Botany Bay City Council v Pet Carriers International Pty Ltd - [2013] NSWLEC 147

Land and Environment Court

New South Wales

Medium Neutral Citation: Botany Bay City Council v Pet Carriers International Pty Limited [2013] NSWLEC 147
Hearing dates: 19 August 2013
Decision date: 13 September 2013
Jurisdiction: Class 1
Before: Preston CJ
Decision:
The orders of the Court are:
1. The appeals are dismissed.
2. The appellant is to pay the respondent's costs of each appeal.

Catchwords: APPEAL - appeals against Commissioner's decisions on questions of law - Commissioner grants development consent for use of building for pet transportation business and revokes Council's order for cessation of use - characterisation of purpose of development - whether Commissioner erred in holding that development was permissible as "commercial premises" and not prohibited as "airport-related land use" and/or "air freight forwarder" under the relevant local environmental plan - Commissioner did not err in characterising development - whether Commissioner denied Council procedural fairness by not imposing proffered draft condition that was not in dispute in granting development consent - consideration of whether the failure of a commissioner to accord with requirements of procedural fairness in making a decision involves error on a decision on a question of law - Commissioner did not deny Council procedural fairness - appeals dismissed - Council to pay respondent's costs of each appeal
Legislation Cited: Environmental Planning and Assessment Act 1979 ss 80A(1)(a), 97, 121B
Land and Environment Court Act 1979 s 56A
Registered Clubs Act 1976
Cases Cited: Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343
Aldi Stores v Newcastle City Council [2010] NSWLEC 227
Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404
Bardsley-Smith v Penrith City Council [2013] NSWCA 200
Berowra RSL Community and Bowling Club Ltd v Hornsby Shire Council [2001] NSWLEC 243; (2001) 114 LGERA 345
Botany Bay City Council v Marana Developments Pty Ltd [2012] NSWLEC 15
Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; 173 LGERA 456
C B Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270
Chambers v Maclean Shire Council [2003] NSWCA 100; (2003) 57 NSWLR 152; (2003) 126 LGERA 7
Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; (2007) 151 LGERA 400
Codling v Manly Council [2011] NSWLEC 57; (2011) 184 LGERA 352
Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233
Director-General, Department of Ageing, Disability and Home Care v Lambert [2009] NSWCA 102; (2009) 74 NSWLR 523
Egan v Hawkesbury City Council (1993) 79 LGERA 321
Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157
Friends of Pryor Park Inc v Ryde Council (Unreported, Land and Environment Court of NSW, Bignold J, 25 September 1995)
Hawkesbury City Council v Sammut [2002] NSWCA 18; (2002) 119 LGERA 171
Hutchinson v Roads and Traffic Authority [2000] NSWCA 332
Kostas v HIA Insurance Service Pty Ltd [2010] HCA 32; (2010) 241 CLR 390
Ku-ring-gai Municipal Council v Geoffrey Twibill & Associates (1979) 39 LGRA 154
Lizzio v Ryde Municipal Council (1983) 155 CLR 211
Pet Carriers International Pty Ltd v Botany Bay Council [2013] NSWLEC 1077
Segal v Waverley Council [2005] NSWCA 310, (2005) 64 NSWLR 177
Shire of Perth v O'Keefe (1964) 110 CLR 529
The Council of the City of Parramatta v Precision Rubber Service Pty Ltd (Unreported, Land and Environment Court of NSW, Pearlman CJ, 10 March 1995)
Warringah Shire Council v Raffles [1979] 2 NSWLR 299; (1978) 38 LGERA 306
Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707
Texts Cited: M J Beazley AO, "The distinction between questions of fact and law: a question without answer?" (2013) 11(3) The Judicial Review 279
Category: Principal judgment
Parties: Botany Bay City Council (Appellant)
Pet Carriers International Pty Limited (Respondent)
Representation:
Mr T S Hale SC (Appellant)
Mr J S van Aalst (Barrister) (Respondent)
Houston Dearn O'Connor (Appellant)
John Hertz and Associates (Respondent)

File Number(s): 10390 and 10391 of 2013
Publication restriction: No

Judgment

The appellant, Botany Bay City Council ('the Council') appeals against two related decisions of a commissioner of the Court of 3 May 2013: Pet Carriers International Pty Ltd v Botany Bay Council [2013] NSWLEC 1077. The first decision upheld the appeal of the respondent, Pet Carriers International Pty Ltd ('Pet Carriers'), under s 97 of the Environmental Planning and Assessment Act 1979 ('EPA Act') and granted development consent to use a building at Unit 4, 16 Beresford Street, Botany for a pet transportation business ('the development consent decision'). The second decision revoked an order issued by the Council under s 121B of the EPA Act directing Pet Carriers to cease the use of the building for a "pet carrier transportation business" ('the Council order decision').

The Council's appeals are under s 56A of the Land and Environment Court Act 1979 ('the Court Act') and are against the decisions on questions of law. In the appeal against the development consent decision, the Council identified two errors of law. The first was that the Commissioner denied the Council procedural fairness by not imposing a proffered condition that was not in dispute in granting development consent. The second was that the Commissioner erred in holding that the proposed development was permissible rather than prohibited under the applicable Botany Local Environmental Plan 1995 ('LEP 1995').

In the appeal against the Council order decision, the Council identified one error of law, being that that the Commissioner erred in holding that the proposed development was permissible rather than prohibited. The Council accepted that the fate of this appeal was dependent on the fate of the appeal against the development consent decision.

I will, therefore, commence with the Council's appeal against the development consent decision. In that appeal, it is logical to commence with the second ground before addressing the first ground, because the second ground goes to the power of the Commissioner to grant development consent and if there is no such power, then there is no occasion to impose conditions of consent.

The planning framework

A consent authority, and the Court on an appeal exercising the functions of a consent authority, can only grant development consent to development proposed in a development application that is permissible, and not prohibited, under an applicable environmental planning instrument. In this case, the building proposed to be used for the pet transportation business was in Zone 4(b) Mixed Industrial under LEP 1995. LEP 1995 applied because Pet Carriers had made its development application before the current Botany Local Environmental Plan 2013 ('LEP 2013') commenced. The savings clause (cl 1.8A) of LEP 2013 provided that a development application made before the commencement of LEP 2013 that had not been finally determined before the commencement was to be determined as if LEP 2013 had not commenced. Hence, Pet Carriers' development application was to be determined according to LEP 1995.

Clause 10(2) of LEP 1995 provided that in relation to land within a zone specified in the table to the clause, development that may be carried out without consent or with consent or development that was prohibited was specified under the applicable headings. For Zone 4(b) Mixed Industrial, the only development specified in item 2 under the heading "Development which may be carried out without development consent" was "Exempt development". The developments specified in item 3 under the heading "Development which may be carried out with development consent" were 21 nominate categories of development. Of relevance to Pet Carriers proposed development was one type, being development for the purpose of "commercial premises".

Clause 7 of LEP 1995 provided that the terms used in the plan (other than those within the Environmental Planning and Assessment Model Provisions 1980 ('the Model Provisions'), which were adopted by cl 6 of the LEP 1995) have the meanings given to them in sch 1 of LEP 1995. Clause 6 of LEP 1995 adopted the Model Provisions except for nine definitions in cl 4(1) of the Model Provisions and also cl 15 of the Model Provisions. None of these exceptions concerns the definition of "commercial premises" in cl 4 of the Model Provisions.

Hence, the definition of "commercial premises" in cl 4 of the Model Provisions was adopted by cl 6 of LEP 1995, namely:

"commercial premises" means a building or place used as an office or for other business or commercial purposes, but does not include a building or place elsewhere specifically defined in this clause or a building or place used for a purpose elsewhere specifically defined in this clause.

The reference in this definition to "this clause" in the phrase "a building or place elsewhere specifically defined in this clause or a building or place used for a purpose elsewhere specifically defined in this clause" is a reference to cl 4 of the Model Provisions.

Neither party relied on any building or place, or building or place used for a purpose, specifically defined in cl 4 of the Model Provisions as providing an exception to characterisation of the proposed development as "commercial premises".

However, the Council did rely on two specific definitions of a building or place, or of the purpose of a use of a building or place, in cl 7(1) and sch 1 of LEP 1995, namely, "airport-related land use" and "air freight forwarder". These terms have the following meanings:

airport-related land use means a building or place used as an office or for other business or commercial purposes or industry related to Sydney (Kingsford Smith) Airport, and includes a building or place used for the provision of:

(a) services related to any of the following uses carried out at Sydney (Kingsford Smith) Airport:

(i) the assembly, storage or land transport of air freight,

(ii) the accommodation or transportation of air passengers by air or land,

(iii) the operation, maintenance or repair of aircraft or aircraft components,

(iv) the administrative functions associated with the airport, such as airport management and security,

(v) the functions of government departments and authorities related to air passengers and air freight, and

(b) services provided for hotel or motel guests, including banking, dry cleaning, hairdressing and the like, that are located within the confines of the hotel or motel building.

air freight forwarder means a building or place used for the assembly, storage or land transport of air freight.

The Council submitted that if the proposed development was properly to be characterised as being for one or other of "airport-related land use" or "air freight forwarder", because these purposes are specifically defined in sch 1, they could not be included in the definition of "commercial premises". Hence, the Council submitted that the proposed development could not be properly characterised as being for the purpose of "commercial premises".

Returning to the Table to cl 10 of LEP 1995 for Zone 4(b) Mixed Industrial, development specified in item 4 under the heading "Development which is prohibited" was "Any development other than development included in item 2 or 3".

The Commissioner's characterisation decision

The Commissioner held that:

(a) the purpose of the business being carried out in the building was best described as a "pet transportation business": at [38];

(b) the different uses and activities carried on all serve the same purpose of a pet transportation business: at [39];

(c) whilst some travel arrangements utilise Sydney (Kingsford Smith) Airport ('Sydney Airport'), this is not the only means of transport used. Pet Carriers' activities indicate that 43% of departing pets utilised Sydney Airport and only 18% of inbound pets used this airport. Pet Carriers' website promotes domestic travel, as well as international travel, between all states in Australia and not necessarily Sydney Airport: at [40]; and

(d) the purpose of the pet transportation business was not an "airport-related land use" but was a "commercial premises" under LEP 1995, and as such was a permissible use: at [41].

The Council's submissions

The Council submitted that the proper characterisation of the purpose of the development is a jurisdictional fact and an error in characterisation is a decision on a question of law: Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707 at [19], [86]-[89], [136], [140], [141], [182], [219]; Codling v Manly Council [2011] NSWLEC 57; (2011) 184 LGERA 352 at [28]; Botany Bay City Council v Marana Developments Pty Ltd [2012] NSWLEC 15 at [17]. If a consent authority, or the Court on appeal exercising the functions of the consent authority, purports to grant consent to a proposed development for what is in truth a purpose prohibited under the relevant local environmental plan, the authority acts without power and thus commits a jurisdictional error: Bardsley-Smith v Penrith City Council [2013] NSWCA 200 at [64].

The Council submitted that the Commissioner erred in characterising the proposed development as being for the permissible purpose of "commercial premises". The Council submitted that the proposed development could not be characterised as being for the purpose of "commercial premises" at all, and hence was prohibited. Alternatively, if the proposed development could be characterised as being for commercial premises, that was only one of the purposes; it was also to be characterised as being for the prohibited purposes of "airport-related land use" and "air freight forwarder". Either way, the development was for a prohibited purpose and a consent authority has no power to grant consent to development for a prohibited purpose: Chambers v Maclean Shire Council [2003] NSWCA 100; (2003) 57 NSWLR 152; (2003) 126 LGERA 7 at [117].

The Council's first argument was that the definition of "commercial premises" excluded development for a purpose specifically defined in sch 1 of LEP 1995, including relevantly the purposes of "airport-related land use" and "air freight forwarder". This argument depended on construing the reference in the definition of "commercial premises" to "this clause" in the phrase "a building or place elsewhere specifically defined in this clause or a building or place used for a purpose elsewhere specifically defined in this clause" to be a reference to cl 7(1) and sch 1 of LEP 1995, instead of cl 4 of the Model Provisions in which the definition occurs or cl 6 of LEP 1995 which adopts the Model Provisions (including cl 4 and the definition of "commercial premises").

The Council submitted that on the facts the proposed development came within the definition of "airport-related land use" in four ways:

(a) the building was "used as an office" related to Sydney Airport (the first limb of the chapeau of the definition) in that the building included the office for the pet transportation business;

(b) the building was used "for other business or commercial purposes" related to Sydney Airport (second limb of the chapeau) in that the building was used and would be used for business purposes, being the pet transportation business. The use of the office and the building for the pet transportation business was related to Sydney Airport in that, the evidence revealed, 61% of jobs undertaken involved pet transportation departing or arriving at Sydney Airport. The remaining 39% involved pet transportation from or to airports other than Sydney Airport;

(c) the building was used for the provision of services related to the use carried out at Sydney Airport of "the assembly, storage or land transport of air freight" (in subpara (a)(i)), by:

(i) the land transport of air freight, being the land transport of pets to and from Sydney Airport (the pets are carried in the cargo of aircraft and are air freight);

(ii) the assembly of air freight, being the placing of pets in travel containers before delivering the containers to Sydney Airport; and

(iii) the storage of air freight, being the keeping of pets overnight in the building; and

(d) the building was used for the provision of services related to the use carried out at Sydney Airport of "the functions of government departments and authorities related to air passengers and air freight" (in subpara (a)(v)). The Council submitted as part of the business of air freight of pets it is necessary for Pet Carriers to make the necessary arrangements with the Australian Quarantine Inspection Service and the Department of Agriculture, Fisheries and Forestry. In that sense, Pet Carriers is providing services relating to the functions of government departments and authorities related to air freight carried out at Sydney Airport.

The Council further submitted that the proposed development came within the definition of "air freight forwarder" because it was in a building used for the assembly, storage and land transport of air freight, for the reasons given above. This purpose does not require that the assembly, storage or land transport of air freight be carried out at Sydney Airport. Hence, insofar as a proportion of pets are carried to and from airports other than Sydney Airport, the business is within "air freight forwarder."

The Council submitted that if the development was properly to be characterised as "airport-related land use" or "air freight forwarder", it could not fall within the nominate permissible purpose of "commercial premises". The Council submitted that the Model Provisions definition of "commercial premises" adopted by cl 6 of LEP 1995 excludes from "commercial premises" development for a purpose specifically defined in sch 1 of LEP 1995. Both "airport-related land use" and "air freight forwarder" are specifically defined in sch 1. Hence, the proposed development was excluded from being for "commercial premises". As the proposed development cannot be characterised as being for any other purpose nominated as permissible in item 3 of the Table, the proposed development falls within item 4, being development other than development included in item 2 or 3 of the Table.

The Council's alternative argument was that even if the development could be characterised as being for the permissible purpose of "commercial premises", it was also for the prohibited purposes of "airport-related land use" or "air freight forwarder". The Council relied on the well-known authorities, such as Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 161; Ku-ring-gai Municipal Council v Geoffrey Twibill & Associates (1979) 39 LGRA 154 at 160; C B Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270 at 271-272; Lizzio v Ryde Municipal Council (1983) 155 CLR 211 at 216-217, to submit that where the whole of premises is used for two or more purposes, none of which subserves the others, it is irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others. The use will be prohibited.

In this case, the Council submitted Pet Carriers' use of the building can properly be characterised as being for "airport-related land use" or "air freight forwarder", and such uses are not subserved by but rather are independent of the use for "commercial premises". Indeed, the Council submitted, on the evidence, "airport-related land use" comprised at least 61% of the business carried on at the premises. As "airport-related land use" and "air freight forwarder" are prohibited developments, the proposed development cannot be approved.

Pet Carriers' submissions

Pet Carriers submitted that:

(a) the Commissioner had jurisdiction to exercise the function and discretion of the consent authority to decide the issue of the characterisation for the purpose of the development and could not be found to have made a jurisdictional error in exercising that function and discretion;

(b) the appellant had failed to articulate any error of law on the part of the Commissioner in respect of his finding that the purpose of the proposed development was as "commercial premises";

(d) alternatively, Pet Carriers relied on and repeated its submissions made before the Commissioner and summarised by the Commissioner in [20] to [26] of his reasons. These include that the proposed development did not fall within "airport-related land use" because:

(i) the various services described in subclauses (a)(i) to (v) of the definition of "airport-related land use" have no relevance to the services provided by Pet Carriers to its customers;

(ii) the connection between the services Pet Carriers provides to its customers and Sydney Airport are too tenuous to be characterised as being "related to" Sydney Airport;

(iii) the business conducted in the office relates to transportation arrangements anywhere in Australia and overseas, and not specifically Sydney Airport;

(iv) the delivery of pets to Sydney Airport for transportation to the designated destination is only part of the arrangements; the main purpose of the business is the processing in the building of the various arrangements to enable a pet to be transported to and from the appropriate airport; and

(v) the primary purpose of the use of the premises is the provision to its customers of the services of arranging for the transportation of their pets by air and the additional service concerning delivery to Sydney Airport is merely incidental to the primary purpose and hence the use is not "related to" Sydney Airport.

Characterisation of the purpose of development

Planning law turns on the characterisation of the purpose of development of land. The threefold classification in the EPA Act and environmental planning instruments made under it in regard to the carrying out of development depends on the characterisation of the purpose of the development. The threefold classification is of development that may be carried out without development consent, development that may be carried out with development consent, and development that is prohibited or cannot be carried out with or without development consent: Chambers v Maclean Shire Council at [33].

That threefold classification is manifested in the land use table for the various zones identified in environmental planning instruments, particularly at the local level (referred to currently as local environmental plans). The land use table for each zone identifies, by reference to the purpose of the development, the categories of development that fall within each of the three classifications. The purpose of a development is objective in the sense that it is the end which is seen to be served by the carrying out of the development, not subjective in the sense that it is the object in the minds of the persons carrying out the development: Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534.

Commonly, the environmental planning instrument containing the land use table with the threefold classification of developments describes each purpose, either directly in a definitions clause or indirectly by incorporating definitions in other statutory instruments. Each purpose is indicated in the instruments by means of a description of a character which the purpose imparts to land or buildings on land in which it is pursued. This may be done at varying degrees of particularity. In some instances, the purpose is described at a level of generality (such as "industries"), so that the purpose may be pursued in a variety of specific ways (such as the variety of specific types of industries). In other instances, the purpose is described at a level of particularity, connoting a narrow range of choice, such as specifically defined types of shops: Shire of Perth v O'Keefe at 534-535; Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; (2007) 151 LGERA 400 at [27].

The nature of the use needs to be distinguished from the purpose of the use. Uses of different natures can still be seen to serve the same purpose: Shire of Perth v O'Keefe at 534-535; Warringah Shire Council v Raffles [1979] 2 NSWLR 299 at 301; (1978) 38 LGERA 306 at 308.

A use of land can also be for two or more purposes. The purposes may or may not be conflicting. Non conflicting purposes have similarities in character. An example of non conflicting purposes are those which have a genus-species relationship: one purpose is a genus (such as "industries") and the other purpose is a species falling within that genus (a particular kind of industry such as "extractive industry" or "rural industry"). Conflicting purposes are different in character. Where land is used for two conflicting purposes, difficult questions of construction and characterisation can arise when the environmental planning instrument permits one purpose but prohibits the other. It may be necessary to ascertain, having regard to the character, extent and other features of the uses, whether the prohibited purpose can be regarded as subsumed in the permissible purpose, so that it is legitimate to disregard the prohibited purpose and treat the permissible purpose as that for which the land is used, or whether they are independent of each other so that the land is being used for both prohibited and permissible purposes.

There are two means by which the environmental planning instrument and land use table for each zone may identify the purpose of development falling in each of the three classifications, namely, identification as either a nominate purpose or an innominate purpose. A nominate purpose is one which the environmental planning instrument expressly nominates by name as being within one of the three classifications. Hence, the land use table for a zone may nominate particular categories of purposes of development as being within the classifications of development that may be carried out without consent, development that may be carried out with consent, or development that is prohibited.

An innominate purpose is one which the environmental planning instrument does not nominate by name as being within one of the three classifications, but rather identifies as falling within a particular classification by reason of it not being nominated in other classifications; it is development other than development in the other classifications. Hence, the land use table for a zone may classify as prohibited development, development for a purpose other than a purpose nominated as being able to be carried out without consent or with consent.

In answering the question of the characterisation of the purpose of development, it is important to determine how, in relation to the particular environmental planning instrument, the question arises. Frequently, the question is whether development consent is necessary and can be obtained to carry out particular development. If the environmental planning instrument provides that development for a particular purpose may be carried out without development consent or is prohibited, development consent cannot be granted for such development: The Council of the City of Parramatta v Precision Rubber Service Pty Ltd (Unreported, Land and Environment Court of NSW, Pearlman CJ, 10 March 1995) at 6-7 (development that was permissible without consent); Chambers v Maclean Shire Council at [37], [38] (prohibited development).

In this situation, the question of characterisation is to be answered by reference to the particular terms of the environmental planning instrument and the land use table for the zone in which the development is to be carried out. The inquiry is whether the development can be characterised as being for a purpose that the instrument identifies as being permissible with consent and not for a purpose that the instrument identifies as being permissible without consent or as being prohibited. The focus of this inquiry is whether the development is within a nominate or innominate purpose, the terms of which are specified in the instrument. It is not to determine, at large, the category of purpose into which the development should be seen as falling and to formulate a description of that category. The latter task may be required when determining whether a development is an existing use under the EPA Act: see C B Investments Pty Ltd v Colo Shire Council at 280. But it is not the task to be undertaken when determining whether development is for a purpose that may be carried out with consent.

In this case, therefore, the relevant inquiry was whether Pet Carriers' proposed development was within a purpose of development that may be carried out with development consent and not one that is prohibited. Relevantly, this required determining whether the proposed development was to be characterised as being for the nominate permissible purpose of "commercial premises" and not for any innominate prohibited purpose, such as "airport-related land use" or "air freight forwarder".

The Commissioner, in characterising the purpose of the proposed development, did not directly undertake this inquiry. Instead, he endeavoured to establish the category of purpose into which the proposed development should be seen as falling and formulated a description for that purpose, namely "pet transportation business". Such a purpose was not one specified by LEP 1995. In this regard, the Commissioner diverted himself from the correct inquiry. Nevertheless, the Commissioner then proceeded to determine whether that purpose of pet transportation business fell within the purpose of "commercial premises" or the purpose of "airport-related land use", both of which terms were specified in LEP 1995. In the end, therefore, the Commissioner did undertake the correct inquiry.

The Commissioner characterised the proposed development as being for the nominate permissible purpose of "commercial premises" and not for the innominate prohibited purpose of "airport-related land use". In my view, the Commissioner did not err on a question of law in this characterisation of the purpose of Pet Carriers' proposed development.

No error in characterisation as "commercial premises"

The Council's first argument that the proposed development cannot be characterised as "commercial premises" is rejected. The fundamental flaw in the argument is that, on a proper construction of the Model Provisions' definition of "commercial premises" adopted by LEP 1995, the two purposes in sch 1 of LEP 1995 relied on by the Council, namely "airport-related land use" and "air freight forwarder", are not excluded from "commercial premises". Hence, it is irrelevant whether the proposed development could be characterised as being for one or other or both of those purposes. Those purposes are not purposes that the definition of "commercial premises" states are not included in "commercial premises". The proposed development is, therefore, for the purposes of "commercial premises", which is a nominate permissible development in item 3. To explain why this conclusion follows it is necessary to return to the land use table to cl 10 and to cll 6 and 7 of LEP 1995.

As I have noted, cl 10 and the land use table thereto provide that the purposes for which development on land within Zone 4(b) may be carried out with development consent are specified in item 3 under the heading "Development which may be carried out with development consent". One of the purposes of development so specified is "commercial premises". If the proposed development can be characterised as being for the purpose of "commercial premises", it is permissible with development consent and is not prohibited. Item 4 of the Table for Zone 4(b) only prohibits development that is not included in item 2 or 3. If the proposed development is for a purpose of development included in item 3, relevantly "commercial premises", it is not prohibited by item 4.

The term "commercial premises" is not defined directly by LEP 1995. Rather, its meaning is derived by LEP 1995 adopting the Model Provisions that define the term. Clause 6 of LEP 1995 adopts all of the Model Provisions except for nine definitions (none of which is "commercial premises") and cl 15 (which concerns the conversion of buildings but that is not relevant here). Hence, the whole of cl 4 of the Model Provisions containing all of the definitions of terms, except for the nine excluded definitions, is adopted by and is incorporated as part of cl 6 of LEP 1995. The definition of "commercial premises" is one of these definitions in cl 4 of the Model Provisions that has been adopted and incorporated as part of cl 6 of LEP 1995.

This definition of "commercial premises" has two parts. The first part describes what is included: "a building or place used as an office or for other business or commercial purposes". The second part is what is excluded: "but does not include a building or place elsewhere specifically defined in this clause or a building or place used for a purpose elsewhere specifically defined in this clause". The reference to "this clause" is to cl 4 of the Model Provisions (which is adopted by cl 6 of LEP 1995). The excluded buildings or places are those specifically defined elsewhere in cl 4 of the Model Provisions. Hence, it is to the other categories of development defined in cl 4 of the Model Provisions that regard needs to be had in order to determine whether the proposed development is a building or place excluded from "commercial premises".

The purposes of development of "airport-related land use" and "air freight forwarder" are not terms "elsewhere specifically defined" in cl 4 of the Model Provisions. Hence, they cannot constitute exclusions from the purpose of "commercial premises".

The terms "airport-related land use" and "air freight forwarder" are terms defined in sch 1 of LEP 1995. Clause 7(1)(a) of LEP 1995 provides that those terms have the meanings given to them in sch 1. However, this does not cause a building used for those purposes to be excluded from the adopted definition of "commercial premises". Clause 7(1)(a) does not have this effect.

Indeed, cl 7(1)(a) expressly excepts those terms within the Model Provisions adopted by cl 6. It provides:

In this plan:

(a) the terms used (other than those within the Environmental Planning and Assessment Model Provisions 1980 adopted by clause 6) have the meaning given to them in Schedule 1.

This effects a separation of the terms defined in the Model Provisions adopted by cl 6 of LEP 1995 and the terms defined in sch 1 of LEP 1995. The two sets of definitions do not intersect.

The consequence is that determining whether the proposed development could be characterised as being for the purpose of "commercial premises" involved, first, determining whether it could be described as falling within the first part of the definition of "commercial premises" and, if so, secondly, determining whether it fell with the exclusions in the second part of the definition, these being a building or place, or a building or place used for a purpose, elsewhere specifically defined in cl 4 of the Model Provisions adopted by cl 6 of LEP 1995 (except for the excluded definitions in cl 6(a)).

The Commissioner found, and the Council does not appeal against the finding, that the proposed development did fall within the first part of the definition of "commercial premises" - the building was and would be used as an office or for other business or commercial purposes. There was no finding by the Commissioner, and the Council did not contend a finding should have been made, that the building fell within a building, or a building used for a purpose, elsewhere specifically defined in cl 4 of the Model Provisions adopted by cl 6 of LEP 1995. Instead the Council's argument was that it fell within two purposes not specifically defined in cl 4 of the Model Provisions but rather in sch 1 of LEP 1995. However, for the reasons I have given, those purposes are not applicable to the exclusions from the definition of "commercial premises".

Accordingly, the Commissioner did not err on a question of law in characterising the proposed development as being for the purpose of "commercial premises".

No error in characterisation as only "commercial premises"

I also reject the Council's alternative argument that the proposed development should be characterised as being for two independent purposes, one the permissible purpose of "commercial premises" and the other the prohibited purpose of "airport-related land use" or "air freight forwarder".

Having regard to the structure and language of the land use table for Zone 4(b), the manner in which the terms of "commercial premises", "airport-related land use" and "air freight forwarder" are defined, and the nature, extent and other features of the proposed development, once the proposed development is properly characterised as being for the permissible purpose of "commercial premises" in item 3, it cannot be characterised as being for the purposes that are prohibited under item 4 of "airport-related land use" or "air freight forwarder".

The structure of the land use table is to nominate the purposes of development that may be carried out without development consent (item 2) and with development consent (item 3) but to leave as innominate development which is prohibited (item 4). The mechanism by which the innominate purposes of development are prohibited is by way of prohibiting "Any development other than development included in item 2 or 3".

Because the category of prohibited development is formulated as being "any development other than development included in item 2 or 3", it necessarily does not and cannot include any purpose of development that is specifically nominated in item 2 or 3: Friends of Pryor Park Inc v Ryde Council (Unreported, Land and Environment Court of NSW, Bignold J, 25 September 1995) at 6.

The terms "commercial premises", "airport-related land use" and "air freight forwarder" overlap, although not entirely. They each deal with a building or place used for certain business or commercial purposes. The purpose of "commercial premises", which is "a building or place used as an office or for other business or commercial purposes", would include a building or place used as an office or for other business or commercial purposes related to Sydney Airport, which would fall within "airport-related land use", as well as "a building or place used for the assembly, storage or land transport of air freight", which would fall within "air freight forwarder".

The consequence is that if, having regard to the character, extent and other features of Pet Carriers' proposed development, it can be characterised as being for "commercial premises" in item 3, it is not for a purpose of development "other than" development included in item 3.

The activities involved in the carrying out of the proposed development, having regard to their character, extent and other features, wholly fall within the general purpose of "commercial premises"; there is no activity which can be regarded as falling outside that purpose and for the different and independent purpose of "airport-related land use" or "air freight forwarder". The fact that Pet Carriers' use of its building as an office or for other business or commercial purposes may be related to Sydney Airport (if that be established) does not cause the development to be for a purpose independent of the purpose of commercial premises. Use of the building as an office or for other business or commercial purposes related to Sydney Airport is a subset of the broader use of the building as an office or for other business or commercial purposes. Similarly, use of the building for the assembly, storage or land transport of air freight (if that be established) is a subset of the broader use of the building as an office or for other business or commercial premises.

The judicial decisions relied on by the Council are not authority to the contrary. Each case turns on the terms of its own facts and the relevant environmental planning instrument and land use table.

The decisions fall roughly into two categories. First, there are decisions which involve a purpose which is a genus and one or more species of purposes falling within that genus. If the genus is a nominate prohibited purpose, development for that purpose will be prohibited even if it could also come within one or more species of purposes that are innominate permissible purposes. Conversely, if the genus is a nominate permissible purpose, development for that purpose will be permissible even if it could also come within one or more species of purposes that are innominate prohibited purposes. Decisions in this first category include Egan v Hawkesbury City Council (1993) 79 LGERA 321; Hawkesbury City Council v Sammut [2002] NSWCA 18; (2002) 119 LGERA 171; Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343; and Friends of Pryor Park Inc v Ryde City Council.

In Egan v Hawkesbury City Council, the issue was whether a quarry with a crushing plant was prohibited. The relevant local environmental plan provided in item 4 of the land use table that "industries" were nominate prohibited purposes and in item 3 that development for a purpose other than one included in item 2 (development permissible without development consent) and item 4 (prohibited development) was permissible with development consent. The Court of Appeal (by majority) held that "industries" included all kinds of industries, including "extractive industry". Even if the proposed development could be said to be for an "extractive industry", it would still be prohibited. Mahoney JA (with whom Cripps JA agreed) rejected the respondents' submission that if a proposed development is within the definition of an activity which is proscribed (such as "industries"), it would yet not be proscribed if it fell also within a definition or class of activity not so proscribed (such as "extractive industry"). That was not how the local environmental plan was intended to operate:

It intended to remove from use with council approval the kinds of activities falling within the definition as proscribed. The fact that a proscribed activity might fall within another definition was not intended to have the effect that it could be carried on, or carried on with consent (at 328).

Mahoney JA also rejected the respondents' alternative submission that the terms of the land use table indicated an intention that consent could be given for a use which is an "extractive industry", even though the use was also an "industry" within the proscription. The argument was that consent could be given for "any purpose other than a purpose included in Item 2 or 4", that "extractive industry" was such a purpose, and accordingly consent could be given for it. Mahoney JA held:

If the terms of cl 9 and its tables be read literally, this argument is unsound. Consent can be given for a purpose "other than a purpose included in item ... 4"; the purpose for which consent is sought is an industry and so within Item 4; and accordingly consent cannot be given for it. This objection can be met only if "industry" as used in item 4 is constructed to exclude uses otherwise defined and so to exclude a use which is an "extractive industry". But to do that raises the difficulties to which I have referred (at 328).

The land use table in that case is the converse to the land use table in the present case. There, the prohibited purposes were nominated and the permissible purposes were purposes other than the prohibited purposes. Here, the permissible purposes are nominated and the prohibited purposes are purposes other than the permissible purposes. However, the same logic applied by the Court of Appeal applies here. There, "extractive industry" was one kind of industry falling within the prohibited purposes of "industries" in item 4 of the land use table. "Extractive industry" could not therefore be for a purpose "other than a purpose included in item 4". Here, the proposed activities fall within the permissible purpose of "commercial premises" in item 3 of the land use table and hence could not be a development "other than development included in item 3".

Furthermore, the Court of Appeal's reasoning for rejecting the argument that the prohibition was not intended to apply to something which, though falling within the nominate prohibited purpose of "industry", also falls within another kind of activity separately defined, is also applicable in the present case. LEP 1995 and the land use table in the present case intended to permit with development consent all of the kinds of activities falling within the definition of "commercial premises". The fact that some of the permitted activities might also fall within another kind of development that is prohibited was not intended to have the effect that the permitted activities could not be carried out with consent.

In Hawkesbury City Council v Sammut, development for the purpose of "industries" was nominated as prohibited. The proposed development was alleged to be for the purpose of "rural industry". "Rural industry" was not a nominate prohibited development and therefore was alleged to be an innominate permissible development. The Court of Appeal held that Egan v Hawkesbury City Council was indistinguishable and its correctness should not be revisited. The environmental planning instrument proscribed all industries, including a rural industry. The proposed development was properly characterised as an "industry" which was prohibited and it mattered not that it could also be characterised as a "rural industry": it was still prohibited (at [23], [24], [34]).

In Abret v Wingecarribee Shire Council, development for the purpose of "residential flat buildings containing more than 2 dwellings (other than single storey units for aged persons)" was nominated as prohibited. The proposed development was alleged to be a seniors housing project. "Seniors housing" was not a nominate prohibited development and was therefore alleged to be an innominate permissible development. The Court of Appeal again applied the reasoning in Egan v Hawkesbury City Council. The proposed development was for the prohibited purpose of "residential flat buildings" (at [64]). There was no evidence that the development was to be limited to seniors housing, and hence could be characterised as being for the purpose of "seniors housing" (at [65], [66]). But even on the assumption that it was to be for the purpose of seniors housing, the proposed development was still for the prohibited purpose of residential flat buildings. That purpose was not independent of, and did not serve or was not incidental to, the purpose of seniors housing. The proposed development was therefore prohibited (at [67], [68]).

Each of these cases is distinguishable from the present case in the same way that I have said Egan v Hawkesbury City Council is distinguishable. In Hawkesbury City Council v Sammut, the specific use of "rural industry" fell within the general use of "industries" which was prohibited. In Abret v Wingecarribee Shire Council, the specific use of residential flat buildings for seniors housing fell within the general use of "residential flat buildings" which was prohibited. Conversely, in the circumstances of the present case, Pet Carriers' use for the specific purposes of "airport-related land use" and "air freight forwarder" fell within use for the general purpose of "commercial premises" which is permissible.

Although not relied on by the Council, the decision in Friends of Pryor Park Inc v Ryde City Council is also relevant. In that case, the issue was whether the approved development was for the prohibited purpose of a "child care centre" and not for the permissible purpose of "community facilities". The land use table in the applicable planning scheme ordinance nominated in Column IV the permissible purposes of development, including "community facilities", and prohibited development for "Any purpose other than those referred to in Column ... IV". "Community facilities" and "child care centre" were defined in the ordinance in such a way that a child care centre was one kind of community facility.

Bignold J held that the purpose of "child care centre" was a species of the genus "community facilities" (at 7 and 10). Once this was acknowledged, "it would be an extraordinary result to conclude that although the genus is a permissible purpose one of its species is nonetheless a prohibited purpose. Such a conclusion would do extreme and unjustified 'violence to the logical structure of the definition' ('of community facilities')" (at 10).

Instead, Bignold J held (at 6) that consent could validly be granted to a development for the purposes of "community facilities", notwithstanding that the development also fell within the purpose of "child care centre":

Properly construed, cl 22 of the Ryde PSO stipulates that "community facilities" is a permissible purpose of development. Accordingly, development consent for that purpose may legally be granted. That is what the First Respondent did in the present case. The fact that the approved development also falls within the definition of "child care centre" does not affect (i) the legal effect of cl 22 stipulating "community facilities" as a permissible purpose, and (ii) the competence and capacity for the First Respondent to grant development consent for that permissible purpose. This conclusion flows from the proper interpretation of cl 22 of the Ryde PSO because the category of prohibited "purposes" (formulated in the Land Use Table as "any purpose other than those referred to in Column II or IV)" necessarily does not, and cannot, include the purpose "community facilities" referred to in Column IV of the Table. This construction is consistent with the construction adopted by Mahoney JA of a similarly worded "Land Use Table" in Egan v Hawkesbury City Council (1993) 79 LGERA 325 at 328.

The same logic applies to the present case. The activities involved in Pet Carriers' proposed development that might cause the development to be for the purpose of "airport-related land use" or "air freight forwarder" make the development be for the purpose of "commercial premises". In the circumstances of the proposed development, any specific use for "airport-related land use" or "air freight forwarder" would come within the general use for "commercial premises". Just as Bignold J held in that case, it would be an extraordinary result in this case, that although the genus of "commercial premises" is a permissible purpose, two of its species are nonetheless prohibited purposes.

Bignold J's reasons for distinguishing the judgments in C B Investments Pty Ltd v Colo Shire Council and Egan v Hawkesbury City Council are also applicable to the present case.

The second category of decisions relied on by the Council involve development that could be seen to be for two or more different purposes, one being permissible and the others being prohibited. The inquiry is whether the prohibited purposes are subsumed in the permissible purpose so that it is legitimate to disregard the prohibited purposes and treat the permissible purpose as that for which the land is being used, or whether they are independent of each other so that the land is being used for both prohibited and permissible purposes. Decisions in this category include Foodbarn Pty Ltd v Solicitor-General; C B Investments Pty Ltd v Colo Shire Council; Lizzio v Ryde Municipal Council; Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404; Berowra RSL Community and Bowling Club Ltd v Hornsby Shire Council [2001] NSWLEC 243; (2001) 114 LGERA 345; and Bardsley-Smith v Penrith City Council.

In Foodbarn Pty Ltd v Solicitor-General, the issue was whether buildings were used for the nominate prohibited purpose of "shops". The trial judge and the Court of Appeal unanimously found on the evidence that the buildings were used as shops (at 159). Foodbarn sought to overcome this finding by different arguments of construction. One was that the definition of "shop" should be construed so as to mean for the dominant purpose of selling. Glass JA (with whom Samuels and Hutley JJA agreed) rejected the proposition that where premises are used for two purposes, that which is not dominant is for planning purposes to be disregarded (at 160). Glass JA held that:

It may be deduced that where a part of the premises is used for a purpose which is subordinate to the purpose which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used. Doubtless the same principle would apply where the dominant and servient purposes both relate to the whole and not to separate parts ... Where the whole of the premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged. The ordinance is nonetheless being disobeyed (at 161).

Glass JA held that sales by retail in that case were not ancillary to other purposes, and hence use for the prohibited purpose of shops was not subsumed by other permissible purposes (at 161).

Glass JA also rejected another argument of construction that warehouse was an exclusion from the definition of "shop" in the ordinance. The definition of "shop" excluded a building or place elsewhere specifically defined in the definitions clause of the ordinance. "Warehouse" was one such specific definition. Glass JA interpreted the definition of "shop" to include all shops except shops specially defined. The definition of "warehouse" involved sale to retailers and hence could not fall within "shop" which involved sales by retailers. Warehouse was, therefore, not a shop and could not be excluded from the definition of shop by the proviso (at 161).

This case differs from the present case. Here, Pet Carriers' use of its building is not for two or more conflicting purposes, such as "shops" and "warehouse". The activities of Pet Carriers which could be said to fall within the definitions of the specific purposes of "airport-related land use" and "air freight forwarder" are the very same activities that fall within the definition of the general purpose of "commercial premises". The purposes of "airport-related land use" or "air freight forwarder" cannot be regarded as operating in a way which is independent of the purpose of "commercial premises". It is therefore legitimate, in the circumstances of this case, to ignore the former purposes and treat the latter purpose as the purpose for which the building is being used.

In Ku-ring-gai Municipal Council v Geoffrey Twibill & Associates, the issue involved the characterisation of a planned retirement village. Under the relevant planning scheme ordinance, "boardinghouses" and "residential flat buildings" were nominated prohibited purposes in column V of the land use table for the relevant zone. The innominate permissible purposes were purposes not prohibited by column V. Hospital was one such innominate purpose. "Hospital" was defined to include a building used as a "home for aged ... persons". The Court of Appeal unanimously held the proposed development was not properly to be characterised as a home for aged persons, and hence a hospital, and therefore was not for a permissible purpose: at 159 per Glass JA, at 161, 162-163 per Samuels JA, and 163, 166-167 per Mahoney JA.

Glass JA further considered whether, if the proposed development could have been said to be for the permissible purposes of building a home for the aged, it was also for the prohibited purposes of residential flat buildings or boardinghouses. Glass JA observed that:

When two or more purposes co-exist one of which is prohibited and one permitted (with or without consent), it is necessary as a matter of construction to determine which of the two shall prevail. It is proper in my view to discern a legislative intention in the ordinance that if one of two conflicting purposes is dominant and the other servient, it is the former which lends its character to the development. On the other hand, if neither subserves the other, the ordinance on its proper construction treats the development as actuated by two independent purposes one of which is allowed and one disallowed: Foodbarn Pty Ltd v Solicitor-General (at 160).

Glass JA found that the purposes of "residential flat buildings" and "boardinghouses" were ancillary to the dominant purpose of "hospital" and in accordance with principle and authority it was legitimate to disregard the prohibited purposes and treat the dominant purpose as being the permissible purpose (at 160).

Again, this case differs from the present case. There is not a use for conflicting purposes. Any use by Pet Carriers that could be said to be for the purposes of "airport-related land use" or "air freight forwarder" is not independent of the use for the purpose of "commercial premises".

In C B InvestmentsPty Ltd v Colo Shire Council, the relevant interim development order provided that the land "shall be developed only for the purposes of agriculture", amongst other purposes. The land owner proposed to permit a contractor to remove sand and silt from the land in consideration for payment of royalties to the land owner based on the volume of extractive material removed. The land owner contended that the effect of the removal of the extractive material would be to improve its suitability for agricultural use. Hence, the land owner contended that what was proposed was development "only for the purposes of agriculture", but not otherwise.

The Supreme Court of NSW at first instance and the Court of Appeal (by majority) on appeal found that the proposed development constituted the carrying on of an extractive industry, which was not a purpose nominated as permissible with consent, and hence was prohibited (at 276 per Reynolds JA and 272 per Hope JA). The character, extent and other features of the activities which involve the removal of extractive material from the agricultural land were such that it was proper to regard them as constituting a use of land in themselves, not subsumed in any agricultural use of the land, and thus a use for the purpose of extractive industry. However, even if the development could properly have been characterised as also being for the permissible purpose of agriculture, the development would still have been prohibited. This circumstance would not have entitled the consent authority to give consent to the activities if, as well as having an agricultural character, it was also a use for a non-agricultural purpose (extractive industry). Hence, the development could not be said to be "only for the purposes of agriculture" (at 271-272 per Hope JA).

The case turned, therefore, on the proposed activities, having regard to their particular character, extent and other features, falling within the definition of "extractive industry" and not being able to be characterised as being "only for the purposes of agriculture". The use for extractive industry was not subsumed in the use for agriculture.

This is different to the present case. The character, extent and other features of Pet Carriers' development are not such that it is proper to regard them as constituting a use of land in themselves for the purposes of "airport-related land use" or "air freight forwarder", not subsumed in the use for the purpose of "commercial premises".

In Lizzio v Ryde Municipal Council, the issue was whether the landowners' selling of flowers from a roadside stall in front of their dwelling was prohibited, which it would be unless it was incidental to the use of the dwelling or was protected as a lawful existing use. The High Court held that the use of the land for the sale of flowers could not in the circumstances be regarded as incidental to the use for the purpose of a dwelling house, but that it was an existing use. The regularity and extent of the activities involved in selling the flowers and the fact that some of the flowers were grown on other land, meant that the use could not be regarded as merely incidental to the use for the purpose of a dwelling house, but rather represented a separate or additional use of the land (at 217, 223-224).

Again, this case is factually distinguishable from the present case. There, the flower-selling activities were distinct from the activities involved with use of a dwelling house and represented different uses of the land. Here, the activities involved are one and the same - the activities involved with use for the purposes of "airport-related land use" or "air freight forwarder" are the same activities involved with use for the purpose of "commercial premises". In any event, the former uses are subsumed in the latter use.

In Baulkham Hills Shire Council v O'Donnell, the land was used for the purpose of extraction of soil and sand (extractive industry). Under the then in force interim development order, it was permissible with development consent. The land owner did not have a current development consent. The Council sought to enjoin the carrying on of the use. The landowner relied on existing use rights, having started the use before development consent was required to be obtained. The Council argued that, for a period of nine years, the use for extractive industry was in pursuance of, and ancillary to, the use of land as a riding school and hence the use for extractive industry could be disregarded during this period. If so, there was not the necessary continuation of the existing use.

The Court of Appeal rejected the Council's argument, finding that both uses could and did physically co-exist on the same land at the same time. Neither use could be said to be either dominant or ancillary (at 409). Meagher JA (with whom Samuels and Clarke JJA agreed) stated:

Notwithstanding the principles laid down in Foodbarn, it does not follow that a use which can be said to be ancillary to another use is thereby automatically precluded from being an independent use of the land. It is a question of fact and degree in all the circumstances of the case whether such a result ensues or not ... But when one use of the land is by reason of its nature and extent capable of being an independent use it is not deprived of that quality because it is "ancillary to", or related to, or interdependent with, another use (at 409-410).

This is a different case to the present. Here, there are not two different uses physically co-existing on the same land at the same time. The nature and extent of Pet Carriers' use of the land do not support a conclusion that there are two or more independent uses of the land.

In Berowra RSL Community and Bowling Club Ltd v Hornsby Shire Council, the issue was whether an existing RSL and bowling club that was proposed to be redeveloped had existing use rights. Resolution of that issue involved characterisation of the existing use. Under the applicable local environmental plan, development for the nominate purposes of "recreation areas" and "recreation facilities" were permissible with consent and, except for a limited number of specified purposes, development for all other purposes, including "registered clubs", was prohibited. That is to say, the land use table nominated the permissible purposes and provided that development other than for the nominate permissible purposes was prohibited. Pearlman CJ held that the existing use fell within the definition of "recreation area" and "registered club". The land had areas used for a sporting activity or sporting facilities (there were bowling greens), which use fell within "recreation area". The land also had built upon it a building (the clubhouse) used by a body incorporated for a sporting purpose and registered under the Registered Clubs Act 1976 (the RSL Club), which use fell within "registered club" (at [27]). As the latter use was prohibited, notwithstanding that the former use was permissible with consent, the use of the land remained prohibited and consequently was an existing use (at [31]).

This case is different from the present. Although the use of the land was found to be for the nominate permissible purpose of "recreation area", that purpose did not include all of the activities being carried out on the land. It only included the areas used for sporting activities or sporting facilities - the bowling greens. It did not include the building or place used by the RSL Club (the clubhouse) and the activities carried on in the clubhouse.

Hence, the finding of the Court was that the land was used for both of the purposes of "recreation area" and "registered club". This was not a case, therefore, where all of the activities being carried on could be characterised as being for the permissible purpose but rather some of the activities could be said to be for a purpose other than the nominate permissible purpose and hence prohibited.

In contrast, in the present case, all of the activities proposed to be carried on in the building can be characterised as being for the permissible purpose of "commercial premises" and none for a purpose "other than" that purpose.

In Bardsley-Smith v Penrith City Council, development for the purpose of shops (other than specifically listed kinds of shops) were nominated under the applicable local environment plan as prohibited development. The development in question had been approved as a "Chemist Warehouse". Development for the purpose of a "warehouse or distribution centre" was an innominate permissible purpose (being a land use other than those included in the prohibited uses). The Court of Appeal found the use of the premises as an ePharmacy was for the purpose of a distribution centre and that a retail pharmacy confined to selling certain items was subordinate to the primary use as a distribution centre (at [92], [93]). Hence, the consent was not granted for the prohibited purpose of "shops" (at [94]).

In the present case, any use by Pet Carriers of its building for "airport-related land use" or "air freight forwarder" can be regarded as subordinate to the primary use for "commercial premises" which is permissible.

For these reasons, the Commissioner did not err in characterising the proposed development as being for the permissible purpose of "commercial premises" and not also for the prohibited purposes of "airport-related land use" or "air freight forwarder".

The Council's second ground of appeal against the development consent decision, and its only ground of appeal against the Council order decision, have not been established.

No denial of procedural fairness

If the proposed development could be characterised as being for the purpose of "commercial premises", the Commissioner had power to grant development consent to Pet Carriers' development application and to impose conditions of consent. As is the practice in appeals under s 97 of the EPA Act, the Council provided, on a without prejudice basis, draft conditions of consent that the Council contended the Court should impose if the Court found the development was permissible and otherwise meritorious. Pet Carriers disputed a number of these draft conditions. However, it did not dispute draft condition 4 which stated:

4. This consent is limited to a twelve (12) month period from the date of issue. A subsequent development application shall be submitted to Council for assessment to continue the use beyond the twelve month period.

Although Pet Carriers did not dispute condition 4, the Commissioner did not accept that the condition was appropriate in the circumstances of the case. The Commissioner said:

While there are times when a time limited consent is appropriate, such as when potential amenity impacts need to be reviewed or there is a likely future significant change to the planning regime affecting a site, I do not understand there to be any substantive reason that could justify a time limited consent in this case. Potential noise impacts are addressed by the acoustic enclosure and the adjoining and nearby land uses are industrial in nature and are likely to stay that way under LEP 2012. As there is no basis for condition 4 it can be deleted (at [59]).

The Council submitted that it was denied procedural fairness by the Commissioner determining not to impose condition 4. The Council submitted that as Pet Carriers had not disputed the draft condition, the Council called no evidence or made submissions to justify the condition.

The Council submitted that a fundamental departure from the rules of procedural fairness involves an error on law and a decision on a question of law: see Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; 173 LGERA 456 at [39]; Aldi Stores v Newcastle City Council [2010] NSWLEC 227 at [41], [42].

Pet Carriers submitted that there was no denial of procedural fairness to the Council by the Commissioner not imposing the condition limiting the duration of the consent to 12 months. The Council had not raised the issue of limiting the duration of the consent to 12 months in its statements of facts and contentions or in its submissions. It was not therefore an issue in respect of which the Council had an interest to be heard.

The question of whether a failure to accord with the requirements of procedural fairness involves a decision on a question of law able to be appealed under s 56A of the Court Act is not settled. There are decisions before the High Court's decision in Kostas v HIA Insurance Service Pty Ltd [2010] HCA 32; (2010) 241 CLR 390, that have held that failing to accord procedural fairness in the course of a hearing and in reaching a decision does not constitute a decision on a question of law so as to be amenable to an appeal that is limited to decisions on a question of law: see Hutchinson v Roads and Traffic Authority [2000] NSWCA 332 at [33] and Director-General, Department of Ageing, Disability and Home Care v Lambert [2009] NSWCA 102; (2009) 74 NSWLR 523 at [75]. However, the High Court in Kostas took a broader view, holding that a right of appeal against a decision on a question of law was not limited to explicit decisions formulated in the proceedings but also extended to decisions which were necessary steps in the reasoning process, whether or not made explicit by the decision-maker: at [23], [69], [78].

This broader view of what constitutes a decision on a question of law would support a conclusion that a failure of a commissioner to accord procedural fairness in the making of a decision disposing of proceedings in Class 1, 2 or 3 of the Court's jurisdiction or decisions which were necessary steps in the reasoning process, whether explicit or implicit, involves error on a decision on a question of law so as to found an appeal under s 56A of the Court Act. Although not referring to the pre-Kostas decisions or the decision in Kostas, this was the conclusion of Craig J in Cavasinni Constructions Pty Ltd v Fairfield City Council at [39] and Pepper J in Aldi Stores v Newcastle City Council at [41], [42]. Writing extra-curially, Beazley P has opined that a failure to accord procedural fairness is an error of law falling within ss 56A and 57 of the Court Act: The Hon Justice M J Beazley AO, "The distinction between questions of fact and law: a question without answer?" (2013) 11(3) The Judicial Review 279 at 291-292. I will proceed on the basis that a failure to accord procedural fairness is such an error amendable to an appeal under s 56A of the Court Act.

It may be accepted that, as a general rule, if a Commissioner or Judge hearing a Class 1 appeal is to determine the proceedings by reference to matters beyond the issues identified by the parties, then procedural fairness requires that the parties be given notice of those additional matters and accorded the opportunity to be heard upon them: see Cavasinni Constructions Pty Ltd v Fairfield City Council at [39]. This is because ordinarily, the Court determines the proceedings on the substantive issues joined between the parties: Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 at [42], [95] and Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 at [37], [38]. If, however, the Court considers that there are issues additional to those joined between the parties that need to be considered, procedural fairness requires the parties to be notified and given an opportunity to be heard in relation to the additional matters.

In the circumstances of this case, however, no substantive issue was raised by or joined between the parties regarding the imposition of a condition limiting the period during which development could be carried out in accordance with any consent granted by the Court. I do not consider that the Commissioner, in not imposing a draft condition proffered by the Council in its draft conditions, failed to accord procedural fairness to the Council.

The fundamental reason is that the Council did not raise as an issue in the proceedings the necessity or desirability of imposing a condition limiting the duration of the consent to 12 months from the date of issue with the consequence that any continuation of the use would require the making and approval of a fresh development application. The Council filed and served its statement of facts and contentions, originally on 9 October 2012 and amended them on 14 December 2012. None of the contentions raised this issue.

Contention 1 was that the proposed development was prohibited. Contention 2 was that LEP 2013, which was to be considered as imminent and certain to be made, prohibited the proposed development. Contention 3 was that the proposed development failed to satisfy the primary objective and secondary objective (b) of Zone 4(b) under LEP 1995. Contention 4 was that the proposed development failed to satisfy the objectives of Zone IN2 - Light Industrial under LEP 2013. Contention 5 was that the proposed development failed to satisfy the objectives of cl 17(2) of LEP 1995. Contention 6 was that the proposed development failed to satisfy specified requirements of the Industrial Development Control Plan No 33 - Industrial Development. Contention 7 was that the proposed development would unreasonably interfere with the amenity of the existing locality due to excessive noise and parking demand. Contention 8 was that the proposed developed failed to satisfy specified aims and objectives and performance criteria of the Off-Street Parking Development Control Plan. Contention 9 was that the subject site was unsuitable for the proposed development because it was a prohibited use in the zone, inconsistent with the zone objectives, and would cause adverse impacts on the amenity of the locality through excessive noise and parking demand. Contention 10 was that, essentially for reasons raised in the other contentions, granting approval would be contrary to the public interest.

None of these contentions expressly or by necessary implication raised the contention that, if consent were to be granted, the period within which the development may be carried out in accordance with the consent should be limited to 12 months.

Pet Carriers filed and served its own statement of facts and contentions responding to the Council's statements of facts and contentions. Pet Carriers' contentions were, in essence, denials of the Council's contentions.

Before and at the hearing, the parties' expert planners gave evidence addressing the contentions raised by the Council in its amended statement of facts and contentions. Because the issue of limiting the period in which development could be carried out had not been raised as a contention, the planners did not address the issue.

Notwithstanding that the Council had not raised the issue in its amended statement of facts and contentions, the Council unilaterally included in its draft conditions, condition 4 limiting the period during which development may be carried out, in accordance with the consent, to 12 months. It is not clear from the record when the Council first provided its draft conditions. The exhibit list does not record the original version of the draft conditions being tendered. Exhibit 3 was the amended, without prejudice conditions that were forwarded by the Council's solicitor to the Court on 10 April 2013, after the hearing had been adjourned on 22 March 2013. However, it appears that the Council did provide the original version of the draft conditions of consent to Pet Carriers prior to the hearing and to the Court at the hearing.

At the hearing (held on 21 and 22 March 2013), the Council did not raise in its submissions, either written or oral, the contention that the Court, if it found it had power to grant consent and was satisfied on the merits that it should grant consent, should impose a condition limiting the period during which development may be carried out in accordance with the consent so granted to 12 months.

It was incumbent on the Council to have drawn both Pet Carriers' and the Commissioner's attention to its proposed condition 4 given that the Council was seeking for the Court to impose a condition of a kind, and addressing an issue, that had not been raised in the proceedings.

Even after the hearing was adjourned on 22 March 2013 in order to permit the parties' planners to confer and produce a final joint report on the draft conditions, that final joint report was submitted on 10 April 2013 to the Court, and the Council's solicitor forwarded to the Court also on 10 April 2013 the draft conditions to which the planners had referred, the Council still did not raise as a contention that a condition limiting the period during which development may be carried out to 12 months should be imposed.

In summary, neither the Council nor Pet Carriers raised the contention, and hence there was no joining of issue between the parties, that a condition of consent should be imposed limiting the period in which development may be carried out in accordance with the consent to 12 months.

The nature of the condition, and the particular circumstances of the case, demanded that the Council raise as an issue in the proceedings the appropriateness of imposing such a condition. Section 80A(1)(a) of the EPA Act does empower a consent authority to impose a condition of development consent limiting the period during which development may be carried out in accordance with the consent so granted. However, such a condition is out of the ordinary. Development consents usually do not impose a limit on the period during which development may be carried out. They are of indefinite duration and run with the land, authorising whosoever is the occupant of the land to carry out development in accordance with the consent. If a council wishes to contend that the usual order of a grant of consent of unlimited period is not to be made, it should raise the issue as one of its contentions in its statements of facts and contentions filed in the proceedings.

Moreover, the particular circumstances of this case made it even more necessary for the Council to have raised the issue. The applicable local environmental plan had been changed. Under a savings provision, Pet Carriers' development application, which had been made but not finally determined before the commencement of LEP 2013, and its appeal to the Court would have to be determined by applying LEP 1995. Under LEP 1995, development for the purpose of commercial premises was a permissible purpose. However, any future development application which would be made after the commencement of LEP 2013 would have to be determined by applying LEP 2013. Under the applicable Zone IN2-Light Industrial in LEP 2013, development for the purpose of commercial premises is a nominate prohibited development. Hence, if Pet Carriers were to do what condition 4 required it to do of making a development application seeking development consent to continue to carry out the development for the purpose of commercial premises, LEP 2013 would preclude a consent authority from granting consent because it would be for a prohibited development. The Council, in seeking for the Court to impose condition 4, was therefore limiting the period during which the proposed development could ever be carried out on the site to only 12 months. This is such a fundamental departure from the ordinary operation and effect of development consents that it was incumbent on the Council to have raised the issue expressly as one of its contentions in the proceedings.

Hence, both because of the nature of the condition and the particular consequences in this case, the Council was obliged to raise the issue expressly as one of the contentions in the proceedings and it should not have included condition 4 as a condition in its draft conditions without doing so and also without expressly bringing the condition to the attention of the other party and the Court.

If the Council had done what it properly ought to have done and raised the imposition of the condition as a contention, the Council would have borne the onus of adducing evidence and making submissions in support of its contention that such a condition should have been imposed. Because the Council did not raise it as an issue in the proceedings, it did not adduce any evidence or make any submissions in support of the condition. However, this was a consequence of the Council's own conduct.

In these circumstances, the Council has not been denied procedural fairness by the Commissioner determining not to impose condition 4 which the Council had included in its draft conditions. The Council could have no legitimate expectation that the Commissioner would impose a condition of that nature and with that consequence, which had not been expressly raised as an issue in the proceedings, or that the Commissioner would not decline to impose such a condition without first giving the Council an opportunity to call evidence and make submissions in support of imposition of the condition.

Accordingly, it was not procedurally unfair for the Commissioner not to have imposed the condition of consent or not to have given the Council an opportunity to be heard before not imposing the condition.

For these reasons, the Council has not established its first ground of appeal against the development consent decision.

Conclusion and orders

The result is that the Council's appeals against the Commissioner's development consent decision and Council order decision should both be dismissed.

The parties accepted that the costs of the appeals should follow the event. As the Council has been unsuccessful, the Council should pay Pet Carriers' costs of the appeals.

The orders of the Court are:

(1) The appeals are dismissed.

(2) The appellant is to pay the respondent's costs of each appeal.

**********

Decision last updated: 13 September 2013

Medium Neutral Citation:	Botany Bay City Council v Pet Carriers International Pty Limited [2013] NSWLEC 147
Hearing dates:	19 August 2013
Decision date:	13 September 2013
Jurisdiction:	Class 1
Before:	Preston CJ
Decision:	The orders of the Court are: 1. The appeals are dismissed. 2. The appellant is to pay the respondent's costs of each appeal.
Catchwords:	APPEAL - appeals against Commissioner's decisions on questions of law - Commissioner grants development consent for use of building for pet transportation business and revokes Council's order for cessation of use - characterisation of purpose of development - whether Commissioner erred in holding that development was permissible as "commercial premises" and not prohibited as "airport-related land use" and/or "air freight forwarder" under the relevant local environmental plan - Commissioner did not err in characterising development - whether Commissioner denied Council procedural fairness by not imposing proffered draft condition that was not in dispute in granting development consent - consideration of whether the failure of a commissioner to accord with requirements of procedural fairness in making a decision involves error on a decision on a question of law - Commissioner did not deny Council procedural fairness - appeals dismissed - Council to pay respondent's costs of each appeal
Legislation Cited:	Environmental Planning and Assessment Act 1979 ss 80A(1)(a), 97, 121B Land and Environment Court Act 1979 s 56A Registered Clubs Act 1976
Cases Cited:	Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343 Aldi Stores v Newcastle City Council [2010] NSWLEC 227 Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 Bardsley-Smith v Penrith City Council [2013] NSWCA 200 Berowra RSL Community and Bowling Club Ltd v Hornsby Shire Council [2001] NSWLEC 243; (2001) 114 LGERA 345 Botany Bay City Council v Marana Developments Pty Ltd [2012] NSWLEC 15 Cavasinni Constructions Pty Ltd v Fairfield City Council [2010] NSWLEC 65; 173 LGERA 456 C B Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270 Chambers v Maclean Shire Council [2003] NSWCA 100; (2003) 57 NSWLR 152; (2003) 126 LGERA 7 Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; (2007) 151 LGERA 400 Codling v Manly Council [2011] NSWLEC 57; (2011) 184 LGERA 352 Design Power Associates Pty Ltd v Willoughby City Council [2005] NSWLEC 470; (2005) 148 LGERA 233 Director-General, Department of Ageing, Disability and Home Care v Lambert [2009] NSWCA 102; (2009) 74 NSWLR 523 Egan v Hawkesbury City Council (1993) 79 LGERA 321 Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 Friends of Pryor Park Inc v Ryde Council (Unreported, Land and Environment Court of NSW, Bignold J, 25 September 1995) Hawkesbury City Council v Sammut [2002] NSWCA 18; (2002) 119 LGERA 171 Hutchinson v Roads and Traffic Authority [2000] NSWCA 332 Kostas v HIA Insurance Service Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 Ku-ring-gai Municipal Council v Geoffrey Twibill & Associates (1979) 39 LGRA 154 Lizzio v Ryde Municipal Council (1983) 155 CLR 211 Pet Carriers International Pty Ltd v Botany Bay Council [2013] NSWLEC 1077 Segal v Waverley Council [2005] NSWCA 310, (2005) 64 NSWLR 177 Shire of Perth v O'Keefe (1964) 110 CLR 529 The Council of the City of Parramatta v Precision Rubber Service Pty Ltd (Unreported, Land and Environment Court of NSW, Pearlman CJ, 10 March 1995) Warringah Shire Council v Raffles [1979] 2 NSWLR 299; (1978) 38 LGERA 306 Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707
Texts Cited:	M J Beazley AO, "The distinction between questions of fact and law: a question without answer?" (2013) 11(3) The Judicial Review 279
Category:	Principal judgment
Parties:	Botany Bay City Council (Appellant) Pet Carriers International Pty Limited (Respondent)
Representation:	Mr T S Hale SC (Appellant) Mr J S van Aalst (Barrister) (Respondent) Houston Dearn O'Connor (Appellant) John Hertz and Associates (Respondent)
File Number(s):	10390 and 10391 of 2013
Publication restriction:	No