Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council

[2025] NSWLEC 46

Land and Environment Court

New South Wales

Medium Neutral Citation:

Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council [2025] NSWLEC 46

Hearing dates:

6 August 2024

Date of orders:

13 May 2025

Decision date:

13 May 2025

Jurisdiction:

Class 1

Before:

Pritchard J

Decision:

The Court makes the following orders:

(1) The appeal is dismissed.

(2) The appellants to pay the respondent’s costs of this appeal.

Catchwords:

APPEAL — s 56A Land and Environment Court Act 1979 (NSW) appeal from decision of a Commissioner — proper characterisation of purpose of proposed development — whether a “water reticulation system” within the meaning of the State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW) and/or “water storage facility” within the meaning of the Wingecarribee Local Environmental Plan 2010 (NSW) (WLEP) — whether “light industry” within the meaning of WLEP — appeal dismissed

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW) Div 8.2

Land and Environment Court Act 1979 (NSW) s 56A

Land and Environment Court Rules 2007 (NSW) r 3.7

State Environmental Planning Policy (Biodiversity and Conservation) 2021 (NSW)

State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW) ss 2.158, 2.159, 2.161, 2.4, 2.7, Land Use Table, Dictionary

Standard Instrument (Local Environmental Plans) Order 2006 (NSW), Dictionary

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Wingecarribee Local Environmental Plan 2010 (NSW) cl 2.3, Dictionary

Cases Cited:

BHP Billiton Iron Ore Pty Ltd v National Competition Council (2008) 236 CLR 145; [2008] HCA 45

Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147

Cai v Fairfield City Council [2022] NSWLEC 58

Chamwell Pty Limited v Strathfield Council (2007) 151 LGERA 400; [2007] NSWLEC 114

Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council [2024] NSWLEC 1177

Environment Protection Authority v Crush and Haul Pty Ltd [2024] NSWLEC 15

Environment Protection Authority v Grafil Pty Ltd (2019) 101 NSWLR 245; (2019) 238 LGERA 147; [2019] NSWCCA 174

Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157

Forgall Pty Ltd v Greater Taree City Council [2015] NSWCA 340

Issa v Burwood Council (2005) 137 LGERA 221; [2005] NSWCA 38

Kingshill Development No 1 Pty Ltd v Port Stephens Council [2025] NSWLEC 1

Laiuw v Gosford City Council (2004) 136 LGERA 349; [2004] NSWLEC 72

Mittagong Mushrooms Pty Ltd v Narrambula Action Group Inc (1998) 97 LGERA 333

Muscat Developments Pty Ltd v Wollondilly Shire Council [2023] NSWLEC 121

PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301; [1995] HCA 36

Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305

Tanious v Georges River Council [2016] NSWLEC 142

The Hills Shire Council v Sales Search Pty Ltd [2013] NSWLEC 103

The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404; [1994] HCA 54

Waterland Blue Mountain Natural Water Pty Ltd v Blue Mountains City Council [2006] NSWLEC 537

Category:

Principal judgment

Parties:

Edwards Pension Fund Pty Ltd (ACN 618 279 502) (First Appellant)
Paul D. Edwards Pty Limited (ACN 003 687 670) (Second Appellant)
Wingecarribee Shire Council (ABN 49 546 344 354) (Respondent)

Representation:

Counsel:
J Lazarus SC (First and Second Appellants)
C Norton (Respondent)

Solicitors:
Holding Redlich (First and Second Appellants)
Lindsay Taylor Lawyers (Respondent)

File Number(s):

2024/172454

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 1

Citation:

[2024] NSWLEC 1177

Date of Decision:

12 April 2024

Before:

Gray C

File Number(s):

2023/103591

JUDGMENT

Introduction

Grounds of appeal

Council’s notice of contention

Factual background and the Commissioner’s findings

Relevant planning instruments

Standard Instrument (Local Environmental Plans) Order 2006 (NSW)

SEPP (T&I)

WLEP

Relevant legal principles

Section 56A appeals

Proper characterisation

Evidence

Grounds of appeal and notice of contention

Ground 1: proper characterisation of the proposed development

Appellants’ submissions

Council’s submissions in relation to Ground 1

Conclusion in relation to Ground 1

Ground 2: error in the interpretation of “water storage facility”

Appellants’ submissions in relation to Ground 2

Council’s submissions in relation to Ground 2

Appellants’ submissions in reply in relation to Ground 2

Conclusion in relation to Ground 2

Ground 3: error in findings regarding storage of water

Appellants’ submissions in relation to Ground 3

Council’s submissions in relation to Ground 3

Appellants submissions in reply in relation to Ground 3

Conclusion in relation to Ground 3

Ground 4: error in finding that the proper characterisation of the development was not a “water reticulation system”

Appellants’ submissions in relation to Ground 4

Council’s submissions in relation to Ground 4

Appellants’ submissions in reply in relation to Ground 4

Conclusion in relation to Ground 4

Ground 5: error in interpretation of definition of “industrial activity” in the WLEP

Appellants’ submissions in relation to Ground 5

Council’s submissions

Appellants’ submissions in reply in relation to Ground 5

Conclusion in relation to Ground 5

Ground 6: error in finding that the proposed development was prohibited on the site

Appellants’ submissions in relation to Ground 6

Council’s submissions in relation to Ground 6

Conclusion in relation to Ground 6

Ground 7: failure to afford procedural fairness

Appellants’ submissions in relation to Ground 7

Council’s submissions in relation to Ground 7

Appellants’ submissions in reply in relation to Ground 7

Conclusion in relation to Ground 7

Notice of contention

Ground 1 of the notice of contention: “industrial activity” and “commercial purposes”

Council’s submissions in relation to Ground 1 of the notice of contention

Appellants’ submissions in relation to Ground 1 of the notice of contention

Conclusion in relation to Ground 1 of the notice of contention

Ground 2 of the notice of contention: “water treatment facility and/or a water supply system”

Council’s submissions in relation to Ground 2 of the notice of contention

Appellants’ submissions in relation to Ground 2 of the notice of contention

Conclusion in relation to Ground 2 of the notice of contention

Costs

Conclusion and orders

JUDGMENT

Introduction

1. On 1 November 2021, by their agent, Edwards Pension Fund Pty Ltd and Paul D Edwards Pty Limited (the appellants) lodged development application DA22/08000 (the DA) for “water extraction, storage and distribution off site” at lot 1 DP 867173 and lot 152 DP 751284, known as 2500 Canyonleigh Road, Canyonleigh (the site), with Wingecarribee Shire Council (Council).

2. The DA proposed the extraction of water from two existing approved licensed bores to an existing water storage tank, with a capacity of approximately 275,000L (the existing storage tank), approximately 20m south west of an existing shed. Water would then be transferred to an existing metal farm shed proposed to accommodate 4 x 50,000L stainless steel water storage tanks (the proposed internal storage tanks), a filtration system and pumping equipment. Trucks would access the site from an existing driveway crossing to transfer water from the proposed internal storage tanks into the water tankers for despatch to remote bottling facilities.

3. On 11 October 2022, Council refused the DA.

4. On 30 March 2023, the appellants filed a Class 1 application appealing Council’s decision to refuse the DA. Between 28 and 30 November 2023, Commissioner Gray (the Commissioner) heard the appeal. On 12 April 2024, in Edwards Pension Fund Pty Ltd v Wingecarribee Shire Council ^[1] (the primary judgment) at [74], the Commissioner made orders dismissing the appeal, and that:

2) The development application DA22/0800 for carrying out of works and use of the site at Lot 1 DP 867173 and Lot 152 DP 751284 for the extraction, piping, filtration, storage and transport of groundwater is determined by refusal.

1. [2024] NSWLEC 1177 (Gray C).

5. In their summons filed 9 May 2024, the appellants appealed the primary judgment pursuant to s 56A of the Land and Environment Court Act 1979 (NSW) (LEC Act) on seven grounds.

Grounds of appeal

6. The appellants’ seven grounds of appeal were as follows (although at the hearing on 6 August 2024, Mr Lazarus SC for the appellants submitted that if the Court decided for the appellants on Ground 1, it would not be necessary to consider Grounds 2 to 7):

1. The first ground was that the Commissioner erred in law by finding as a matter of characterisation that the proposed development met the definition of “light industry” and was therefore prohibited on land zoned C3 Environmental Management (C3) under the Wingecarribee Local Environmental Plan 2010 (NSW) (WLEP), and not a “water reticulation system” which was permissible with consent on any land pursuant to s 2.161 of the State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW) (SEPP (T&I)), or a “water storage facility” which was a nominated permissible use on land zoned C3 under the WLEP (at [42]-[62] of the primary judgment).

2. The second ground was that the Commissioner erred in law by misconstruing the definition of “water storage facility” in the WLEP, misdirecting herself or asking the wrong question in concluding that “storage” did not exclude “temporary” storage, but did exclude “transient” storage (at [45] and [49]-[51] of the primary judgment).

3. The third ground was that the Commissioner erred in law by finding without evidence that:

1. any storage of water within the proposed system would be transient or brief (at [49], [50] and [51] of the primary judgment); and

2. the storage tanks had minimal or insufficient reserve capacity (at [49] and [50] of the primary judgment).

4. The fourth ground was that the Commissioner erred in law in finding that the proposed development as a whole was not for the purpose of a “water reticulation system” (at [52] of the primary judgment) in that the Commissioner:

1. failed to correctly apply s 2.7 of SEPP (T&I), the effect of which is to give precedence to, inter alia, s 2.161 of SEPP (T&I) over cl 2.3 of the WLEP and the land use table in the WLEP to the extent of any inconsistency;

2. failed to apply the extended definition of “water reticulation system” in s 2.159(6) of SEPP (T&I), being a “water supply system of any kind”; and

3. concluded that the definition of “water reticulation system” in s 2.159(6) of SEPP (T&I), even including water supply reservoirs, is not sufficiently broad to extend to the export of water from the site, in circumstances where that definition necessarily includes the use of a building or place for the transport of water without limitation of any kind.

5. The fifth ground was that the Commissioner erred in law by misconstruing the definition of “industrial activity” in the Dictionary to the WLEP, misdirecting herself or asking the wrong question in concluding (at [54], [58]–[60] of the primary judgment) that:

1. the purpose of the development was for the production of mineral water despite finding (correctly) that the actual use that the water is later put to after transport was irrelevant; and

2. the extracted water was a “product”, and the proposed activities on site were for the “production” of that product, in circumstances where the water remained a raw product which was relevantly unaltered by the proposed development.

6. The sixth ground was that the Commissioner erred in law by finding as a matter of characterisation that the proposed development is prohibited in the C3 zone under the WLEP because, based on the facts fully found, the only conclusion reasonably open to the Court was that the proposed development is permissible with development consent as a “water reticulation system” within the meaning of s 2.161 of SEPP (T&I) and/or a “water storage facility” within the meaning of the Dictionary to the WLEP.

7. The seventh ground was that the Commissioner erred in law by failing to afford procedural fairness to the appellants in finding (at [49] of the primary judgment) that the relative rates of water extraction and transportation were relevant to the characterisation of the development so that as a matter of characterisation, the proposed development was not a “water storage facility”. This question was not in dispute in the proceedings and the Commissioner did not indicate to the parties any concern that these rates were relevant to the characterisation of the development, nor put to the appellants this matter on which she later relied to make that finding so as to afford the appellants an opportunity to respond to that matter.

7. The appellants submitted that the Commissioner made errors of law in characterising the proposed development as “light industry” within the meaning of the WLEP (Grounds 1 and 5), not characterising the proposed development as a “water reticulation system” or “water storage facility” within the meaning of the WLEP (Grounds 1 to 4), finding that the proposed development is prohibited in the C3 zone under the WLEP (Ground 6), and in failing to afford procedural fairness to the appellants (Ground 7).

8. The orders sought by the appellants are as follows:

1. Appeal allowed.

2. The judgment and orders of Commissioner Gray of 12 April 2024 is set aside.

3. The proceedings are remitted to Commissioner Gray for determination in accordance with law and the Court’s reasons for judgment.

4. The respondent is to pay the appellants’ costs of the appeal.

9. Council submitted that the appellants’ grounds of appeal reduce to the following propositions:

1. Grounds 1 to 6 relate to the proposition that the only conclusion reasonably open to the Court on the facts fully found was that the proposed development was properly characterised as a “water reticulation system” within the meaning of s 2.161 of SEPP (T&I), and/or a “water storage facility” for the purposes of the WLEP.

2. Grounds 2, 3, 4 and 5 are all assertions of errors made as part of the characterisation process. In particular:

1. Grounds 2 and 3 relate to the Commissioner’s findings in relation to “transient” storage and the capacity of the storage tanks;

2. Ground 4 relates to the application of the definition of “water reticulation system” in SEPP (T&I); and

3. Ground 5 relates to the application of the definition of “industrial activity” in the Dictionary to the WLEP.

3. Ground 7 is a discrete ground asserting a failure to afford procedural fairness.

Council’s notice of contention

10. In its notice of contention filed 4 June 2024, Council contends that the decision of the Commissioner should be affirmed on grounds other than those relied on by the Commissioner, but does not seek a discharge or variation of any part of the decision. Council contends that the Commissioner should have found that:

1. In determining the purpose served by the proposed development, it was relevant to consider evidence regarding the use to which the water extracted and transported from the site would be put for the purpose of applying the definition of “industrial activity” in the WLEP (contrary to the primary judgment at [45], [59]).

2. In the absence of an indication in the development application that the use to which the water extracted from and transported from the site would be put would be limited to non-commercial purposes, this, together with the quantities of water proposed to be extracted, treated and transported, was an additional reason for finding that the production of water on the site was for commercial purposes (see the primary judgment at [50]).

11. In its notice of contention, Council contends that the Commissioner should have found for the purpose of applying SEPP (T&I) in the context of the WLEP that at least part of the proposed development was for the purpose of a water treatment facility and/or a water supply system, and not rendered permissible by SEPP (T&I).

Factual background and the Commissioner’s findings

12. The relevant factual background (much of which was set out by the Commissioner in the primary judgment and is not agitated on the appeal) can be set out as follows.

13. At all relevant times, the appellants have held an approval under the Water Management Act 2000 (NSW) permitting the extraction of a total of 70ML of water per year from two bores.

14. On 16 September 2019, WaterNSW issued statement of approval no 10CA123289 authorising the appellants to “construct and use a water supply work” at the site.

15. On 17 February 2021, Council approved development application DA21/1066 for “residential alterations and additions – farm shed”, including construction of a shed, driveway and driveway crossing.

16. On 1 November 2021, by their agent, the appellants lodged the DA with Council. The broad description of the proposed development was “water extraction, storage and distribution off site”. A more detailed description of the development was provided in the statement of environmental effects (SEE) as follows:

The proposed development involves the ground infrastructure and truck movements that are associated with the extraction of ground water under an existing license from Water NSW…The water is then filtered and stored in stainless steel water storage tanks, prior to being pumped into purpose designed bulk water tankers for delivery off site.

…

The development will operate as follows:

• Water will be extracted from the two existing approved licensed bores to the existing storage tank (capacity of approximately 275,000 litres) that is approximately 20 metres south west of the shed

• Water is then transferred to the existing metal farm shed that will accommodate 4 x 50,000 litre stainless steel water storage tanks, filtration system and pumping equipment

• Trucks will access the site from the existing driveway crossing to transfer water from the internal storage tanks into the water tankers, for despatch to remote bottling facilities. These trucks will be general access “short B – Double” combinations up to 19m in length and 57 tonne mass.”

17. On 10 December 2021, Council wrote to the appellants stating that development proposed under the DA was not permissible. On 24 December 2021, the appellants provided Council with legal advice from its solicitors, Holding Redlich, in support of the permissibility of the DA.

18. On 13 January 2022, NSW Land Registry Services issued a water access licence reference 440054 associated with work approval number 10CA123289 to Paul Edwards under s 87B of the Water Management Act 2000.

19. On 1 March 2022, WaterNSW provided concurrence to the DA under Chapter 8 of the State Environmental Planning Policy (Biodiversity and Conservation) 2021 (NSW) (since repealed on 20 November 2022) (the water approval).

20. On 30 March 2022, WaterNSW confirmed to Council that the proposed development did not require a change of use to the water approval for the use of the existing bores on the site.

21. On 11 October 2022, Council determined the DA by way of refusal.

22. On 27 March 2023, under Division 8.2 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act), the appellants lodged with Council an application for review of Council’s determination to refuse the DA.

23. On 30 March 2023, the appellants filed a Class 1 application appealing Council’s determination, being proceedings 2023/103591 (the first instance proceedings).

24. On 31 July 2023, the appellants filed a notice of motion seeking leave to amend the DA to rely on additional and amended plans and documents. On 4 August 2023, Deputy Registrar Orr granted leave to the appellants to amend the DA to rely on additional and amended plans and documents (the amended DA).

25. On 15 November 2023, WaterNSW confirmed its concurrence to the amended DA.

26. Between 28 and 30 November 2023, the Commissioner heard the first instance proceedings, and on 12 April 2024, handed down the primary judgment.

27. At [47] of the primary judgment, the Commissioner made the following finding in relation to the manner in which the development was proposed to be carried out:

All of the proposed activities are carried out in a single continuous chain of events in which the water is pumped from the approved bores, passes through pipes to the existing tank, is pumped from the existing tank towards four new water storage tanks, passes through piping and filtration to arrive at the new water storage tank system, and is then pumped from the water storage tanks into a truck and transported off-site.

28. At [56] of the primary judgment, the Commissioner referred to a report by Hydroilex Geological Consultants dated 27 October 2021 (the Hydroilex report). The Hydroilex report relevantly provided that:

… it has been decided to supplement agricultural activities with the extraction of high-quality ‘spring water’. …

a number of issues have been addressed that are specific to the proposed licensing of the bores for an ‘industrial’ purpose …

Groundwater management consistent with the requirements for ‘mineral water’ production require the installation of a groundwater monitoring bore.

In view that the site and subject bores have a current ‘irrigation’ usage, the proposal for mineral water extraction is considered to have no impact on the aquifer system.

29. At [57] of the primary judgment, the Commissioner referred to a letter from Aquamann Irrigation addressed to “Concerned Party” dated 25 July 2023 (Aquamann Irrigation letter) which was attached to the Addendum Statement of Environmental Effects dated 28 July 2023 (ASEE). The Aquamann Irrigation letter relevantly stated:

To ensure the cleanliness and purity of the water, it will pass through a filtration and disinfection system before being stored in the holding tanks. This filtration process is similar to the standard filters commonly used in residential and commercial settings. The estimated water delivery rate of this system is four litres per second, which meets the requirements set by NSW Health for “potable” water, meaning it is safe for consumption straight from the tap.

…

Our focus is solely on providing a safe and reliable means of exporting water as a raw material.

30. The Commissioner found at [49]-[50] of the primary judgment that:

1. the proposed development was “intended to operate with the piping of water that is pumped from the bores at 0.20736” megalitres (ML) a day;

2. water was proposed to be trucked from the site at a rate of 0.2475ML or 0.2488ML per day (depending on the type of truck used);

3. the existing storage tank has a capacity of 0.27ML;

4. the proposed additional tank system would have the capacity to hold 0.2ML of water; and

5. the system of pipes and tanks would cater for the daily volume of pumped water, with minimal reserve volume, and water would be trucked from the site at a similar daily volume.

31. Based on this material, the Commissioner found at [58] that “the purpose of the proposed development is for the production of extracted groundwater that can be made suitable for consumption.”

32. Additional information provided by the appellants as part of the amended DA (though not the subject of specific findings by the Commissioner) disclosed that water transferred from the existing storage tank to the proposed new water storage tanks would pass through filtration pumps, sediment filters and UV sterilising. A schematic diagram of the proposed tanks and hydraulic design provided by Aquamann Irrigation and submitted as part of the ASEE dated 28 July 2023 is extracted below:

33. It was agreed by the parties’ traffic experts in their joint report filed 8 November 2023 that the proposed average number of truck movements per day (taking into account the annual volume of water to be extracted, and assuming that water was to be removed only on weekdays that are not public holidays) is 9 entry movements and 9 exit movements if a 19m general access short B-double tanker is used; or 10 entry movements and 10 exit movements if a 19m semi-trailer tanker is used.

Relevant planning instruments

Standard Instrument (Local Environmental Plans) Order 2006 (NSW)

34. The Standard Instrument (Local Environmental Plans) Order 2006 (NSW) (the Standard Instrument) contains the following relevant definitions:

water reticulation system means a building or place used for the transport of water, including pipes, tunnels, canals, pumping stations, related electricity infrastructure and dosing facilities.

Note.

Water reticulation systems are a type of water supply system—see the definition of that term in this Dictionary.

water storage facility means a dam, weir or reservoir for the collection and storage of water, and includes associated monitoring or gauging equipment.

Note.

Water storage facilities are a type of water supply system—see the definition of that term in this Dictionary.

water supply system means any of the following—

(a) a water reticulation system,

(b) a water storage facility,

(c) a water treatment facility,

(d) a building or place that is a combination of any of the things referred to in paragraphs (a)–(c).

water treatment facility means a building or place used for the treatment of water (such as a desalination plant or a recycled or reclaimed water plant) whether the water produced is potable or not, and includes residuals treatment, storage and disposal facilities, but does not include a water recycling facility.

Note.

Water treatment facilities are a type of water supply system—see the definition of that term in this Dictionary.

SEPP (T&I)

35. Section 2.7 of SEPP (T&I), provides relevantly as follows in relation to the relationship between Chapter 2 of SEPP (T&I), and other environmental planning instruments as follows:

2.7 Relationship to other environmental planning instruments

Note–

This section is subject to section 3.29(4) of the Act.

(1) Except as provided by subsection (2), if there is an inconsistency between this Chapter and any other environmental planning instrument, whether made before or after the commencement of this Chapter, this Chapter prevails to the extent of the inconsistency.

Note–

Subsection (1) does not prevent a local environmental plan from making provision about development of a kind specified in Part 2.3 in a particular zone if the provisions of this Chapter dealing with development of that kind do not apply in that zone.

…

36. Part 2.3 of SEPP (T&I) is headed “Development controls” and includes Div 24 which is titled “Water supply systems”. Section 2.158 provides that the terms "water storage facility", "water supply system" and "water treatment facility" have the same meaning as in the Standard Instrument, and that the term "water reticulation system" has the same meaning as in the Standard Instrument, but also includes water supply reservoirs.

37. Section 2.158 of SEPP (T&I) defines “prescribed zone” for the purposes of Div 24 as any of the nominated “land use zones or land use zone that is equivalent to any of those zones”. The C3 zone within which the site is situated is not one of the nominated land use zones or land use zones that is equivalent to any of those zones.

38. Section 2.161 of SEPP (T&I) makes development for the purpose of “water reticulation systems” permissible with consent on any land:

2.161 Development permitted with consent

(1) Development for the purpose of water reticulation systems may be carried out by any person with consent on any land.

(2) Development for the purpose of water treatment facilities may be carried out by any person with consent on land in a prescribed zone.

(3) Nothing in this section requires a public authority to obtain consent for development that is permitted without consent by section 2.159.

39. The respondent submitted, and I find, that the effect of s 2.161 of SEPP (T&I) is to render permissible development for the purpose of water reticulation systems, despite any provision of the WLEP. However, it does not render permissible water treatment facilities as the site is not in a prescribed zone.

40. Subsection 2.159(6) of SEPP (T&I) provides as follows in relation to development for the purpose of a water supply system:

(6) In this Division, a reference to development for the purpose of a water supply system of any kind includes a reference to development for any of the following purposes if the development is in connection with the water supply system—

(a) dams, reservoirs, weirs, levees, spillways and fishways,

(b) catchment management works,

(c) groundwater investigation works, groundwater bore stations, borefields, minewater works and the like,

(d) access ways,

(e) water intakes, pumping stations, pipelines, channels, tunnels, canals and aqueducts,

(f) gauging and monitoring equipment,

(g) power supply to the water supply system,

(h) hydro-electric power generation equipment and associated connections to the electricity network,

(i) construction works,

(j) emergency works and routine maintenance works,

(k) environmental management works,

(l) schemes for the reuse of water treatment residuals,

(m) maintenance depots.

WLEP

41. Relevant definitions in the Dictionary to the WLEP are as follows:

general industry means a building or place (other than a heavy industry or light industry) that is used to carry out an industrial activity.

Note—

General industries are a type of industry—see the definition of that term in this Dictionary.

…

industrial activity means the manufacturing, production, assembling, altering, formulating, repairing, renovating, ornamenting, finishing, cleaning, washing, dismantling, transforming, processing, recycling, adapting or servicing of, or the research and development of, any goods, substances, food, products or articles for commercial purposes, and includes any storage or transportation associated with any such activity.

…

industry means any of the following—

(a) general industry,

(b) heavy industry,

(c) light industry,

but does not include—

(d) rural industry, or

(e) extractive industry, or

(f) mining.

…

light industry means a building or place used to carry out an industrial activity that does not interfere with the amenity of the neighbourhood by reason of noise, vibration, smell, fumes, smoke, vapour, steam, soot, ash, dust, waste water, waste products, grit or oil, or otherwise, and includes any of the following—

(a) high technology industry,

(b) home industry,

(c) artisan food and drink industry,

(d) creative industry.

….

water reticulation system means a building or place used for the transport of water, including pipes, tunnels, canals, pumping stations, related electricity infrastructure and dosing facilities.

Note—

Water reticulation systems are a type of water supply system—see the definition of that term in this Dictionary.

…

water storage facility means a dam, weir or reservoir for the collection and storage of water, and includes associated monitoring or gauging equipment.

Note—

Water storage facilities are a type of water supply system—see the definition of that term in this Dictionary.

…

water supply system means any of the following—

(a) a water reticulation system,

(b) a water storage facility,

(c) a water treatment facility,

(d) a building or place that is a combination of any of the things referred to in paragraphs (a)–(c).

…

water treatment facility means a building or place used for the treatment of water (such as a desalination plant or a recycled or reclaimed water plant) whether the water produced is potable or not, and includes residuals treatment, storage and disposal facilities, but does not include a water recycling facility.

Note—

Water treatment facilities are a type of water supply system—see the definition of that term in this Dictionary.

42. Under the WLEP, the site is zoned C3 environmental management. The land use table for zone C3 provides as follows:

2 Permitted without consent

Environmental protection works; Extensive agriculture; Home-based child care; Home occupations

3 Permitted with consent

Agricultural produce industries; Agritourism; Airstrips; Bed and breakfast accommodation; Cellar door premises; Community facilities; Dairies (pasture-based); Dual occupancies (attached); Dwelling houses; Eco-tourist facilities; Environmental facilities; Farm buildings; Farm stay accommodation; Flood mitigation works; Health consulting rooms; Helipads; Home businesses; Horticulture; Information and education facilities; Oyster aquaculture; Places of public worship; Pond-based aquaculture; Recreation areas; Recreation facilities (outdoor); Roads; Roadside stalls; Secondary dwellings; Signage; Tank-based aquaculture; Viticulture; Water storage facilities

4 Prohibited

Industries; Local distribution premises; Multi dwelling housing; Residential flat buildings; Retail premises; Seniors housing; Service stations; Warehouse or distribution centres; Any other development not specified in item 2 or 3”

43. The expressions “water reticulation system”, “water supply system” and “water treatment facility” are not named in any item in the zoning table for zone C3. In other words, whilst “water storage facilities” are permissible with consent within zone C3 under the WLEP, other types of water supply systems, including a water reticulation system, a water storage facility, water treatment facility, and a building or place that is a combination of any of these three is not.

44. Within zone C3, “water storage facilities” are a nominated permissible use with consent (item 3), “industries” are a nominated prohibited use (item 4), and any use not nominated in the items 2 or 3 is an innominate prohibited use (item 4).

Relevant legal principles

Section 56A appeals

45. An appeal under s 56A of the LEC Act against a decision made by a Commissioner is limited to an order or a decision on a question of law. The principles relevant to the determination of s 56A appeals were helpfully summarised by Pepper J in Tanious v Georges River Council ^[2] (Tanious) at [10] (citations omitted):

first, the appeal is only concerned with errors or questions of law and not questions of fact;

second, an overly critical examination of the Commissioner’s decision for relevant error should not be employed. The Commissioner’s reasons for the decision must therefore be read as a whole and considered reasonably. A “verbal slip or infelicity of expression does not necessarily warrant drawing an inference of an error of law”;

third, the Commissioner must give adequate reasons for her decision. This means that she must refer to evidence that is important or critical to the determination of the principal or central issues in the case. This does not mean, however, that every argument advanced by a party in support of these issues must be considered by the Commissioner or reasons given for accepting or rejecting it;

fourth, and as corollary to the principle above, if the decision of the Commissioner reveals an error on a question of law, the decision is only vitiated if the error is material to the decision made; and

fifth, an error will not be material to the decision if the matter complained of on appeal was a matter that was not the subject of submissions made to the Commissioner below in a way that called for a reasoned consideration of that matter. A party is bound by the way it conducted its case at the hearing.

2. [2016] NSWLEC 142 at [10] (Pepper J); cited in Environment Protection Authority v Crush and Haul Pty Ltd [2024] NSWLEC 15 at [10] (Pain J) and The Council of the City of Sydney v Emag Apartments Pty Limited [2023] NSWLEC 23 at [8] (Duggan J).

46. In Class 1 proceedings involving a s 56A appeal against a Commissioner’s decision, findings of fact are not generally reviewable: Cai v Fairfield City Council ^[3] at [38] (Preston CJ of LEC). There, the chief judge said (citations omitted):

A commissioner does not make an error of law in preferring the evidence of one witness over that of another or in making findings of fact or drawing inferences of fact based on some evidence rather than other evidence. If there is evidence of a fact, the question whether that evidence ought to be accepted in whole or part, or ought to be accepted as sufficient to establish the fact, is itself a question of fact and not a question of law…Similarly, to make a finding of fact that is against the weight of the evidence is also to make an error of fact not law…Even if the finding of fact were to be perverse or unreasonable or the reasoning whereby the finding of fact was reached was demonstrably unsound, there still would not be an error on a question of law.

3. [2022] NSWLEC 58 at [38] (Preston CJ of LEC), cited in Kingshill Development No 1 Pty Ltd v Port Stephens Council [2025] NSWLEC 1 at [6] (Pain J).

Proper characterisation

47. An applicant for development consent bears the burden of establishing the facts necessary to establish the permissibility of the development and, in particular, where contested, that the development falls within the classification of development that may be carried out with consent in the relevant zone: Forgall Pty Ltd v Greater Taree City Council at [7] (Basten JA). ^[4] The proper characterisation of a proposed use is a jurisdictional fact and raises a question of law within the meaning of s 56A(1) of the LEC Act. ^[5]

    4. [2015] NSWCA 340 at [7] (Basten JA); Muscat Developments Pty Ltd v Wollondilly Shire Council [2023] NSWLEC 121 at [95] (Preston CJ of LEC).

    5. Issa v Burwood Council (2005) 137 LGERA 221; [2005] NSWCA 38 at [18] (Pearlman AJA) (Mason P and Tobias JA agreeing); The Hills Shire Council v Sales Search Pty Ltd [2013] NSWLEC 103 at [5] (Biscoe J).

48. Here, Council acknowledged that the proper characterisation of a proposed development for the purpose of establishing permissibility under an environmental planning instrument is one of jurisdictional fact. Council accepted that a decision on such a matter is reviewable on an appeal confined to questions of law. However, as Preston CJ of LEC held in Chamwell Pty Ltd v Strathfield Council ^[6] (Chamwell) at [57] (emphasis added):

The characterisation of the purpose of a development is an essential task for any consent authority in exercising the power to determine a development application. That task involves, largely, questions of fact and degree although it can also involve questions of law including determining what is the proper interpretation of relevant environmental planning instruments and of the nominate purposes of development.

6. (2007) 151 LGERA 400; [2007] NSWLEC 114 at [57] (Preston CJ of LEC).

49. In relation to the process of characterisation of a proposed development, it has been held as follows:

1. In Foodbarn Pty Ltd v Solicitor-General ^[7] (Foodbarn) Glass JA said at 161:

   7. (1975) 32 LGRA 157 at 161 (Glass JA, Samuels and Hutley JJA agreeing).

Where the whole of a premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others...

2. In Chamwell, Preston CJ of LEC said at [27] that “use must be for a purpose…purpose is the end to which land is seen to serve. It describes the character which is imparted to the land at which the use is pursued”. And at [36] and [43] his Honour said: ^[8]

   8. Here, the Commissioner at [43] cited Chamwell at [36], and said that “characterisation of the purpose involves determining the end that is served by the various works and activities that form part of the development, at a level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on, not in terms of the detailed activities, transactions or processes”.

36    The characterisation of the purpose of a use of land should be done at a level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on, not in terms of the detailed activities, transactions or processes: Royal Agricultural Society (NSW) v Sydney City Council (1987) 61 LGRA 305 at 310.

…

43

   In Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 161, Glass JA said “it may be deduced that where a part of the premises is used for a purpose which is subordinate to the purpose which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used. Doubtless the same principle would apply where the dominant and servient purposes both relate to the whole and not to separate parts”. See also Lizzio v Ryde Municipal Council (1983) 155 CLR 211 at 216-217; 51 LGRA 114 at 116-117.

3. In Botany Bay City Council v Pet Carriers International Pty Ltd ^[9] (Pet Carriers) at [32] Preston CJ of LEC said:

…The question of characterisation is to be answered by reference to the particular terms of the environmental planning instrument and the land use table for the zone in which the development is to be carried out. The inquiry is whether the development can be characterised as being for a purpose that the instrument identifies as being permissible with consent and not for a purpose that the instrument identifies as being permissible without consent or as being prohibited.

9. (2013) 201 LGERA 116; [2013] NSWLEC 147 (Preston CJ of LEC) cited at [43] of the primary judgment.

Evidence

50. The appellants tendered a voluminous appeal book which included the transcripts of the hearing before the Commissioner on 28, 29 and 30 November 2023 and the exhibits and other documents before the Commissioner.

51. The key documents in the appeal book were:

1. the development application form lodged 1 November 2021, with a description of the development as “[u]se of property for water extraction, storage and distribution off site”;

2. the SEE dated October 2021;

3. the Hydroilex report; and

4. the Aquamann Irrigation letter that was included with the ASEE.

Grounds of appeal and notice of contention

52. There was an overlap in the parties’ submissions in relation to the seven grounds of appeal in particular in relation to Grounds 1 and 2 to 5, and the two grounds in the notice of contention.

Ground 1: proper characterisation of the proposed development

53. In Ground 1, the appellants allege that the Commissioner erred in law by finding as a matter of characterisation, that the proposed development met the definition of “light industry”, and was therefore prohibited on land zoned C3 under the WLEP, and not a “water reticulation system” which was permissible with consent on any land pursuant to s 2.161 of the SEPP (T&I) or a “water storage facility” which was a nominated permissible use on land zoned C3 under the WLEP.

Appellants’ submissions

54. The appellants submitted that the relevant question of law related to the proper characterisation of the proposed development for which consent was sought, and that any error which was material to the Commissioner’s finding that the proposed development was prohibited was sufficient to vitiate her ultimate decision.

55. The Commissioner found that the proposed development was for the purpose of “light industry”, rather than a “water reticulation system” or “water storage facility” (primary judgment at [42]-[62]). The Commissioner erred, the appellants submitted, in characterising the development proposed as “light industry”. The proposed development was submitted to be for the purpose of a “water reticulation system” within the meaning of SEPP (T&I) and/or “water storage facility” within the meaning of the WLEP, and permissible with consent. The appellants submitted that the Commissioner misdirected herself or asked the wrong question in concluding that the purpose of the proposed development was “for the production of extracted groundwater that can be made suitable for consumption” (primary judgment at [58]), despite having correctly found that the actual use that the water would be later put to after transport was irrelevant (primary judgment at [45], [59]).

56. The evidence before the Commissioner was that:

1. the water would “pass through a filtration and disinfection system before being stored in the holding tanks”;

2. the “system is not designed for bottling purposes nor is it intended to be”; and

3. the “focus is solely on providing a safe and reliable means of exporting water as a raw material”.

57. The appellants submitted that the proposed development did not involve any “industrial process” because the extracted groundwater remained extracted groundwater, as a raw material. The omission of “extraction” from the list of processes in the definition of “industrial activity” in the WLEP was significant as the WLEP delineates between industry involving raw materials (rural industry, extractive industry and mining), and industry involving the processing of raw materials (industry that involves “industrial activity”).

58. The proposed use of a filtration system was submitted to be ancillary and subservient to the dominant purpose of water storage. The proposed system is not one that processes raw groundwater into a different product which was submitted to be the essential feature of any industrial activity. The proposed development was not a factory to produce water, to carbonate water, to mix water into soft drink, or “even” to bottle water. Apart from the ancillary filtration system, the proposed development was “simply for the extraction and handling of a non-potable raw product (water)”, ^[10] which would subsequently be “transported offsite”. It was not an industrial activity, and whatever industrial activities in order to produce and bottle the final product (mineral water) were proposed to be conducted off-site, such activities were off-site, as the Commissioner held at [59] of the primary judgment and irrelevant to the characterisation of the proposed development.

    10. See Mittagong Mushrooms Pty Ltd v Narrambula Action Group Inc (1998) 97 LGERA 333 at 334 (Meagher JA) (Mason P and Sheller JA agreeing).

59. The appellants referred to the Commissioner’s finding (primary judgment at [60]) that the pumping and piping of water from the bores to the existing tank, the filtration of the water, and the pumping and piping of the water to the proposed tank system from which the water was capable of being extracted to fill water tanker trucks were all for the purpose of “production” of the water “product”. While groundwater may be a primary product, ^[11] that was not to say that the water would undergo any industrial process so as to become a product of that process. Aside from filtration, which is ancillary to storage, the other aspects of the proposed development referred to by the Commissioner were all “squarely” outside the concept of “production”. In BHP Billiton Iron Ore Pty Ltd v National Competition Council ^[12] (BHP Billiton) the High Court held at [37] that the ordinary meaning of the phrase “production process” is “the creation or manufacture by a series of operations of some marketable commodity”.

Council’s submissions in relation to Ground 1

11. Laiuw v Gosford City Council (2004) 136 LGERA 349; [2004] NSWLEC 72 at [17] (Lloyd J).

12. (2008) 236 CLR 145; [2008] HCA 45 (Gummow, Kirby, Hayne, Heydon, Crennan and Kiefel JJ).

60. Council submitted that Ground 1 is dependent upon the Court’s conclusions in relation to Grounds 2 to 5, and need not be addressed separately.

Conclusion in relation to Ground 1

61. In relation to Ground 1, having considered also Grounds 2 to 5 and the parties’ submissions in relation to them, I find, as held by the Commissioner, that as a matter of characterisation the proposed development meets the definition of “light industry” in the WLEP, and was therefore prohibited on land zoned C3 under the WLEP. The appellants have identified no error of law, or question of law within the meaning of s 56A(1) of the LEC Act. In particular:

1. I am not satisfied that the proposed development ought properly be characterised as a “water reticulation system” permissible with consent on any land pursuant to s 2.161 of SEPP (T&I), or a water storage facility, being a use permissible with consent on land zoned C3 under the WLEP. In any event, I am not satisfied that the appellants have identified any error of law in the Commissioner’s conclusion (at [58]) that the purpose of the proposed development was “for the production of extracted groundwater that can be made suitable for consumption”.

2. It is true, as the appellants submitted, that the extracted groundwater would remain extracted groundwater. However, I do not consider that the Commissioner erred or asked herself the wrong question in concluding at [58] that the purpose of the proposed development was for the production of extracted groundwater that can be made suitable for consumption, and hence properly characterised as within the definition of “light industry” in the WLEP (and hence within the definition of “industry”, being a prohibited use on the C3 zone).

3. It is likewise correct, as the appellants submitted, that the system was not designed for bottling purposes. However, it is artificial to suggest that the proposed use of a filtration and disinfection system before the water was to be stored in the holding tanks is ancillary and subservient to the dominant purpose of water storage. The appellants have not suggested how the filtration of the water as it is proposed to be pumped from the existing tanks to the proposed storage tanks system is ancillary and subservient to the storage of the water in the proposed tank system. I am not satisfied that the Commissioner erred in finding at [60] that the pumping and piping of water from the existing approved licensed bores to the existing tank, the filtration of the water, and the proposed tank system from which the water was capable of being extracted to fill water tanker trucks were all for the purpose of the production of extracted groundwater that can be made suitable for consumption. The appellants have not identified how a development in which all the proposed buildings and activities are directed to this purpose is “squarely” outside the concept of “production”, and not to be characterised as light industry.

4. As the chief judge held in Chamwell at [57], the characterisation of the purpose of a development involves, largely, questions of fact and degree. At [43] of the primary judgment the Commissioner cited Chamwell at [36], and correctly applied the approach set out by the chief judge in characterising the purpose of the development proposed here, namely “light industry” and hence prohibited on land zoned C3 under the WLEP. The appellants have not made out Ground 1 in their seven grounds of appeal.

62. I find no error of the kind alleged by the appellants in their seven grounds of appeal.

Ground 2: error in the interpretation of “water storage facility”

63. In Ground 2, the appellants allege that the Commissioner erred in law by misconstruing the definition of "water storage facility" in the WLEP, misdirecting herself or asking the wrong question in concluding that "storage" did not exclude "temporary" storage, but did exclude "transient" storage.

Appellants’ submissions in relation to Ground 2

64. In relation to Ground 2, the appellants referred to the definition of “water storage facility” in the Dictionary to the WLEP as follows:

… a dam, weir or reservoir for the collection and storage of water and includes associated monitoring and gauging equipment.

65. Ground 2 (and Ground 3) focused on [49]-[50] of the primary judgment which are extracted below (emphasis added):

49. In considering the facts of the case, I consider that it is the latter of the two above alternatives. I am not satisfied that the activities on the site, including the storage tanks and storage activities, serve the purpose of a ‘water storage facility’. This is because the storage is so transient that it forms part of a system that serves a different purpose and cannot be considered the purpose itself. The rate at which water is extracted from the proposed new tanks for transport off-site is not less than the rate of water discharged from the bores, and any storage in the interim is transient with minimal reserve capacity…

50. I consider that when you have a daily volume of water that is pumped from the bores passing through a system of pipes and tanks that caters for that daily volume, with minimal reserve volume when each of the existing and proposed tanks are considered as two separate components (as the water has to pass through both), proposed then to be trucked from the site at a similar daily volume, any storage within that system is transient and subordinate to the purpose served by that system as a whole. To put it simply, the storage tanks do not have sufficient reserve capacity to be considered as something other than part of a system through which the daily volume of water passes. The end that this system serves is not storage, but, as set out further below, is to extract and produce water.

66. Although “reservoir” is not defined, the appellants said that it was not in dispute that the relevant water storage tanks fell within the ordinary meaning of the term “reservoir”.

67. Further, the appellants submitted, the Commissioner correctly found, consistent with authority, ^[13] that “storage” can include temporary storage of water pending its transfer to another place for another purpose (primary judgment at [45]). However, the Commissioner went on to conclude that “the storage is so transient that it forms part of a system that serves a different purpose” (primary judgment at [49]). Nowhere does the Commissioner explain how “transient” storage differs from “temporary” storage, or how that distinction (if there be one) is contemplated by the definition of “water storage facility” in the WLEP.

    13. Environment Protection Authority v Grafil Pty Ltd (2019) 101 NSWLR 245; (2019) 238 LGERA 147; [2019] NSWCCA 174 (Grafil) at [191] (Preston CJ of LEC) (Davies and Adamson JJ agreeing).

68. The appellants submitted that the Commissioner erred in construing the word “storage” in a way that is inconsistent with both the ordinary meaning of the word, and the statutory text and context in which the word is used. They referred to authority for the principle that it is “of fundamental importance that limitations and qualifications are not read into a statutory definition unless clearly required by its terms or its context”. ^[14] No such requirement, it was submitted, arises in this case to warrant the qualification of storage with a duration for which the storage must occur, namely that storage must not be “transient”.

    14. PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 310; [1995] HCA 36 (Brennan CJ, Gaudron and McHugh JJ) citing The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 420; [1994] HCA 5 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ); Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1; [2015] HCA 14 at [61]-[62] (French CJ, Hayne, Kiefel and Nettle JJ) and at [77] (Gageler J).

69. Further, the appellants submitted, the ordinary meaning of “storage” connotes some future use or application, ^[15] but does not specify when such a future use has to occur. In Grafil, Preston CJ of LEC said at [191] in relation to the storage of waste that the ordinary meaning of the storage of waste can include the temporary storage of the waste pending transfer to another place to be used for another purpose. To import a requirement that the storage be for any particular period of time, would also be “nonsensical” in the context of the relevant land use definition more broadly. A dam or reservoir does not cease to be a water storage facility simply because it is collecting water that is, at the same time, being drawn out for irrigation of other land. ^[16]

Council’s submissions in relation to Ground 2

15. Grafil at [191] (Preston CJ of LEC).

16. Grafil at [191] (Preston CJ of LEC).

70. Council submitted that the reference in the first sentence of [49] of the primary judgment to “two above alternatives” was a reference to the two alternatives identified at [48] of the primary judgment, namely:

…either the storage activities are for the purpose of a water storage facility and all of the other activities on the site serve that purpose, or the storage activities serve some other purpose to which all of the activities on the site are directed.

71. When read in context, Council submitted, it is clear that the Commissioner was considering the overall question of identifying the purpose, or purposes, served by the various activities comprising the development, as required by Chamwell, Foodbarn and other relevant authorities. Council submitted that the appellants “fixate” on the use of the word “transient” which appears three times in [49]–[50] of the primary judgment, seeking to suggest that the Commissioner imported a requirement that storage, for the purpose of characterisation, not be “transient”. This, Council said, ignored the overall context and fell into “nitpicking, uncontextualised analysis”. In context, the Commissioner was not qualifying the term “storage”, but commenting that to the extent that storage occurs within the system, it is for a short period and is “but a step” in the overall process of extracting and producing water that is then transported off-site. The Commissioner was answering the question posed at [48] of the primary judgment by stating that the storage use is not a primary, independent use which the other activities serve, but that the storage use serves another purpose.

72. Council submitted that any system which holds or transports a substance “stores” it for some period of time. For example, water running from water mains in the street and into a house is stored temporarily in the pipes until it flows out of the taps. It may be stored for a number of days, depending on the capacity of the system and the volume of use by the house. However, even though the term “storage” is capable of encompassing temporary storage, the temporary storage of water within the pipes of a house is unlikely to be considered a separate purpose of the use of the land on which the pipes are situated. The Commissioner’s description of the storage as “transient” is to be understood in that context; namely that whilst storage occurs, such storage serves a broader purpose. That the term was used in a sense in relation to which persons might reasonably differ as to a matter of fact and degree did not in itself demonstrate an error of law.

Appellants’ submissions in reply in relation to Ground 2

73. In reply to Council’s submissions in relation to “transient” storage raised in Grounds 2 (and 3), the appellants submitted that Council’s assertion that the appellants engage in “nitpicking” and “uncontextualized analysis” was incorrect since it is clear from the primary judgment at [49] that the Commissioner’s finding of “transience” of the storage was determinative of the characterisation of the proposed development, the Commissioner finding that:

1. the activities on the site, including the storage tanks and storage activities, do not serve the purpose of a “water storage facility” because the storage is so transient that it forms part of a system that serves a different purpose and cannot be considered the purpose itself; and

2. storage is “subordinate to the purpose served by that system as a whole” because “any storage within that system is transient”.

74. The appellants submitted that the example provided by Council at [72] in relation to the proposition that the presence of “storage” in a system does not prevent the system being for a purpose other than storage, is inapt and misleading since in the example of household water stored temporarily in water mains being other than for a primary storage purpose, there is no independent reservoir for the retention of water beyond the capacity of the mains pipe itself.

75. It was clear from the primary judgment at [50] that the Commissioner found that for the storage tanks to be “considered as something other than part of a system through which the daily volume of water passes”, their reserve capacity would need to be “sufficient”. In context, the Commissioner found that the “reserve capacity” or “reserve volume” was “minimal”, and therefore fell short of what was “sufficient” for the storage tanks to be “considered as something other than part of a system through which the daily volume of water passes”. The appellants’ reference to “insufficient reserve capacity” therefore did not degenerate into questions of fact and degree, but rather was apposite in light of the Commissioner’s own methodology relating to the characterisation of the nature of the development.

Conclusion in relation to Ground 2

76. In relation to Ground 2 I find that, read in context, the Commissioner’s references to the transient nature of any proposed storage of water on the site is such that any such storage forms part of a system that serves a different purpose, not that of storage, but that of the extraction and production of water for transport off-site. This was a correct application of the approach required by Foodbarn and Chamwell. The Commissioner correctly answered the question posed at [48] of the primary judgment by holding at [49]–[50] that having regard to the proposed extraction rate and minimal reserve capacity of the proposed storage tanks, any storage within the system serves some other overall purpose to which the other activities on the site are directed, namely the extraction and production of water for transport off-site.

77. I find, as submitted by Council, that the Commissioner’s description of the proposed storage as “transient” is to be understood as indicating that whilst storage would occur, it would secure a broader purpose. In any event, the adjective “transient” was used by the Commissioner in a context involving a question of fact and degree.

78. I find no error of the kind alleged by the appellants in Ground 2 of their seven grounds of appeal.

Ground 3: error in findings regarding storage of water

79. In Ground 3, the appellants allege that the Commissioner erred in law by finding without evidence that (a) any storage of water within the proposed system would be transient or brief; and (b) the storage tanks had minimal or insufficient reserve capacity.

Appellants’ submissions in relation to Ground 3

80. The appellants submitted that notwithstanding that “the time particular molecules of water spend in storage” was “irrelevant”, the Commissioner erred in inferring “transience” from the per day figures cited at [49] and [50] of the primary judgment. The effect of the Commissioner’s conclusion was that the water travelled directly from the pumps to the trucks, passing through the water tanks only transiently. That approach involved making findings without evidence, ^[17] or alternatively making findings contrary to the only conclusion which was reasonably open based on the facts (see in relation to Ground 6 below).

    17. Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane (2021) 274 CLR 398; [2021] HCA 41 at [17] (Keane, Gordon, Edelman, Steward and Gleeson JJ).

81. The evidence was that the existing bores are capable of extracting water at a rate 11,520L per hour, and each truck transporting water from the site would have a maximum capacity of 27,500L to 31,100L. Water would be transported from the site at a rate of 1 truck per hour, between the hours of 7:30 am and 2:30 pm or 3:30 pm, Monday to Friday.

82. The appellants submitted that this means that:

1. outside the hours in which trucks attended the site, groundwater would be extracted and stored;

2. during the operating hours of the trucks, water would be transported from the site at a rate faster than the rate at which groundwater would be extracted; and

3. accordingly, the storage of water is an essential feature of the proposed development as it allows for extracted water to be collected and stored, pending transportation from the site between the hours of 7:30am and 2:30pm or 3:30pm, Monday to Friday.

83. Further, the appellants referred to storage capacity of the existing tanks of 0.27ML, and that of the tanks proposed as part of the development of 0.2ML (primary judgment at [49]). While the water would pass through the existing tank to the proposed tanks, this would not reduce the water storage capacity on the site to 0.2ML, contrary to the Commissioner’s finding in the primary judgment at [49]. Rather, there would be a capacity to store more than twice the volume of water proposed to be transported from the site on operational days (that is, the transport of 0.2475ML to 0.2488ML per day from the site, calculated on the basis of truck volume and number of trucks proposed per day). This was not a system with “minimal reserve volume”; rather, the proposed development would have reserve volume, and clearly perform a storage function.

Council’s submissions in relation to Ground 3

84. In relation to Ground 3, Council repeated its submissions in relation to Ground 2, and made the following further submissions.

85. Ground 3 “fixate[d]” on aspects of the language used by the Commissioner, shorn of context, and sought to demonstrate “via mathematics” that there was “some lack of evidentiary base”. This did not identify any clear error, let alone a material one. Rather, the ground “degenerate[d]” into an argument over matters of fact and degree.

86. The Commissioner’s findings in relation to duration of storage did not concern whether such storage meets a statutory definition. Nor were the Commissioner’s findings directed to whether or not the proposed development would perform a storage function. As the primary judgment at [48] makes clear, the Commissioner accepted that one of the activities occurring on site would be storage. The real purpose of the primary judgment at [49]–[51] was to consider whether that storage activity is, of itself, the independent purpose served by all activities on site.

87. The same, Council submitted, could be said in relation to the reserve capacity of the tanks. The appellants’ complaint was one of “labelling”, as the Commissioner clearly understood how the system would be configured, and the assertion that there was some error in the Commissioner’s calculations of volume in the primary judgment at [49] was simply incorrect having regard to the primary judgment at [51].

88. In relation to the issue raised by the appellants concerning the use of the term “minimal” to describe the reserve capacity, given that the Commissioner correctly identified the relevant figures, the description of that capacity was of no moment. In relation to the issue raised by the appellants concerning “insufficient reserve capacity”, the Commissioner did not use that term. At [50], the Commissioner said that the tanks “do not have sufficient reserve capacity to be considered as something other than part of a system through which the daily volume of water passes.” This was not a finding that the capacity was “insufficient”, but that the capacity relative to daily passthrough volume was a factor which leads to the conclusion that the storage tanks serve another purpose.

Appellants submissions in reply in relation to Ground 3

89. In reply, the appellants submitted that the water storage tanks proposed on the site, agreed by the parties each to be a “reservoir”, would provide storage capacity for extracted water prior to export from the site. Council’s submission that Ground 3 (relating to “transience” and “insufficient reserve capacity”) raises only a “semantic” question that “degenerates” into an argument over fact and degree was wrong: the issue is not “semantic” because the Commissioner based her finding that the proposed development could not be a “water storage facility” due to the “transience” of water in the system and that the water storage tanks would provide “minimal reserve capacity” and “minimal reserve volume”.

90. Ground 3 was not semantic, but rather addresses the mathematical basis — in terms of inflows and outflows — which formed the basis of the Commissioner’s characterisation of the proposed development as not being a “water storage facility” due to “transience” based on “minimal reserve capacity” and “minimal reserve volume”. Importing a requirement for storage of water to be proven not to be “transient” as a determinative element of characterisation by applying a requirement for the storage to remain static for a requisite period of time: (a) did not accord with the ordinary meaning of the word “storage”; and (b) involved making findings without proper consideration of the evidence that the tanks are performing a storage function.

91. The proposed water storage tanks had reserve volumes twice the volume of water proposed to be transported from the site on operational days. The proposed development was a “water storage facility” because its primary purpose was to store water, necessarily connoting some future use of the stored item, in this case, exportation of the stored water off-site.

Conclusion in relation to Ground 3

92. Essentially, Ground 3 raises the same issue as Ground 2, namely, the Commissioner’s finding in relation to the duration of storage of water on site. In relation to Ground 3, I find that the appellants have failed to identify any error in the Commissioner’s findings in relation to the duration of the storage of water on the site. Rather, as Council submitted, the ground is one about matters of fact and degree. In [49]–[51] of the primary judgment, the Commissioner was concerned with whether the storage activity on the site was the independent purpose served by all activities on site.

93. Likewise, in relation to the reserve capacity of the tanks, I accept that the Commissioner understood how the system was proposed to be configured, and that having regard to the primary judgment at [51], the appellants have identified no error in the calculations in the primary judgment at [49].

94. At [49] of the primary judgment, the Commissioner identified that the existing tank (which holds water prior to passing through the filtration system) has a capacity of 0.27ML, and the proposed new tank system (which is to hold water after it passes through the filtration system) a capacity of 0.2 ML. The Commissioner clearly appreciated that this produces a total capacity of 0.47ML (primary judgment at [51]). When [49]–[51] are read together, the Commissioner found that whether one has regard to the tanks as two separate components (at [50]), or as a single facility with a capacity of 0.47ML (at [51]), in each case storage is not such as to constitute an independent purpose, but is subordinate to the overall purpose of the system proposed to be implemented on the site.

95. Similarly, in relation to the issue raised by the appellants concerning the use of the term “minimal” to describe the reserve capacity, I am satisfied that the Commissioner identified the relevant figures and that her finding that the tanks “do not have sufficient reserve capacity to be considered as something other than part of a system through which the daily volume of water passes “was a finding which, as the respondent submitted, led to the conclusion that the proposed storage tanks serve another purpose.

96. The appellants have identified no error in relation to the volume of water proposed to be stored on site. Ground 3 distracts from the issue which is the true complaint of the appellants; that is, the characterisation of the purpose of the proposed development. I do not consider anything to turn on the Commissioner’s use of the words “transient”, “brief”, “minimal” or “sufficient” reserve capacity, or there to be any legal error otherwise evinced in the Commissioner’s reasons in this respect.

97. I find no error of the kind alleged by the appellants in Ground 3 of their seven grounds of appeal.

Ground 4: error in finding that the proper characterisation of the development was not a “water reticulation system”

98. In Ground 4, the appellants allege that the Commissioner erred in law in finding that the proposed development as a whole was not for the purpose of a "water reticulation system" in that the Commissioner: (a) failed to correctly apply s 2.7 of SEPP (T&I) (concerning the relationship between Chapter 2 “Infrastructure” of SEPP (T&I) and other environmental planning instruments); (b) failed to apply the extended definition of "water reticulation system" in s 2.159(6) of SEPP (T&I), being a "water supply system of any kind"; and (c) concluded that the definition of "water reticulation system", even including water supply reservoirs, is not sufficiently broad to extend to the export of water from the site in circumstances where that definition necessarily includes the use of a building or place for the transport of water without limitation of any kind.

Appellants’ submissions in relation to Ground 4

99. The appellants submitted that the Commissioner made a finding that the proposed development as a whole was not for the purpose of a “water reticulation system” on the basis that although water reticulation forms part of the proposed activities and system as a whole, it was not “the end purpose of the system” (primary judgment at [52]). The appellants submitted that a “water reticulation system” is a species of “water supply system”, ^[18] and accordingly that the reference to development for the purpose of “water reticulation systems” in s 2.161(1) of SEPP (T&I) includes any of the development types listed in s 2.159(6) of SEPP (T&I) which include, inter alia, reservoirs (s 2.159(6)(a)) and access ways (s 2.159(6)(d)). The Commissioner erred in not finding that the proposed development is permissible with consent as a “water reticulation system” given that:

    18. See definitions in the Dictionary to the Standard Instrument at [41] above.

1. extraction and transportation of water including through pumping and pipes are explicitly covered by the concept of “transport of water” in the definition of “water reticulation system”, supported by reference to the definition of “pipes” and “pumping stations” in the Dictionary to the Standard Instrument;

2. storage of water in the proposed water storage tanks is “explicitly covered” by the concept of “water supply reservoirs” given that the water will be stored for the purpose of “supply” until the trucking of water off-site, the parties being in agreement that the tanks constitute a “reservoir”; ^[19]

3. the definition of “water reticulation system” is broad enough to extend to the export of water from the site as the substantive part of the definition involves a use of a building or place for the transport of water (without limitation of any kind), and the export of water from the site “on any view” involves using the site for the transport of water;

4. the export of water is, in any event, ancillary to the storage of water as “otherwise the water would remain there permanently”;

5. ultraviolet filtration of water is clearly ancillary to the storage and transportation of water and, to the extent there be any doubt, is clearly permissible where more intrusive “dosing facilities” are permissible; and

6. the access route contemplated as part of the proposed development, and its use to transport water, is both ancillary to the overall “water reticulation system” use, but also covered by the associated types of development listed in s 2.159(6) of SEPP (T&I).

   19. As stated in the primary judgment at [22].

100. Thus, the appellants submitted, once it is appreciated that the proposed development falls within the definition of a “water reticulation system”, it was incumbent on the Commissioner to determine the permissibility issue in the appellants’ favour because of the effect of the paramountcy provision in s 2.7(1) of SEPP (T&I).

Council’s submissions in relation to Ground 4

101. In relation to Ground 4, Council submitted that the appellants’ “real complaint” was that the Commissioner should have found that the proposed development was a “water reticulation system” within the meaning of SEPP (T&I). This submission was also relevant to Ground 2 of Council’s notice of contention.

102. As to paragraph (a) of Ground 4, Council submitted that an error of the kind alleged did not appear in the primary judgment. The Commissioner identified s 2.161 of SEPP (T&I) at [11] of the primary judgment, and whilst not referring to s 2.7, it was clear that the Commissioner considered, correctly, that if the development was for the purpose of a “water reticulation system”, it would be permissible with consent. However, the Commissioner found that it was not for that purpose.

103. As to paragraph (b) of Gound 4, the appellants’ submissions did not identify how any matter in s 2.159(6) of SEPP (T&I) to which the Commissioner should have specifically adverted compelled a different conclusion.

104. Therefore, Council submitted, Ground 4 reduced to paragraph (c) which was essentially an argument that the proposed development should have been characterised as a “water reticulation system”. As a matter of characterisation, the definition of “water reticulation system” could not be read on its own, but needed to be read together with other definitions in the relevant planning instruments, namely SEPP (T&I) and WLEP. In particular:

1. both SEPP (T&I) and WLEP identify three types of “water supply system”: water reticulation systems, water storage systems, and water treatment facilities. In SEPP (T&I), the definition of “water reticulation system” is expanded to include water supply reservoirs;

2. the term “water supply reservoirs” is not defined, but Council did not contend that the tanks that form part of the development were not capable of being “reservoirs”. It was unclear, however, whether the tanks proposed in the development were “water supply reservoirs”;

3. the Commissioner concluded that the overall development was not for the purpose of a “water storage facility”. This finding would stand if Grounds 2 and 3 were not upheld;

4. the definitions of “water reticulation system” and “water treatment facility” should be read in tandem, the definition of “water reticulation system” focusing on a building or place used for the transport of water, including built infrastructure which transports water, and also dosing facilities;

5. therefore, a facility that “doses” water (which connotes the addition of substances, such as fluoride) falls within the definition of “water reticulation system”. However, a facility that “treats” water, including storage facilities, falls within the definition of “water treatment facility”. At the very least, the filtration and disinfection system which forms part of the proposed development is more properly described as a “water treatment facility”, even if the storage tanks could be said to fall within the scope of the term “water reticulation system”; and

6. whilst the proposed storage tanks themselves and associated connecting pipes might be capable of falling within the definition of “water reticulation system”, the filtration and disinfection component would not. There was no evidence to support the appellants’ assertion that ultraviolet filtration of water is clearly ancillary to storage and transportation of water. Nor was there anything in the definition of “water reticulation system” indicating that ultraviolet filtration was permissible.

105. In applying SEPP (T&I), Council submitted, whilst that instrument rendered development for the purpose of a water reticulation system permissible, it did not render development permissible for other purposes; in particular, whilst s 2.159 rendered permissible development for the purpose of a water treatment facility in a number of circumstances (whether specifically as a water treatment facility in subsection (4), or as a type of water supply system in other provisions), none of those circumstances were applicable here. Whilst s 2.161 of SEPP (T&I) would be sufficient to overcome the prohibition in the WLEP on development for the purpose of a water reticulation system, it did not render permissible: (a) development for the purpose of industry which is expressly prohibited under the WLEP, or (b) development for the purpose of a water treatment facility which is prohibited as an innominate use under the WLEP.

106. Council referred to the Commissioner’s finding at [52] of the primary judgment that whilst part of the overall development comprised a water reticulation system, that was not the overall “end purpose” of the proposed activities on the site. The Commissioner ultimately found at primary judgment [53] that the purpose of the development was “industry” on the basis that (a) the purpose of the development was the production of mineral water, being extracted groundwater that can be made safe for consumption (at [54]-[58] of the primary judgment); and (b) the system and activities all met the definition of “industrial activity” under the WLEP (at [60]-[62] of the primary judgment).

133. The use of water produced and exported from the site for commercial purposes is relevant to the characterisation of the proposed activities as an industrial activity, as well as being an element of the definition of industrial activity as to the Chamwell inquiry in relation to the overall end being served by the development. As held by the chief judge in Chamwell at [57], the task of characterising the purpose of a development involves, largely, questions of fact and degree. There was evidence before the Commissioner that the water was being dispatched to bottling (not production) facilities off-site, and that the extraction, storage and export of water was for the production of high quality mineral/spring water and that one purpose of the filtration and disinfection system was to render the extracted ground water potable. The appellants’ submission to the effect that the proposed activities amount to no more than the extraction of water from a bore disregards the filtration and disinfection to occur on site. Likewise, their analogy with the stock piling of coal at a coal mine is inapposite.

134. I find that there is no requirement in the definition of “industrial activity” in its application to the activities proposed here that the goods, substances, foods or products which leave the site be in their final form, or that there may not be some further altering, transforming, processing or adapting the water off-site. That is implicit in the part of the definition of “industrial activity” which provides “and includes any storage or transportation associated with any such activity”. The appellants’ approach is one which disregards the element of the definition of “industrial activity” which concerns any storage or transportation associated with any such activity which can occur at another location.

135. Finally, I do not consider the appellants’ reliance on the principle of generalia specialious non derogant to have any present application in circumstances in which the question raised by Ground 5 of the appellants’ grounds of appeal and Ground 1 of the notice of contention is the proper characterisation of the purpose of the overall end being served by the development, not the relationship between provisions within a land use table in an LEP.

136. I am satisfied that on the evidence before the Commissioner, the proposed activities were readily capable of satisfying the definition of industrial activity in the WLEP. That is another reason for affirming the decision of the Commissioner, but on a ground other than those relied on by the Commissioner in dismissing the appellants’ Class 1 application appealing Council’s refusal of the DA.

137. The appellants have not made out Ground 5 of their seven grounds of appeal. If it be necessary, I would affirm the decision of the Commissioner for the reasons advanced in connection with Ground 1 of the notice of contention.

Ground 6: error in finding that the proposed development was prohibited on the site

140. Ground 6 of the appellants’ grounds of appeal alleges that the Commissioner erred in law by finding as a matter of characterisation that the proposed development is prohibited in the C3 zone under the WLEP because, based on the findings of fact, the only conclusion was that the proposed development was permissible with consent as a "water reticulation system" within the meaning of s 2.161 of SEPP (T&I) and/or a "water storage facility" within the meaning of the WLEP.

Appellants’ submissions in relation to Ground 6

141. In relation to Ground 6, the appellants submitted that the Commissioner erred in law by finding as a matter of characterisation that the proposed development was prohibited in the C3 zone. The appellants submitted that the only conclusion reasonably open to the Court was that the proposed development was for the purposes of: (a) a “water reticulation system” permissible on the site with development consent under of s 2.161 of SEPP (T&I); and/or (b) a “water storage facility” permissible on the site with development consent in the C3 zone under the WLEP.

Council’s submissions in relation to Ground 6

142. Mr Norton for Council submitted that Ground 6 seemed to be based on material that “appeared” in the other grounds of appeal. Mr Norton referred to Chamwell and submitted that:

…one needs to ask two questions. One, what is the purpose or multiplicity of purposes which is served by the development? I think Mr Lazarus quite fairly conceded a development might have more than one, and even if one purpose is water reticulation system for the purpose of the SEPP, that did not preclude there from being an additional aspect or additional component to the development that forms the second thing. And as we’ll see in this exercise, one has to inquire, first of all, is there a permissible purpose, but also secondly, is there a prohibited purpose? One has to look at both.

143. Mr Norton submitted that the Commissioner asked these questions, and that if the Court considers that the findings that the Commissioner made were findings that were reasonably open to her on the evidence, “the Court would not disturb the finding of the Commissioner if it was one that was open to her as a matter of law.”

Conclusion in relation to Ground 6

144. In relation to Ground 6, I have concluded that the matters raised by the parties have been addressed in relation to other grounds of appeal, in particular Ground 1 above at [61]. I am satisfied that on the evidence before her, it was open to the Commissioner to find that the purpose of the proposed development was for “light industry”, and therefore prohibited on land zoned C3 under the WLEP. In relation to Ground 1, I have considered and rejected the appellants’ submission that the proposed development ought be characterised as a “water reticulation system” permissible with consent on any land pursuant to s 2.161 of SEPP (T&I), or a “water storage facility” being a permissible use on land zoned C3 under the WLEP.

145. Likewise, in relation to Ground 2, I have considered and rejected the appellants’ submission that the Commissioner erred in law by misconstruing the definition of “water storage facility” in the WLEP. In relation to Ground 3, I have found that the Commissioner made no error of law in her findings in relation to the duration of the storage of water on the site. Ground 3 is one which concerns matters of fact and degree. In relation to Ground 4, I have likewise found that on the evidence before her, it was available to the Commissioner to find, and she made no error of law in finding that the proposed development could not be characterised as a water reticulation system within the meaning of s 2.159(6) of SEPP (T&I). As to Ground 5, I have considered and rejected the appellants’ submissions in relation to Ground 1, and also their submission that the Commissioner erred in law by misconstruing the definition of “industrial activity” in the WLEP.

146. I am satisfied that there was no error of law in the Commissioner finding that the proposed development was for the purpose of light industry, and hence for a prohibited purpose.

Ground 7: failure to afford procedural fairness

147. In Ground 7, the appellants allege that the Commissioner erred in law by failing to afford procedural fairness to the appellants in finding that the relative rates of water extraction and transportation were relevant to the characterisation of the development so that as a matter of characterisation, the proposed development was not a “water storage facility”, and the Commissioner did not put to the appellants this matter on which she later relied to make that finding so as to afford the appellants an opportunity to respond to that matter.

Appellants’ submissions in relation to Ground 7

148. The appellants submitted that the Commissioner erred in law by failing to afford procedural fairness to the appellants in finding that the relative rates of water extraction and transportation were relevant to the characterisation of the development: primary judgment at [49]. During the course of the three day hearing, the Commissioner did not raise the issue of the relative rates of water extraction and transportation as an aspect of the characterisation of the development. The appellants (and Council) should have been provided with an opportunity to respond to this issue. The Commissioner’s conclusion that the relative rates of water extraction and transportation were relevant to the characterisation of the development was erroneous and unreasonable.

Council’s submissions in relation to Ground 7

149. In relation to Ground 7, Council submitted that the issue of the scale and rate of water extraction was raised in Council’s written submissions before the Commissioner. In particular, in its written submissions:

1. at [5], Council set out the holding capacities of the existing tank, and the four proposed tanks (which information came from the DA);

2. at [16], Council noted in the fifth bullet point that water stored in the new tanks would only be stored “temporarily”;

3. at [27], Council raised the issue that the entire quantity of water extracted would be removed from the site for bottling; and

4. at [29], Council raised the issue of the quantity of water being extracted, treated and transported from the site.

150. Further, in its oral submissions, Council referred to the large quantity of water and stated purpose of the use, albeit in reference to satisfying the definition of “industrial activity”, rather than specifically in relation to “storage”. As to the rate of dispatch of water in tankers, there was evidence in relation to the capacity of the tankers. The appellants did not complain that any of the factual integers in the Commissioner’s consideration was, in fact, incorrect. Nor did the appellants cite any authority for the proposition that a “judicial officer” is required to raise with the parties the specific use to which the “judicial officer” might intend to put certain evidence. The broader issue of the correct characterisation of the development with reference to the relevant planning instruments, and the evidence, was clearly identified.

151. Further, Council submitted, the appellants had not identified any argument that they were denied the opportunity to raise, save for the arguments put in support of Grounds 2 and 3, both of which were ventilated in this s 56A appeal. Even if the appellants were denied procedural fairness by the Commissioner (which was denied), the ability for the appellants to put its arguments before me would cure any unfairness.

Appellants’ submissions in reply in relation to Ground 7

152. In reply, the appellants said that while the relative rates of water extraction and water exportation were clearly in evidence, the application of those relative rates to a determinative finding that “transience” in the water reserve capacity meant that the proposed development was not a “water storage facility” disclosed a failure to afford procedural fairness which resulted in a material error. That error was said to be in not providing an opportunity for the appellants to respond to the “particular and unique use” of the evidence which was determinative of the Commissioner’s characterisation of the development.

153. The appellants accepted that the denial of procedural fairness would not be material if the Court determined the permissibility issue afresh, as contended for in Ground 1. However, if the Court concluded that the grounds in the summons do not raise questions of law, then the deprivation of the right to make submissions on the topic the subject of Ground 7 would be a material error.

Conclusion in relation to Ground 7

154. In relation to Ground 7, I find that in both its written and oral submissions before the Commissioner, Council referred to the scale and rate of water extraction and transportation as relevant to the characterisation of the proposed development. The appellants, in reply, accepted that the relative rates of water extraction and exportation were clearly in evidence. I am satisfied that the appellants had the opportunity to respond to this evidence and Council’s submissions in relation to that evidence.

155. It is true that in its written submissions before me, Council erroneously referred to the Commissioner as a “judicial officer”. This was not correct. A commissioner of the Court is not a judicial officer. The primary function of commissioners is to adjudicate, conciliation or mediate merits review appeals in proceedings in Class 1, 2 and 3 of the Court’s jurisdiction (and in Class 8 where a commissioner is an Australian lawyer). However, such an erroneous description of a Commissioner of the Court in Council’s submissions does not bear upon the question of whether there was here a denial of procedural fairness to the appellants.

156. The appellants did not complain, nor do I consider, that any aspect of the Commissioner’s consideration of the rates of water extraction and transportation was erroneous. I am not satisfied that there was any relevant denial of procedural fairness. Further, I am satisfied that if there had been a denial of procedural fairness, any such denial was cured by the ability of the appellants to put any argument concerning rates of water extraction and transportation before me.

157. The appellants have not made out Ground 7 of their seven grounds of appeal.

Notice of contention

158. Council submitted that the contentions raised in its notice of contention relate “largely, or almost exclusively” to questions of fact and degree. This was not a case like Issa v Burwood Council ^[24] that turns upon whether particular terms have a technical, rather than ordinary meaning. Rather, it concerned the application of the definitions in the WLEP and SEPP (T&I) to the facts. Given that, as the Commissioner acknowledged, minds might reasonably differ on such questions, the Court would not set aside the decision of the Commissioner if no error of law was demonstrated, and if the only matter with which the Court might take issue was a question of fact and degree.

     24. (2005) 137 LGERA 221; [2005] NSWCA 38 (Mason P, Tobias JA and Pearlman AJA).

Ground 1 of the notice of contention: “industrial activity” and “commercial purposes”

159. In Ground 1 of its notice of contention, Council contended that the Commissioner should have found that in determining the purpose served by the proposed development, it was relevant to consider evidence regarding the use to which the water extracted and transported from the site would be put for the purpose of applying the definition of “industrial activity” under the WLEP.

Council’s submissions in relation to Ground 1 of the notice of contention

160. Council said that Ground 1 of its notice of contention was “linked” to Ground 5 of the grounds of appeal in relation to the appellants’ assertion that the Commissioner misdirected herself by “taking into account the purpose of the development, being for the production of mineral water”. As set out above in relation to Ground 5, Council submitted that the use to which water extracted and transported from the site would be put was relevant to applying the definition of “industrial activity” (contrary to the Commissioner’s finding at [45] and [59] of the primary judgment). Given that the Commissioner concluded that the development for which consent was sought was for commercial purposes, this was an “additional relevant factor” supporting the Commissioner’s decision.

Appellants’ submissions in relation to Ground 1 of the notice of contention

161. The appellants submitted that Ground 1 of Council’s notice of contention was “misconceived” as it misapplied the task of the Court in characterising development. The appellants repeated their submissions in relation to Ground 5, and said that the amended DA sought consent in relation to development on the site only, being the land to which the application related. In characterising the development the subject of the development application, it was only relevant to consider the development proposed on the site.

Conclusion in relation to Ground 1 of the notice of contention

162. I have considered Ground 1 of Council’s notice of contention above in concluding that the appellants have not established Ground 5 of their seven grounds of appeal. I have there concluded that the use to which water extracted and transported from the site would be put is relevant to applying the definition of industrial activity: cf the primary judgment at [45], [49]. Accordingly, this is another reason for affirming the Commissioner’s decision, but on a ground other than those relied on by the Commissioner in dismissing the appellants’ Class 1 application appealing Council’s refusal of the DA.

Ground 2 of the notice of contention: “water treatment facility and/or a water supply system”

163. In Ground 2 of its notice of contention, Council contended that the Commissioner should have found, in the absence of an indication in the amended DA that the use to which the water extracted and transported from the site would be put would be limited to non-commercial purposes, that this matter, taken together with the quantities of water proposed to be extracted, treated and transported, was an additional reason for finding that the production of water on the site was for commercial purposes.

Council’s submissions in relation to Ground 2 of the notice of contention

164. In relation to Ground 2 of its notice of contention, Council submitted that the term “water reticulation system” did not cover the entirety of the proposed development. Even if the appellants were correct that the term “water reticulation system” extends to trucking movements, and even if the appellants succeed in establishing Ground 5 in the summons, namely that the development is not for the prohibited purpose of “industry”, the filtration and disinfection process was sufficiently independent in character to be considered an independent use, being for a “water treatment facility”. A development which comprises both a water reticulation system and a water treatment facility would be a “water supply system” which, in such omnibus form, is also prohibited under the WLEP, and not rendered permissible by SEPP (T&I). Council repeated its submission that there was no evidence to demonstrate that filtration and disinfection was in any way ancillary to either the storage or transportation of water. Nor does it involve the “dosing” of water, being the addition of substances. Rather, it involves treatment of water which is beyond the scope of the definition of “water reticulation system”.

Appellants’ submissions in relation to Ground 2 of the notice of contention

165. The appellants repeated their submissions in relation to Ground 4, and submitted that Ground 2 of Council’s notice of contention was not made out as the proposed development should be characterised as a water reticulation system for the purpose of s 2.7(1) of SEPP (T&I).

Conclusion in relation to Ground 2 of the notice of contention

166. In essence, Ground 2 of Council’s notice of contention is to the effect that the Commissioner should have found that the absence of any indication in the amended DA that the use to which the water extracted and transported from the site would be put would be limited to non-commercial purposes, together with the quantities of water proposed to be extracted, treated and transported, were an additional ground for finding that the production of water on the site was for commercial purposes. Council submitted that the proposed development involved treatment of water beyond the scope of a “water reticulation system”, the filtration and disinfection process being sufficiently independent in character to be considered an independent use, that is, for a “water treatment facility”.

167. Having dismissed each of the appellants’ grounds of appeal, strictly I do not need to consider Ground 2 of Council’s notice of contention. In relation to Ground 4 of the grounds of appeal, I have found that the Commissioner did not err in finding that the proposed development was not for the purpose of “water reticulation system” within the meaning of SEPP (T&I), and as such not permissible with consent. Having determined to dismiss the appeal, it is unnecessary to consider whether the proposed development could also have been characterised as a “water treatment facility”, being sufficiently independent in use. If it were necessary, however, I would be satisfied that the filtration and disinfection component of the proposed development is for the purpose of a “water treatment facility” which is a prohibited innominate use. Even if the storage tanks could be said to fall within the scope of the term “water reticulation system”, that term, is insufficient to cover the entirety of the proposed development.

166. That would be an additional reason for affirming the decision of the Commissioner, but on a ground other than those relied on by the Commissioner.

Costs

169. The appellants submitted that Council should pay its costs of the appeal. Council submitted that costs of a s 56A appeal would normally follow the event.

170. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) applies so that costs would be awarded to the successful party in the absence of disentitling conduct. There has not been identified any disentitling conduct on the part of the respondent.

Conclusion and orders

171. The Court makes the following orders:

1. The appeal is dismissed.

2. The appellants to pay the respondent’s costs of this appeal.

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Endnotes

Decision last updated: 13 May 2025