room or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile"; (iii)"dwelling house", means "a building containing only one dwelling"; (iv)"RFB" means "a building containing 3 or more dwellings, but does not include an attached dwelling or multi dwelling housing, and (v)"shop top housing" means "one or more dwellings located above ground floor retail premises or business premises". Interpretation Act 1987 39Sections 6, 11 and 33 of the Interpretation Act 1987 provide: 6. Definitions that occur in an Act or instrument apply to the construction of the Act or instrument except in so far as the context or subject-matter otherwise indicates or requires. 11. Words and expressions that occur in an instrument have the same meanings as they have in the Act, or in the relevant provisions of the Act, under which the instrument is made. 33. In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object. Submissions Introduction 40The respondent Council submits that, because the proposed development has a commercial component, the development is not a "RFB", and, therefore, Division 1 of the SEPP does not apply to it. 41In contrast, the applicant submits that the inclusion of the commercial units does not preclude the residential component of the development being characterised as a "RFB" for the purposes of the SEPP. 42The respondent Council's argument is that, as this development is not a "RFB" for the purposes of cl 10 of the SEPP (set out above at [28]), provisions of Div 1 of the SEPP do not apply to it, because of the operation of the word "containing" in the definition of "RFB" in the standard instrument (set out above at [38]), adopted in the SEPP, by virtue of cl 4(2) (above at [25])). 43The Court of Appeal decision in Botany Municipal Council v Feneck ("Feneck") (1987) 61 LGRA 299 is said to support the Council's argument, and its counsel (Mr C McEwen SC) said (Tp29, LL21 - 23) "that the context and the subject matter [of the SEPP] clearly favours (sic) what I might describe as the more restrictive Feneck definition". 44However, the applicant would distinguish Feneck, in favour of pressing on the Court a more "extended definition" of RFB (Tp31, L46). 45Mr McEwen says that if that "extended" definition is preferred to the "confined" one, Div 5 of the SEPP would have "no work to do" (see Tp33, LL9 - 19), and there would be an absurd result, for example, in terms of floor space ratio (Tp34, LL32 - 38). 46On the applicant's behalf, Mr Tomasetti SC relied on a series of cases - namely Woollahra Municipal Council v Ageitos and another ("Ageitos") (1979) 38 LGRA 365, Caltex Oil (Australia) Pty Ltd v Canterbury Municipal Council ("Caltex") (1983) 50 LGRA 1, and Nguyen v Marrrickville Municipal Council ("Nguyen") (1988) 64 LGRA 391 - which culminated in the 2005 Court of Appeal decision in Calleja v Botany Bay City Council ("Calleja") [2005] NSWCA 337; (2005) 142 LGERA 104. 47Mr McEwen, however, submitted that, on "careful consideration" (Tp40, LL2 - 3), Calleja "plainly assists the respondent" (Tp36, LL47 - 48). 48All these authorities deserve this Court's attention as the respective submissions are examined. (It is appropriate to deal now with the respondent Council's submissions first) Respondent's Submissions 49The respondent submits (par 13) that the proposed development is not for the purpose of a RFB because it will not contain, or comprise, only three, or more, dwellings. It also "contains" two retail units and eight dwellings. 50In Feneck, conversion of a dwelling house to a dual occupancy was permitted where "a dwelling house exists on that allotment, and the Court of Appeal dealt with the proper construction of "dwelling-house", which was defined in cl 2(a) of Interim Development Order No 19 - Municipality of Botany ("IDO") as "a building containing one but not more than one dwelling". 51Samuels JA held that, for the purposes of the IDO, a dwelling house could contain only dwellings, because of the operation of the word "containing" in the definition. His Honour said, at (pp302 - 303 - emphasis mine): In my opinion, the definition of "dwelling-house" constitutes a complete and exclusive definition of the scope and use of the building. "Containing" does not mean including, but rather comprising, or consisting of or being composed of, which are all meanings of "comprised" taken from the Macquarie Dictionary. If one is asked to describe the functional contents of a building, one could not accurately comply with the request by listing only a part. The contents of a building are all that it contains. To say that a building contains so and so is to convey the idea that that is all that it contains. This meaning is, I think, supported by the definition itself, which specifies that the building may contain one but may not contain more than one dwelling. This seems to me to contemplate the construction I favour because if "containing" introduces other than a complete and exclusive description, it would be an accurate description of a multi-dwelling building to say that it contained one dwelling. Accordingly, I think that the appellant's argument upon the first point is correct. 52It was argued by the respondent in the present matter, relying on Feneck, that the word "containing" in the definition of "RFB" in the Standard Instrument, set out above (at [38](iv)), has the same effect, restricting the application of Div 1 of the SEPP to buildings which contain only dwellings. 53The Council submits that its construction is to be preferred, because it would not "defeat a meaning required by the context" of the SEPP, and/or offend its aims, and/or lead to an absurd result: see ss 6 and 33 of the Interpretation Act (above at [39]), and Cranbrook School v Woollahra Municipal Council ("Cranbrook") [2006] NSWCA 155: (2006) 66 NSWLR 37; (2006) 146 LGERA 313, especially at [40]. 54Counsel for the respondent in Feneck argued that this construction was overcome by the inclusion of the word "building" in the definition, which by virtue of the Interpretation Act had the meaning ascribed to it by s 342B of the Local Government Act 1993, as including "any structure or part thereof". Thus, the dwelling, as part of the structure, was a building within itself, separate from the retail component, and, therefore, as that building contained only a dwelling, bringing it under the definition of a RFB (Feneck, at 303). A similar argument is relied upon by the applicant here. 55Samuels JA rejected that argument, on the basis of the wording of s 342B of the Local Government Act, which said that the definition of building applies, "unless the context or subject matter otherwise indicates". 56His Honour found (at 303) that the context and subject matter did so indicate in the circumstances, and, therefore, the meaning of "building" did not extend to include "part of the structure". 57His Honour said, albeit "with some regret, that it [was] impossible to overcome the force generated by a fair reading of the language which the drafter has seen fit to employ", and he had regard to the aims of the provision, which "should be construed with a constructive eye firmly fixed on its purpose": Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297. 58While Samuels JA expressed that conclusion "with some regret", both Priestley and McHugh JJA agreed with his Honour's reasons and orders, without additional comment. 59The respondent Council submits that the expanded definition of "building" should not apply in the circumstances of this case either. It pointed (par 17) to cls 13 and 14 of the SEPP to support this point (above at [29] and [30]): They "do not contemplate, address or take account of any non-residential component, and are clearly intended to relate to development which is comprised solely of dwellings". 60Council says (par 17) that the non-residential component would be left uncontrolled by the SEPP, as the "floor space bonuses, site area and landscaped area standards would apply without regard to the non-residential uses also being proposed upon the same site". 61The Council's written submissions concluded (par 18): If it be suggested that one should default to local planning controls to fill the void, then it would need to be demonstrated how this could work in practice, or at all. In any event, the absence of reference to any non-residential component of development to which the Division would apply is a strong indicator that the Division was not intended to apply except where the proposed development was wholly residential. Applicant's Submissions 62I have earlier referred to the applicant's primary submissions, but more comprehensive written submissions were filed, on the remaining question concerning the SEPP, "in reply" to the Council's concession that the first question separated should be answered in the negative. 63Mr Tomasetti argued that the exception contained in the prohibition of RFBs, namely "other than a RFB attached to or used in conjunction with shops or commercial premises" ([21] above), seems "clearly to contemplate a shop or commercial premises being physically attached to a RFB", whereas the term "mixed use development" (a "prohibited" use in the land use table in [21] above) seems "to contemplate a building being broadly used for non-residential purposes, but then have one or more dwellings attached to it" (Tp5, LL41 - 42, c.f. p6, LL23 - 25). 64He noted that Council appeared to concede that the subject development containing two or more dwellings "is a building in its own right, notwithstanding that it's attached to shops" (Tp7, LL10 - 11). 65He also noted: (1)that Feneck concerned different provisions in the context of a "dwelling house", located above a shop, and proposed to be converted to "dual occupancy"; (2)that "planning has progressed since the decision was made" in 1987 (Tp10, L38), and Feneck may "not necessarily" be relevant more than 20 years later (Tp14, LL1 - 2); (3)that the Feneck judgment "whilst unanimous and whilst from a very eminent bench, was a matter of impression" (Tp11, LL38 - 39); (4)that the Court of Appeal arrived at a conclusion the opposite of that reached by Nott C and Cripps J in this Court (reply subs par 36), and Feneck: (a)"is not binding authority that the word 'containing' in the defined meaning of 'residential flat building' cannot mean 'including' in its context" (par 35); and (b)"does not have universal application to every LEP" (Tp13, LL43 - 44); (5)that (reply subs pars 7 - 15) the HLEP at the heart of the present case: (a)allows a dwelling house to contain not only no more than one dwelling, but also a child care centre or professional consulting rooms (Tp13, LL29 - 36), and (b)"expressly contemplates" (cl 32) that Council can approve a RFB "containing uses other than dwellings", such as a commercial component, without negating its characterisation as a RFB; (6)that cl 36(2)(b) of the SEPP ([33] above) "clearly" contemplates a "shop top type scenario" (as to which see now Hrsto v Canterbury City Council (No 2) [2014] NSWLEC 121), and so mandates "that you not use the ground floor of the [RFB] that fronts the street for a residential purpose", which, therefore, means that Feneck "just doesn't apply here" (Tp18, LL19 - 31); and (7)that the SEPP, in saying nothing about how commercial premises should be used in context, leaves that matter to Council's other controls (Tp19, LL46 - 48). 66The applicant submits that Feneck should not be used to construe the HLEP, and I will now set out, in fairness to its argument, but in regrettable detail, its written submissions in this regard, (pars 16 - 42): 16. The LEP contemplates as permissible with consent ... in the Zone 3 (b) Neighbourhood Business Zone a residential building attached to or used in conjunction with shops or commercial premises. It is impossible to contemplate a building that contains only dwellings and which is nevertheless attached to a shop or commercial premises. A shop means, inter-alia, a building. Commercial premises mean, inter-alia, a building. A building that is attached to another building can be a building. 17. ... Except in so far as the context or subject-matter otherwise indicates or requires a "building" includes part of a building. The context in which the word "building" appears in the LEP and the context in which the word "contains" appears in the LEP does not indicate or require that the statutory meaning of the word "building" not include its extended definition. 18. As a matter of statutory construction you cannot have a "residential flat building" attached to a shop building or commercial premises building if, as a matter of legal characterisation, a residential flat building must contain and only contain dwellings unless the expanded definition of the word "building" in the Act applies. If it were otherwise as soon as the residential flat building contained more than dwellings then the exception in item 4 of the land use table in zone 3 (a) and Zone 3 (b) and clause 32 would have no work to do. ... 21. The context in which the word "building" appears in the AHSEPP and the context in which the word "contains" appears in the AHSEPP does not indicate or require that the statutory meaning of the word "building" not include its extended definition. 22. ... Part of the building is expressly contemplated therefore to comprise of uses for commercial purposes although the Division only applies to development for the purposes of a residential flat building. 23. If the respondent's argument was correct clause 35 would preclude the development of a building on land zoned primarily for commercial purposes that comprises of dwellings and uses for commercial purposes on the ground floor that fronts Street. This would give rise to an absurd result. 24. The development concerned is a building a part of which comprises of residential dwellings with associated car parking. That part of the building is a "building" by definition in its own right. It is that (part of the) building which is "development for the purposes of [a] residential flat building" within the meaning of clause 10 (1) of the AHSEPP. It is to that part of the building then that the provisions of the AHSEPP logically apply. 25. This outcome does not give to rise to absurd or illogical results. The development concerned is for a residential flat building albeit attached to 2 "shops", the latter word being a separately defined development in the adopted Environmental Planning and Assessment Model Provisions 1980. See clause 6 of the LEP. The AHSEPP plainly applies to that part of the development that is intended to be used as dwellings. The aims of the Policy are expressed in clause 3... [see [24] above]. 26. ... The development concerned is a residential flat building albeit one that is attached to or used in conjunction with 2 shops. There is no apparent reason why the Policy should not apply to that part of the development concerned which is a residential flat building. 27. Conversely, not to apply the Policy to the residential flat building militates against the attainment of the Aims of the Policy. The AHSEPP is an instrument intended to work beneficial social outcomes. It is not an instrument to benefit developers through the provision of incentives, but encourage developers to provide affordable rental housing for homeless and disadvantaged people in parts of their developments. Its provisions should be given a broad and beneficial construction and interpretation so as to best achieve the desired and important social outcomes. ... 32 The Court held [in Feneck] that a dwelling house can only be a building, the whole of which is used for the purpose of a single dwelling. 33. The respondent's argument gives rise to an absurd result. The LEP defines the phrase "residential flat building" as "a building containing" two or more dwellings et cetera. The Standard Instrument defines the phrase "residential flat building" as "a building containing" three or more dwellings et cetera. Under the LEP, although the building also contains 2 shops, the respondent concedes that it is a permissible development. Under the Standard Instrument the respondent says it is not a "residential flat building" because it contains 2 shops. This construction gives rise to absurdity and inconsistency. It should be avoided. Cooper Brookes ... 34. The better argument is that the LEP contemplates a residential flat building which may be attached to or used in conjunction with shops. The AHSEPP applies to "development for the purposes of residential flat buildings" whether or not they are attached to shops or used in conjunction with shops. Disadvantaged and homeless people who need low-cost rental housing can be accommodated in residential flat buildings whether or not they are attached to shops or used in conjunction with shops. The presence of the shops makes no difference to the suitability of residential flat development for disadvantaged and homeless people and the low cost rental housing. The respondent submits that its interpretation of the definition should be preferred because it would not defeat meaning required by the context: [Cranbrook] at [40]. If the aim of the Policy stated broadly is to provide low-cost rental accommodation for disadvantaged and homeless people, the construction advanced by the respondent "prevents" the residential dwellings in the development being used by people of that character. Accordingly, the Respondent's construction should be avoided unless the context in which the word "building" appears, indicates or requires it. There is nothing in the LEP or the AHSEPP which indicates this or requires such a construction. On the contrary, the express language of the LEP and the AHSEPP suggest otherwise. ... 37. There is nothing in the expressed Aims of the AHSEPP (as there was in the expressed aims of the SREP) that supply a context which excludes the extended definition of "building" in s 4 of the Act. That is a complete answer to the first argument in Feneck which turned on its own particular facts. 38. Next the Respondent refers to the bonus floor provisions in clause 13 and the nondiscretionary development standards in clause 14. It is submitted by the respondent that these clauses do not contemplate address or take account of any mixed use development non-residential component and are clearly intended to relate to development which comprises solely of dwellings. 39. The Respondent's argument overlooks the fact that the provisions of clause 13 and 14 are expressly limited to "development to which this Division applies". Clause 10 (1) expressly provides that "This Division applies to development for the purposes of... residential flat buildings..." Accordingly, the provisions of clause 13 and 14 only apply to residential flat building development and not the shops that are attached to or used in conjunction there with. The shops are not left "uncontrolled". For example in the Neighbourhood Business Zone see clause 5.4 (7) of the 2013 LEP. If there is absence of necessary controls in the LEP that is a function of the Council's failure to cause relevant controls to be made after the commencement of the AHSEPP and not something to which the Court would have regard to the purposes of construing the word "building" or the word "containing" in the Standard Instrument. 40. The absence of any reference to any non-residential component of development to which the Division applies is completely unsurprising given that the Division only applies to the residential flat building component of the development. Indeed, that is what clause 10 (1) expressly says. 41. There is no reason why affordable rental housing cannot be provided to disadvantaged or homeless people in a development comprising of a residential flat building attached to or used in conjunction with shops (or for that matter commercial premises). 42. If the Court concludes that Feneck applies and is binding, then the applicant submits that the decision is wrong and reserves all its rights. 67I turn now, therefore, to the cases Mr Tomasetti analysed after he had restated those basic submissions in his oral address in chief (see [46] above). 68In Ageitos in 1979, Sheppard J, sitting with the Administrative Law Division of the Supreme Court, dealt with the then correct interpretation, pre EPAA, of some of the terms relevant in the present context. The first respondent wanted to increase the residential accommodation at the rear of a shop and dwelling in Paddington. 69His Honour held that the land was used for the two separate purposes of "dwelling house" and "shop", rather than for one "single, undivided, yet undefined purpose of "shop and dwelling", and that the additional accommodation would be an adjunct to the existing dwelling house, and was permissible under the relevant planning scheme ordinance ("PSO"). 70His Honour referred (at 369) to several "existing use" cases and distinguished them: "Nothing decided in those cases affects my view that the draftsman contemplated that a shop and dwelling house would be regarded separately ... for the purposes of ... the land use table". 71In Caltex (1993), Cripps J (then of this Court) dealt with an application to change the nature of the goods permitted to be sold in the kiosk sales area of an existing service station, but to discontinue traditional lubrication/repair services. His Honour (at 6 - 7) distinguished between changing the use of land and changing, with consent, the use of a "building" erected on it. 72I turn, next, to Nguyen (1988), a case later in time than the Court of Appeal decision in Feneck. 73Nguyen concerned "home industries" which the relevant PSO defined as being carried on in a "building", not being a dwelling-house or a dwelling in a RFB, and upon which certain building restrictions were prescribed, including as to floor space. 74The only dispute before the Court concerned the limitation on floor space, and Bignold J held that the proposed workshop relevantly met the definition of "building" for the purposes of the PSO. His Honour noted (at 394) a number of cases where an "extended meaning" was given to the word "building", including to embrace "part of a building", and also noted other cases, including Feneck, where such an "extended definition" was excluded, often (as in Feneck) by the finding of "a contrary context". 75His Honour (at 395) could not find "any contrary indication in the context of the statutory definition of 'home industry' to exclude the extended meaning of 'building'." He commented: The limitations found in the definition of 'home industry' on the nature and character of the industry and the manner in which it is carried on reflect the obvious legislative intent to strike the right planning balance in the co-existence in residential areas of residential uses and home industrial uses. The statutory limitations clearly recognise a bias in favour of residential uses with only a limited accommodation of home industrial uses undertaken by the owner of each dwelling-house. 76Lastly, I come to Calleja, a 2005 Court of Appeal decision which Mr Tomasetti discussed on the basis that it "may or may not be of assistance" (Tp27, LL28 - 29). 77This case involved two attached buildings on the appellant's land, each of which was a (single) "dwelling house". It was common ground that, if the land was not being used for the purpose of "dwelling houses" immediately before the LEP came into force (on 30 June 1995), the LEP had the effect of prohibiting the use at that time. 78In Calleja, as here, the LEP definition of "RFB" meant "3 or more dwellings", while the Model Provisions required "2 or more". 79The Court of Appeal, allowing an appeal from Talbot J, held that nothing in the ordinary meaning of the word "building" justified any conclusion that the subject premises constituted more than one "building", and declared that the use for two dwellings was an "existing use". 80In delivering the principal judgment, Tobias JA said (at [8] - [26]), of the first-instance decision: 8 ... The primary judge was informed that such a declaration was required to provide the necessary statutory authority to support a proposed development application for a change of use of the land from one non-conforming use to another non-conforming use. 9 Section 106(a) of the EP&A Act defines the term "existing use" relevantly to mean "the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would ... have the effect of prohibiting that use." 10 The issue which thus arose was whether the land was being used for a lawful purpose immediately before the coming into force of the LEP, which instrument had the effect of prohibiting that use. Its resolution depended on the relevant provisions of the LEP to which I now turn. ... 19 The appellants argued before the primary judge that the land was at all material times being used for the purpose of a building containing two dwellings. Notwithstanding that in September 1948 the Council approved an addition or extension to the existing building upon the land, that did not mean that when taken as a whole there were two buildings rather than one simply because there were now two separate domiciles or dwellings. 20 The primary judge determined (at [34]) that the evidence confirmed that there were distinct parts of the "premises" which were constructed independently (except to the extent of the common walls) for the purpose of providing two separate residences on the one allotment of land. Each one of those two parts, his Honour considered, contained one "dwelling" as defined. As there were clearly two dwellings on the land, they took a form that, according to the primary judge (at [35]), fell within the common understanding of either a single storey duplex or a pair of semi-detached dwellings. It would seem that his Honour considered that the fact that there were two dwellings upon the land and that the LEP did not limit the number of dwelling houses that might be built on a single parcel of land, was sufficient to constitute the use of the land as one for "dwelling houses" as defined, being a use which was not prohibited by the LEP either before or after it came into force. 21 The primary judge concluded (at [37]) as an alternative finding that "the total development of the land can be regarded as two buildings each with the benefit of party wall for support at one location and separately used as an individual dwelling thereby meeting the definition of a dwelling house adopted by the LEP from the Model Provisions." 22 Accordingly, his Honour held (at [38]) that the development on the land was for a purpose permissible with consent under the LEP, namely, "dwelling houses". That in itself was descriptive of the use of the land as well as the characterisation of the premises thereon. It followed that the land was not being used at the relevant date for a purpose that became prohibited when the LEP came into force. Accordingly, no question of existing use arose and the appellants' application for a declaration to that effect was therefore dismissed. ... 24 The Council generally repeated on the appeal the submissions which had found favour with the primary judge below. In addition, it submitted that there was no logic (which I assume was intended to refer to planning logic) in permitting with consent on the land two separate buildings each containing one dwelling which would, on the appellants' argument, each constitute a "dwelling house" as defined but in prohibiting the same two dwellings but in a building in which they were attached to each other. However, the same logic, or lack of it, would apply to three single buildings each containing one dwelling upon the land which would be permissible with consent as three "dwelling-houses" as defined and one building containing the same three dwellings which would constitute a "residential flat building" as defined but which would be prohibited. 25 With respect, any attempt to always find planning logic in planning instruments is generally a barren exercise. One can only speculate, for instance, why it was considered that a residential flat building should be defined in the LEP to comprise three dwellings rather than two. And yet there is no provision in either residential zone for what are commonly referred to as duplexes or semi-detached dwellings containing not more than two dwellings. If one considers the conventional duplex of two dwellings located one on top of the other in the one building, then it is clear that, subject to the application of the extended definition of "building" in s 4(1) of the EP&A Act, neither dwelling could constitute either a "dwelling-house" or a "residential flat building" under the LEP. Yet one might query the logic of prohibiting that type of duplex within the residential zones. 26 The Council sought in particular to support the primary judge's finding that, by dint of the extended definition of "building" in s 4(1) of the EP&A Act as including "part of a building", in the present case each of the two dwellings was contained in a part of the building and, therefore, each part itself constituted "a building" within the meaning of the definition of "dwelling house". 81His Honour noted (at [30]) the Council's reliance on Feneck, and quoted some of Samuels JA's remarks. His Honour went on to find (at [33], [34], and [39]: 33 In my opinion it follows from the decision of this Court in Feneck that the primary judge's conclusion, to the extent to which it based upon the extended definition of "building" in s 4(1) of the EP&A Act, cannot stand. In my respectful opinion, although it may well be that the premises might be commonly understood as a pair of semi-detached dwellings, that of itself does not satisfy the definition of "dwelling house" in the 1980 Model Provisions as adopted by the LEP. That definition requires, in my opinion, that there be one dwelling contained within a single building. It is thus confined to detached housing rather than attached housing (such as semi-detached dwellings or terrace dwellings). 34 It follows that in my view the land was, at the time the LEP came into force, being used as a single building containing two dwellings and, therefore, did not fall within the definition of "dwelling house". It equally follows that not being a "dwelling house" the use of the land for the purpose of two dwellings contained within a single building became a prohibited use of the land when the LEP came into force and was, therefore, an "existing use" as defined in s 106(a) of the EP&A Act. ... 39 In my opinion, the appellants have demonstrated that the primary judge erred in finding that the land was used for the purpose of two "dwelling houses" as defined in that it comprised two buildings each containing one dwelling. It follows that, although the land was being used for a lawful purpose (not being one or more "dwelling houses") immediately before the LEP came into force, that instrument had the effect of prohibiting that use as a consequence whereof it became an "existing use" within the meaning of s 106(a). Accordingly, the appellants are entitled to the declaration they seek although it should be confined to the position as at the date of his Honour's decision, namely, 1 December 2004. ... 82Basten JA agreed with the reasons advanced by Tobias JA, and joined in the resulting orders, but did not deal with Feneck. Young CJEq agreed, without comment. 83Before me, Mr Tomasetti noted, in respect of Calleja (Tp28, LL7 - 9): The Court effectively held that this was a building which contained two dwellings. It was, therefore, not a dwelling-house and it was, therefore, protected by existing use provisions. 84He concluded his oral submissions on the present matter by noting (Tp28, LL12 - 13) that each case "has to depend upon its own facts and the legislation and statutory construct", and he submitted, by way of summary (Tp28, LL13 - 24): The key question here is whether or not the affordable housing SEPP, properly construed, is intended to displace the meaning of "building" which is defined in the Act. There is nothing, in our respectful submission, in context or subject matter which indicates or requires that the extended meaning of "building" be displaced and, indeed, the context in which the word appears would mandate the contrary argument because of the provisions inter alia of clause 36(2)(b), to which I have pointed. Also, there is nothing in the aims of objectives of the affordable housing SEPP which would be promoted by the construction for which the respondent contends. Indeed, achievement of those aims would be frustrated by that very construction, as I have indicated. 85He went on to repeat pars 40 and 41 of his written submissions (see [66] above). 86After Mr McEwen's address, Mr Tomasetti, in reply, said again that absurd results should be avoided, that the respondent's submissions would lead to one, and that the applicant's submissions would have "all the instruments working perfectly together" (Tp43, LL4 - 5), so that "discretionary and non-discretionary advantages", eg in FSR, flow to a proponent only if it proposes "at least 20% for affordable housing" (Tp44, LL5 - 8). CONSIDERATION 87Statutory instruments such as SEPPs, are to be interpreted in accordance with the general principles of statutory construction, requiring consideration of the language, context, policy, intention and purpose of all their provisions: Cranbrook (above at [53]). 88As McHugh, Gummow, Kirby and Hayne JJ said in Project Blue Sky v Australian Broadcasting Association [1998] HCA 28; (1998) 194 CLR 355 (at [78]): The duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction ... may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. 89In Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343, Beazley JA said (at [45]): ... I am not to be taken as saying that the objectives are not relevant to the construction of other provisions in the LEP. A provision is to be construed within the statutory instrument as a whole ... Thus a construction of a provision which was more conducive to the achievement of the objectives of the LEP is to be preferred to a construction that does not achieve those aims. 90Although the word "containing" was found in Feneck to mean "only containing" in respect of dwelling houses, provisions are to be interpreted in their own context, and the ratio in Feneck clearly does not have universal application to all instruments. 91The context in which the word "containing" appears, in the definition of "RFB", in both the HLEP and the SEPP, suggests that the Feneck construction not be applied to it. The definitions of "child care centre" and "professional consulting rooms" both contemplate a dwelling house being used for purposes other than as a dwelling, so the word "containing" in the HLEP should not be found to mean "only containing". 92Although a "RFB", as defined in the HLEP, did not have to contain "only" dwellings, a "RFB", for the purposes of the SEPP, must contain only dwellings, despite the similarity of the definition in both instruments. 93However, ss 6 and 11 of the Interpretation Act would apply to the SEPP the extended definition of "building", contained in s 4 of the EPAA, except in so far as the context or subject-matter otherwise indicates or requires, and would bring within the definition of "RFB", for the purposes of s 10 of the SEPP, that component of the structure or "part of a building" which is used for residential purposes. 94The Council did not point to anything in the context or subject matter of the SEPP which suggested that the extended definition should not be so adopted. 95The other cases to which the Court was taken - namely Ageitos, Nguyen, Caltex, and Calleja - demonstrate that whether the extended definition of "building" will be applied is entirely dependent on the context in which the word appears. (See pars [66] - [83] above). 96Contrary to Mr Tomasetti's diffidence, I found Calleja very helpful, and, contrary to Mr McEwan's view, I did not find that it "plainly assisted" the applicant (see [47] and [76]). I respectfully adopt the reasoning of Tobias JA ([80] - [81] above). 97The applicant drew the Court's attention to a number of provisions in the SEPP, which suggested that application of the extended definition of "building" should be applied in the SEPP, in particular, cl 36(2)(b), which contemplates the approval of a "residential flat building" which does not have a residential component on the street-front. Clearly, Div 5 relies on the application of the extended definition of "building", otherwise cl 36(2)(b) would have no work to do. 98Samuels JA's dicta in Feneck as to the social engineering role of the SEPP supports the present applicant's construction, because the social aims of the policy are best served by the policy's broad application. 99Broadly speaking, the SEPP serves the public purpose that it facilitates the provision of affordable rental housing to disadvantaged individuals. More particularly, one of its aims is to support local businesses and employment, through the provision of affordable rental housing close to shops. These aims are best served by a broader application of the policy, and, in this particular case, its application to housing attached to shops. 100Unlike Feneck, the word "building" in the SEPP should, in the present case, be given its extended meaning, because there is nothing in the context or subject matter which otherwise dictates. 101I accept the applicant's submissions (at [66] above) on the question at hand. CONCLUSION/ORDERS 102The remaining separated question is answered in the affirmative, the question of costs is reserved, and Exhibits A1 and A3 are 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: 25 August 2014