Agonic Holdings Pty Ltd v Lithgow City Council

[2009] NSWLEC 34

Land and Environment Court

of New South Wales

CITATION:	Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34
PARTIES:	APPLICANT: Agonic Holdings Pty Ltd RESPONDENT: Lithgow City Council
FILE NUMBER(S):	10580 of 2007
CORAM:	Biscoe J
KEY ISSUES:	COSTS :- Class 1 proceedings - whether fair and reasonable in the circumstances to make a cost order - whether a party acted unreasonably in the conduct of proceedings
LEGISLATION CITED:	Civil Procedure Act 2005, ss 56, 98 Environmental Planning and Assessment Act 1979, s 79C Land and Environment Court Act 1979, s 34 Land and Environment Court Rules 1979, Pt 16 r 4(2) Land and Environment Court Rules 2007, r 3.7 Lithgow City Council Local Environmental Plan 1994
CASES CITED:	Agonic Holdings Pty Ltd v Lithgow City Council [2008] NSWLEC 1347 Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103, (2008) 158 LGERA 224 Grant v Kiama Municipal Council [2006] NSWLEC 70 Hunter Development Brokerage Pty Ltd v Cessnock City Council (No 2) [2006] NSWCA 292, (2006) 151 LGERA 46 Lennard v Jessica Estates Pty Ltd [2008] NSWCA 121, (2008) 159 LGERA 420 Port Stephens Council v Sansom [2007] NSWCA 299, (2007) 156 LGERA 125 Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472, (2004) 136 LGERA 254 Wehbe v Pittwater Council [2007] NSWLEC 827, (2007) 156 LGERA 446
DATES OF HEARING:	11 & 12 March 2009
DATE OF JUDGMENT:	2 April 2009
LEGAL REPRESENTATIVES:	APPLICANT: Mr P. Tomasetti SC SOLICITORS: D.C. Balog & Associates RESPONDENT: Mr. J. A. Ayling SC SOLICITORS: Pikes Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

2 April 2009

10580 of 2007

AGONIC HOLDINGS PTY LIMITED v LITHGOW CITY COUNCIL

JUDGMENT

1 HIS HONOUR: This is an application for costs by the successful applicant in a planning appeal in class 1 of the Court’s jurisdiction. The respondent, Lithgow City Council, refused a development application by Agonic Holdings Pty Ltd to subdivide 1,855 hectares of rural holding at Tarana, near Lithgow, (the Property), into 40 lots ranging in size from 40 to 104 hectares. The applicant’s appeal, in which the number of lots was reduced to 38, was upheld by a commissioner of the Court and conditional consent to the application was granted: Agonic Holdings Pty Ltd v Lithgow City Council [2008] NSWLEC 1347. As a commissioner does not have power to make a costs order, this costs application is before a judge for determination.

The costs rules

2 Section 98 of the Civil Procedure Act 2005 provides that, subject to the rules of court, costs are in the discretion of the court. Rule 3.7 of the Land and Environment Court Rules 2007, which applies to class 1, 2 and 3 proceedings, relevantly provides:

“(2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

(3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following:…


(c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings,

(d) that a party has acted unreasonably in the conduct of the proceedings,

(e) that a party has commenced or defended the proceedings for an improper purpose,…”

3 The applicant submits that it is fair and reasonable to order the council to pay its costs in the circumstances referred to in r 3.7(2) and (3)(c), (d) and (e).

4 The Land and Environment Court Rules 2007 commenced in January 2008 and replaced the Land and Environment Court Rules 1979. Rule 3.7(2) of the new rules replaced Pt 16 r 4(2) of the old rules which provided that: “No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable”. The essential difference between those two provisions is the absence of the words “in the circumstances of the particular case” in the new rule. In relation to the old provision, Bryson JA in Hunter Development Brokerage Pty Ltd v Cessnock City Council (No 2) [2006] NSWCA 292, (2006) 151 LGERA 46 at [4] said that those words excluded “generalised approaches”. By reason of the omission of those words in the new rule, it may be that generalised approaches are permissible, although a specific generalised approach may be insufficient to enliven the discretion or may be displaced by the circumstances of the particular case. The non-exhaustive list of circumstances in rule 3.7(3) directs attention to the circumstances of the particular case. The list is similar to the indicative guidelines formulated under the old rule in Grant v Kiama Municipal Council [2006] NSWLEC 70 at [15] by Preston J and approved by the Court of Appeal in Port Stephens Council v Sansom [2007] NSWCA 299 (2007), 156 LGERA 125 at [56].

5 The effect of the costs rule is that, in the ordinary case, costs will lie where they fall. This presumptive rule is not displaced unless the Court considers that the making of a costs order is fair and reasonable in the circumstances. The rationale of the presumptive rule was addressed in Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103, (2008) 158 LGERA 224 at [9] – [10] by me as follows:

“[9] In the context of the presumptive rule that there will be no order as to costs in planning appeals, the power to make a costs order is in the broadest of terms, that is, what is "fair and reasonable in the circumstances". All rational considerations are relevant to the formulation of that judgment. In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule. Indicative guidelines for the exercise of the discretion are useful in promoting consistent decisions, but are not entitled to presumptive, let alone determinative, weight. These principles were identified in the context of the former Part 16 r 4 by the Court of Appeal in Port Stephens Council v Sansom at [48], [53] and [54] and Thaina Town (On Goulburn) Pty Ltd v Sydney City Council (2007) 156 LGERA 150 at [33] and [35]. Those judgments were delivered on the same day by an identically constituted Bench of five judges. Spigelman CJ delivered the leading judgment in each case. The presence of the words `in the particular circumstances of the case’ in the old rule influenced his Honour to hold that a general characterisation of proceedings such as `merits review’ or `capacity’, cannot be determinative or, indeed, entitled to presumptive weight: Sansom at [60]. In the present case, there was no suggestion that the absence of these words from the new rule bears on the outcome.

[10] One of the purposes of the costs follow the event rule in ordinary civil litigation is to encourage the parties to settle their disputes: Sansom at [26]; Thaina at [65]. In contrast, a no discouragement principle underlies the no costs rule in planning appeals, that is, that persons generally should not be discouraged from exercising their rights of appeal via the prospect of an adverse costs order: Sansom at [22]-[23]. This may be rationalised on the bases that a significant purpose of planning appeals is to improve the decision-making process and that those involved are not adversaries in the same sense as adversaries in conventional civil litigation. Spigelman CJ explained this in Sansom at [71]-[74]:


71 ...An appeal from a consent authority is similarly an element of the management of the scheme of the EPA Act by that authority. To treat such a review as equivalent to a lis between adversarial parties is, in most cases, a considerable oversimplification. In particular, it does not give weight to the public interest regulatory responsibilities of the consent authority, which should itself be anxious to ensure that it has made the correct decision. In such a context, characterisation of the proceedings either as merits review or as equivalent to adversarial litigation does not appear to me to be a particularly useful approach to the formulation of the judgment for which r 4(2) provides.

72 In my opinion, a significant purpose served by planning appeals is to improve the quality of the decision-making process. This is a purpose which any statutory consent authority should be presumed to be anxious to achieve as an incident of its exercise of the statutory powers which Parliament has reposed in it. Individuals and corporations who challenge such decisions do not have the same obligations. They do, however, have a legitimate expectation that the decision-making process will result in the correct or preferable decision.

73 One of the critical differences between ordinary civil litigation and planning appeals is the absence of a reciprocal relationship between the interests of the parties. They are not, or should not be, adversaries in the sense that can be said of the usual kind of civil litigation in courts.

74 Underlying Justice McClellan's approach [in Gee v Port Stephens Council (2003) 131 LGERA 325] is an assumption that each side in a planning appeal should be treated the same as a matter of fairness: whether the proceedings are classified as merits review or as raising an issue of capacity. In my opinion, a comparison of the interests to which I have referred at [71]-[73] of these reasons, suggest that an unsuccessful consent authority should be more likely to suffer an adverse costs order than an unsuccessful applicant.”

Applicant’s costs contentions

6 The applicant contends that a costs order is fair and reasonable in the circumstances because the council acted unreasonably in its conduct of the proceedings in the following ways:

(i) the council attempted to improperly elevate the strength of its case by purporting to have a map identifying areas of “prime crop and pasture land” on the applicant’s land deposited in the office of the council the day before the hearing began;

(ii) the council acted inconsistently, unfairly and unreasonably, in dealing with the applicant’s development application. Whilst refusing to determine the development otherwise than in accordance with the support of the Department of Primary Industry ( DPI ), it granted development consent over the same period to many other development applications to subdivide land zoned 1(a) Rural (General). It did so generally without referring the development application to the DPI. The action of the council included consenting to the subdivision of “Dennarque”, an adjoining property to “Westholme”, from a 500 acre (125 hectare) parcel into 4 complying lots each of approximately 40 – 50 hectares;

(iii) the council refused to determine the development application otherwise than with the concurrence of the DPI. It abrogated its responsibility as consent authority under the Environmental Planning and Assessment Act 1979 ( EPA Act ) to that body;

(iv) the council sought to use the proceedings as a policy review of the 40 hectare minimum lot size provided for in the 1(a) zone so as to establish a larger minimum lot size; and

(v) the council put in issue matters which were simply not tenable and which led the applicant to incur significant extra expense.

7 The applicant did not press at the hearing a sixth contention that the council in breach of its duty did not participate in good faith in a conciliation conference under s 34 of the Land and Environment Court Act 1979.

8 The council submits that none of the contentions pressed by the applicant is correct or, alternatively, none would justify a departure from the usual costs rule.

9 The applicant also submits that by reason of the matters for which it contends, the council did not comply with the duty of parties to assist the Court to further the overriding purpose of the Civil Procedure Act 2005 and rules, which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56. In principle, I think, any such breach of duty would inform the exercise of the discretion under the costs rule.

The Property

10 The Property’s topography varies from relatively flat to moderate slopes, rising to very steep land. Some of it is at a high elevation. Sixty percent of the Property has a slope greater than 15 percent and 45 percent is covered with woody native vegetation. The Property is fenced. It has been developed with typical rural improvements including sheds, houses, dams and internal roads.

11 The Property is known as “Westholme”. It was aggregated over time by the applicant and its director Mr Christopher Walker, by the purchase of five adjoining farms as they became available. The Property was used for grazing and breeding of cattle. Mr Walker developed a substantial Wagyu cattle stud herd which he dispersed in 2006. After the dispersal, he continued to use the Property for cattle breeding and grazing.

12 Mr Walker thereafter decided to make a development application to subdivide the Property to create 42, and ultimately 38, lots ranging in size from 40 to 104 hectares. Each lot would be capable of separate sale, and each was of a size which would permit, with consent, the erection of a dwelling house upon it.

13 Thus, if approved, a large rural holding capable of being operated as the applicant had operated it would be lost and substituted by 38 comparatively small lifestyle properties, which may or may not have been suitable for some form of agricultural activity such as a hobby farm.

14 On 21 December 2004 the applicant’s consultant lodged the development application. On 12 June 2007 - two and half years later - the council notified its refusal of the development application.

The LEP

15 The only environmental planning instrument that applied to the land was the Lithgow City Council Local Environmental Plan 1994 (LEP). The council had no development control plan that regulated the proposal. The development proposed was in compliance with all the requirements of the LEP including the minimum lot size for lots with dwellings in the zone. In each instance the minimum lot size met or exceeded that required under cl 12(2) of the LEP which provides:

“(2) Creation of “40 hectare allotments”
The Council may consent to a subdivision of land within Zone No 1(a) if each allotment to be created by the subdivision will have an area of not less than 40 hectares.”

16 The council had no other studies, plans or policies that guided the public as to what should be an appropriate lot size for rural subdivision.

17 Although the proposed allotments all met the minimum 40 hectare standard, it does not follow that the council or the Court could not properly decide to refuse consent. A consent authority is obliged to consider all relevant matters referred to in s 79C of the EPA Act, including the public interest. Compliance with a development standard is only one of the considerations.

18 Clause 9(2) of the LEP states:

“The council must not grant consent to development unless it is of the opinion that such development is consistent with the objectives for the zone in which it is proposed to be carried out”.

19 The LEP defines “prime crop and pasture land”, as follows:

“Land within an area identified, on a map prepared by or on behalf of the Director-General of Department of Agriculture deposited in the office of the council as Class 1, Class 2 or Class 3 or as land of merit for special agricultural uses, but does not include land which the Director-General has notified the Council in writing is not prime crop and pasture land for the purposes of this Plan.”

The former Department of Agriculture is now the DPI.

20 Under the LEP the subject land is zoned 1(a) Rural (General). By cl 1 the objective of that zone is to promote the proper management and utilisation of natural resources by (among other things):

“(a) protecting, enhancing and conserving rural land,

(i) in particular prime crop and pasture land, in a manner which sustains its efficient and effective agricultural potential;


(b) preventing the unjustified development of prime crop and pasture land for purposes other than agriculture

(d) minimising the cost to the community of:

(i) fragmented and isolated development of rural land.”

21 Significance is also attached to “prime crop and pasture land” in one of the considerations of council for development set out in cl 11(1) of the LEP, which provide:

“(1) Before determining a development application relating to land within Zone No 1 (a) or 1 (c), the Council must take into consideration the effect that the proposed development would have on:

(a) the present use of the land, and the potential for sustained agricultural production of so much (if any) of the land as is prime crop and pasture land,…

(f) development on adjoining land and on other land in the locality, including any cumulative impact…”

Department of Primary Industries

22 On 21 July 2005 the council notified the DPI of the application and sought their comments on the proposal. The council did not seek the DPI’s concurrence because it is not a concurrence authority under the LEP. However, it is the peak NSW government body dealing with agricultural issues. On 29 August 2005 council received the DPI’s objection to the application and forwarded it to the applicant for comment. The DPI contended that the LEP was inappropriate to maintain the agricultural land resource for the future, that the LEP should be rectified, that the 40 hectare minimum was outdated, and that its use was not supported by the DPI.

23 Some ten months later, on 3 July 2006, the applicant responded by providing additional reports to council with an amendment to the application which reduced the subdivision proposal from 42 lots to 40 lots. On 1 August 2006 this information was forwarded by the council to the DPI. The DPI did not respond for almost five months. Meanwhile, on 23 October 2006, the council advised the applicant that “Council continues to await a response from the Department of Primary Industries”. On 15 November 2006 Mr Walker wrote to council requesting that it determine the development application, noting that the DPI had had over 100 days to respond to the additional reports. On 22 November 2006 council notified the DPI that it required their comments within 14 days.

24 The DPI responded to the council on 21 December 2006 that subdivision of a large commercial operating farm into relatively small allotments of the kind proposed was unjustified in terms of its and the government’s policies concerning sustainable agriculture.

25 On 22 January 2007 Mr Walker complained to council about the delay and insisted that the application be determined. He drew attention to the facts that (a) the DPI still had not visited the Property; (b) council had in the meantime approved subdivision of the adjoining property “Dennarque” of 500 acres into 4 lots – a property surrounded on 3 sides by “Westholme”; and (c) the “Westholme” development application complied with the LEP minimum lot size requirements.

26 On 12 June 2007 council refused the development application. Five reasons were given. The first reason was: “The advice received from the Department of Primary Industries (Agriculture and Fisheries) pertaining to sustainable agriculture.” The fifth and final ground was “The public interest.” It was otherwise contended that the development was antipathetic to the aims and objectives of the 1(a) zone and that there would be an impact on adjoining agricultural properties.

27 On 21 June 2007 the applicant lodged this appeal. On 1 August 2007 the council filed a Statement of Facts and Contentions in which the issues increased to:

• Loss of Sustainable Agricultural land;

• Land Use Conflicts;
• Visual Impact;
• Heritage;
• Flora and Fauna;
• Effluent Disposal;
• Access and Increased Traffic; and
• Public Interest and Issues Raised by Objectors.

28 In September 2007 the commissioner presided over a conciliation conference under s 34 of the Land and Environment Court Act 1979. The hearing commenced in December 2007.

29 Ms Kovac, the DPI officer in charge of the matter for the DPI, was called as an expert witness by the council. She did not visit the Property until the time of the conciliation conference. However, in cross-examination she said that she was very aware of the area.

30 In order to address the issues raised by the council, the applicant obtained expert reports from agricultural consultants, a heritage expert, a town planner, an ecologist, an accountant, an engineer and an agricultural consultant and grazier.

31 After the council lost the appeal, it decided that it would try to recover part of its costs from the DPI. This is evidenced by the minutes of a meeting of the council’s Finance and Services Committee of 4 November 2008, which record that the advice from the DPI not to support the development application was the “determining factor” in the application being refused by council. It was then resolved that representations be made on council’s behalf to the Minister for the DPI to fund 80 percent of council’s costs of the proceedings.

Issues before the commissioner

32 The council’s Amended Statement of Contentions filed in the proceedings before the commissioner included (but was not limited) to the following:

(a) Lots of the size proposed will not be able to support viable commercial agriculture.

(b) Lack of water to each lot results in the inability to sustain intensive plant agriculture.

(c) The proposed development denies current and future generations the opportunity to undertake commercial agriculture on this land.

(d) The proposed development is not consistent with cl 2(b)(1) of the LEP, which specifies that an aim of the Plan is to encourage the proper management, development and conservation of natural resources and the built environment within the City of Lithgow by protecting, enhancing or conserving prime crop and pasture land.

(e) The proposal is not consistent with the aim in cl 2(c)(i) and (ii) of the LEP which states:


“(c) to replace the former local planning controls with a comprehensive local environmental plan to help facilitate growth and development of the City of Lithgow in a manner which is consistent with the aims specified in paragraph (a) and which:

(i) minimises the environmental cost to the community of fragmented and isolated development of rural land which has less than full provision of services,
(ii) facilitates the efficient and effective provision of amenities and services”


(f) The proposal will not be consistent with objective 1(a)(i), (b) and (d) of the Rural (General) 1(a) zone: see [20] above.

(g) Clause 9(2) of the LEP: see [18] above.

(h) Clause 11 of the LEP, which specifies that the consent authority is to take certain matters into consideration before determining a development application in relation to land within Zone 1(a): see [21] above. The council contended that the proposed development will have an adverse impact on the present use of the land and the potential for sustained agricultural production of land that is zoned prime crop and pasture land.

Contention 1: late deposit of maps

33 The applicant’s first contention is that the council attempted to improperly elevate the strength of its case by purporting to have a Department of Agriculture map identifying areas of “prime crop and pasture land” deposited in the office of the council the day before the hearing began.

34 The applicant submits that it appears as though this conduct was a deliberate attempt by the council and its expert witness Ms Kovac to muddy the waters before the commissioner and that it was, without doubt, designed to strengthen the council’s case and weaken the applicant’s case. The applicant points out that the council contended that the development was not consistent with objectives 1(a) (i) and (b) of the zone, which specifically refer to land that is prime crop and pasture land as defined in the LEP. The applicant also points out that the council contended that the Court did not have jurisdiction to approve the application because the Court could not form the opinion required by cl 9(2) of the LEP that the development was consistent with the objectives.

35 In 1983 the Department of Agriculture (now the DPI) prepared a 1:100,000 “Agricultural suitability classification” map for the council’s local government area (1983 map). The 1983 map was deposited in the office of the council. It thereby became a map referred to in the LEP definition of “prime crop and pasture land”. The land classified on the 1983 map lies generally to the east or north of an irregular thick black line on the map, and is marked class 1, 2, 3, 4 or 5. The whole of the land generally to the west or south of the irregular thick black line is not marked with any classification. This includes most of the Property except for the northern part. Two relatively small areas of the northern part of the Property are classified class 3 on the 1983 map and none are classified as class 1 or 2. The 1983 map contains the following note:

“This map was prepared from information supplied by the Department of Agriculture New South Wales for use by that Department and the Department of Environment and Planning, and in the preparation of a Local Environmental Study for the Council of the City of Greater Lithgow.

The map provides a generalised analysis of land suitability classification and is based on agronomic and other data…”

36 The 1983 map contains the following legend:

“CLASS 1 Arable land, very good capability for agricultural uses such as intensive horticulture and cropping where there are only minor or no constraints to sustained high levels of production.

CLASS 2 Arable land, good capability for agriculture. Capable of intensive agriculture and cropping but there may be moderate constraints to sustained production.

CLASS 3 Land not suited to continuous cropping or intensive horticulture but with good capability for agriculture and well suited to grazing. Can be cultivated for an occasional cash crop or forage crop in conjunction with pasture management.

CLASS 4 Grazing land not suited to cultivation. Agricultural capability is based on native pastures and/or improved pastures relying on aerial or zero tillage techniques.

CLASS 5 Land not suited for agriculture or suited for rough grazing only. Agricultural production, if any, is very low.”

37 On the day before the commencement of the hearing, the DPI, at the request of the council, deposited two base overlay 1:25,000 maps (base maps) at the office of the council. They are the “map” referred to in council’s Contention 1. They classified a large part of the Property not shown on the 1983 map as class 3 and the remainder as classes 4 and 5.

38 The base maps were enclosed with a letter from the DPI to the council dated 17 December 2007 which stated.

“Please find copies of the base overlays for the 1:25 000 maps of Tarana and Meadow Flat that form the area’s base information layer to the official 1:100 000 map for the Suitability of Agricultural Lands in the City of Greater Lithgow area. These two maps have been supplied in relation to the recently highlighted incomplete area of the official 1:100 000 map in the south westerly parts of the Lithgow City Council area in the Tarana area. Although the official 1:100 000 map published in 1983 is incomplete in this area, the Tarana and Meadow Flat overlays done for but not incorporated in the official map complete the coverage of mapping in this part of the shire area.

It should be noted that cartographic discrepancies are inherent to the conversion of these base maps to the final 1:100 000 map. Hence some adjustment should be considered with the use of these maps.

As you are aware there are issues associated with the use of these maps for property level decisions to be made with this mapping scale. The maps were produced for strategic planning processes and should only be used for such work as seen with Council’s recent strategic work.”

39 The council submitted to the commissioner that the deposit of the base maps made them a “map” as referred to in the LEP definition of “prime crop and pasture land” and that thereby most of the applicant’s land became prime crop and pasture land as defined. The commissioner in her judgment did not address or decide that point.

40 It is necessary to put these events in context.

41 On 11 January 2005, soon after lodgement of the original development application, the council sent a letter to the applicant’s consultant who had lodged the application saying that, “The Lithgow Land Suitability Map (Dept of Agriculture) shows Classes 3, 4 and 5 for part of the property. However the Lithgow sheet omits a larger section of the property. The Dept of Primary Industries should be contacted to ascertain the correct an [sic] accurate classification of the land” . The map referred to in the first sentence of this quote is the 1983 map.

42 The applicant’s consultant replied on 8 February 2005 as follows: “The DPI will be contacted to fill in the gaps in the Dept of Agriculture’s mapping”. I infer that that happened. Thus, the applicant’s camp knew, or should have known, that the DPI had classified on the base maps the parts of the Property which were not classified on the 1983 map.

43 Prior to the hearing, Mr Smith, a planner acting for the applicant, attended the council offices to prepare the evidence for the appeal and asked for the map referred to in the LEP definition. The 1983 map was produced.

44 In September 2007, before the substantive hearing which commenced in December 2007, the commissioner made a direction that Ms Kovac, a DPI officer retained by the council to give expert evidence, “provide a map by 5 October 2007 to show better agricultural land on the property and to identify land that is of little or no agricultural value”. Ms Kovac produced a map in the time required by that direction. It is a photocopy of part of the 1983 map on which she marked classifications for the whole of the Property. Those classifications appear to be based on the classifications in the base maps. The commissioner in her judgment at [101] appears to have indicated her view that this map was not compliant with her direction (referred to in the judgment as an “invitation” or “inquiry”): see [56] below.

45 In September 2007 Mr Ian Sinclair, a planning expert called by the council, produced a report, later tendered at the hearing, in which he gave reasons why the development application should be refused. He reproduced part of what he referred to as a 1982 DPI map –which appears to be identical with the 1983 map – which covered only the northern part of the Property. He noted that the DPI had provided a more detailed map taken from the map for the adjoining local government area (as directed by the Court) “which has shown that there is a considerable amount of class 3 agricultural land on the lower part of the property”. He also reproduced the detailed map in his report: it appears to be Ms Kovac’s map to which I have referred above. He concluded that the land in the southern part of the Property was high class agricultural land, as well as being the land shown on the 1982 map.

46 The applicant’s expert, Mr G W Smith, said in his report of October 2007 that he had been provided with that map prepared by Ms Kovac following the s 34 conference and he reproduced it in a more legible form in his soil map.

47 Shortly after the commencement of the hearing, the transcript records confusion over the maps that were placed by the council and Ms Kovac before the Court. The position seems to have been as follows.

48 In response to a notice to the council to produce the map referred to in the LEP definition of “prime crop and pasture land”, the council produced an extract of the 1983 map.

49 The council also tendered the map prepared by Ms Kovac pursuant to the commissioner’s September 2007 direction, and said it had been produced within the time required by that direction. Ms Kovac was questioned about it and said that it reflected the classes on the base maps. The council indicated to the commissioner it had been provided to the applicant’s solicitor some weeks ago. The applicant’s counsel responded that his instructions were that it was not some weeks ago but that was by the by.

50 The council then opened its case, contending among other things that there was a failure to meet zone objectives 1(a)(i), (b) and (d) and that the LEP’s concern was with rural land and not just prime crop and pasture land. The opening included the following:

“Commissioner it’s the Council’s place that this subdivision application ought to be refused because if it is approved it will permit the fragmentation of rural land and threaten the viability of that land for agriculture purposes. Secondly it will introduce the prospect of land use conflicts between adjoining owners and adjoining users some of whom will be rural residential, some of whom will be farmers. Thirdly because it will permit on large scale, that is 38 lots are proposed to come into existence under the subdivision, the creation of a rural residential subdivision area not envisaged in any planning instrument of the Council on an ad hoc basis with issues and concerns in relation to the appropriateness of the siting of that settlement and its accessibility to services and otherwise.

In putting forward our case in support of refusal we rely upon the LEP, we rely in particular upon the failure to meet the zone objectives in the LEP as identified in our statement of contentions—

…

The proposal is not consistent with objective 1(a)(1), (b), (d) of the zone. (a) imposes a positive duty of an applicant to promote the proper management and utilisation of natural resources by protecting, enhancing and conserving rural land. In particular prime crop and pasture land in a manner which sustains its efficient and effective agriculture production potential. Can I just pause there, that provides the complete answer to this technical issue that my friend has raised in relation to prime crop and pasture land. An argument has been put that – the suggestion has been made that one can ignore the rural land generally and focus on the prime crop and pasture land. If that is part of the applicant’s case; then we resist it and we say that the objective makes it quite plain that the concern is with rural land.

…

Our case relies not only on those non-compliances with the LEP but also with the public interest. The public interest brings into focus in this particular application consideration of the policies of the State Government as set out both by the Department of Primary Industries in some instances and the Department of Planning in others…

…

…What we will be saying in relation to this proposal is that there is an enormous difference between small farmlets, if I can use that term, which are dependent upon off-farm income and farms which are called in the vernacular “Pitt Street farms”, which deliberately use the farm as a means of receiving off-farm income to achieve primary producer status for high income individuals and which then afford opportunities consistent with the taxation law to split income to claim expenses as deductible items for income tax against the farm operation.”

51 After the council had opened its case and some evidence had been tendered, Ms Kovac produced the 1983 map in response to a subpoena which the applicant had caused to be issued to the DPI to produce the map referred to in the LEP definition. The council tendered an extract from the base maps (which it had earlier attempted to tender before Ms Kovac was called). It shows the classifications for the whole of the Property, with the Property boundaries overlaid. Ms Kovac was then examined in relation to that exhibit. She indicated that (a) they had noticed that the 1983 map was incomplete in the area of the Property; (b) the base maps preceded and formed the basis for the 1983 map; (c) on the previous day, the DPI had deposited copies of the base maps with the council, at the council’s request. The applicant’s counsel said that the applicant’s planning expert Mr Smith had been to the council, asked the questions and was given a copy of the 1983 map.

52 The council’s legal representative indicated that the base maps could well be a map indicated in the LEP definition but that its relevance was more than that because it said things about the suitability of rural land. After the commissioner commented that the base maps had been with the council only since the previous day, the council’s legal representative said:

“It’s – the definition doesn’t state any time limit for the map being deposited and it can now be deposited – if the applicant wants to engage in that technical argument. But the relevance of the map is more than that because the relevance of the map is that it relates to rural land and the objective you will recall says ‘Rural land including all prime crop and pasture.’ So this overlay must be relevant in these proceedings. It is relevant because it relates to rural land and it tells you relevant things about the suitability of that rural land. My friend wants to raise a technical argument and he is not cut off in any way from raising that argument and persisting with that argument although the document is received into tender. But we will answer that argument in a number of ways, including pointing out that the argument goes wider than prime crop and pasture, but even to the extent that it goes to prime crop and pasture, yes we will say that if there was an oversight and part of the map was not deposited at a point in time, then it could be deposited at another point in time and we will ask you to rule on that.”

53 The applicant’s counsel later said that:

(a) he had no problem with Ms Kovac arguing that land left out of the 1983 map is in fact good quality grazing land and had no problem with her referring to the base maps; but

(b) he was vigorously trying to defend the position whereby the 1983 map becomes corrupted by the base maps belatedly lodged with the council - that was his concern.

54 The commissioner commented that the council was “trying to muddy the waters” with maps when she was trying to understand the facts of agricultural viability and sustainability and that the council had been attempting to get the base maps in as part of the map referred to in the LEP.

55 The hearing proceeded. In council’s closing submissions the only reference to the base maps was as follows:

“These are maps of greater accuracy (ie 1:25,000 versus 1:100,000). They were the base maps for subsequent agricultural assessment maps. They are maps which have been deposited with the Council (Exhibit 21). Even if they were to be rejected as determining what land comes within the definition ` prime crop and pasture land’, they would nonetheless remain highly relevant in assessing land quality generally.

Again, the Applicant’s witnesses do not substantially challenge their accuracy and they are generally consistent with the experts’ views as to where good quality agricultural land is to be found.”
(emphasis in the original).

56 The commissioner in her judgment did not consider or decide whether the base maps were maps within the LEP definition of prime crop and pasture land. The only reference to the matter in her judgment was at [101], as follows (the paragraph is difficult to follow in places because words appear to be missing):

“Early in the proceedings the Court invited the respondent through the DPI to identify the ‘better’ agricultural land on the subject site and that land that is of little or no agricultural value and the Court enquired if the councils considered it appropriate for larger lots on the ‘better’ agricultural land. For its own reasons the council did not embrace or respond to this enquiry. The respondent chose instead to supplement the 1983 maps required by the LEP. The DPI in various documents caution against using the land classification maps are not at a small-scale for decisions on individual properties and advised that the maps should only be used for strategic purposes because of the lack of detail at a larger scale.”

57 The quality of the Property as rural land was in issue under cl 1(a)(i) of the objects of the 1(a) Rural (General) Zone, independently of whether it was prime crop and pasture land as defined in the LEP. The direction made by the commissioner at the s 34 Conference reflected that fact: see [44] above.

58 It was not unreasonable, in my view, for the council to take the position that the base maps were relevant in assessing the quality of the Property largely as good quality grazing land, independently of any issue under the LEP definition. That was in effect acknowledged by the applicant at the hearing before the commissioner: see [53(a)] above. It is likely that the applicant was or should have been aware from as early as 2005 that the DPI had classified the Property largely as good quality grazing land: see [41] and [42] above. Be that as it may, the DPI classification appeared in Ms Kovac’s plan which was reproduced in Mr Sinclair’s report and Mr Smith’s report, all served before the hearing: see [44] to [46] above. It was consistent with the interests of justice that evidence of the base maps’ classifications of the Property should be before the commissioner.

59 However, it was unreasonable, in my opinion, for the council to arrange with the DPI to deposit the base plans at the council offices on the eve of the hearing, in order to submit that the deposit made them a map within the LEP definition, thus enlarging the area of prime crop and pasture land on the applicant’s property, which in turn strengthened the council’s case and weakened the applicant’s case. The unreasonableness lies in the lateness of the deposit of the base maps, by arrangement between the council and the DPI, for parties are expected to conduct litigation in a timely and orderly way. The lateness of the deposit brought about a last minute change to the prime crop and pasture land case which the council, until the hearing, had led the applicant to believe that it had to meet. It caused confusion and some delay at the hearing. The council changed the goalposts at the last moment. Although that conduct was an insufficient reason not to admit the base maps and their late lodgement into evidence, if that conduct wasted the applicant’s money, the applicant should be compensated in costs.

60 In fact, the council’s conduct in that regard appears to have occasioned the applicant very little in costs. There were costs associated with minor delay on the first day of the hearing and an element of costs wasted by proceeding to hearing on the basis that the prime crop and pasture land was as shown in the 1983 map. Such costs are difficult to quantify but must be a very small component of the applicant’s total costs.

Contention 2: council inconsistency

61 The applicant’s second contention is that the council acted inconsistently, unfairly and unreasonably in dealing with the development application because, whilst refusing to determine it otherwise than in accordance with the support of the DPI, it granted development consent over the same period to a number of other development applications to subdivide land zoned 1(a) Rural (General) and generally did so without referring those development applications to the DPI. The applicant submits that it was not fair or reasonable for council to assess and approve other similar subdivision development applications and then to assess and refuse the applicant’s application in a substantially different way; nor to refer the subject development application to the DPI when other applications were not so referred.

62 This contention is based on a joint report of the expert witnesses, Kovac, Lane and Dymock, recording their agreed analysis of council consent to eight applications for subdivision of other rural land between 2004 and 2006. Four of the eight included or comprised class 3 land and in all except one instance the application was not referred to the DPI for comment. In that instance the DPI objected. The joint report provided the following details:

(a) in 2006, 276 hectares of class 3 land in Jerry’s Meadow Road was, over DPI objection, subdivided into six lots;

(b) in 2005, a subdivision of class 3, 4 and 5 land in Peach Tree Road, Megalong Valley, within the Sydney Water Catchment, was subdivided into 9 lots of sizes unknown to the experts;

(c) in 2004, Mr Gracey’s class 4 land in the Kanimbla Valley was subdivided into two 40 hectare lots;

(d) in 2005, some more of Mr Gracey’s class 4 and 5 land was subdivided into two 40 hectare plus lots;


(e) in 2006, Mr Gracey secured a further subdivision approval for another two 40 hectare plus lots of class 4 and 5 land;

(f) in 2004, class 3 and 4 land on Castlereagh Highway, Cullen Bullen, was subdivided into two 40 hectare plus lots;

(g) in 2004, class 3 and 4 land in Hayman, Portland was subdivided in three 40 hectare plus lots;

(h) in 2005, approximately 202 hectares of class 4 and 5 land close to the subject land in Tarana was subdivided into four 40 hectare plus lots.

63 The commissioner referred to those other approvals for subdivision of rural land in her judgment at [62], [72] – [82], and at [105] said:

“105 In my assessment of the proposal there are no distinguishing features of this land compared to adjoining properties that have enjoyed subdivision approval. The difference is this property is the result of several amalgamations/aggregations. However this should not prejudice its potential for subdivision and there is no reason as to why I should not follow council's previous decisions and assessments in allowing subdivisions to create lots of 40 ha. The development standard and planning framework or adopted public policies have not changed to require new factors to be considered.”

64 The applicant refers to Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472, (2004) 136 LGERA 254 at [87] per McClellan J:

“Consistency of decision-making must be a fundamental objective of those who make administrative decisions. That objective is assisted by the adoption of development control plans and the making of decisions in individual cases which are consistent with them. If this is done, those with an interest in the site under consideration or who may be affected by any development of it have an opportunity to make decisions in relation to their own property which is informed by an appreciation of the likely future development of nearby property.”

65 The commissioner’s judgment records that (a) council and the DPI had carried out strategic work which indicated a need to increase the minimum lot size in order to achieve policy outcomes and protect agricultural land resource; (b) at the time council commissioned an independent land use analysis report by a consultant who said that if the remaining genuine agricultural production areas were to be preserved, it would be necessary to limit further subdivisions to those holdings that were already less than 400 hectares; Ms. Kovac could not assist in relation to what the minimum lot size should be; (d) Mr Sinclair, a town planner engaged by council, thought that the minimum size for rural subdivision should be 400 hectares; and (e) council had no plan, policy or code to say the minimum size should be larger than 40 hectares. The commissioner concluded that the council and the DPI may consider it is now timely to review the 40 ha minimum lot size in the Rural 1(a) zone; that in the interim the council could choose to adopt a development control plan, policy or code that was available in the public domain, but had not done so; that it would appear that the council was seeking to establish a policy position through the proceedings for a greater minimum lot size in the Rural 1(a) zone than 40 ha; and that this was inappropriate as the development application had to be assessed against the statutory planning framework and other adopted policies available to the public.

66 The gravamen of Contention 2 is that in refusing the applicant’s development application and seeking the comments of the DPI, the council acted inconsistently because it had previously approved the subdivision of rural lots into 40 hectare plus panels without, generally, seeking the comments of the DPI.

67 I do not accept Contention 2, largely for the reasons advanced by the council, as follows.

68 First, it was reasonably arguable that the only factor in common between the earlier approvals and the subject was that they all involved subdivision of rural lots into lots exceeding the maximum area but that there were the following points of distinction:

(a) apart from the nine lot subdivision within the Sydney Water Catchment area (which is well separated locationally from the Property) and assuming that Mr Gracey’s three applications should be amalgamated into one on the assumption that they were contiguous, the largest yield from an approved subdivision was six lots, which represents less than one sixth the number in the subject proposal;

(b) if the largest of the other subdivided parcels was 276 hectares (approval (a) at [62] above), this represents less than 15 percent of the area of the Property. Approval (a) was also opposed by the DPI;

(c) the Property was a single holding, despite having been amalgamated from smaller parcels, upon which a substantial agricultural enterprise, concerned with the raising of cattle for the gourmet meat trade and for export, had for a decade or more been conducted. No comparable background fact seems to have been present in any of the allegedly comparable applications. This fragmentation of a potentially commercial landholding into non-commercial and lifestyle lots appears to be the main motivation for the DPI’s objection.

(d) there is a difference, in terms of attempts to maintain agricultural sustainability in the public interest, between subdivisions of small parcels which are already too small to be likely to support efficient agricultural activities, and the subdivision of a large farm – one of the few remaining in the Lithgow local government area – into what appear to be lifestyle or hobby blocks for sale to all comers.

69 Secondly, even if there was an inconsistency, Stockland does not stand for the proposition that the mere fact that a council’s decisions in respect of like matters are inconsistent amounts to proof of unreasonableness. Consistency in all circumstances may deny a consent authority the opportunity to change its mind where it ought to do so in the interests of good planning.

70 Thirdly, the commissioner’s comment that the council appeared to be seeking to establish a policy position represents her assessment of the effect of Ms Kovac’s evidence. However, it was not unreasonable for Ms Kovac or the council to put to the Court the government’s concern that 40 hectare minimum lot sizes in the zone might adversely affect the capacity for efficient production and profitability of enterprises for that location over the longer term. What might be a reasonable policy in relation to a proposal to break up an 1800 hectare farm might not hold good for an 80 hectare lifestyle block where the owner sought subdivision into two lots. The mandatory public interest consideration under s 79C of the EPA Act, which a consent authority and the Court on appeal is obliged to take into consideration, makes it difficult to say that such a concern could not be taken into account. The commissioner considered that the LEP should prevail in the absence of any developed and written policy to which the DPI or council could point to support their position. That does not mean it was unreasonable for the council to have argued a contrary view, a view taken by its experienced planning expert Mr Sinclair. The fact that the council ultimately failed does not make its conduct unreasonable.

71 For these reasons, I do not accept Contention 2.

Contention 3: DPI

72 The applicant’s third contention is that council refused to determine the development application otherwise than with the concurrence of the DPI, and thereby abrogated its responsibility as consent authority to determine the development application to that body. The applicant submits that the council placed the advice of the DPI, which was an advocate for sustainable agriculture, above the approach that it had consistently adopted to complying subdivisions in the rural 1(a) zone, and that this was an abrogation of its responsibilities and was not fair or reasonable. Reliance is placed on the council committee minutes, which referred to the DPI advice as “the determining factor”: see [31] above. In cross-examination, Mr Muir, the council’s group manager of regional services, described the DPI advice as having significant determinative weight but did not accept that the council refused the application simply because the DPI did not support it. I accept his evidence.

73 The DPI was not a concurrence authority under the LEP, nor did the council treat it as a concurrence authority. It was reasonably open to the council, in a context such as this, to seek the advice of a relevant peak government body such as the DPI and to give that advice weight, even great weight. The evidence does not establish that the council went so far as to abrogate its own statutory function as consent authority. Had it had done so, its decision would have been invalid, but the predicate of the proceedings was that the decision was valid.

74 For these reasons, I do not accept Contention 3.

Contention 4: council sought to use proceedings as a policy review

75 The applicant’s fourth contention is that council sought to use the proceedings as a policy review of the 40 hectare minimum lot size provided for in the 1(a) zone so as to establish some larger minimum lot size. The applicant submits that it was not fair or reasonable for the council to use the proceedings (or to allow the DPI to use the proceedings) to establish a policy for rural land subdivision not embodied in the LEP or some DCP code or adopted policy of Council.

76 The springboard for the contention is the commissioner’s statement that: “It would appear that the respondent is seeking to establish a policy position through these proceedings”: judgment at [99].

77 The council’s submissions canvass the possible meaning of “policy review” in this contention, and refute each meaning as follows:

(a) if it means that it was unreasonable for the council to seek to agitate matters in a merit appeal which were or involved a submission that the LEP development standard for minimum lot size was, as it were, a blunt instrument for dealing with cases in which it was the case, or was said to be the case, that there would be an adverse impact upon the continued potential of the land to sustain agricultural activities, then the contention is baseless.

(b) if it means that a council must never be allowed to consider relevant public interest considerations unless those considerations are in some way enshrined in an EPI or DCP or some less potent form such as a written policy, then the submission flies in the fact of the Act itself.

(c) if it means that a council acts unreasonably if it calls evidence which draws attention to what it (or the Government) perceives as an adverse impact on the public interest when there is no LEP, DCP or policy enshrining the issue, and if it attempts to explain through that evidence what the issue is and what it means in terms which might suggest that the current LEP controls do not adequately deal with the problem, then there is no authority for the proposition and it is self-obviously incorrect.

78 Having regard to the mandatory public interest consideration in s 79C of the EPA Act, I find this submission persuasive and accept it. Consequently, I do not accept Contention 4.

Contention 5: council raised untenable issues

79 The applicant’s fifth contention is that the council put in issue matters which were simply not tenable and which led the applicant to incur significant extra expense. Namely:

(i) the proposal would result in a large commercial agricultural holding being fragmented into lots that will not sustain efficient and effective commercial agricultural production;

(ii) the proposed development will create conflicts with the use of agricultural properties in the vicinity;

(iii) the proposed development will adversely impact on the rural landscape;

(iv) heritage;

(v) that each proposed lot would not have available to it an area suitable for effluent disposal.

80 As to the first matter, sustainability of agriculture production, the applicant submits that:

(a) the council expert Mr Sinclair was a town planner and had no expertise in sustainable and efficient agricultural production.

(b) Ms Kovac of the DPI gave evidence (against small farms achieving sustainability of agriculture production), yet the DPI’s own publications supported the fact that small farms are capable of effective commercial agriculture;

(c) Ms Kovac (and therefore the DPI) never did a site inspection (before the s 34 conference);

(d) no change in use was proposed, simply a rearrangement of the existing “subdivision” from 21 lots to 38 lots. The Council consistently accepted this proposition on other applications (Judgment [72], [76], [81] and [82]);

(e) the development was fully compliant with the Council’s LEP. This seemed to be enough on other applications for subdivision of rural land (Judgment [74], [76] and [80]).

(f) there was no DCP or published adopted code or policy of council that prescribed when a development application for subdivision of rural land would be referred to the DPI nor what would be consistent the minimum viable agricultural unit in Lithgow, Tarana or otherwise;

(g) Council’s approval of other subdivision applications indicated that it consistently applied a policy that if the lot size was 40 ha or more then council accepted it would be capable of use for agriculture (Judgment [74] and [80]).

81 When cross-examined about his expertise, Mr Sinclair said he had experience in farming and had been a rural planner for 20 years, an answer which was not challenged. I therefore do not accept the applicant’s present challenge to Mr Sinclair’s expertise. His opposition expert planner, Mr George Smith, could not claim any direct farming expertise.

82 The applicant’s suggestion that no change of use was proposed relies on the proposition that once a lot is sold, the purchaser is entitled to use the lot for agriculture, a use permitted without consent. Mr Sinclair’s thesis was that the resultant subdivided lots would probably be used primarily for rural-residential lots and not as efficient farms. He gave examples of other small lots and their use for residential purposes. The commissioner did not hold that Mr Sinclair’s thesis was wrong. The commissioner merely said that the proposed development does not prevent the land being used for purposes other than agriculture: at [104]. The matter that persuaded the commissioner to approve the application was its consistency with the planning controls and objectives of the zone. Subdivision itself does not involve any use of land and consent for subdivision alone does not import any approval for subsequent use for any purpose: Wehbe v Pittwater Council [2007] NSWLEC 827, (2007) 156 LGERA 446 at 28. However, that has to be understood in light of the conclusion of the Court of Appeal – with which Mr Sinclair’s thesis was consistent - in Lennard v Jessica Estates Pty Ltd [2008] NSWCA 121, (2008) 159 LGERA 420 at [61] that a subdivision is generally in order to use land for a particular purpose, and should not be treated as a colourless or neutral act. Tobias JA (McColl and Bell JJA agreeing) held at [61]:

“…The issue is whether ‘a land use allowed by’ the LEP includes the subdivision of land for a particular purpose of use. It is true that in some contexts the cases have drawn a distinction between the subdivision of land on the one hand and the use of land as subdivided on the other. That distinction has been covered in the definition of subdivision of land in s 4B(1) of the EPA Act which contemplates the division of land into two or more parts anterior to the actual use or occupation of those parts. However, in my opinion the expression ‘a land use’ in cl 6(1) of the LEP is capable of including the subdivision of land for the purpose of a use permitted by the LEP. Generally speaking, in the context of planning, land is not subdivided except for a particular purpose. Thus the Estate was subdivided for the purpose of creating residential lots i.e. lots intended to be used for residential purposes.”

83 Having regard to these considerations, I do not think it has been established that the first matter was untenable.

84 As to the second matter, land use conflicts, the council submits that:

(a) there was no factual evidence before council or the Court that the subdivision would give rise to land use conflict;

(b) any evidence given on this subject was speculation. No specific concern was identified by any council witness;

(c) Mr Sinclair said the conflicts can arise when residential use is placed next to an agricultural use (Judgment [47]). The proposal did not involve residential use. He also said a conflict can occur between an extensive form of agriculture and an intensive form of use (Judgment [47]) No further explanation was forthcoming of this concern. Mr Sinclair was a town planner with no expertise in agriculture practice;

(d) in relation to an earlier subdivision approval of Class 3 and 4 agriculture land that was partly prime crop and pasture land, a council assessment report had said that the location of the development would not appear to be in conflict with the existing land uses: judgment [76].

85 This issue does not seem to have attained importance. However, as the council submits, if small lots in close proximity were used for agricultural activity sufficiently intense as to create conflict (eg dogs attacking sheep and spray drifts), this would not be an irrelevant matter. I have earlier not accepted the challenge to Mr Sinclair’s expertise. I do not think it has been established that the second matter was untenable.

86 As to the third matter, visual impact, the council’s concern was with the visual impact of housing that might develop as a result of the approval of the application. The applicant points out the subject application was for subdivision of land; and the application involved road construction but no other building work. Any dwelling that might one day be built would be the subject of a separate development application. The commissioner recorded that the planners had agreed that the visual impact issue could be dealt with by way of condition of consent and that there were no unreasonable adverse impacts on the rural landscape by the subdivision: judgment [48]. No conditions were proposed by council in the event.

87 This issue was not pursued, neither party called evidence about it, and no costs were incurred. Accordingly, I do not think it is significant.

88 As to the fourth matter, heritage, the applicant submits that:

(a) there is an existing house on the “Property” which council said had heritage value that would be adversely affected by the development;

(b) council had no heritage evidence to support this issue or concern, except for reference to a “cottage” in a council inventory of 1997;

(c) Mr Walker had restored the dwelling at a cost of $500,000 since 1997 (Judgment [68]). Council was in possession of documents that related to that work;

(d) Mr Walker had to obtain a heritage report once the issue was raised, at significant cost. That report, by Ms Hickson, was completed following the s 34 conciliation conference;

(e) Ms Hickson said the house had been considerably modernized and was now a substantial country dwelling with a mix of styles and details. It had a low level of heritage significance since the house had undergone recent change. All this was obvious to the council. Raising this issue was inappropriate.

89 The heritage issue was dropped after the s 34 conciliation conference and was omitted from the council’s last statement of contentions. Ms Hickson’s heritage impact report stated that it had been prepared “…to assist the owner to minimise impact on the heritage item due to this new development”, and that the proposal called for the subdivision of land on which a proposed heritage item, Westholme stands. The report said that the owners were willing for a limitation to be imposed that any new building on certain lots be positioned over the hill to avoid impact. On this costs application, Mr Walker gave evidence that he accepted that proposition and said so to council, and that as a result the heritage issue was dropped. I am not persuaded that the fourth matter was untenable.

90 As to the fifth matter, effluent disposal, the applicant submits that:

(a) no application was made for any building or development that would generate effluent;

(b) each proposed lot was 40 hectares or greater in area;

(c) the plans produced identified a suitable building area each the size of a football field (Judgment [110]);

(d) disposal of effluent from dwellings was obviously not a serious issue;

(e) yet Mr Walker was required to retain Mr J Armitage to provide a response to the issue, again at considerable cost. (Judgment [84] and [92]). He had no hesitation asserting effluent disposal was not an issue;

(f) effluent disposal was not an issue in relation to other similar applications, a fact the commissioner specifically noted (Judgment [75], [79] and [110]);

91 Effluent disposal was an issue, but, it seems, only insofar as there was a difference of opinion as to whether effective disposal areas should be identified or whether “football field” sized building platforms could be regarded as large enough to ensure proper disposal. Little time was spent on it. The commissioner said at [84] and [110]:

“84. The applicant provided a response to the Council’s contention about effluent disposal in a report prepared by Mr J. Armitage, a Geotechnical engineer and in summary he states, ‘although bore logs were carried out on 11 lots in total, I have no hesitation in stating that an appropriate effluent treatment system would be suitable for all proposed 40 lots.
…

110 The effluent disposal report was submitted to demonstrate that septic systems could be accommodated on the lots and as such the report was submitted to demonstrate this purpose. The applicant contends that the minimum size of any of the lots is approximately 67 football fields and that the potential building envelope identified on each site is approximately the size of one football field and that a dwelling could be sited anywhere within the building envelope or outside the building envelope at the stage when a development application is submitted by individual lot owners. I note that the approvals issued by the council for other 40 ha lots did not require a building platform and effluent disposal area and given the size of the lots and the effluent disposal report I am satisfied that no uncertainty is created and this is a matter appropriately addressed at the development application stage for each dwelling.”

92 It appears that, in reaching this conclusion, the commissioner was assisted by the effluent report obtained by the applicant. The commissioner did not suggest that it was unreasonable for the effluent issue to have been raised. I am not satisfied that the fifth matter was untenable.

Conclusion

93 Each party seeks an order that the other party pay its costs of this costs application.

94 The applicant has been unsuccessful on this costs application except in relation to Contention 1. However, as discussed at [60] above, the consequential costs were very small and difficult to quantify. On the other hand, Contention 1 occupied much of the two day costs hearing, although I estimate Contention 1 would have taken relatively much less preparation time. Setting off these considerations in a broad brush way, I propose to make no order as to the costs of the proceedings before the commissioner and to order the applicant to pay 80 percent of the respondent’s costs of the costs application. The orders of the Court are as follows:

1. The applicant’s notice of motion filed on 3 November 2008 is dismissed.

2. The applicant is to pay 80 percent of the respondent’s costs of the notice of motion.

3. The exhibits may be returned.