David Casson trading as Casson Planning and Development Services v Upper Hunter Shire Council (No 2) - [2017] NSWLEC 149

Land and Environment Court

New South Wales

Medium Neutral Citation: David Casson trading as Casson Planning & Development Services v Upper Hunter Shire Council (No 2) [2017] NSWLEC 149
Hearing dates: 24 October 2017
Date of orders: 13 November 2017
Decision date: 13 November 2017
Jurisdiction: Class 1
Before: Moore J
Decision:
(1)   The appeal is upheld;
(2)   The orders of the Court made on 31 May 2017 are set aside;
(3) Pursuant to s 56A(2)(b) of the Land and Environment Court Act 1979, Development Application DA27-2016 for subdivision of Lot 212 in Deposited Plan 1154848 at Hunter Road, Moonan Flat is determined by refusal;
(4)   The Appellant is to pay the Respondent's costs as agreed or assessed; and
(5)   The Appeal Book is returned.

Catchwords: APPEAL - proposed subdivision - proposal to subdivide an undersized rural allotment into two allotments - alleged errors of law by Commissioner - Commissioner concluded that two provisions of a local environmental plan (LEP) were not available to permit approval of the subdivision - Commissioner further considered that, if one of the provisions of the LEP was available, as a matter of discretion, its provisions were not satisfied - case run before Commissioner on a significantly erroneous basis - Commissioner addressed the bases of the case as it was advanced to her - significant errors in Commissioner’s decision arising as a consequence of the way the case was run before her - appeal upheld
DETERMINATION OF DEVELOPMENT APPLICATION - Discretion available pursuant to s 56A(2)(b) of the Land and Environment Court Act 1979 to determine development application on the facts found by the Commissioner and held to be available on the evidence before her - first test in relevant provision of the LEP not satisfied - failure to satisfy test dispositive of the application - development application determined by refusal
COSTS - costs in appeals against Commissioners’ decisions usually follow the event - no disentitling conduct on appeal by the Respondent - Appellant ordered to pay the Respondent’s costs of the appeal as agreed or assessed
Legislation Cited: Environmental Planning and Assessment Act 1979, s 97
Land and Environment Court Act 1979, ss 56A and 57
State Environmental Planning Policy (Rural Lands) 2008
Upper Hunter Local Environmental Plan 2013, cll 4.2 and 4.2A
Cases Cited: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1998] 1 KB 223
Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367
David Casson trading as Casson Planning & Development Services v Upper Hunter Shire Council [2017] NSWLEC 1279
EMGA Mitchell McLennan Pty Limited v Byron Shire Council [2016] NSWLEC 63
Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30; [2004] HCA 63
Sze Tu v Lowe (No 2) [2015] NSWCA 91
Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council (2007) 156 LGERA 150; [2007] NSWCA 300
The Presbyterian Church (New South Wales) Property Trust v Woollahra Municipal Council [2015] NSWLEC 47
Category: Principal judgment
Parties: David Casson trading as Casson Planning & Development Services (Appellant)
Upper Hunter Shire Council (Respondent)
Representation:
Counsel:
Mr R Lovas and Ms S Hill, barristers (Appellant)
Ms H Irish, barrister (Respondent)
Solicitors:
Scone Legal (Appellant)
Local Government Legal (Respondent)

File Number(s): 191233 of 2017
Publication restriction: No

TABLE OF CONTENTS

Summary of outcomes

Introduction to the appeal
The appeal
The site
The relevant planning controls
Introduction
The site’s zoning.
The relevant rural subdivision provisions in the UHLEP

The pre-hearing process
Introduction
The Class 1 appeal papers
Introduction
The Statement of Environmental Effects
The Council's Statement of Facts and Contentions
The Statement of Facts and Contentions in Reply
The evidence filed before the hearing
The Appellants’ written evidence
Mr Hayne’s affidavit
Mr Casson’s Statement of Evidence
Mr Ropa’s Statement of Evidence
The Council’s written evidence
Mr Fryar’s Statement of Evidence
Mr Hamilton’s Statement of Evidence

Mr Johnson’s written objection to the proposed subdivision
The Joint Expert Reports
Town planning
Agricultural land use

The Appellants’ draft conditions of consent
The Appellants’ draft conditions of consent before the Commissioner
The Appellants’ draft conditions of consent on appeal

The oral evidence before the Commissioner
The submissions made to the Commissioner
The Commissioner’s decision
The structure of the Commissioner’s decision
Matters considered by the Commissioner
The Commissioner's conclusion

The grounds of appeal
The Appellants’ position on appeal
The Council's position
Written submissions in the appeal proceedings
Analysis of the Commissioner’s decision
The Appellants’ case on appeal
Introduction
The written expert evidence
The agricultural evidence
The planners’ evidence
Examination of the transcript and related documents
Introduction
First substantive transcript reference
The Appellants’ case on appeal

The Commissioner's conclusion on cl 4.2
Introduction
The relevant sequential structure of cl 4.2
Clause 4.2(1)
Clause 4.2(3)
The proper cl 4.2 process
The Commissioner’s analysis of the evidence
The sufficiency of her fact finding
The Appellants’ position concerning the Commissioner’s fact-finding
The Commissioner’s conclusion on cl 4.2
The consequence of the Commissioner’s conclusions

Finding facts; selecting tests; reaching conclusions
Introduction
The validity of the Commissioners fact-finding
The impact of the cl 4.2A errors on the Commissioner’s [61] conclusions
The correct UHLEP test
The Commissioner’s cl 4.2(3) conclusion

My power on appeal
The terms of cl 4.2(1) of the UHLEP
The objectives of the relevant zones
No need to apply the tests in cl 4.2(3)
A concluding comment on the outcome of the appeal

Outcomes of the grounds of appeal
Conclusion
Costs of the appeal
Orders

Judgment

Summary of outcomes

Because of the unusual nature of the proceedings before Dixon C, and the nature of the appeal filed against her decision (see David Casson trading as Casson Planning & Development Services v Upper Hunter Shire Council [2017] NSWLEC 1279) pursuant to s 56A of the Land and Environment Court Act 1979 (the Court Act), I consider it appropriate to set out a summary of that which it has been necessary to consider in order to reach my determination in this appeal and to set out the outcomes which follow. The relevant matters are:

on 7 April 2016, Mr David Casson, a town planning consultant retained by Mr and Mrs Hayne, lodged a development application with Upper Hunter Shire Council (the Council), seeking development consent to subdivide Lot 212 in Deposited Plan 1154848 at Hunter Road, Moonan Flat. Although Mr and Mrs Hayne are not the owners of the land, the development application was lodged with the consent of the owners of the land. The Statement of Environmental Effects (SEE) lodged in support of the development application was prepared by Mr Casson. The development application and the SEE relied exclusively on cl 4.2A of the Upper Hunter Local Environmental Plan 2013 (the UHLEP) as the provision in the relevant environmental planning instrument said to be available to permit the granting of the development consent sought;

the assessment by the Council's staff recommended approval of the application. The assessment was undertaken on the assumption that cl 4.2A of the UHLEP was available to grant approval to the proposal (see Appeal Book, folio 345, where the assessing officer notes that the application is made in reliance on cl 4.2A of the UHLEP);

the Council's Development and Environmental Services Committee recommended to a full meeting of the Council that the Council refuse the proposal. The Council refused the proposal on 22 August 2016;

on 19 January 2017, Mr Casson (as the nominal Appellant on behalf of Mr and Mrs Hayne) commenced Class 1 proceedings, through his legal representative, in the Court pursuant to s 97 of the Environmental Planning and Assessment Act 1979 (the EP&A Act) against the Council's refusal. The relevant functional order sought to be the outcome of the appeal sought consent to the proposed subdivision - the UHLEP provision relied upon was not specified. However, filed with that application was a copy of Mr Casson's SEE that had been lodged with the Council in support of the development application - a document exclusively reliant upon cl 4.2A of the UHLEP;

on 14 February 2017, the Council filed a Statement of Facts and Contentions (SOFAC) setting out why the appeal should be dismissed. This SOFAC set out a number of reasons why the Council said that the proposed subdivision should not be approved, with the primary one arising out of the terms of the UHLEP being non-compliance with cl 4.2A of the UHLEP;

on 6 March 2017, a Statement of Facts and Contentions in Reply (SOFACR) was filed. This document relied upon cl 4.2A of the UHLEP. It made no mention of cl 4.2 of the UHLEP (typographic errors in (11)(d)(ii) and (iii) excepted);

the merit appeal was heard by Dixon C on 25 May 2017, with the hearing being held at Scone Court House following an inspection of the site; an examination of the transcript of the hearing (Mr Casson being represented by counsel and the Council being represented by its solicitor) discloses that the contest before the Commissioner was based on consideration of whether or not the development should be approved on its merits pursuant to cl 4.2A of the UHLEP. Although other provisions of the UHLEP were addressed, this consideration in the written and oral evidence and the submissions was, effectively, in passing;

the Commissioner delivered her decision on 31 May 2017. The decision was responsive to the evidence and the submissions put to her. She decided that the appeal must be dismissed. She set out, at [61] of her decision, why she considered this was so. She said:

61. Accordingly, I find that I do not have power under cl 4.2 or cl 4.2A to permit this subdivision of land. And, even if I did I am not satisfied of the matters in cl 4.2A(a) and (b) and on that basis the application cannot be approved;

on 26 June 2017, an appeal was commenced against her decision. The primary complaint in the appeal can be summarised as one that the Commissioner made an error of law by assessing the proposed subdivision against the provisions of cl 4.2A of the UHLEP. This, on appeal, was asserted to be a provision that was not applicable to this proposed subdivision. This complaint, made on appeal, on behalf of Mr Casson as the nominal Applicant for development consent, it is to be recollected, is, effectively, a complaint that the basis upon which Mr Casson originally applied for development consent (as well as the basis upon which the case in support of it was dominantly run before the Commissioner) was based on a false premise - namely that cl 4.2A of the UHLEP was the relevant applicable provision against which this proposed subdivision should be measured. That complaint, that Mr Casson got it wrong from the beginning, is well-founded as the provision is in fact inapplicable. That means that two of the three elements of the Commissioner's conclusion, at [61], were errors of law. For the reasons dealt with later in this decision, her conclusion that the relevant and actually applicable provision of the UHLEP, cl 4.2, was also not available was not based on a proper application of the tests contained in that provision. This is unsurprising given the negligible assistance she was given on that provision of the UHLEP in the evidence and submissions before her. It therefore follows that none of the three bases upon which she dismissed the appeal was legally available to her. The result, therefore, is that the appeal must be upheld.

Section 56A(2) of the Land and Environment Court Act 1979 (the Court Act), the provision pursuant to which the appeal has been brought, provides two options for me to deal with the matter as a consequence of my finding that the appeal should be upheld. The first is to send the matter back to a Commissioner (whether being Dixon C or another Commissioner not being relevant - as I do not propose to take that course) for consideration in light of my determination, or to make such other order in relation to the appeal as seems fit (s 56A(2)(b)). It is the use of this latter provision that is proposed in the Summons commencing the appeal that I utilise - the Summons proposing that I should uphold the appeal and dispose of the matter by granting development consent to the subdivision. I am satisfied that availing myself of this provision, in order to dispose of the appeal, is the correct outcome.
However, the outcome proposed for Mr Casson is entirely inappropriate, for the reasons set out in my analysis of the facts found by Dixon C (without any relevant error by her in this process), on the evidence before, and submissions put to, her and all of the material tendered and submissions made on appeal.
The correct conclusion to be drawn is that the proposed subdivision does not satisfy the gateway test set by cl 4.2(1) of the UHLEP and that, as a consequence, pursuant to s 56A(2)(b) of the Court Act, development consent should be refused.
Although the first, technical outcome of the appeal is that it is upheld, the general proposition, in appeals pursuant to s 56A of the Court Act, is that costs “follow the event”. The “event” is the substantive, functional outcome of the proceedings. In this instance, the “event” is my conclusion that the development application for the proposed subdivision should be determined by refusal. Substantively, therefore, the appeal is unsuccessful, and Mr Casson is to be ordered to pay the Council's costs of the appeal.

Introduction to the appeal

On 31 May 2017, Dixon C dismissed an appeal against the refusal by the Council of a development application to subdivide an existing allotment, Lot 212 in Deposited Plan 1154848, (the site) of 185.3 hectares into two new allotments.

The appeal

Mr Casson now appeals against the decision made by Dixon C. The appeal is made pursuant to s 56A of the Court Act. This provision of the Court Act is, relevantly, in the following terms:

56A   Class 1, 2, 3 and 8 proceedings—appeals to the Court against decisions of Commissioners
(1)   A party to proceedings in Class 1, 2, 3 or 8 of the Court’s jurisdiction may appeal to the Court against an order or a decision of the Court on a question of law, being an order or a decision made by a Commissioner or Commissioners.
(2)   On the hearing of an appeal under subsection (1), the Court shall:
(a)   remit the matter to the Commissioner or Commissioners for determination by the Commissioner or Commissioners in accordance with the decision of the Court, or
(b)   make such other order in relation to the appeal as seems fit.
(3)   ...

As can be seen, appeals against decisions (such as that which had been made by Dixon C in this instance) are confined to ones which raise questions of law.
As can also be seen, my powers on determination of this appeal are those set out in s 56A(2)(a) or (b).
The Appellant presses eight grounds of appeal upon which it is submitted that legal defects in the Commissioner’s decision-making process are demonstrated. Those grounds of appeal are later set out.

The site

At [9] and [10] of her decision, the Commissioner observed:

9 The Site comprises a rural lot of 185.3 hectares. It has a frontage of approximately 100 metres to Hunter Road in two locations. Hunter Road bisects the top portion of Lot 212. Proposed Lot 1 has been designed to be on one side of Hunter Road with the remainder of the Lot (proposed Lot 2) being on the other side of Hunter Road. The northern boundary of Lot 212 (now to be proposed Lot 1) adjoins the Hunter River.
10 The proposed development will result in Lot 1 being wholly zoned RU4 with a size of 1.6 hectares and Lot 2 partly zoned RU4 partly zoned RU1 with a lot size of 183.75 hectares.

The allotment which is proposed to be subdivided is located at Moonan Flat. A map showing the site’s boundaries is reproduced below:

The site is traversed by Hunter Road, with 1.6 hectares lying to the north of that road and 183.7 hectares lying to the south. As can be seen from the map, the northern boundary of the site is the Hunter River.
Mr David Casson (trading as Casson Planning & Development Services) was the consultant town planner engaged by Mr and Mrs Hayne, who are the owners of “Carlisle”, the property to the east of the proposed northern allotment. Mr Casson was engaged for the purpose of applying to the Council for development consent for the proposed subdivision. The application was made with the consent of Mr and Mrs Dawson, the owners of the site.
The persons whose substantive, functional interests have been engaged throughout these proceedings are Mr and Mrs Hayne, as the putative tenants of the proposed northern allotment pursuant to a 99-year lease to them set to be entered into and registered if the subdivision is granted consent. It is appropriate, throughout my decision, to refer to Mr and Mrs Hayne as the Appellants, rather than to the nominal Mr Casson.
The proposed subdivision seeks to divide the land into two new allotments, allotments which would reflect the physical division of the land by Hunter Road.
The two new allotments (to which I will refer as the proposed northern and proposed southern allotments) would, if the subdivision was to be approved, remain in common ownership (subject to litigation in the Supreme Court noted later).
The Commissioner’s decision records, in [4], that Mr Hayne and his wife have owned Carlisle since 1990 and that the proposed northern allotment has for some time been the subject of an unregistered lease to them. She wrote:

… Moreover, it has been farmed as part of the “Carlisle” property since 1990 and share farmed by the previous owners for some 40 odd years before that. Until 2008, Mr Hayne was under the mistaken belief that this land in Lot 1 [the proposed northern allotment] was in fact part of his property. It is submitted that this application simply seeks to enable a continuation of the farming practices associated with the “Carlisle” property for well over 50 years. The lease arrangement is the reason for this subdivision application. …

It is to be observed that, for the purposes of cl 4.2(1) of the UHLEP, Mr and Mrs Hayne are not (and, if the proposed subdivision was to be approved, would not become) the owners of the proposed northern allotment.
The southern proposed allotment is proposed to be retained (at least for the time being), legally and functionally, by Mr and Mrs Edwards. As was subject of complaint by Mr Lovas, counsel for the Appellants before me, little attention was given to the proposed southern allotment in the Commissioner’s decision.
As will be obvious from that which is later revealed concerning that which led up to, and was encompassed in, the hearing before the Commissioner, both the advocates below saw little or no need to address the southern proposed allotment, as its fate did not appear, on the cases advanced below, to raise impediments (whether valid or not) to the subdivision sought - the impediments were seen to arise with respect to the proposed northern allotment.

The relevant planning controls

Introduction

The relevant planning controls are to be found the Council's UHLEP.

The site’s zoning.

The site is partially zoned RU1 - Primary Production and partially RU4 ‑ Primary Production Small Lots. The entirety of the northern proposed allotment is zoned RU4, whilst the southern proposed allotment is partially zoned RU1 and partially zoned RU4.
The UHLEP is a modern one, based on the Standard Instrument template.
Reproduction of the objectives of the Land Use Table in the UHLEP for the RU1 zone is necessary. They are in the following terms:

Zone RU1   Primary Production
1   Objectives of zone
•   To encourage sustainable primary industry production by maintaining and enhancing the natural resource base.

•   To encourage diversity in primary industry enterprises and systems appropriate for the area.
•   To minimise the fragmentation and alienation of resource lands.
•   To minimise conflict between land uses within this zone and land uses within adjoining zones.
•   To protect the agricultural value of rural land.
•   To maintain the rural landscape character of the land in the long term.
•   To ensure that development does not unreasonably increase demand for public services or public facilities.
•   To ensure that development for the purposes of extractive industries, underground mines (other than surface works associated with underground mines) or open cut mines (other than open cut mines from the surface of the flood plain) will not:
a)   destroy or impair the agricultural production potential of the land or, in the case of underground mining, unreasonably restrict or otherwise affect any other development on the surface, or
b)   detrimentally affect the quantity, flow and quality of water in either subterranean or surface water systems, or
c)   visually intrude into its surroundings, except by way of suitable screening.

Reproduction of the objectives of the Land Use Table in the UHLEP for the RU4 zone is also necessary. They are in the following terms:

Zone RU4   Primary Production Small Lots
1   Objectives of zone
•   To enable sustainable primary industry and other compatible land uses.
•   To encourage and promote diversity and employment opportunities in relation to primary industry enterprises, particularly those that require smaller lots or that are more intensive in nature.
•   To minimise conflict between land uses within this zone and land uses within adjoining zones.

The relevant rural subdivision provisions in the UHLEP

Lot Size Map - Sheet LSZ_010A of the UHLEP - shows that the minimum allotment size in the RU1 zone is 400 hectares, whilst that applicable to the RU 4 zone is 40 hectares.
For the purposes of considering the application to subdivide the site into the northern and southern allotments, two specific provisions of the UHLEP were advanced below as being required to be considered by the Commissioner. These clauses were 4.2 Rural subdivision and 4.2A Exceptions to minimum subdivision lot sizes for certain rural subdivisions. Only the second of these was relied upon by the Applicant, whilst both were pleaded by the Council (although the extent of the Council’s pressing of cl 4.2 was limited, as later discussed).
The first of these provisions is in the following terms:

4.2   Rural subdivision
(1)   The objective of this clause is to provide flexibility in the application of standards for subdivision in rural zones to allow land owners a greater chance to achieve the objectives for development in the relevant zone.
(2)   This clause applies to the following rural zones:
(a)   Zone RU1 Primary Production,
(b)   Zone RU2 Rural Landscape,
(c)   Zone RU4 Primary Production Small Lots,
(d)   Zone RU6 Transition.
Note.
When this Plan was made it did not include all of these zones.
(3)   Land in a zone to which this clause applies may, with development consent, be subdivided for the purpose of primary production to create a lot of a size that is less than the minimum size shown on the Lot Size Map in relation to that land.
(4)   ...
(5)   A dwelling cannot be erected on such a lot.

The second of these provisions is in the following terms:

4.2A   Exceptions to minimum subdivision lot sizes for certain rural subdivisions
(1)   The objective of this clause is to enable the subdivision of land in rural areas to create lots of an appropriate size to meet the needs of current permissible uses other than for the purpose of dwelling houses or dual occupancies.
(2)   This clause applies to the following rural zones:
(a)   Zone RU1 Primary Production,
(b)   Zone RU4 Primary Production Small Lots.
(3)   Land to which this clause applies may, with development consent, be subdivided to create a lot of a size that is less than the minimum size shown on the Lot Size Map in relation to that land, if the consent authority is satisfied that the use of the land after the subdivision will be the same use (other than a dwelling house or a dual occupancy) permitted under the existing development consent for the land.
(4)   Development consent must not be granted for the subdivision of land to which this clause applies unless the consent authority is satisfied that:
(a)   the subdivision will not adversely affect the use of the surrounding land for agriculture, and
(b)   the subdivision is necessary for the ongoing operation of the permissible use, and
(c)   the subdivision will not cause or increase rural land uses conflict in the locality, and
(d)   the subdivision is appropriate having regard to the natural and physical constraints affecting the land.

The parties accept (before me, and below) that the facultative and beneficial provisions of cl 4.6 Exceptions to development standards of the UHLEP are not available in this instance because of the exclusionary effect of cl 4.6(6).

The pre-hearing process

Introduction

There are a number of steps which inevitably follow the commencement of a merit appeal in a Class 1 made pursuant to s 97 of the EP&A Act. These sequential steps are the necessary precursors to the holding of a contested merit hearing. The relevant ones for these proceedings, prior to Dixon C travelling to the site to inspect the proposed subdivision, were:

The filing of the Class 1 appeal application and its supporting papers;

The Council preparing and filing an SOFAC in response to the commencement of proceedings;

The Appellants prepared and filed their SOFACR;

The preparation, filing and serving of expert and/or lay evidence on behalf of the Appellants; and

The preparation, filing and serving of responsive evidence on behalf of the Council.

In further preparation for the hearing, the Council's legal representatives also prepared a tender bundle. This assemblage of documents would have included, relevantly, copies of the necessary documents from the Council’s file (including the original assessing officer’s report and the Council's notice of determination), together with relevant extracts from the UHLEP; the relevant development control plan; and any potentially relevant State Environmental Planning Policies such as State Environmental Planning Policy (Rural Lands) 2008 (the SEPP).
To the extent relevant in this appeal, the documents to which I need to have regard for this analysis of relevant material leading up to the hearing before Dixon C (and before her for her consideration in that hearing) are contained in the Court file; in the material in the Appeal Book (including a transcript of the hearing before the Commissioner); or are readily accessible through the New South Wales legislation website maintained by the Office of Parliamentary Counsel.
I have carefully examined the parts of this material that are relevant to a proper understanding of the way that the appeal was conducted before Dixon C and how this precursor material framed not only the conduct of the appeal but also how the Commissioner dealt with the issues pressed by the advocates appearing before her.
All these aspects necessarily informed the way the Commissioner undertook her analysis of the evidence to make findings of fact; distillation of aspects requiring to be addressed as arising from the facts she had found and the relevant instruments engaged; formulation of the reasons for decision dealing with the evidence and submissions from the hearing; and her findings and the conclusion she derived from them.

The Class 1 appeal papers

Introduction

The Class 1 appeal papers, in addition to the formal application document prepared by Scone Legal (the Appellants’ legal representative) also included a copy of the SEE prepared by Mr Casson. Mr Casson, through his consulting firm, had, as earlier noted, become the nominal applicant for development consent to the Council; subsequently he became the nominal Appellant in the Class 1 merit appeal pursuant to s 97 of the EP&A Act; and, finally, the nominal Appellant in these proceedings pursuant to s 56A of the Court Act.

The Statement of Environmental Effects

Mr Casson's SEE was filed with the Application Class 1 commencing the proceedings. The application and this relevant supporting document were filed on 19 January 2017. Relevant to the provisions of the UHLEP, the SEE dealt with what Mr Casson considered was the sole provision in the UHLEP requiring to be engaged in the Council's consideration of the Appellants’ development application.
Set out below is the entirety of the relevant extract from this document (at 2.2 Zoning and Planning Instruments - page 7):

This subdivision proposal relies on clause 4.2A of the UHLEP as it is proposed to create a lot which is smaller than the minimum 40ha.

Mr Casson makes no mention whatsoever of cl 4.2 of the UHLEP. The sole provision proposed as a pathway to consent is cl 4.2A.
It is also to be observed that Mr Casson fails to observe that the proposed to be created Lot 2 (the proposed southern allotment) would also fail the minimum lot size in the UHLEP applicable to it. Indeed, the analysis which follows in the SEE entirely ignores the proposed southern allotment and any matters requiring consideration concerning it.
It is a little rich, given the emphasis below on the virtual exclusive relevance on cl 4.2A of the UHLEP and no attention in the SEE to the proposed southern allotment, as later discussed in dealing with what has been put on appeal, for Mr Lovas to complain, on appeal, about the lack of attention to, or assessment of, the proposed southern allotment given in the Commissioner’s consideration of matters raised at first instance.

The Council's Statement of Facts and Contentions

The Council's SOFAC is in the form required by cl 18 and Sch B of the Class 1 Development Appeals Practice Note. It addresses, in its first part, the relevant factual circumstances leading up to the appeal (including identifying relevant provisions in statutory instruments or Council policies).
In the Council’s SOFAC (at Appeal Book, Tab 10, folios 256 and 257), the Council identified cll 2.3(2), 4.1, 4.2, 4.2A and 6.10 of the UHLEP as potentially relevant in the appeal. It is unnecessary to set out the entirety of these provisions, but I have earlier set out the terms of cl 4.2 (that, now, being the only operative evaluative clause of the UHLEP requiring consideration in this appeal). The relevant elements for the RU1 and RU4 zones contained in the Land Use Table in the UHLEP were also referred to in the SOFAC. In the Council’s SOFAC, the statutory controls, pleaded by the Council as actually being relevant, were cll 4.2 and 4.2A of the UHLEP.
The second half of the SOFAC sets out the contentions pressed by the Council as evidencing the defects, in the Council's opinion, arising with respect to the proposed development. As required, these pleaded the bases upon which the Council said the Commissioner should conclude that the proposed subdivision ought be refused together with those matters of concern to the Council but where the Council considered that they were capable of being addressed by conditions of consent if the Commissioner did not consider that the proposed subdivision should be refused.
The Council's contentions, at folios 260 and 261, raise two bases upon which the Council contended that the application should be refused. The first of those requires no further consideration. However, the second of them is in the following terms:

The proposed development does not comply with the exception is the minimum subdivision lot sizes for rural subdivisions as set out in cl 4.2A of the UHLEP.

There are then provided four particulars in support of that contention. All of them relate to non-compliances with cl 4.2A of the UHLEP and do not raise any issues with respect to cl 4.2 of the UHLEP.
The first mention of cl 4.2 is contained in the particulars to the Council’s Contention 4. This Contention is in the following terms:

The proposed development will result in the creation of a proposed Lot 1, which is unlikely to have carrying capacity to support sustainable and productive agriculture.

The sixth particular to Contention 4 is in the following terms:

The proposed development does not comply with the objectives of the RU4 zone as it does not promote sustainable primary industry and would not warrant approval under cl 4.2 of UHLEP.

The SOFAC was signed by Mr Matthew Pringle, Director - Environmental and Customer Services, of the Council. The SOFAC necessarily frames the way the Council is expected to run its case in a Class 1 merit appeal and, also, provided the basis upon which it is expected that the Appellants in such appeal will frame their case in support of seeking consent to the proposed development.
Equally applicably, self-evidently, a case framed in response to the Contentions set out above will, necessarily, require the Commissioner to engage with and consider the matters that are advanced both by the Appellants and by the Council. In this instance, as framed in the elements of the SOFAC set out above, and in the material contained in Mr Casson's expert report, that course was followed.

The Statement of Facts and Contentions in Reply

In the Appellants’ SOFACR (Appeal Book, Tab 5, folios 78 to 86), no exception was taken to the listing by the Council of the potentially relevant UHLEP provisions. However, at (11) of this document, the Appellants said:

The Applicant’s primary position in relation to minimum lot size requirements is that the exception provisions contained in clause 4.2A UHLEP have been satisfied.

After that assertion, there followed four particulars pleaded in its support. Despite incorrect citations, in particular (d)(ii) and (iii), these particulars clearly rely exclusively on cl 4.2A of the UHLEP.

The evidence filed before the hearing

The Appellants and the Council each filed and served two expert reports leading up to the hearing before the Commissioner.
Lay affidavit evidence was also given in support of the proposed subdivision by Mr Hayne, one of the Appellants/owners of “Carlisle” (Appeal Book, Tab 6, folios 87 to 196 - including annexures).
The expert reports were prepared:

for the Appellants, by Mr Casson - on town planning matters, and by Mr Ropa - on agricultural issues; and

for the Council, by Mr Fryar, a consultant town planner engaged by the Council, and Mr Hamilton, an external agricultural consultant retained by the Council.

The Council retained external consultants for the purposes of the proceedings because the staff recommendation concerning the proposed development was one proposing that the subdivision should be approved subject to conditions of consent (whilst the determination of the Council was that it should be refused). As is customarily the position in such circumstances, the staff would have been conflicted had they been required to prepare material in support of the Council's position, as that position was contrary to their own assessment - hence, the necessity to engage external experts to address relevant matters.

The Appellants’ written evidence

Mr Hayne’s affidavit

In 2010, Mr and Mrs Edwards and Mr Johnson, the owner of Lot 211 to the east of the southern portion of the site (being the land to the south of Hunter Road), executed a contract for Mr Johnson to purchase Lot 212. At (15) to (21) of Mr Hayne’s affidavit, he set out material relating to the presently unresolved Supreme Court proceedings commenced by him concerning this proposed sale to Mr Johnson. It is unnecessary for me to provide any further detail concerning that collateral legal dispute.
Mr Hayne also described, at (25) to (27), what might be the consequences if he was not able to obtain the benefit of the proposed lease over the proposed northern allotment if the subdivision does not proceed.
However, the dis-benefits expressly discussed in (27) arise because the identification of the lands permitted to be irrigated pursuant to his present water licence exclude the proposed northern allotment. The fact is that the proposed northern allotment is excluded from the land permitted so to be irrigated by the terms defined in the licence. This impact on its current use is caused by this and not by the nature of the relevant cadastral boundaries currently applicable. He gave no evidence that subdivision and a 99-year lease were necessary to remedy this.
It is to be noted that there is no evidence of what position would arise, if the water licence were to be extended to encompass the portion of the site to the north of Hunter Road, should the owners of “Carlisle” have a lease over that portion that would permit them to have the water licence extended in its coverage. There certainly is no evidence that this would require a lease for 99 years rather than for some permitted shorter term that might, at a practical level, be rolled over on an ongoing basis without the necessity for formal options for this to occur.
It is also to be observed that there is nothing in Mr Hayne’s affidavit that would permit the conclusion to be drawn that, post subdivision, there would be any greater chance to achieve the objectives for development in the relevant zone (the relevant zone, for the purposes of Mr Hayne’s affidavit, being the RU4 zone) as a consequence of the bare continuation of his current farming activities.

Mr Casson’s Statement of Evidence

Mr Casson's report (tendered before the Commissioner and Appeal Book, Tab 7, folios 197 to 236) was filed on 7 April 2017. In his expert report, at (12), Mr Casson first proposes that the development be approved pursuant to cl 4.2A of the UHLEP. At (25)(f), Mr Casson merely refers to cl 4.2 of the UHLEP and, at (25)(g), adverts to cl 4.2A and sets out the terms of cl 4.2A(3) and cl 4.2A(4).
At pages 8 to 10, inclusive, of his report (folios 205 to 207), Mr Casson deals with the question of lot size and does so, entirely, in the context of cl 4.2A of the UHLEP - he makes no mention whatsoever of cl 4.2 of the UHLEP.

Mr Ropa’s Statement of Evidence

Mr Ropa's report (tendered before the Commissioner and Appeal Book, Tab 8, folios 237 to 243) was filed on 19 April 2017.
Mr Ropa’s evidence dealt primarily with the proposed northern allotment and the impact on farming on “Carlisle” if it did not continue to be farmed in conjunction with the proposed northern allotment. That is, correctly understood, he dealt with the benefits of continuing the present arrangements and did not postulate that the proposed subdivision would allow land owners a greater chance to achieve the objectives for development in the relevant zone [emphasis added by me]. This is consistent with the evidence of Mr Hayne and its acceptance by the Commissioner.

The Council’s written evidence

Mr Fryar’s Statement of Evidence

For the hearing, as earlier noted, the Council retained Mr Fryar as its external consultant town planner. Mr Fryar's report (tendered before the Commissioner and Appeal Book, Tab 12, folios 427 to 454) was filed on 10 April 2017.
At 3.5 of his report (folio 437), Mr Fryar wrote:

The LEP contains cl 4.2 that would apply to the subject site and states:
[The text of cl 4.2 is then set out with cl 4.2(3), (4) and (5) being underlined by Mr Fryar].

At 3.6 of his report (also folio 437), he wrote:

The DA (as made) appears to rely upon the provisions of cl 4.2A of the LEP 2013 for its permissibility. Clause 4.2A states as follows:
[The terms of that clause are then set out without underlining].

In Part 4 of his expert report, headed “Reasons For Refusal”, Mr Fryar deals with the Council's contentions. At 4.8 (folio 442) to 4.11 (folio 443), Mr Fryar deals with Contention 2 that:

The proposed development does not comply with the exceptions to the minimum subdivision lot sizes for rural subdivisions at as set out in cl 4.2A of UHLEP.

In his discussion concerning cl 4.2A, Mr Fryar does not engage with cl 4.2 of the UHLEP.
Mr Fryar turned his attention (folio 444) to Contention 4, the contention that:

The proposed development will result in the creation of proposed Lot 1 which is unlikely to have the carrying capacity to support sustainable and productive agriculture.

At 4.15, dealing with Contention 4, Mr Fryar wrote:

This matter is the subject of separate Expert Evidence in the Proceedings. Clause 4.2 of the LEP allows for the subdivision of land in certain rural zones that can be demonstrated that the parcel of land to be created can sustain the future use of the land for the purpose of primary production. However, it is considered in the circumstances that the objectives of the RU4 zone cannot be satisfied.
Based on my reading of the draft Statement of Evidence prepared by Mr John Hamilton, it is concluded the proposed lot 1 as a “stand alone parcel” of land would not be a viable agricultural unit.

Mr Fryar did not return, in his written statement, to any further mention of cl 4.2 of the UHLEP.

Mr Hamilton’s Statement of Evidence

Mr Hamilton's report (tendered before the Commissioner and Appeal Book, Tab 13, folios 455 to 462) was filed on 13 April 2017.
Mr Hamilton dealt exclusively with viability issues he considered arose concerning the proposed northern allotment. At folio 462, he wrote:

The risks associated with the creation of a small lot without dwelling approval could result in the land not being used sustainably due to its lack of viability. This could result in misuse of the land and poor weed control on the Lot 1.

He did not engage at all with any suggestion that the proposed subdivision would allow land owners a greater chance to achieve the objectives for development in the relevant zone [emphasis added by me].

Mr Johnson’s written objection to the proposed subdivision

On 29 April 2017, Mr Johnson wrote a letter (Appeal Book, Tab 11, folios 308 to 310) to the Council objecting to the proposed subdivision. Relevant to the impact of the future use of site on his activities if the proposed subdivision went ahead, he wrote (at folio 309):

(3) That if the subdivision was granted, I would be restricted to access to my water pump, which is situated on the banks of the Hunter River. This water supply is the only water supply for Lot 212. Whilst there is an easement in place for water supply this comes with its own restrictions in terms of access. It was my intention after purchasing the land to erect fencing for the purpose of preventing public access to my pump. I have been unable to do this to date and note that the pump has been vandalised on a number of occasions since I committed to the purchase of the land. As a result of this vandalisation on one occasion, I lost four cows as a result of troughs on Lot 212 not being filled. Not only has the pump been vandalised, but contractors, who have been engaged to repair the pump, have had difficulties with Mr Hayne. These matters have been reported to Police for recording purposes as I making every effort to avoid confrontational situations. However, if the harassment and pump interference continues I have been advised that the option of a restraining order remains. This is an action which I am trying to avoid and feel that the rejection of the development application would be sufficient to prevent any such escalation as a result of ongoing access issues to the pump.
(4) Further, I am currently seeking legal advice as to the impact of any subdivision on the existing easement for water supply. The existing easement only benefits Lot 211 (but obviously currently benefits Lot 212 as it burdens Lot 212). If indeed a subsequent subdivision of Lot 212 meant that the resulting remainder Lot (to be retained by Mr Dawson/me) did not have the benefit of the easement for water supply, then Council must ensure that any conditions of consent include the provision of an easement for water supply for the benefit of the remainder Lot. This issue however, does require legal clarification.

Although a deal of this is irrelevant to matters I am required to consider in this appeal, it is clear that the relevant import of Mr Johnson’s submission is that there will be, in his view, a negative probable impact on his existing agricultural activities.
Although Mr Johnson was not required to give evidence in the witness box at Scone Court House, nonetheless, Mr Johnson’s lawyer addressed the Commissioner during the course of her site inspection (Commissioner’s decision at [34]). Her conclusions at [59] and [60] are consistent with accepting his position that there would likely be a negative impact on his farming activities.
On the basis of the material I have set out above, and without having heard Mr Johnson or being able to read a transcript of what was said on his behalf (neither party having required Mr Johnson’s lawyer or Mr Johnson to return to the courthouse to give oral evidence as they would have been entitled to do), it is reasonable to infer that neither of the advocates below wished to challenge Mr Johnson’s on-site evidence. Certainly no submission to this effect appears in the transcript of the hearing before the Commissioner.
That which was said by Mr Johnson in his written objection (which had been tendered as part of the hearing) was, to the extent relevant, as much evidence in the proceedings, as if it had been given in the witness box at Scone Court House. That which was said for Mr Johnson during the course of the on-site submissions was, to the extent relevant, as much submissions in the proceedings, as if it had been made at Scone Court House. As the matters to which the Commissioner had regard in reaching her conclusion concerning Mr Johnson's evidence were not ones that were fresh or novel ones, there was no need for her to have given the parties notice as it was clearly a matter relevant to the Council’s Contention 4, particular 6 rather than a matter distinct from and not arising out of the Council's pleading (contra the position dealt with in The Presbyterian Church (New South Wales) Property Trust v Woollahra Municipal Council [2015] NSWLEC 47, on appeal, where Pain J accepted that it was appropriate, if a Commissioner considered that a matter raised by the objectors was potentially determinative but had not been raised by the consent authority, notice needed to be given to the Applicant to afford such an Applicant procedural fairness by providing an opportunity to respond to that issue).
As a consequence of the way the matter was run before the Commissioner, I am satisfied that it was open to her to reach the conclusion concerning a potential adverse impact on Mr Johnson’s agricultural operations and that, in her doing so on the totality of the evidence before her on that point, she made no legal error.

The Joint Expert Reports

Town planning

Mr Casson and Mr Fryar conducted a joint conference on 24 April 2017 and had subsequent e-mail and telephone contact. Their Joint Expert Report (Appeal Book, Tab 14, folios 469 to 479) was dated 27 April and was filed that day.
At 2.1.4, they agree that cl 4.2A of the UHLEP is available as a basis for approval of the proposed subdivision. The remainder of the Joint Expert Report - to the extent that it engages with the UHLEP - does so solely in the context of cl 4.2A. There is simply no mention whatsoever made of, or engagement with, cl 4.2 of the UHLEP.

Agricultural land use

Mr Ropa and Mr Hamilton conducted joint conferencing by telephone between 28 April and 5 May 2017. Their Joint Expert Report (Appeal Book, Tab 15, folios 480 to 483) was dated 15 May 2017 and was filed the following day.
The report is of limited scope and there was no disagreement between Mr Ropa and Mr Hamilton.
However, it is to be observed that, in dealing with river access, nothing is mentioned of Mr Johnson’s water access issues. There is certainly nothing in this report that could be regarded as answering his concerns.

The Appellants’ draft conditions of consent

The Appellants’ draft conditions of consent before the Commissioner

Before the Commissioner, the Appellants proposed a number of conditions of consent. One of them proposed that two restrictions be placed on title for the two allotments proposed to be created by the subdivision. The relevant condition was proposed to be in the following terms:

(3)   All easements, rights-of-way, right-of-carriageway, and restrictions-as-to-user as indicated on the plans submitted with the application for a Subdivision Certificate are to be registered on the title of the relevant LOTS together with the following additional easements/rights-of-way/restrictions, naming Upper Hunter Shire Council as the sole authority empowered to release or modify the same:
(a)   A 5 metre wide easement for water supply shall be created from the Hunter River such as to burden proposed Lot 1 for the benefit of proposed Lot 2.
(b)   A restriction as to user shall be registered on the title of Lot 1 prohibiting the erection of a dwelling house on the land.

This condition contains no imposed requirement to address any water supply issues that might relate to Lot 211 owned by Mr Johnson.

The Appellants’ draft conditions of consent on appeal

On appeal, the Appellants proposed a number of conditions of consent. One of them, equivalent to but differing from that set out above as being before the Commissioner, proposed that three restrictions be placed on title for the two allotments proposed to be created by the subdivision. The relevant condition proposed is in the following terms:

(3)   All easements, rights-of-way, right-of-carriageway, and restrictions-as-to-user as indicated on the plans submitted with the application for a Subdivision Certificate are to be registered on the title of the relevant LOTS together with the following additional easements/rights-of way/restrictions, naming Upper Hunter Shire Council as the sole authority empowered to release or modify the same:
(a)   A 5 metre wide easement for water supply shall be created from the Hunter River such as to burden proposed Lot 1 for the benefit of proposed Lot 2.
(b)   A restriction as to user shall be registered on the title of Lot 1 prohibiting the erection of a dwelling house on the land.
(c)   A positive covenant shall be registered on the title of Lot 1 requiring the land to be used in conjunction with Lot 3 and 4 DP 752476.

Although expanded from that proposed before the Commissioner, this extended condition also contains no imposed requirement to address any water supply issues that might relate to Lot 211 owned by Mr Johnson. It is also to be observed that that which is proposed in (b) (in either condition above) is a nonsense as a consequence of cl 4.2(5) acting to impose a prohibition on erection of a dwelling on either of the proposed subdivided allotments.

The oral evidence before the Commissioner

Mr Casson and Mr Fryar gave oral evidence before the Commissioner. The transcript is reproduced in the Appeal Book behind Tab 4. Their evidence is at pages 24 to 39 of the transcript (Appeal Book, folios 57 to 72). To the extent that their oral evidence engaged with the UHLEP, this engagement was with cl 4.2A and was of limited compass. There was no questioning about, or oral evidence touching on, cl 4.2 of the UHLEP.

The submissions made to the Commissioner

Nothing in the submissions made to her provides any relevant assistance for my engagement with the matters requiring my consideration in this appeal (given the significant - near complete - reframing by the Appellants of the issues to be addressed on appeal).

The Commissioner’s decision

The structure of the Commissioner’s decision

The Commissioner’s decision is structured in an entirely conventional fashion. It is divided into five parts:

Part 1 - a factually descriptive introduction;

Part 2 - an analysis of the case run by the Appellants before her;

Part 3 - an analysis of the case run by the Council before her;

Part 4 - discussion and consideration of the comparative merits of the parties’ competing positions; and

Part 5 - the Commissioner’s conclusions.

Matters considered by the Commissioner

To the extent that Commissioner’s decision might be regarded as a little muddled when compared to the nature of the case that has been run on appeal before me, this can hardly be said to be her fault given that the nature of the case below differed significantly from the case that has been run on appeal.
Below, the Commissioner was invited to undertake intellectual excursions into the applicability or otherwise of cl 4.2A of the UHLEP and, similarly, into State Environmental Planning Policy (Rural Lands) 2008.
As is now accepted to be the position by both the Appellants and the Council on appeal, neither of these provisions were, on a correct understanding of their terms, relevant in any way to the issues which the Commissioner was required to address.
Those issues requiring consideration arise out of the sole provision in the UHLEP which could, potentially, provide a basis for approval of the proposed subdivision (being cl 4.2 of the UHLEP). Indeed, on appeal, a significant complaint made by the Appellants is that clause 4.2(3) of the UHLEP required that the Commissioner undertake a discretionary merit assessment of the proposed subdivision and that she failed to do so.
It is to be observed that, from a reading of the transcript disclosing the oral submissions made to her for the Appellants and the Appellants’ counsel’s written submissions before the Commissioner, she was never asked, in terms, to do so by the Appellants’ counsel then appearing before her.

The Commissioner's conclusion

The Commissioner summarised, at [61] of the decision, the basis upon which she had dismissed the Appellants’ appeal. She wrote:

61 Accordingly, I find that I do not have power under cl 4.2 or cl 4.2A to permit this subdivision of land. And, even if I did I am not satisfied of the matters in cl 4.2A (a) and (b) and on that basis the application cannot be approved

The Appellants submit to me that each of the three elements of this conclusion was infected with legal error.

The grounds of appeal

In the Summons commencing this appeal, the Appellants plead eight grounds upon which, it is submitted, the Commissioner’s decision was defective. Those grounds were:

(2)   The Commissioner made jurisdictional errors in holding that she did not have power under clause 4.2 of the Upper Hunter Local Environmental Plan 2013 (LEP) to permit the subdivision of the land (judgment at [53] & [61]).
[Particulars omitted]
(3)   The Commissioner made jurisdictional errors in failing to grant the development consent as permitted by sub-clause 4.2(3) of the LEP.
(4)   The Commissioner made a jurisdictional error by regarding the matters in subclauses 4.2A(4)(a) and (b) of the LEP as relevant to a consideration of her power under clause 4.2 of the LEP (judgment at [61]).
(5)   In the alternative to ground of appeal 3 above, the Commissioner erred in failing to give reasons for refusing to grant development consent even if empowered to do so under clause 4.2 of the LEP (judgment at [61]).
(6)   The Commissioner made a jurisdictional error in failing to consider whether the proposed development would "allow [the] land owners a greater chance to achieve the objectives for development in the relevant zone" (per sub-clause 4.2(1) of the LEP).
(7)   The Commissioner made jurisdictional errors in failing to take the following relevant facts, or any of them, into consideration; namely:
a)   that the proposed development would "allow [the] land owners a greater chance to achieve the objectives for development in the relevant zone" (per sub-clause 4.2(1) of the LEP);
b)   that it was not practical or sustainable in the long term to farm proposed lot 1 with proposed lot 2;
c)   that the most agriculturally viable use of proposed lot 1 is that it be farmed with Lot 4 in DP75247;
d)   that without the proposed subdivision the agricultural productivity of both the proposed Lot 1 and Lot 4 in DP75247 will be dramatically reduced.
(8)   The Commissioner made a jurisdictional error in taking an irrelevant fact into consideration; namely, that the proposed lot 1 was not a viable agricultural lot in its own right Judgment at [53]).
(9)   Further, by reason of the errors cited above, or any of them, the Commissioner's decision was so unreasonable that no reasonable consent authority would have so decided.

I will return, later, to summarise my findings with respect to each of these grounds.

The Appellants’ position on appeal

The outcome of the appeal proposed by the Appellants, as the primary relief sought, is that I form the opinion that, on my analysis of matters engaged by cl 4.2 of the UHLEP, the proposed subdivision should be approved subject to conditions which were appended to the Appellants’ Summons commencing the appeal and that I grant approval subject to conditions (using, it is to be inferred, s 56A(2)(b) of the Court Act to do so). The substantive, operative orders sought were in the following terms:

(a) The appeal to the court below from defendant's refusal to grant development consent to development application 27/2016 be allowed.
(b) Development consent be granted to development application 27/2016 on the conditions set out in Annexure A or, in the alternative, on such conditions as the Court thinks fit.

In the alternative, the Appellants propose that, if I am satisfied that the appeal should be upheld but I am not prepared to exercise the power under s 56A(2)(b) of the Court Act to approve the subdivision, I should order that the matter be remitted to a Commissioner for further consideration in determination based on the guidance that would be given with respect to such defects as I would have concluded infected Dixon C’s decision. On either approach proposed by the Appellants, I would also order that the Council pay the Appellants’ costs of the appeal.
The remitter sought, if it was needed (but it is not), was to be subject to further submissions by the parties as to whether it should be an exclusionary one (the Appellants seeking such an exclusionary remitter) so that the remitted matter would be heard by a different Commissioner.
Before me, unlike before the Commissioner at first instance, the Appellants expressly disavowed any reliance on cl 4.2A of the UHLEP. More is to be said about the way the case below was run by the Appellants later in this decision. At this point, it is sufficient to note that, in my discussion of the structure of the Commissioner’s decision, she was lured into considering matters of complete irrelevance by the way in which the case below was argued before her.

The Council's position

Unsurprisingly, the Council's position is that the Commissioner’s decision contains no legal defect; was supported by a proper analysis of the relevant provisions of the UHLEP when applied to the facts and circumstances of the proposed subdivision application; and contained no unavailable and sufficiently unreasonable factual basis for her conclusion to warrant it being set aside.
On this analysis, Ms Irish, counsel for the Council, submitted that the appeal should be dismissed and the Appellants ordered to pay the Council's costs.

Written submissions in the appeal proceedings

I have been assisted by the provision of written submissions from counsel for both the Appellants and the Council as well as concise written submissions in reply on behalf of the Appellants.
However, for the reasons able to be understood from that which follows, much of the written and oral submissions do not require analysis as they address cl 4.2(3) of the UHLEP and its tests - tests I am satisfied do not get reached for consideration.

Analysis of the Commissioner’s decision

It is now long settled that, in my consideration of the Commissioner’s conclusion and the reasons upon which she based that conclusion, I am not to undertake a detailed, parsing dissection of her decision. Such a fine‑toothed comb approach is entirely inappropriate (Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367).

It will, however, be necessary to set out relevant passages from the Commissioner’s decision in order to understand the appeal grounds advanced with respect to each of her conclusions and whether or not I am satisfied that the relevant attack on the Commissioner’s conclusion on that aspect of the matters dealt with by her has any valid foundation.

The Appellants’ case on appeal

Introduction

In order to understand the Appellants’ case in advancing the proposition that the Commissioner erred in each of the conclusions which she set out at [61] of her decision, it is necessary to address not only the attack on appeal on each of these elements of the Commissioner’s conclusion, but also to address, in some detail, the way the case was run in the first instance.

The written expert evidence

The written evidence from the four earlier identified experts was tendered before the Commissioner.

The agricultural evidence

The experts who gave evidence on agricultural matters reached agreement in their joint conferencing, agreement which was reflected in their Joint Expert Report placed in evidence before the Commissioner. Matters from their individual reports and in their joint report are earlier dealt with - see above at [65] and [66], [75] to [77] and [86] to [88].
She recorded this position in her decision where she wrote, at [28] and [29]:

28 The Court received expert evidence from two agricultural experts. Kyle Ropa who appeared on behalf of the Applicants and John Hamilton who provided evidence on behalf of the Council.
29 These experts initially prepared individual statements of evidence before conferring to prepare a joint report (exhibit 6). In the ultimate they agreed that Lot 1 is not a viable agricultural Lot in its own right. They also agreed that if the Court were to approve the subdivision then Lot 1 needs to accommodate easements to allow access to the river for both Lot 2 and the adjoining property “Carlisle” and Mr Johnson’s land. These property owners currently rely upon water pumped from the river for their agricultural use of their land.

The planners’ evidence

Mr Casson and Mr Fryar were required to give oral evidence. I have earlier set out the relevant elements of their written evidence (both in their individual reports and in their joint report - see above at [63] and [64], [67] to [74] and [84] and [85]). To the extent necessary, their concurrent oral evidence is considered below.

Examination of the transcript and related documents

Introduction

To understand how she came to address the various issues dealt with in her decision, it is also necessary to set out various matters dealt with by reference to the hearing on 25 May 2017 and documents called up from the Appeal Book relating to them.
Before turning to consider, in any detail, the transcript and related documents, it is appropriate to note that the case below was run, to very considerable extent, in reliance on cl 4.2A of the UHLEP. Before turning to the detail of the case below, it is, therefore, appropriate to observe that it is in highly unsurprising that a good deal (but not the totality) of the Commissioner’s written decision was responsive to the argument that was put to her concerning that provision.
To the extent that it is now submitted, on appeal, that the only relevant provision which could have provided a pathway to approval of the proposed subdivision is cl 4.2 of the UHLEP and that the Commissioner was in error in addressing and making determinations with respect cl 4.2A, it is appropriate to make clear the position that any such error is one into which the Appellants (first) and the Council (in response) led the Commissioner by the way the case was run before the Commissioner.
I now turn to the transcript below and documents called up from it (all page or line mentions in the below section are to the transcript of 25 May 2017 and the relevant page and line details - folio citations are to the relevant folio(s) of the Appeal Book).

First substantive transcript reference

At page 5, commencing at line 37, Mr Pickup, solicitor appearing below for the Council, dealt with the question of the recommendation by the Council's staff that the application should be approved. He refers to the Council staff’s assessment pursuant to cl 4.2A and that, in that regard, he said:

In respect of their assessment in cl 4.2A, I might note that I think they’ve accepted, probably, a submission from the Applicant and I think there was actually a legal opinion provided by Ms Hill in relation to the interpretation of cl 4.2A which I am of the view is not correct, so that may underpinned as to why the Council recommended approval but I can't say that for sure.

Mr Pickup also refers (page 5, lines 49 and 50), to the fact that the legal advice was annexed to Mr Casson's Statement of Evidence (SOE) tendered before the Commissioner.
This SOE is behind Tab 7 in the Appeal Book and the legal advice to which reference is made is at folios 220 to 222. It is an advice, in terms, responding to a request concerning the statutory construction of sub-cl 4.2A(3) of the UHLEP.
The advice was confined to dealing with the statutory construction of cl 4.2A(3) of the UHLEP and did not deal with the applicability of, or any tests requiring to be addressed as a consequence of, cl 4.2 of the UHLEP. This is unsurprising given that the request for advice, it is to be inferred from the terms of the request, was merely confined to cl 4.2A.
The necessity for seeking that advice appears to have come from an e-mail from Mr Paul Smith, a Senior Environmental Planner employed by the Council. The e-mail (folio 217) was dated 29 April 2016 and sent to Mr Casson. This e-mail is in the following terms:

I have completed a preliminary review of this DA. Clause 4.2A does not seem to be applicable as there is no existing development consent for the land (unless you can provide evidence of such a consent). Notwithstanding cl 4.2 is applicable and its use seems reasonable given the intent of the subdivision. However, lot 212 currently has a dwelling entitlement under cl 4.2B(3)(c) as it was a subdivision approved under the Scone LEP. If, however, Council approve this subdivision neither proposed lot 1 or 2 would not have a dwelling entitlement. Is this the outcome the owners of the land want?

The last sentence clearly contains an unintended double negative and Mr Smith’s intention was to draw to the attention of the proponents of the subdivision the fact that, if approved, pursuant to cl 4.2 of the UHLEP, cl 4.2(5) would act to prohibit the erection of a dwelling on either of the resultant allotments.
The barrister's advice was provided to Mr Casson and to Mr Smith on 17 June 2016. The advice explains why, in the view of the author, cl 4.2A was available as a vehicle for approval of the proposed subdivision.

The Appellants’ case on appeal

The Appellants’ case on appeal, although advanced on the range of formal grounds earlier set out, can, correctly understood, be summarised and dealt with as follows:

To the extent that the Commissioner concluded that she was precluded from granting consent to the proposed subdivision by utilising the pathway available through cl 4.2 of the UHLEP, this conclusion was not available to her. This conclusion (that she could not approve the proposed subdivision in reliance on cl 4.2 of the UHLEP) was not based on a correct understanding of the provision and that this was a legal error which vitiated the first of the three elements of the conclusion set out at [61] of the Commissioner’s decision;

A proper understanding of cl 4.2 of the UHLEP and its application to the proposal for subdivision of the site required testing and analysis of the proposal against the requirements of, first, cl 4.2(1) and, subsequently (if arising), consideration and analysis against the provisions of cl 4.2(3). The Appellants submit that the Commissioner, to the extent that she might be regarded as having fulfilled these tasks, did not express any conclusion on such evaluations. As she was not precluded, in the absolute sense expressed in the first of her conclusions in [61] of her decision, from approving the proposed subdivision, she was obliged to express a conclusion on the outcome of a merit evaluation undertaken, as required by cl 4.2(1) and (3) of the UHLEP, and she failed to do so. This failure, the Appellants submit to me, constitutes a further legal error on behalf of the Commissioner;

With respect to the second conclusion expressed by the Commissioner in [61] of her decision - namely that cl 4.2A of the UHLEP could not provide a pathway to permit her to approve the proposed subdivision - this conclusion was correct. However, given that the case for the Appellants below, properly understood, relied on cl 4.2A, the Commissioner’s analysis of, and reliance upon, testing the Appellants’ case against this provision was so inextricably interwoven with any consideration which she might have given to matters arising from cl 4.2 of the UHLEP that her consideration of cl 4.2A impermissibly infected such consideration as it might be possible to infer she had given to cl 4.2 of the UHLEP and that this infection was a further error which vitiated her decision.

I interpolate that, for the reasons I have earlier set out concerning the way the Appellants ran the case before the Commissioner, if this complaint could be seen to have a proper foundation, it is solely because of the way the Appellants ran their case at the first instance. There is simply no basis to conclude that the Commissioner had, for some inappropriate reason, “gone off on a frolic of her own” and considered a provision of the UHLEP not principally relied upon before her and rejected the proposed subdivision on that basis.

The Appellants submitted, with respect to the second of the Commissioner’s conclusions in [61] of her decision, the proposition that cl 4.2A acted as a barrier to her approval of the proposed subdivision was irrelevant as the provision did not provide an available pathway to approval. In relying on this provision as a second basis for concluding that she could not (as opposed to ought not, on a proper merit assessment basis) approve the proposed subdivision tainted the whole of the Commissioner’s reasoning process on a proper reading of the totality of the reasons for decision that this constituted an error of law which vitiated the whole of her decision; and
To the extent that the third of the reasons, at [61] of her decision, was that, on a merit assessment, the proposal failed cl 4.2A(a) and (b) (this being accepted to be citation of cl 4.2A(4)(a) and (b)), as cl 4.2A was not available as a pathway to approval, the fact that the Commissioner had reached an adverse merit assessment of the Appellants’ proposal, based on these two of the four evaluative elements called up for consideration by cl 4.2A(4) of the UHLEP, meant that such a merit assessment could provide no basis for concluding that the Commissioner had made the required merit assessment arising from the applicable elements of cl 4.2 of the UHLEP. To the extent that this conclusion reflected the outcome of the totality of the Commissioner’s merit assessment, that merit assessment had been undertaken on an incorrect basis. It was not, on appeal, open to conclude that the Commissioner had undertaken any merit assessment on the correct basis and it could certainly not be regarded as having expressed any properly derived evaluation from a merit assessment on the basis required by engaging with cl 4.2 of the UHLEP.

The Commissioner's conclusion on cl 4.2

Introduction

From the Appellants’ grounds set out above, it follows that I need commence my consideration of the validity (or otherwise) of the Appellants’ complaints by addressing the Commissioner's conclusion concerning cl 4.2 of the UHLEP.
In [61] of her decision, the Commissioner expressed the conclusion that cl 4.2 of the UHLEP, as a potential pathway to approval of the proposed subdivision, was not a pathway available for that purpose. It is, therefore, necessary to consider what is the necessary reasoning process required at first instance in engaging with the steps mandated by the clause, and assessing whether the approach taken by the Commissioner (whether expressly or by necessary implication) correctly approached the provision in the necessary sequential fashion.
As I have earlier explained, the way the Appellants’ case was mounted before the Commissioner was one which was somewhat muddled and, particularly, focused overwhelmingly on the interpretation of the terms of cl 4.2A and its availability (there being a common position on appeal that this provision was not available to provide a pathway for approval of this proposed subdivision).
I am satisfied that the way the matter was run at first instance (neither Mr Lovas nor Ms Irish appearing before the Commissioner) contributed to the way she has structured her decision; how she approached the fact-finding processes; and factual conclusions she drew from the evidence (both written and oral) that was before her.

The relevant sequential structure of cl 4.2

Clause 4.2(1)

It is to be recalled that, as earlier set out, there are two relevant elements of cl 4.2 that require consideration. They are cl 4.2(1) and cl 4.2(3). What the Commissioner was required to address was whether or not both of these provisions were satisfied so as to permit approval of the proposed subdivision.
First, it is appropriate to repeat the terms of cl 4.2(1) and to set out what was required to be satisfied arising from it as a necessary precondition to turning to address what was required by cl 4.2(3). I therefore repeat the terms of cl 4.2(1):

4.2 Rural subdivision
(1) The objective of this clause is to provide flexibility in the application of standards for subdivision in rural zones to allow land owners a greater chance to achieve the objectives for development in the relevant zone.

Although expressed in what might be regarded as primarily descriptive and preambular terms, it is nonetheless clear that cl 4.2(1) does mandate consideration of and satisfaction with one preliminary matter precedent to proceeding to embarking on addressing matters arising from cl 4.2(3). This arises from the fact that cl 4.2(1) contains a gateway element, namely that the proposed subdivision must allow the relevant land owners a greater chance to achieve the objectives for development in the relevant zone [emphasis added].
In this instance, given the primary focus in the hearing before the Commissioner on the proposed northern allotment, an allotment which would, if created, be entirely within the RU4 zone, the focus in the relevant elements of the Commissioner’s fact-finding and reasoning process (a reasoning process able to be understood both from that which she has set out expressly and from that which is necessarily to be inferred from her decision) was, particularly, on matters concerning the objectives of this zone rather than those of the RU1 zone. For the reasons later set out, there was no fault in this aspect of her consideration of these matters.

Clause 4.2(3)

First, it is to be observed that cl 4.2(3) is a hybrid provision. This arises because it is one which contains a second gateway element but, in addition, requires the engagement of the decision-maker undertaking a discretionary evaluation to reach a merit conclusion. As can be seen from the terms of the provision itself:

(3) Land in a zone to which this clause applies may, with development consent, be subdivided for the purpose of primary production to create a lot of a size that is less than the minimum size shown on the Lot Size Map in relation to that land.

Although not cast in this order, the decision-maker must be satisfied that the purpose of the proposed subdivision is for the purpose of primary production. Testing the proposed subdivision in this fashion brooks only a “yes” or “no” answer and is, therefore, also a gateway element.
More importantly, however, the element of the provision that reads may, with development consent, mandates that the decision-maker engage in weighing all factors called up by these words. Only after undertaking such an evaluative process is it permissible for the decision-maker to reach a discretionary conclusion as to whether or not the proposed subdivision should be approved (contingent on the decision-maker having concluded that an affirmative answer has been established to one of the two gateway provisions earlier discussed).

The proper cl 4.2 process

It is only if all three steps are in favour of a proposed subdivision that the decision-maker can utilise the terms of cl 4.2 to grant approval to that subdivision.
Such a provision must be regarded as “beneficial and facultative” because, for proposed subdivisions to satisfy the applicable process relevant to that proposed subdivision (in this instance, the three steps set out above), satisfaction, once achieved, enables a bypassing of the otherwise proscriptive effects of cl 4.1 of the UHLEP - a provision which would otherwise bar approval of subdivisions that fell to be assessed against the relevant tests contained in cl 4.2 of the UHLEP. However, although beneficial and facultative, any tests arising from the provision must, necessarily, be satisfied.

The Commissioner’s analysis of the evidence

The complaint which is made on behalf of the Appellants concerning the Commissioner’s approach to the mandated tasks set by cl 4.2 overall is that, in her evaluative process, she did not undertake; set out any analysis concerning; or provide any concluded view about the matters which would be mandated by proper engagement of the discretionary requirements of cl 4.2(3).
To the extent that there is validity in the above complaint raised by the Appellants that the Commissioner did not address, appropriately, matters of discretionary evaluation mandated by cl 4.2(3), it is clear that this complaint is a valid one.
I therefore turn to an analysis of the Commissioner’s decision to evaluate what are the relevant findings of fact she has made that are applicable to the question of whether or not this subdivision would give land owners a greater chance to achieve the objectives for development in the RU4 zone and the RU1 zone if this proposed subdivision was to be approved.
Before doing so, I remind myself of two matters earlier set out relevant to undertaking such an analytic process. These factors are:

I am not to undertake a “fine-toothed comb” analysis of the Commissioner’s decision (Brimbella as earlier cited); and

The fact-finding and reasoning process in the various portions of the Commissioner’s written decision are intermingled and not neatly compartmentalised as a consequence, primarily if not exclusively, of the way that the case in support of approval of the proposed subdivision had been run before her engaging, significantly, with cl 4.2A (a provision now acknowledged as being unavailable) as well as the provisions of cl 4.2, the provision to which I now turn.

I have earlier, at [18], quoted the relevant provisions contained in [4] of the Commissioner’s decision concerning the past history of the land use of the proposed northern allotment. It is unnecessary to repeat that which she has accepted as fact on this point, as that which she set out (and I have summarised) is not contested on appeal.
In essence, relevantly, for the proposed northern allotment, there has been no practical alteration to its agricultural use since 1950 and that, since the discovery of the correct position concerning the ownership of what is now known to be part of Lot 212 in Deposited Plan 1154848, this use has continued unchanged by virtue of an unregistered lease to the proprietors of “Carlisle” (merely being an unregistered formalisation of what has been the factual position for well over half a century).

The correct UHLEP test

I have earlier described the correct sequencing of the required analysis of a development proposal for which consent might be permissibly granted utilising cl 4.2 of the UHLEP. The correct sequence involves two gateway tests (the first in cl 4.2(1) and the second in cl 4.2(3)) and, if both gates are open, a discretionary, merit-based testing (one also arising out of cl 4.2(3)).
Because of the way that the case was run before the Commissioner, to the extent that she applied the outcomes of her fact-finding by going straight to an assessment of this proposed subdivision development against the two tests contained in cl 4.2(3) of the UHLEP without testing whether the gateway in cl 4.2(1) was open (the necessary precursor to any consideration of cl 4.2(3), she was in error so to do.
However, as can also be seen from my analysis of the way the case was run below, this error was also one into which she was led by the approach taken to the parties in advancing to her what they said was the correct decision‑making matrix she was required to address.

The Commissioner’s cl 4.2(3) conclusion

It therefore follows that the Commissioner’s conclusion that cl 4.2(3) was not available to provide a pathway approval was also an error (whether the fact‑finding and discretionary analysis for the purposes of this provision was inadequate or not is irrelevant) because she failed to engage with the necessary precursor test in cl 4.2(1).
It also therefore follows that, with respect to her cl 4.2(3) conclusion in [61] of her decision (namely, that this pathway to power was not available), that was also infected by error and is to be disregarded.

My power on appeal

In the decision in Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council (2007) 156 LGERA 150; [2007] NSWCA 300, a five-judge Bench of the Court of Appeal dealt with the question of the availability to use s 57(2)(b) of the Court Act to make dispositive orders dealing with the matter found on appeal to have been dealt with legally erroneously by the primary judge. The options available to the Court of Appeal pursuant to s 57(2) of the Court Act were:

(2)   On the hearing of an appeal under subsection (1), the Supreme Court shall:
(a)   remit the matter to the Court for determination by the Court in accordance with the decision of the Supreme Court, or
(b)   make such other order in relation to the appeal as seems fit.

As can be seen, this provision is, mutatis mutandis, identical to the terms of s 56A(2) of the Court Act in circumstances where I have found that the Commissioner's conclusions were all infected with legal error (albeit, for the reasons set out, through no fault of her own).
In Thaina Town, Spigelman CJ expressly held, at [104], that, when, only on the facts properly found below, a dispositive outcome could be discerned, then that outcome could be given effect utilising s 57(2)(b) of the Court Act. His conclusion on this point was agreed with by Mason P and Beazley, Giles and Ipp JJA.
By necessary analogy, given the identical effect of the power available to me pursuant to s 56A(2) on this appeal from the Commissioner, it is open to me to make an order dispositive of the merit appeal when it is assessed against the correct test provided, if I am satisfied that, on the facts as found by the Commissioner (and confined to those findings of fact relevant to the correct test) and that that fact-finding had, in itself, not miscarried, to give effect to what I consider to be the necessary outcome of the Class 1 merit appeal.
I have earlier set out the correct sequencing of the three matters requiring to be addressed arising from the terms of cl 4.2 of the UHLEP. I again observe that the Commissioner did not address these matters in the correct order because of the approach taken by the parties (particularly for the Appellants) in the hearing before her

The terms of cl 4.2(1) of the UHLEP

It is, therefore, appropriate to turn, first, to the mandated requirements of clause 4.2(1) of the UHLEP and consider what the outcome of such consideration would be required to be on the application of the facts found by the Commissioner relevant to that provision had she applied those facts to that provision. It is next appropriate to repeat the terms of cl 4.2(1) of the UHLEP. It provides:

(1) The objective of this clause is to provide flexibility in the application of standards for subdivision in rural zones to allow land owners a greater chance to achieve the objectives for development in the relevant zone.

The objectives of the relevant zones

To enable an assessment of whether the facts demonstrate that the proposed subdivision would satisfy cl 4.2(1), it is necessary to consider the objectives of both zones engaged by this proposed subdivision. First, it is convenient to repeat the objectives of the RU1 zone. These are in the following terms:

Zone RU1   Primary Production
1   Objectives of zone
•   To encourage sustainable primary industry production by maintaining and enhancing the natural resource base.
•   To encourage diversity in primary industry enterprises and systems appropriate for the area.
•   To minimise the fragmentation and alienation of resource lands.
•   To minimise conflict between land uses within this zone and land uses within adjoining zones.
•   To protect the agricultural value of rural land.
•   To maintain the rural landscape character of the land in the long term.
•   To ensure that development does not unreasonably increase demand for public services or public facilities.
•   To ensure that development for the purposes of extractive industries, underground mines (other than surface works associated with underground mines) or open cut mines (other than open cut mines from the surface of the flood plain) will not:
a)   destroy or impair the agricultural production potential of the land or, in the case of underground mining, unreasonably restrict or otherwise affect any other development on the surface, or
b)   detrimentally affect the quantity, flow and quality of water in either subterranean or surface water systems, or
c)   visually intrude into its surroundings, except by way of suitable screening.

Next, it is appropriate to consider the objectives of the RU4 zone. These are in the following terms:

Zone RU4   Primary Production Small Lots
1   Objectives of zone
•   To enable sustainable primary industry and other compatible land uses.
•   To encourage and promote diversity and employment opportunities in relation to primary industry enterprises, particularly those that require smaller lots or that are more intensive in nature.
•   To minimise conflict between land uses within this zone and land uses within adjoining zones.

It can be seen, obviously, that the facts of this proposed subdivision do not engage with, in any contrary fashion, with any of the objectives of the RU1 zone other than the fifth of them.
A similar conclusion is to be drawn with respect to the second and third objectives of the RU4 zone. As a consequence, nothing is engaged by any of these zone objectives requiring consideration as to satisfaction of the test in cl 4.2(1) of the UHLEP.
In testing on the basis of the relevant evidence for, and fact-finding made by, the Commissioner about fact-finding (which, on my separate consideration of all the material now before me and the submissions made before me, were correctly determined by the Commissioner), I need to consider the applicability of these findings to the fifth objective of the RU1 zone and first objective of the RU4 zone to which they must be applied – namely, whether this proposed subdivision would allow land owners a greater chance to achieve the enabling of sustainable primary industry and other compatible land uses.
I am satisfied that, relevant to matters arising to be considered pursuant to cl 4.2(1) of the UHLEP, it can be seen that the Commissioner, expressly or by necessary inference, made the following findings of fact:

With respect to the proposed northern allotment, there would be no increase in the chance of achieving the first objective of the RU4 zone by enabling a 99-year lease to be effected to the owners of “Carlisle”. The agricultural activities on the proposed northern allotment are not likely, in any practical operational sense, to change from the way those activities have been conducted since the early 1950s.

All the subdivision would achieve would be a change in the legal status for the continuation of the long-standing existing lucerne-farming activities;

There would be no change of any significance (if any) on the farming activities on the southern allotment post subdivision when compared to the position presently operating. Although the evidence is scant on this point, the logical inference is that these activities would, too, remain unchanged; however,

On the evidence in writing by Mr Johnson and the submissions by his lawyer on his behalf, approval of the proposed subdivision is likely to have a negative impact on his agricultural activities on Lot 211, the allotment adjacent to the eastern boundary of the proposed southern allotment. Although evidence of the likely negative outcomes on Mr Johnson’s activities is limited, it nonetheless stood uncontradicted or challenged.

Taken together with the neutrality of the position concerning future agricultural activities on the northern and southern portions of the site, the inevitable conclusion is that this proposed subdivision will not provide a “greater chance” of achieving the only relevant one of the zone objectives of the RU1 zone - being the fifth of those objectives and the only relevant one of the zone objectives of the RU4 zone - being the first of those objectives. In fact, this evidence establishes that there will be a lesser chance of satisfying those zone objectives.
The Commissioner also found (correctly) that there would be no dwelling entitlement on either of the northern or southern proposed allotments if the subdivision were to be approved, whereas, at the present time, the existing unsubdivided allotment had such a dwelling entitlement.
I am satisfied that all of these findings of fact were open to her to make on the basis of the totality of the material put to her. The first three of these findings are obviously directly relevant to the test in cl 4.2(1) of the UHLEP. At best, for the Appellants, the finding concerning the extinguishing of the existing dwelling entitlement on Lot 212 would be neutral but, on the other hand, could also be regarded, properly, as weighing against any conclusion that the test in cl 4.2(1) of the UHLEP had been satisfied when weighed against the relevant zone objectives.
Although I am satisfied that, on balance, the Commissioner’s fact-finding was insufficient for the purposes of any evaluation of whether or not the tests in cl 4.2(3) of the UHLEP had been satisfied so that her third conclusion, if it is to be inferred that it was that the proposed subdivision should be rejected on a cl 4.2(3) merit basis, is also to be rejected because of its unreasonableness in a Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1998] 1 KB 223) or Temwood (Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30; [2004] HCA 63). Such rejection, however, would not apply with respect to the adequacy and reasonableness of her fact-finding if the facts she found were to be applied to the test in cl 4.2(1) of the UHLEP.
I have set out earlier the relevant elements of the Commissioner’s fact-finding exercise that are appropriate to be applied to the gateway test set for this proposed subdivision by cl 4.2(1) of the UHLEP. For the reasons set out, I am satisfied that there is no defect in the fact-finding process undertaken by the Commissioner that led her to adopt those factual outcomes on the basis of the evidence and submissions made below. Those facts relevant to the cl 4.2(1) test are sufficient for the reasons earlier set out to conclude that that test has not been satisfied. Failure to pass through that gateway means that it is unnecessary to address the tests that arise pursuant to cl 4.2(3) of the UHLEP.
Although the errors which infected the Commissioner’s decision were ones which require that the operative orders she made be set aside, the outcome which she determined to be correct (namely, the rejection of the proposed subdivision) remains appropriate to be effected by the orders which I may make pursuant to s 56A(2)(b) of the Court Act.
It is consistent with the approach taken by the Court of Appeal in Thaina Town that I make the dispositive order determining the development application for the proposed subdivision. It therefore follows that, on the basis of the Commissioner’s adequate and sufficient fact-finding, those found facts - when applied to the correct test - leads to the result that the appeal is to be dismissed and the proposed subdivision development refused. That, therefore, must be the outcome of this appeal.

No need to apply the tests in cl 4.2(3)

The complaint (although correct) that the Commissioner did not address, adequately or at all, matters arising pursuant to cl 4.2(3) does not arise for consideration as, on a proper understanding of the requirements of cl 4.2(1), cl 4.2(3) does not become engaged for consideration.

A concluding comment on the outcome of the appeal

Although there was only one true path out of the maze and the Commissioner did not find and follow it, the reason for that lies squarely at the feet of the Appellants’ town planner, by his initial assertion in the SEE submitted to the Council that the only true pathway was to be found through cl 4.2A of the UHLEP, an assertion that was simply wrong.

Outcomes of the grounds of appeal

I have earlier set out the eight grounds of appeal pleaded on behalf of the Appellants. Having undertaken my analysis of the way the matter was conducted before the Commissioner and how, properly, her conclusions at [61] of her decision were to be regarded, it is now appropriate (purely for completeness) to set out, in a more formal sense, each of the Appellants’ grounds of appeal and the conclusion to be drawn with respect to it. The results so derived are:

(2)   The Commissioner made jurisdictional errors in holding that she did not have power under clause 4.2 of the Upper Hunter Local Environmental Plan 2013 (LEP) to permit the subdivision of the land (judgment at [53] & [61]).
[Particulars omitted]
This ground is made out for the reasons earlier set out. However, the Commissioner’s conclusion (based on cl 4.2(3) of the LEP) was, although erroneous, one which arose because of the way the case was run before her.
(3)   The Commissioner made jurisdictional errors in failing to grant the development consent as permitted by sub-clause 4.2(3) of the LEP.
The Commissioner’s consideration of cl 4.2(3) was limited because of the way the case was run before her in reliance by the development proponent on an inapplicable LEP provision - cl 4.2A. To the extent she considered cl 4.2(3), she did not adequately do so. However, to suggest that this required her “to grant the development consent as permitted by sub-clause 4.2(3) of the LEP” misunderstands the process required by cl 4.2 of the LEP. As dealt with elsewhere, the correctly applicable approach first requires satisfaction of the test in cl 4.2(1). As this is, on a proper understanding of the evidence, not satisfied, consideration of cl 4.2(3) is not required as it is not reached.
(4)   The Commissioner made a jurisdictional error by regarding the matters in subclauses 4.2A(4)(a) and (b) of the LEP as relevant to a consideration of her power under clause 4.2 of the LEP (judgment at [61]).
This ground is established because cl 4.2A has no applicability to the application - despite the assertion by Mr Casson in his development application and Statement of Environmental Effects lodged with the Council that this clause was the sole provision by which the application might be approved.
(5)   In the alternative to ground of appeal 3 above, the Commissioner erred in failing to give reasons for refusing to grant development consent even if empowered to do so under clause 4.2 of the LEP (judgment at [61]).
Given my finding on Ground 3, this alternative ground does not require to be addressed.
(6)   The Commissioner made a jurisdictional error in failing to consider whether the proposed development would "allow [the] land owners a greater chance to achieve the objectives for development in the relevant zone" (per sub-clause 4.2(1) of the LEP).
This ground is established because the Commissioner clearly did not do so - it is, however, pertinent to noted that she was not requested to do so by the pleadings before her or the evidence and submissions in the hearing before her.
(7)   The Commissioner made jurisdictional errors in failing to take the following relevant facts, or any of them, into consideration; namely:
a)   that the proposed development would "allow [the] land owners a greater chance to achieve the objectives for development in the relevant zone" (per sub-clause 4.2(1) of the LEP);
b)   that it was not practical or sustainable in the long term to farm proposed lot 1 with proposed lot 2;
c)   that the most agriculturally viable use of proposed lot 1 is that it be farmed with Lot 4 in DP75247;
d)   that without the proposed subdivision the agricultural productivity of both the proposed lot 1 and Lot 4 in DP75247 will be dramatically reduced.
Aspect (a) of this ground is also established - but see comment on (6). As to (b) and (c), these findings were made on the evidence and submissions made to her and were open to her. However, those findings she made that were contrary to what is asserted in (d) were, for the reasons elsewhere explained, correctly open to her on the evidence and submissions made to her.
(8)   The Commissioner made a jurisdictional error in taking an irrelevant fact into consideration; namely, that the proposed lot 1 was not a viable agricultural lot in its own right Judgment at [53]).
In light of my findings concerning the three conclusions expressed by the Commissioner at [61] of her decision, it is clear that this was a finding only potentially relevant to cl 4.2A of the LEP. Her making of this finding arose from the way the case was run before her, on an entirely inapplicable premise.
(9)   Further, by reason of the errors cited above, or any of them, the Commissioner's decision was so unreasonable that no reasonable consent authority would have so decided.
To the extent this attack on the Commissioner’s fact finding is directed at the conclusions at [61] of her decision, it is well founded. However, for the reasons set out by me, her fact-finding when directed to the correct test in cl 4.2(1) is not infected in the fashion pleaded by this ground.

Conclusion

The case below was, from an examination of the evidence put to the Commissioner and the transcript of the submissions made to her, virtually entirely confined to consideration of the proposed northern allotment and the consequences of its approval if this was to have been the outcome.
The fact that she did not also engage with a separate detailed consideration of the proposed southern allotment is reflective, it is to be inferred, that the parties, in their positions below (particularly that of the Appellants), did not consider that the fate of the proposed southern allotment played any significant role in the assessment of the proposed subdivision. It is clear that the Commissioner, by necessary implication, also adopted that position. In this regard, the parties are bound by their conduct below. Even if this was not so, there is nothing in the evidence, to the limited extent it dealt with the proposed southern allotment, which could alter the outcome on a proper application of the facts found by the Commissioner when applied to cl 4.2(1) of the UHLEP.

In setting out my conclusion as to how I should dispose of this appeal, it is appropriate to note that, when the development application proposing this subdivision was lodged with the Council on 19 January 2017, it was lodged on a fundamentally flawed basis. This is self-evidently the position because the SEE prepared by Mr Casson asserted that the sole provision in the UHLEP relied upon for approval of the proposed subdivision was cl 4.2A of the UHLEP, a provision now acknowledged before me simply to be unavailable for this purpose.
That entirely erroneous assertion, questioned by the Council's Senior Environmental Planner in an e-mail to Mr Casson dated 29 April 2016, should have alerted Mr Casson that the only potentially available provision in the UHLEP via which the proposed subdivision might lawfully be approved was not cl 4.2A but cl 4.2 of the UHLEP. Mr Casson’s erroneous assumption continued throughout the proceedings below infecting not only the evidence and submissions made to the Commissioner but also affecting her decision.
I have, in the main body of this judgement, set out an analysis not only of the three conclusions nominated by the Commissioner at [61] of her decision, but also of the fact-finding process undertaken by her in order to found those conclusions. It has been necessary for me to consider not only whether the conclusions which she reached were infected with legal error but also the extent, if any, to which the factual analysis and the findings of fact made arising from that might also have been infected by error in a legal sense.
In summary, I have concluded that there is no valid complaint to be made about her fact-finding process and its outcomes but that, with respect to the conclusions set out in [61] of her decision, the first of those conclusions, namely, that cl 4.2 of the UHLEP was not available to permit approval of the proposed subdivision because the proposal failed to satisfy cl 4.2(3), was infected by error. For the reasons set out, this error arose from the way the case was run before the Commissioner with the fault for that lying heavily with the Appellants. As a consequence, the conclusion that cl 4.2 was not available on the basis via which she reached that conclusion cannot be permitted to stand.
The second and third elements of her conclusions at [61] of the decision were ones concerning, first, the unavailability of cl 4.2A of the UHLEP and, second, a contingent finding that, if she was in error concerning the availability of cl 4.2A, discretionary considerations arising pursuant to that clause mandated rejection of the proposed subdivision. It is clear that her conclusion concerning the unavailability of cl 4.2A was, as is now conceded on appeal, correct, but has no practical effect. As a further consequence, it is unnecessary to consider the contingent merit-based conclusion founded on that provision.
However, although the second of her conclusions in [61] was valid, it was also irrelevant, as cl 4.2A could never have been applicable, in these circumstances, to provide a pathway to approval of the proposed subdivision.
Although the consequence of these determinations is that the Commissioner’s conclusion, on the sole basis addressed by her concerning a permissible pathway to approval via cl 4.2 of the UHLEP, was infected by error and cannot stand, that is not the end of the matter.
For the reasons which I have earlier set out, the facts found by the Commissioner, when applied to the gateway test mandated in cl 4.2(1) of the UHLEP, would have required the Commissioner to conclude that the proposed subdivision was barred from further consideration because that gate remained shut. That correct application of the facts found by her to the sequence of decision-making mandated by the provision must lead to the dismissal of this appeal.
That the Commissioner was, unfortunately, led into error by the way the Appellants’ case was infected by the entirely erroneous assertion that cl 4.2A of the UHLEP was available to be utilised to approve the proposed subdivision is regrettable and no blame should be attached to the Commissioner for responding to the Appellants’ case on the basis that was, initially, put to the Council and, subsequently, was put to her.

Costs of the appeal

I have explained why, although the appeal is to be upheld, the functional outcome of the appeal is that the proposed subdivision is to be refused development consent. As the Court of Appeal observed, in Sze Tu v Lowe (No 2) [2015] NSWCA 91 (Gleeson JA at [39], Meagher and Barrett JJA concurring):

How “the event” should be defined will depend upon the nature of the litigation. Generally the “event” refers to the event of the claim and may be understood as referring to the practical result of a particular claim.

In this instance, although the appeal has been upheld, “the event” for the purposes of consideration as to where the liability for costs should fall is determined by the practical, functional outcome of the proceedings. As this is that the Appellants fail and the proposed subdivision is to be refused development consent, it follows that the Appellants must pay the Council's costs of this appeal.
As there was no submission made to me that this should be other than on the ordinary basis, those costs are to be as agreed or assessed.

Orders

The orders of the Court, therefore, are:

The appeal is upheld;

The orders of the Court made on 31 May 2017 are set aside;

Pursuant to s 56A(2)(b) of the Land and Environment Court Act 1979, Development Application DA27-2016 for subdivision of Lot 212 in Deposited Plan 1154848 at Hunter Road, Moonan Flat is determined by refusal;

The Appellant is to pay the Respondent's costs of the appeal as agreed or assessed; and

The Appeal Book is returned.

***************

Decision last updated: 15 November 2017

Medium Neutral Citation:	David Casson trading as Casson Planning & Development Services v Upper Hunter Shire Council (No 2) [2017] NSWLEC 149
Hearing dates:	24 October 2017
Date of orders:	13 November 2017
Decision date:	13 November 2017
Jurisdiction:	Class 1
Before:	Moore J
Decision:	(1) The appeal is upheld; (2) The orders of the Court made on 31 May 2017 are set aside; (3) Pursuant to s 56A(2)(b) of the Land and Environment Court Act 1979, Development Application DA27-2016 for subdivision of Lot 212 in Deposited Plan 1154848 at Hunter Road, Moonan Flat is determined by refusal; (4) The Appellant is to pay the Respondent's costs as agreed or assessed; and (5) The Appeal Book is returned.
Catchwords:	APPEAL - proposed subdivision - proposal to subdivide an undersized rural allotment into two allotments - alleged errors of law by Commissioner - Commissioner concluded that two provisions of a local environmental plan (LEP) were not available to permit approval of the subdivision - Commissioner further considered that, if one of the provisions of the LEP was available, as a matter of discretion, its provisions were not satisfied - case run before Commissioner on a significantly erroneous basis - Commissioner addressed the bases of the case as it was advanced to her - significant errors in Commissioner’s decision arising as a consequence of the way the case was run before her - appeal upheld DETERMINATION OF DEVELOPMENT APPLICATION - Discretion available pursuant to s 56A(2)(b) of the Land and Environment Court Act 1979 to determine development application on the facts found by the Commissioner and held to be available on the evidence before her - first test in relevant provision of the LEP not satisfied - failure to satisfy test dispositive of the application - development application determined by refusal COSTS - costs in appeals against Commissioners’ decisions usually follow the event - no disentitling conduct on appeal by the Respondent - Appellant ordered to pay the Respondent’s costs of the appeal as agreed or assessed
Legislation Cited:	Environmental Planning and Assessment Act 1979, s 97 Land and Environment Court Act 1979, ss 56A and 57 State Environmental Planning Policy (Rural Lands) 2008 Upper Hunter Local Environmental Plan 2013, cll 4.2 and 4.2A
Cases Cited:	Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1998] 1 KB 223 Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 David Casson trading as Casson Planning & Development Services v Upper Hunter Shire Council [2017] NSWLEC 1279 EMGA Mitchell McLennan Pty Limited v Byron Shire Council [2016] NSWLEC 63 Planning Commission (WA) v Temwood Holdings Pty Ltd (2004) 221 CLR 30; [2004] HCA 63 Sze Tu v Lowe (No 2) [2015] NSWCA 91 Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council (2007) 156 LGERA 150; [2007] NSWCA 300 The Presbyterian Church (New South Wales) Property Trust v Woollahra Municipal Council [2015] NSWLEC 47
Category:	Principal judgment
Parties:	David Casson trading as Casson Planning & Development Services (Appellant) Upper Hunter Shire Council (Respondent)
Representation:	Counsel: Mr R Lovas and Ms S Hill, barristers (Appellant) Ms H Irish, barrister (Respondent) Solicitors: Scone Legal (Appellant) Local Government Legal (Respondent)
File Number(s):	191233 of 2017
Publication restriction:	No