Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd

[2010] NSWCA 214

Reported Decision: 175 LGERA 433

New South Wales

Court of Appeal

CITATION:	Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd & Ors [2010] NSWCA 214
HEARING DATE(S):	29 July 2010
JUDGMENT DATE:	2 September 2010
JUDGMENT OF:	Tobias JA at 1; McColl JA at 46; Handley AJA at 47
DECISION:	(a) Appeal dismissed. (b) The appellant to pay the first and second respondents’ costs of the appeal up to and including 11 July 2010 and to pay the third respondent’s costs of the appeal from and including 12 July 2010.
CATCHWORDS:	ENVIRONMENT AND PLANNING – development control – planning instruments – local environmental plan – Ku-ring-gai LEP 194 – interpretation – whether approval of Governor required under s 28(3) of EPA Act to provisions of LEP 194 that effected change of zoning – whether provisions of LEP 194 provide that regulatory instrument specified in LEP 194 shall not apply to any particular development STATUTORY INTERPRETATION – extrinsic material – dictionaries – definition of “provide”, “provision” and “tenor” - STATUTORY INTERPRETATION – principles – context reading provision in – plain and unambiguous text giving effect to – purposive approach STATUTORY INTERPRETATION – EPA Act, s 28(2) and (3) – “provide”, “provision”, “regulatory instrument”, “specify”, “tenor”
LEGISLATION CITED:	Conveyancing Act 1919 Environmental Planning and Assessment Act 1979 Income Tax Act 1952 (UK) Interpretation Act 1987 Ku-ring-gai Local Environmental Plan No 74 Ku-ring-gai Local Environmental Plan No 194 Ku-ring-gai Planning Scheme Ordinance Local Government Act 1919 Miscellaneous Acts (Planning) Repeal and Amendment Act 1979
CATEGORY:	Principal judgment
CASES CITED:	Commissioner of Stamps (SA) v Telegraph Investment Co to Ltd [1995] HCA 34; 184 CLR 453 Container Terminals Aust Ltd v Xeras (1991) 23 NSWLR 214 Coshott v Ludwig (1997) NSW ConvR 56,366 Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd [2009] NSWSC 717 Cumerlong Holdings Pty Limited v Dalcross Properties Limited & Anor (No 2) [2009] NSWSC 1157 Inland Revenue Commissioners v Kenmare [1956] 1 Ch. 483 IRC v Jamieson [1964] AC 1445 McMorran v Marrison (Contractors) Ltd [1944] 2 All ER 448 Reid v Allan (1849) 4 Ex 326; 154 ER 1237 Re The Arthur Average Association Ex parte Cory (1875) 44 LJ (NS) 569 Toowoomba Foundry Pty Ltd v The Commonwealth (1945) 71 CLR 545 Walsh v Secretary of State for India [1863] 10 HLC 367; 11 ER 1068
TEXTS CITED:	A Delbridge et al, Macquarie Dictionary, 3rd ed (rev) (2001) Macquarie Dictionary Publishers Bryan A. Garner, Black’s Law Dictionary, 8th ed (2004) West Group Daniel Greenberg, Stroud’s Judicial Dictionary of Words and Phrases, 7th ed (2006), vol 3, Sweet & Maxwell Earl Jowitt and Clifford Walsh, The Dictionary of English Law, 1st ed (1959) Sweet & Maxwell Ltd J Simpson and E Weiner (eds), The Oxford English Dictionary, 2nd ed (1989), vol XII, Clarendon Press
PARTIES:	Cumerlong Holdings Pty Limited Dalcross Properties Pty Limited Dalcross Holdings Pty Limited Australasian Conference Association Pty Limited
FILE NUMBER(S):	CA 2009/298592
COUNSEL:	A: P McEwen SC / N Eastman 1,2&3R: A Galasso SC / G Newport J Griffiths SC / C Spruce (amicus curiae - Minister for Planning)
SOLICITORS:	A; Williamsons Solicitors Pty Limited, Sydney 1,2&3 R: Robert Napoli & Co, Hornsby
LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	SC 4269/08
LOWER COURT JUDICIAL OFFICER:	Smart AJ
LOWER COURT DATE OF DECISION:	29 July 2009
LOWER COURT MEDIUM NEUTRAL CITATION:	Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd [2009] NSWSC 717

CA 2009/298592
SC 2008/4269

TOBIAS JA
McCOLL JA
HANDLEY AJA

Thursday 2 September 2010

CUMERLONG HOLDINGS PTY LIMITED v DALCROSS PROPERTIES PTY LIMITED & ORS

FACTS

The appellant, Cumerlong Holdings Pty Limited, is the registered proprietor of Lot 1 DP302605 known as 9 Werona Avenue, Killara. The first respondent, Dalcross Properties Pty Ltd, was the registered proprietor of Lots 102 and 103 in DP834629 known as 26 Stanhope Road, Killara. The second respondent, Dalcross Holdings Pty Ltd, operates a private hospital upon Lot 101 in DP834629 which adjoins Lot 103. On 28 June 2010 the third respondent, Australasian Conference Association Limited, acquired Lots 102 and 103.

On the registration of DP834629 on 10 November 1993 there was created pursuant to s 88B(3) of the Conveyancing Act 1919 a restriction on use upon Lots 102 and 103 which benefited, amongst other lots, the appellant’s land. The terms of the restriction provided that no part of Lots 102 and 103 was to be used, amongst other things, for the purpose of any hospital (the covenant).

Prior to 28 May 2004, Lot 103 was zoned 2(b) under the Ku-ring-gai Planning Scheme Ordinance (KPSO). Clause 68(2) of the KPSO provided that the operation of any restriction on the use of land in any zone (other than, amongst other zones, zone 2(b)) was suspended. On 28 May 2004 Ku-ring-gai Local Environmental Plan No 194 (LEP 194) was gazetted by which the zoning of large areas of land (including Lot 103) were rezoned to 2(d3). Clause 68(2) of the KPSO did not exempt zone 2(d3) from its operation, meaning that the prima facie effect of clause 68(2) was to suspend the operation of the covenant.

On 27 August 2008 Ku-ring-gai Municipal Council granted a deferred commencement development consent to an application by the second respondent to, amongst other things, construct over Lot 103 an extension of the hospital erected upon Lot 101.

On 18 August 2008 the appellant filed a summons in the Equity Division of the Supreme Court seeking an order that the first and second respondents be restrained from using or permitting to be used the land in Lots 102 and 103 as, relevantly, a hospital in contravention of the covenant. On 30 October 2009 Smart AJ dismissed the summons.

HELD

As to whether the approval of the Governor was required under s 28(3) of the Environmental Planning and Assessment Act 1979 (EP&A Act) to the provisions of LEP 194 that effected a change of zoning of Lot 103

Per Tobias JA, McColl JA agreeing:

(a) The relevant question is whether or not the relevant zoning provisions of LEP 194 met the terms of s 28(2) of the EP&A Act in that they provided that a regulatory instrument (which included the covenant) specified in LEP 194 shall not apply to any particular development.

(b) In the present context a “provision” referred to in s 28(3) is one which, for the purpose of s 28(2), provides that, to the extent necessary to serve the relevant purpose, the regulatory instrument specified in a particular environmental planning instrument shall not apply to any such development. In other words, a “provision” is a clause or statement which “provides” for a certain result or outcome.

(c) Section 28(3) of the EP&A Act refers to a provision that accords with the text of s 28(2). Clause 68(2) is such a provision but no such provision is contained in LEP 194.

(d) The whole purpose of cl 68(2) and its then empowering provision, s 342G(4) of the Local Government Act 1919, was to suspend or render inapplicable private covenants where they were inconsistent with the land which should be developed.

Coshott v Ludwig (1997) NSW ConvR 56,366 applied.

(e) Absent a provision in LEP 194 which provided that a regulatory instrument specified therein was not to apply to any development permissible under that LEP, it must follow that s 28(3) was not engaged and the Governor’s approval of the relevant zoning provisions of LEP 194 was not required.

Per Handley AJA dissenting:

(a) Section 28(2) of the EP&A Act can only apply to LEP 194 if that instrument was an exercise of the power it conferred to “provide”, and if that instrument “specified” the regulatory instrument or class of regulatory instrument affected. If the LEP does this that “provision” will only “have effect according to its tenor” if it was approved by the Governor.

(b) An argument that the protection of s 28(3) would be engaged if the suspension of covenants was achieved by an LEP drafted one way, but the same result can be achieved without engaging s 28(3) if the LEP is drafted another way invites the closest scrutiny.

(c) The words “an … instrument may provide” in s 28(2) include an instrument which produced the relevant result although it did not spell that out in the text.

IRC v Jamieson [1964] AC 1445 applied.

(d) Since something may be specified if it is unambiguously identified the question is whether the LEP unambiguously identifies restrictive covenants that would prevent permissible development.

Reid v Allan (1849) 4 Ex 326; 154 ER 1237; Re The Arthur Average Association Ex parte Cory (1875) 44 LJ (NS) 569; McMorran v Marrison (Contractors) Ltd [1944] 2 All ER 448 applied.

(e) LEP 194 provided that restrictive covenants shall not apply in the new zone because it brought about that result, and it specified those restrictive covenants by incorporating or being incorporated into the KPSO which it amended. When the two instruments are read together the restrictive covenants are unambiguously identified and therefore specified.

(a) Appeal dismissed.

(b) The appellant to pay the first and second respondents’ costs of the appeal up to and including 11 July 2010 and to pay the third respondent’s costs of the appeal from and including 12 July 2010.
______________________________________________________________________________________________________________________________

CA 2009/298592
SC 2008/4269

TOBIAS JA
McCOLL JA
HANDLEY AJA

Thursday 2 September 2010

CUMERLONG HOLDINGS PTY LIMITED v DALCROSS PROPERTIES PTY LIMITED & ORS

Judgment

1 TOBIAS JA: On 18 August 2008 the appellant, Cumerlong Holdings Pty Ltd, filed a summons in the Equity Division of the Supreme Court seeking an order that the first and second respondents, Dalcross Properties Pty Ltd and Dalcross Holdings Pty Ltd, be restrained from using or permitting to be used the land in Lots 102 and 103 in DP834629 as, relevantly, a hospital in contravention of a restriction on use created by an instrument which took effect pursuant to s 88B(3) of the Conveyancing Act 1919 upon the registration of that deposited plan. On 30 October 2009 the primary judge, Smart AJ, dismissed the summons and ordered the appellant to pay the respondents’ costs. The appellant appeals to this Court from those orders.

THE RELEVANT FACTS

2 The appellant is the registered proprietor of Lot 1 DP302605 known as 9 Werona Avenue, Killara (the appellant’s land). The first respondent, Dalcross Properties Pty Ltd, is the registered proprietor of Lots 102 and 103 in DP834629 known as 26 Stanhope Road, Killara (Lots 102 and 103). Dalcross Private Hospital, which is not a party to the proceedings, is the registered proprietor of Lot B in DP322493 which is located on the corner of Stanhope Road and Werona Avenue (Lot B). The second respondent, Dalcross Holdings Pty Ltd operates a private hospital upon Lot 101 in DP834629 which adjoins Lot 103 on its Stanhope Road frontage (Lot 101).

3 On 28 June 2010 the third respondent, Australasian Conference Association Limited acquired, relevantly, Lots 102 and 103 and was, as a consequence, joined as a party to the appeal on 12 July 2010. On 14 July 2010 the first and second respondents filed a submitting appearance except as to costs and the third respondent took up the carriage of their case on the appeal. These facts are relevant only to the appropriate order for costs on the appeal depending upon its outcome.

4 On the registration of DP834629 on 10 November 1993 there was created pursuant to s 88B(3) of the Conveyancing Act 1919 a restriction on use upon Lots 102 and 103 which benefited, amongst other lots, the appellant’s land. The terms of the restriction provided that no part of the land so burdened (being Lots 102 and 103) was to be used, amongst other things, for the purpose of any hospital (the covenant).

5 On 27 August 2008 Ku-ring-gai Municipal Council (the Council) granted a deferred commencement development consent (the Consent) to an application by the second respondent to demolish the existing house upon Lot 103 and Lot B and to construct over both lots an extension of the hospital erected upon Lot 101. The construction of the hospital on Lot 103 (but not Lot B) was potentially in breach of the covenant. It was that breach that the appellant sought to restrain.

THE APPLICABLE PLANNING REGIME

6 The applicable environmental planning instrument for the whole of the Council’s area is the Ku-ring-gai Planning Scheme Ordinance originally published in the Government Gazette on 1 October 1971 (the KPSO). The KPSO was made pursuant to Part XIIA of the Local Government Act 1919 (the LG Act) which Part was repealed as and from 1 September 1980 when the Environmental Planning and Assessment Act 1979 (the EP&A Act) came into force. However, the KPSO was a “former planning instrument” within the meaning of cl 1(1) of Schedule 3 of the Miscellaneous Acts (Planning) Repeal and Amendment Act 1979 (the Miscellaneous Act) which contained the necessary savings and transitional provisions with respect to Part XIIA of the LG Act and its relationship to the EP&A Act.

7 Clause 2(1) of the Miscellaneous Act provided as follows:

“A former planning instrument, as in force immediately before the appointed day, shall, subject to this Act have full force and effect according to its tenor and should be deemed to be a deemed environmental planning instrument.”

The appointed day was 1 September 1980.

8 Section 4(1) of the EP&A Act is a definition provision in which a “deemed environmental planning instrument” was defined to mean a “former planning instrument” and an “environmental planning instrument” was defined to include “a deemed environmental planning instrument” as well as a “local environmental plan”. Accordingly, the KPSO, being a “former planning instrument” was also “a deemed environmental planning instrument” and, therefore, an “environmental planning instrument” for the purposes of the EP&A Act.

9 Section 342G(2) of the LG Act before its repeal provided that a scheme (which included the KPSO) may contain provisions for regulating and controlling the use of land and the purposes for which it may be used. Section 342G(4) provided as follows:

“A scheme may suspend either generally or in any particular case or class of cases the operation of any provision of this or any other Act, or of any rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made, to the extent to which that provision is inconsistent with any of the provisions of the scheme.”

10 Pursuant to that provision, the KPSO included cl 68(2) which was in the following terms:

“(2) In respect of any land which is comprised within any zone, other than within Zone No 2(a), 2(b), 2(c), 2(d), 2(e), 2(f) or 2(g) the operation of any covenant agreement or instrument imposing restrictions as to the erection or use of buildings for certain purposes or as to the use of land for certain purposes is hereby suspended to the extent to which any such covenant, agreement or instrument is inconsistent with any provision of this Ordinance or with any consent given thereunder.”

11 On the coming into force of the EP&A Act and the repeal of Part XIIA of the LG Act, s 342G(4) ceased to operate and was, in effect, replaced by s 28 of the EP&A Act which relevantly provides as follows:

“(1) In this section, regulatory instrument means any Act (other than this Act), rule, regulation, by-law, ordinance, proclamation, agreement, covenant or instrument by or under whatever authority made.
(2) For the purpose of enabling development to be carried out in accordance with an environmental planning instrument or in accordance with a consent granted under this Act, an environmental planning instrument may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development or shall apply subject to the modifications specified in that environmental planning instrument.
(3) A provision referred to in subsection (2) shall have effect according to its tenor, but only if the Governor has, before the making of the environmental planning instrument, approved of the provision.”

12 It will be appreciated that although s 342G(4) of the LG Act was similar in terms to s 28(2) of the EP&A Act, the former did not have any provision equivalent to s 28(3): in other words cl 68(2) did not require the approval of the Governor for it to take effect according to its tenor.

13 Prescribed schemes (which included the KPSO) were made by the Governor under Part XIIA of the LG Act whereas environmental planning instruments are made under the EP&A Act by the Minister. However, it was not suggested that the former fact was in any way relevant or constituted a substitution for compliance with s 28(3) if that provision was otherwise engaged.

14 On 9 March 1990 cl 68(2) of the KPSO was amended by Ku-ring-gai Local Environmental Plan No 74 which deleted the words “or 2(g)” and substituted the words “, 2(g) or 2(h)”. In other words, it added a further exempted zone to the original cl 68(2).

THE RELEVANT ZONING

15 Prior to 28 May 2004, Lot 103 was zoned 2(b) - Residential B under the KPSO in which hospitals were a permissible use with consent. On 28 May 2004 Ku-ring-gai Local Environmental Plan No 194 (LEP 194) was gazetted which by cl 4(a) amended the KPSO as set out in Schedule 1. Clause [1] of Schedule 1 inserted at the end of the definition of Scheme map in cl 4(1) of the KPSO the words “Ku-ring-gai Local Environment Plan No 194 - Zoning Map”. Clause [2] amended the development control table in cl 23 of the KPSO relating to Zone No 2(c) by inserting two new zones being (c1) Residential “C1” and (c2) Residential “C2”. Clause [3] amended the table relating to Zone No 2(d) by inserting a new zone being (d3) Residential “D3” in which hospitals were permitted with consent. Significantly, pursuant to the zoning map referred to in cl [1] of Schedule 1 of LEP 194, Lot 103 was rezoned from Zone No 2(b) to Zone No 2(d3). Accordingly, hospitals remained a permissible use with consent on Lot 103.

THE ISSUE BEFORE THE PRIMARY JUDGE

16 As cl 68(2) of the KPSO did not exempt Zone No 2(d3) therefrom, the prima facie effect of that provision was that the covenant was suspended with respect to its application to Lot 103 to the extent to which it was inconsistent with the provisions of the KPSO that permitted the use of Lot 103 for the purpose of a hospital with the consent of the Council. However, it was submitted that the effect of LEP 194 was to apply cl 68(2) to Lot 103 in circumstances where it had previously been exempt from its provisions when zoned 2(b) but in contravention of cl 28(3) of the EP&A Act in that the Governor had not, prior to the making of LEP 194, approved of its provisions which had the effect referred to. This was the issue that was tendered for the primary judge’s decision.

THE PRIMARY JUDGE’S DECISION

17 In a judgment published on 29 July 2009 (the first judgment) the primary judge held (at [37]) that in view of the compounding effect of cl 68 of the KPSO and LEP 194 and the change of zoning of Lot 103 which permitted the provisions of cl 68(2) to suspend the operation of the covenant coming into effect, the approval of the Governor was required under s 28(3) of the EP&A Act to LEP 194: Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd [2009] NSWSC 717.

18 However, his Honour declined to make any final orders regarding the outstanding evidentiary matter, namely, whether the Governor had in fact approved LEP 194. He therefore stood the matter over for 21 days for the purpose of ascertaining whether the Governor had or had not done so.

19 It became common ground that the Governor had not approved LEP 194. However, by motion dated 13 August 2009 the Minister for Planning sought leave to appear as amicus curiae in the proceedings as she wished to advance submissions as to the correct construction of s 28 of the EP&A Act and cl 68(2) of the KPSO and the interaction of those provisions. In particular, she wished to contend that notwithstanding s 28(3) of the EP&A Act, the approval of the Governor was not required to LEP 194.

20 The primary judge granted that leave as a consequence whereof he heard submissions from senior counsel for the Minister. On 30 October 2009 he published further reasons in which he upheld the Minister’s submissions, vacated the first judgment and dismissed the appellant’s summons: Cumerlong Holdings Pty Limited v Dalcross Properties Limited & Anor (No 2) [2009] NSWSC 1157. In so doing he accepted the first and second respondents’ and the Minister’s submissions that:

(a) the Governor’s approval was not required to LEP 194 as it did not meet the terms of s 28(2) of the EP&A Act ;

(b) LEP 194 did not directly provide that a regulatory instrument (which included the covenant) specified in that LEP should not apply to any particular development;

(c) rather, LEP 194 dealt with zoning matters and did not purport to contain a provision in terms of s 28(2) which could be the subject of the Governor’s approval pursuant to s 28(3).

21 His Honour came to the conclusion that the Governor’s approval was not required to LEP 194 with some reluctance. He was concerned that although LEP 194 did not contain a provision specifying that a regulatory instrument would not apply to any permitted development to be carried out in accordance with its provisions, nevertheless it wrought changes that had a major impact on the proprietary rights of the appellant. At [31] he said:

“However, s 28(2) and (3) appear to proceed on the premise that, before the Governor’s approval is required to an environmental planning instrument, it should contain a provision that a regulatory instrument specified in that environmental planning instrument should not apply to the permitted development. LEP 194 does not do so by its terms. It does so indirectly by removing Lot 103 from zone 2(b), the land within which is, by clause 68(2), exempted from the ‘suspension of covenant’ provisions of that clause.”

22 His misgivings notwithstanding, his Honour accepted, correctly in my view, that the resolution of the issues in the proceedings depended upon the construction of s 28(2) and (3) of the EP&A Act and acknowledged that the approach that he had taken in the first judgment had not paid sufficient attention to the language of those provisions.

THE SUBMISSIONS OF THE PARTIES ON THE APPEAL

23 The appellant submitted that because of the change of zoning effected by LEP 194 with respect to Lot 103, when combined with cl 68(2) of the KPSO, it purported to have the effect of suspending the covenant affecting that land as a consequence whereof, s 28(3) of the EP&A Act mandated the approval of the Governor to LEP 194. In the absence of that approval, the LEP would not have “effect according to its tenor” resulting in the suspension of the covenant with respect to Lot 103.

24 That submission was supported by the following propositions:

(a) The critical words are “ provide ” in s 28(2) and “ provision ” in s 28(3). The latter, according to the Oxford Concise Dictionary , means “ the act or instance of providing ” or “ a legal or formal statement providing for something ”;

(b) Where those words are used in s 28 they do not mean or refer to a section, clause, subsection or subclause of an environmental planning instrument but rather mean and refer to the facilitation, operation and effect of the lawfulness or otherwise of certain conduct provided for in such an instrument;

(c) As the KPSO is a compilation of a number of environmental planning instruments and as LEP 194 amended the KPSO, it followed that if the term “ provision ” referred to in s 28(3) has the meaning contended for in the previous subparagraph, then the Governor’s approval was required to the making of that amendment;

(d) Thus LEP 194 makes “ provision ” by effecting a change in the zoning table which, in turn, has the effect, according to its tenor, that land in the 2(d3) zone no longer attracts the exemption in cl 68(2) of the KPSO;

(e) Accordingly, LEP 194 “ provides ” that the regulatory instruments referred to in cl 68(2) are suspended on the grant of a development consent with respect to land in the 2(d3) zone so that s 28(3) is engaged.

25 In its oral submissions, the appellant essentially submitted that after 1 September 1980 s 28 of the EP&A Act applied to a zone which theretofore had been exempted by cl 68(2) under the previous legislative regime with the consequence that s 28(3) was engaged where any amendment was, in substance if not in form, made to cl 68(2). Accordingly, if the practical result of LEP 194 was that cl 68(2) suspended a covenant in respect of land in a particular zone where otherwise that covenant would not, but for that LEP, have been suspended, then cl 28(3) must be complied with. Otherwise form would trump substance.

26 In other words, after 1 September 1980 any environmental planning instrument (such as LEP 194) which, when combined with any other relevant provision of such an instrument (or deemed instrument) had the effect according to its tenor of suspending a covenant which was not previously suspended, then s 28(2) and (3) must be complied with.

27 The respondents’ submissions may be summarised thus:

(a) Unless LEP 194 contains a provision of the nature of that to which s 28(2) refers, then s 28(3) is not engaged;

(b) LEP 194 contains no provision in terms or effect that provides that a regulatory instrument therein specified shall not apply to any relevant development;

(c) The only provision of the KPSO as amended by LEP 194 which contains a provision of the nature of that referred to in s 28(2), is cl 68(2);

(d) Section 28(2) focuses upon an environmental planning instrument that provides for the non-application of a regulatory instrument and it is only if such an instrument so provides that s 28(3) is engaged;

(e) Furthermore, the Governor’s approval under s 28(3) is only required to a provision in the particular environmental planning instrument which, pursuant to s 28(2), provides that a regulatory instrument specified in that instrument shall not apply to any relevant development;

(f) LEP 194 does not answer that description with the consequence that s 28(3) was never engaged.

28 In oral submissions the respondents referred to a number of sections of Part 3 of the EP&A Act (in which s 28 falls) where the word “provision” is used as a noun as well as where it is used as a verb. In this respect, the Court’s attention was drawn to ss 25(3), 26(1) and (3b), 27(1) and (2), 29, 29A(2), 30(1) and (2), 33, 67 and 72(1)(a) and (3). It was submitted that in its context, the word “provision” in s 28(3) referred to a clause in an environmental planning instrument and that the reference in s 28(3) to such a provision having effect “according to its tenor” was a reference to such a clause having effect according to its exact words. It was further submitted that the word “provide” in s 28(2) similarly referred to a clause in an environmental planning instrument that stated that a regulatory instrument specified therein shall not apply to development to be carried out in accordance with that or any other environmental planning instrument.

29 In this last-mentioned respect, the words “an environmental planning instrument” where secondly and thirdly used in s 28(2) included, but not exclusively, an environmental planning instrument where first referred to in that subsection.

30 The Minister made similar submissions to those of the respondents. In essence he submitted that LEP 194 did not contain any provision of the kind referred to in s 28(2) and that the appellant did not seek to identify any such provision. Rather, it had submitted that the word “provision” in s 28(3) should be construed as referring to

“the facilitation, operation and effect of the lawfulness or otherwise of certain conduct provided for in an environmental planning instrument”.

The Minister submitted that whatever that proposition may mean, it could not be reconciled with the plain words of the text of s 28(2) and (3).

31 The Minister therefore submitted that LEP 194 did no more than supply the relevant facts upon which cl 68(2) of the KPSO operated so as to suspend the covenant. It did not itself operate to suspend the covenant; nor did it contain any provision that facilitated, operated or had the effect of suspending the covenant in any legal sense. The fact that it had the practical effect of causing the suspension of the covenant by virtue of cl 68(2) was not sufficient to engage s 28(3).

32 In oral submissions the Minister submitted that the words “according to its tenor” in s 28(3) was a reference to the precise terms of the provision to which the subsection refers: cf Toowoomba Foundry Pty Ltd v The Commonwealth (1945) 71 CLR 545 at 568 per Latham CJ. Such a construction was supported by Bryan A. Garner (ed), Black’s Law Dictionary, 8^th ed (2004) West Group which defines “tenor” in the present context as “the exact words of a legal document”. In Earl Jowitt and Clifford Walsh, The Dictionary of English Law, 1^st ed (1959) Sweet & Maxwell Ltd, the entry with respect to the word “tenor” is as follows:

“The tenor of a document means, in ordinary conversation, its purport and effect, as opposed to the exact words of it. In law, in its correct usage, the reverse is the case, and tenor means the exact words of the document.”

33 In reply the appellant submitted that LEP 194 “provided” for a change of zoning in cls [2] and [3] of Schedule 1 which were “provisions” in respect of which the approval of the Governor pursuant to s 28(3) was required as the “effect” of the “tenor” of those provisions, when combined with cl 68(2), was to “provide” that the covenant shall not apply to development permissible within, relevantly, zone 2(d3).

THE GOVERNOR’S APPROVAL WAS NOT REQUIRED

34 The Court was provided with a number of references to the words “provide” and “provision”. Clearly, as the various dictionary meanings reveal, the word has different meanings depending upon their context. In the present case, in my view the governing word is “provision” in s 28(3) and the word “provide” in s 28(2) takes its meaning from s 28(3) given that the “provision” which that subsection identifies, is that referred to in subsection (2). Thus, relevantly, in the present context a “provision” referred to in subsection (3) is one which, for the purpose of s 28(2), provides that, to the extent necessary to serve the relevant purpose, the regulatory instrument specified in a particular environmental planning instrument shall not apply to any such development. In other words, a “provision” is a clause or statement which “provides” for a certain result or outcome.

35 This construction is, in its context, supported by the following authoritative references:

● J Simpson and E Weiner (eds), The Oxford English Dictionary , 2 ^nd ed (1989), vol XII, Clarendon Press:

“Each of the clauses or divisions of a legal or formal statement, or such a statement itself, providing for some particular matter; also, a clause in such a statement which makes an express stipulation or condition; a proviso.”

● The Dictionary of English Law (op cit):

“A provision also means a clause in a legal document.”

● Daniel Greenberg, Stroud’s Judicial Dictionary of Words and Phrases , 7 ^th ed (2006), vol 3, Sweet & Maxwell:

“’ Provision ’ is used in the sense of a clause or term or part of the settlement as opposed to the sense of denoting that which is provided” ( Inland Revenue Commissioners v Kenmare [1956] 1 Ch. 483 at 501 per Morris LJ).

● Stroud’s (op cit): “provisions ” is used in the sense of regulations or rules: Walsh v Secretary of State for India [1863] 10 HLC 367 at 383; 11 ER 1068 at 1075 where Lord Westbury LC stated that in the context there under consideration the word “ provisions ” was clearly intended to indicate ordinances, rules, directions and things ejusdem generis .

36 As to the word “provide” it is relevantly defined in A Delbridge et al, Macquarie Dictionary, 3^rd ed (rev) (2001) Macquarie Dictionary Publishers, to mean, where used in a legal context, to “stipulate beforehand, as by a provision”.

37 Initially, it was the appellant’s submission that s 28(3) required the Governor’s approval of LEP 194 itself. When it was pointed that the subsection requires a “provision referred to in subsection (2)” to be approved before the making of the relevant environmental planning instrument, it was submitted that the relevant provisions of LEP 194 which required the Governor’s approval were clauses [1], [2] and [3] of Schedule 1 to that instrument.

38 The difficulty with this submission was that accepting that each of those clauses were “provisions”, they were not a provision of the nature of that referred to in s 28(2). In other words, it was not a clause of or statement in the LEP that, in terms, provided that a regulatory instrument therein specified would not apply to the development of land within any of the zones referred to. True it is that when combined with cl 68(2) the effect of the rezoning of Lot 103 from 2(b) to 2(d3) was to engage cl 68(2) of the KPSO with respect to that land. But s 28(3) does not refer to a provision that has that effect. Rather, it refers to a provision that accords with the text of s 28(2). Clause 68(2) is such a provision but no such provision is contained in LEP 194. No regulatory instrument is specified in that LEP which then provides that that instrument shall not apply to the development permissible in the zones created by that LEP.

39 During the course of argument it was suggested that the effect of LEP 194, when combined with cl 68(2) of the KPSO, was to achieve indirectly what could not be achieved directly. With respect, I do not believe that that is so. Of course, it was open to the Minister to amend cl 68(2) to include the 2(d3) zone in the exempted zones referred to in that provision. But that was obviously the antithesis of what was intended. It was unnecessary for the Minister to insert a s 28(2) provision in LEP 194, as such a provision already existed in cl 68(2). In my opinion there was no relevant obligation upon the Minister to include in LEP 194 a new s 28(2) provision simply because he was creating in that LEP zones that did not fall within the exempted zones as then specified in cl 68(2).

40 Although one can accept for present purposes that the effect of the rezoning of Lot 103 was to render inapplicable the covenant thereto and thereby affected the proprietary rights of those having the benefit of that covenant, nonetheless the whole purpose of cl 68(2) and its empowering provision, s 342G(4) of the LG Act, was to suspend or render inapplicable private covenants where they were inconsistent with, what was no doubt regarded in the public interest as, the land which should be developed. In other words, the public interest trumped private interests. But that was the intention of the legislation then and now.

41 As Meagher JA, with the agreement of Giles AJA and Simos AJA, observed in Coshott v Ludwig (1997) NSW ConvR 56,366 at 56,368

”The self-evident purpose of s. 28 of the [EP&A] Act and clause 32 of LEP27 [equivalent to cl 68(2) of the KPSO] is to nullify and remove all obstacles to the planning principles decided on by the Council or the Minister.”

42 It may well be that if it was sought to amend cl 68(2) by deleting the exempted zones, such a provision would be caught by s 28(3) as it would be extending the effect of cl 68(2) beyond the zones in the KPSO to which it currently applies. It would then at least be arguable that that was a provision within the meaning of s 28(2) and therefore required the Governor’s approval if it was to have effect according to its tenor.

43 The appellant submitted that such a result could also be achieved by rezoning all the land within the exempted zones to a different zone as happened in the present case with respect to land within the 2(b) and (c) zones. Again, it was submitted that this would be to achieve indirectly what could not be achieved directly.

44 Whether this be so or not, in my opinion the Court is required to be true to the plain and unambiguous text of s 28(3) in its application to the facts of this case. Absent a provision in LEP 194 which provided that a regulatory instrument specified therein was not to apply to any development permissible under that LEP, it must follow that s 28(3) was not engaged and the Governor’s approval of the clauses in Schedule 1 to LEP 194 was not required.

CONCLUSION

45 For the foregoing reasons, in my opinion the challenge by the appellant to the primary judge’s ultimate finding that s 28(3) was not engaged so as to leave the covenant intact with respect to its application to Lot 103 should be rejected. I would therefore propose the following orders:

(a) Appeal dismissed.

(b) The appellant to pay the first and second respondents’ costs of the appeal up to and including 11 July 2010 and to pay the third respondent’s costs of the appeal from and including 12 July 2010.

46 McCOLL JA: I agree with Tobias JA.

47 HANDLEY AJA: In this appeal I have had the benefit of reading the reasons for judgment of Tobias JA in draft. He has carefully set out the relevant facts, the applicable legislation, and the history of the proceedings. I have the misfortune to differ from my colleagues but his analysis enables me to express my reasons with some economy.

48 The appeal involves a construction and operation of clause 68 (2) of the Ku-ring-gai Planning Scheme Ordinance (KPSO), s 28(2) of the Environmental Planning & Assessment Act (the Act) and the provisions of the Ku-ring-gai Local Environmental Plan No 194 (LEP 194) which took effect on 28 May 2004.

49 Clause 68(2) in the KPSO, which came into force on 1 October 1971, quoted by Tobias JA [10], suspended the operation of existing restrictive covenants (described as "any covenant agreement or instrument imposing restrictions as to the erection or use of buildings … or as to the use of land") (herein restrictive covenant) within any zone covered by the KPSO other than those specifically excluded. It is not necessary to consider the effect of cl 68(2) on covenants created after it came into force.

50 Clause 68(1), suspended residential proclamations within the Council's area which were inconsistent with the Ordinance or any consent thereunder.

51 LEP 194 transferred the land burdened by the restrictive covenant in suit from zone 2(b), an excluded zone, to zone 2(d3) which was not excluded. As a result cl 68(2) suspended the covenant the appellant seeks to enforce, provided the LEP is valid.

52 Section 28(1) defined “regulatory instrument” as including “any … agreement, covenant or, instrument.”

53 The question is whether the provisions of LEP 194 summarised by Tobias JA [15] fall within s 28(2) which relevantly provides:

“For the purposes of enabling development to be carried out in accordance with an environmental planning Instrument, or in accordance with a consent … an environmental planning instrument may provide that, to the extent necessary to serve that purpose, a regulatory instrument specified in that environmental planning instrument shall not apply to any such development.”

54 The first question is whether the covenant is a regulatory instrument “specified” in LEP 194 which did not, in terms, “specify” any such instrument. The Interpretation Act 1987 or its predecessor allows the words “a regulatory instrument” in the singular in s 28, to be read in the plural. Section 28 therefore extends to a class of regulatory instruments such as restrictive covenants.

55 While Lot 103 burdened by the covenant remained zoned 2(b) and cl 68(2) remained unamended, the erection or use of a hospital on the Lot, although permissible with consent, would be a breach of the covenant.

56 The erection or use of the hospital was also permissible with consent in zone 2(d3) but the rezoning, if valid, disapplied or suspended the covenant so that development for a hospital would no longer be a breach.

57 LEP 194 affected a substantial part of the Council’s area for the stated purpose (blue 250) of permitting multi-unit housing. It would be fanciful to infer that the Minister had hospitals or Lot 103 in mind. However one of her purposes was to remove legal obstacles to development for multi-unit housing and this required amendments to the KPSO and the disapplication or suspension of restrictive covenants that would inhibit such development.

58 I conclude therefore that LEP 194 was made for the purposes referred to in s 28(2).

59 Section 28(2) did not apply to the KPSO as it existed immediately before that section came into force and it did not operate retrospectively to require the Governor’s approval for cl 68(2).

60 Section 28(2) can only apply to LEP 194 if that instrument was an exercise of the power it conferred to “provide”, and if that instrument “specified” the regulatory instrument or class of regulatory instrument affected. If the LEP does this that “provision” will only “have effect according to its tenor” if it was approved by the Governor.

61 One issue is whether LEP 194 "specified" restrictive covenants by necessary implication or incorporation by reference. Another is whether an LEP which achieves a particular result can be said to provide for it.

62 The legal and practical effect of LEP 194 on the restrictive covenant in suit, and other restrictive covenants burdening land within zone 2(d3), was not in dispute. As Tobias JA said [38]:

"… when combined with clause 68(2) the effect of the rezoning of Lot 103 from 2(b) to 2(d3) was to engage clause 68(2) of the KPSO in respect of that land. But s 28(2) does not refer to a provision that has that effect."

63 The respondent and the Minister acknowledged that the suspension of restrictive covenants over land in the zone could have been achieved by provisions that would have required the Governor's approval pursuant to s 28(3). Tobias JA accepts that this is so [39], [40], [42].

64 Parliament inserted s 28(2) and (3) to provide, or appear to provide, some protection for persons having the benefit inter alia of restrictive covenants which can be an important and valuable proprietary right. The case concerns the validity of the relevant provisions of LEP 194 which were not approved by the Governor and if this was necessary they are ultra vires and void.

65 An argument that the protection of s 28(3) would be engaged if the suspension of covenants was achieved by an LEP drafted one way, but the same result can be achieved without engaging s 28(3) if the LEP is drafted another way invites the closest scrutiny.

66 Section 28(2) is engaged if an environmental planning instrument "provides" that a “specified” regulatory instrument or class of instruments shall not apply to the relevant development. The qualification "to the extent necessary to serve that purpose", defines the purpose and limits of the power. However where the instrument provides for the complete suspension or disapplication of covenants (“shall not apply”) there is no need to further define "the extent ".

67 Courts have held that matters can be specified by implication. In Reid v Allan (1849) 4 Ex 326 [154 ER 1237] the Court of Exchequer held that the requirement in 35 Geo 3 c 63 s 11 for the names of the underwriters to be "expressed or specified in or upon" a marine policy was satisfied, where a partnership underwrote the policy, if it was subscribed in the name of the firm. The decision was distinguished in Re The Arthur Average Association Ex parte Cory (1875) 44 LJ (NS) 569, 574, 576 where the policy was with an unincorporated mutual insurance society with a fluctuating membership.

68 In McMorran v Marrison (Contractors) Ltd [1944] 2 All ER 448 Asquith J (later Lord Asquith of Bishopstone) said at 450:

"What is argued is that before a person can be said to be ‘specified’, the Order requires the Minister to specify either the person or a class or description of persons; that specifying persons, as distinct from class or description, necessarily imports giving their names; that specifying a class or description necessarily involves specifying a type of worker … and as the list in this notice does neither of these things precisely, there has been no valid specification and the order does not apply.
I dissent from this argument. Persons can, in my view, be specified without being named, provided they are unambiguously identified.”

69 It could fairly be said in Reid v Allan (above) that the partners were unambiguously identified by the firm name although there were 504 of them: (1849) 4 Ex at 326 [154 ER at 1237].

70 The next question concerns the meaning of “provide” in s 28(2) and of "provision" in s 28(3). As Tobias JA recognised [34] these words can have different meanings depending on their context.

71 They may for example mean that which provides, or that which is provided.

72 Their width of meaning is illustrated by IRC v Jamieson [1964] AC 1445 which concerned the liability of a settlor to surtax on the income of a settlement. The relevant section, s 399 of the Income Tax Act 1952 provided:

“… a settlement shall not be deemed to be irrevocable if the terms thereof provide … (b) for the determination of the settlement by the act … of any person.”

73 The relevant clause gave the trustees a power of appointment. At first glance the case would appear an unpromising source of assistance on the construction of s 28, but in my opinion, on closer examination, it is helpful.

74 Lord Reid referred, at p 1460, to the taxpayers’ argument that “the settlement does not ‘provide’ for its determination – it merely confers power to do something which will in fact bring about its determination.”

75 He considered this argument at pp 1462-3:

“The other main argument for the respondent turned on the meaning of the word ‘provide’. In this case the settlement provides means whereby the trustees can do an act which in fact determines the settlement. But it is said that that is not providing for the determination of the settlement by that act: the settlement must expressly provide that it shall come to an end if a certain act is done … the ordinary meaning of a word is something which each of us must decide according to our experience of the ordinary use of the English language. I can only say that to my mind a person who contemplates or desires a certain result and gives powers to trustees which enable that result to be achieved could properly be said in ordinary parlance to provide for that result by giving those powers … the terms of [the] settlement … enable the trustees to appoint the whole fund absolutely to any person who might in future come within the class of beneficiaries set out in clause 3. If … an appointment would in law determine the settlement then the settlor made provision for its being determined in that way and the settlement so provided. Any other view would simply open the door wide for evasion. All that would have to be done would be to confer powers in terms sufficiently wide to enable them to be used in several different ways and then to say that a settlement does not provide for the use of those powers in any particular way.”

76 Lord Guest and Lord Pearce agreed with Lord Reid (at p 1464). Lord Jenkins at p 1466, and Lord Hodson at pp 1467-8 agreed that the settlement did “provide” for its determination.

77 Section 28(2) states:

"… an environmental planning instrument may provide … that a regulatory instrument specified in that environmental planning instrument shall not apply to any such development …".

78 Fortified by the reasoning of Lord Reid in IRC v Jamieson (above) I construe the words “an … instrument may provide" in s 28(2) to include an instrument which produced the relevant result although it did not spell that out in the text.

79 A construction which focuses on the text to the exclusion of its result elevates form over substance, and, in the words of Lord Reid quoted above [29], would "simply open the door wide for evasion". By giving appropriate drafting instructions the Minister could determine for herself whether her instrument required the Governor's approval or not.

80 In my opinion LEP 194 did "provide" for the suspension of covenants in zone 2(d3) so that they "shall not apply" to development permissible with consent. By creating zone 2(d3), transferring land from excluded zone 2(b) to the new zone, and leaving cl 68(2) unchanged the Minister "provided" for the suspension of restrictive covenants within the new zone. The LEP did so "provide" because that was the result, and a necessary and intended result, of the making of that LEP. It provided for that result.

81 The Minister could have achieved her stated purpose recited in LEP 194 (blue 250) without affecting restrictive covenants if that had been her intention. She could have done this by enlarging the uses permissible with consent in zone 2(b) to include multi-unit housing, or she could have added zone 2(d3) to the excluded list in cl 68(2).

82 I turn next to the question whether LEP 194 "specifies" restrictive covenants by implication or incorporation. Since something may be specified if it is unambiguously identified the question is whether the LEP unambiguously identifies restrictive covenants that would prevent permissible development.

83 Clause 4(a) of the LEP (blue 250) provides:

"This plan amends:
‘(a) the Ku-ring-gai Planning Scheme Ordinance as set out in Schedule 1, and
(b) …”.

84 Clause [1] of Schedule 1 amended the definition of “Scheme Map” in cl 4(1) of the KPSO in force on 28 May 2004 (blue 106-7) by adding LEP 194 to the list of amending maps.

85 Clause [3] of Schedule 1 created zone 2(d3) and, read with the amended definition of Scheme Map and the Zoning Map for LEP 194, it transferred Lot 103 from zone 2(b) to the new zone.

86 The relevant provisions in LEP 194 were applicable to land in the new zone, but the general provisions of the KPSO which were not inconsistent with LEP 194 continued to be applicable.

87 These general provisions included cl 68(2).

88 Clause 68(1) suspended all residential proclamations within the Council's area to the extent to which they were inconsistent with the KPSO or with any consent under it. The proclamations having been suspended nothing further was required in that regard when LEP 194 was made.

89 Clause 68(1) applied to land in zone 2(d3) following the rezoning but in this respect LEP 194 changed nothing.

90 On the other hand cl 68(2) operated differently in relation to land transferred from zone 2(b) to the new zone because inconsistent restrictive covenants were thereby disapplied or suspended.

91 Restrictive covenants were the only regulatory instruments affected by cl 68(2) and the rezoning of the zone 2(b) land.

92 An amending statute must be construed with the statute it amended. In Commissioner of Stamps (SA) v Telegraph Investment Co to Ltd [1995] HCA 34, 184 CLR 453, 463 Brennan CJ, Dawson and Toohey JJ said:

"The principle is that every Act amending another Act shall, unless the contrary intention appears, be construed with such other Act and as part of it. The Commonwealth Acts Interpretation Act has no application to South Australian legislation and there is no South Australian counterpart to s 15. However, that section is declaratory and represents the modern approach to the construction of an amended statute. The result is that both the Act which is amended and the amending Act are to be read together as a combined statement of the will of the legislature."

93 McHugh and Gummow JJ said at p 479:

"… the better view is that under modern practice it is the intention of the legislature when effecting textual amendment of an Act to produce a revised text which thereafter and as to subsequent events is to be construed as a whole."

94 The same principles must apply to the construction of a statutory instrument which amends another.

95 Section 28 applies to environmental planning instruments which amend existing planning instruments and to new self-contained planning instruments made after the commencement of the Act although its language is more apt in relation to the latter.

96 Restrictive covenants in land transferred from zone 2(b) to zone 2(d3) were suspended because LEP 194 picked up cl 68(2) as part of a combined instrument.

97 The two instruments may be combined by reading LEP 194 into the KPSO or the KPSO into the LEP. On either approach the combined instrument contains cl 68(2) which specifies the restrictive covenants which "shall not apply".

98 I conclude therefore that LEP 194 provided that restrictive covenants shall not apply in the new zone because it brought about that result, and it specified those restrictive covenants by incorporating or being incorporated into the KPSO which it amended.

99 When the two instruments are read together the regulatory instruments, that is the restrictive covenants which are suspended, are unambiguously identified and therefore specified.

100 In these circumstances there is no need to invoke the principle that what cannot be done directly cannot be done indirectly which does not add to the statutory text but draws attention to its true width and legal effect: Container Terminals Aust Ltd v Xeras (1991) 23 NSWLR 214, 217.

101 In my opinion the appeal should be allowed.

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