Inner West Council v XYZ Services Pty Limited

Case •

[2025] NSWLEC 68

•

30 June 2025

No judgment structure available for this case.

Land and Environment Court


New South Wales

Medium Neutral Citation: Inner West Council v XYZ Services Pty Limited [2025] NSWLEC 68
Hearing dates: 26 May 2025
Date of orders: 30 June 2025
Decision date: 30 June 2025
Jurisdiction:Class 1
Before: Preston CJ
Decision:

The Court:

(1) Dismisses the appeal against the decision and orders of Commissioner Walsh of 28 November 2024.

(2) Orders the appellant to pay the respondent’s costs of the appeal.

Catchwords:

APPEAL – appeal against Commissioner’s decision on question of law – grant of development consent to dwelling houses in foreshore area – contravention of foreshore building line – whether development standard – dwelling houses not rebuilding of existing dwelling house – whether considered by Commissioner – cl 4.6 request justifying contravention of development standard – whether adequately addressed cl 4.6(3) matters – existing dwelling house encroaching on adjoining land – demolition of existing dwelling house but not encroaching wall – whether consent of owner of adjoining land required – restrictive covenant preventing new dwelling houses beyond foreshore building line – utility in granting development consent – whether covenant considered by Commissioner

Legislation Cited:

Conveyancing Act 1919 (NSW)

Environmental Planning and Assessment Act 1979 (NSW), ss 1.4, 3.16, 4.16

Land and Environment Court Act 1979 (NSW), ss 39(4), 56A

Cases Cited:

Al Maha Pty Ltd v Huajun Investments Pty Ltd (2018) 233 LGERA 170; [2018] NSWCA 245

Baron Corporation Pty Ltd v Council of the City of Sydney [2019] NSWLEC 61

Bowen v Willoughby City Council (2000) 108 LGERA 149

Bowen v Willoughby Council [2001] NSWLEC 27

Chehab v City of Canada Bay Council (2002) 123 LGERA 431; [2002] NSWLEC 220

Conveyancing Act 1919 (NSW)

Currey v Sutherland Shire Council (Unreported, 30 November 1989, Hemmings J)

Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 197 ALR 389; [2003] HCA 26

Groffen v Lake Macquarie City Council [2001] NSWLEC 138

Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118

Lowy v The Land and Environment Court of NSW (2002) 123 LGERA 179; [2002] NSWCA 353

North Sydney Council v Ligon 302 Pty Ltd (1996) 185 CLR 470 at 476; (1996) HCA 20

North Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222

Pascale v Sutherland Shire Council (1995) 87 LGERA 30

Patrial Holdings Pty Ltd v Sutherland Shire Council (Unreported, 29 March 1995, Talbot J)

Quinn O'Hanlon Architects Pty Ltd v Leichhardt Municipal Council (1989) 68 LGRA 114

Strathfield Municipal Council v Poynting (2001) 116 LGERA 319; [2001] NSWCA 270

Sydney City Council v Ipoh Pty Ltd (2006) 68 NSWLR 411; [2006] NSWCA 300

Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88

Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827

Wenli Wang v North Sydney Council [2018] NSWLEC 122

Whitefield v Sutherland Shire Council (1989) 69 LGRA 48

Texts Cited:

County of Cumberland Planning Scheme Ordinance, cl 39

Inner West Local Environmental Plan 2022, cls 1.9A, 4.6, 5.10, 6.5

Category:Principal judgment
Parties: Inner West Council (Appellant)
XYZ Services Pty Limited (Respondent)
Representation: Counsel:
M Wright SC (Appellant)
M Seymour SC (Respondent)
Solicitors:
Hall & Wilcox (Appellant)
The Property Law Group (Respondent)
File Number(s): 2024/462679
Publication restriction: NIL
 Decision under appeal 
Court or tribunal:
Land and Environment Court
Jurisdiction:
Class 1
Citation:

[2024] NSWLEC 1765

Date of Decision:
28 November 2024
Before:
Walsh C
File Number(s):
2024/149366

JUDGMENT

Development consent granted despite a council’s contentions

  1. XYZ Services Pty Ltd (XYZ) sought development consent for the demolition of an existing dwelling house and separate garage on the existing lot (the site), the Torrens Title subdivision of that lot into two lots, and the erection of two new detached dwelling houses (one on each resulting lot), each with a swimming pool, deck, foreshore access and associated landscaping, at 1 Longview Street, Balmain. The site is zoned R1 General Residential under Inner West Local Environmental Plan 2022 (LEP). The proposed development of dwelling houses is permissible with consent in that zone. The site is also within an area identified as “Foreshore Area” on the Foreshore Building Line Map under cl 6.5(2) of the LEP. Clause 6.5 restricts the development that can be carried on in the Foreshore Area. Clause 6.5(3) provides:

“(3) Development consent must not be granted for development on land to which this clause applies except for the following purposes—

(a)  the extension, alteration or rebuilding of an existing building wholly or partly in the foreshore area,

(b)  boat sheds, cycleways, fences, jetties, retaining walls, slipways, swimming pools, walking trails, waterway access stairs, wharves, picnic facilities or other recreation facilities (outdoors).”

  1. The landward boundary of the Foreshore Area, which runs north-south, bisects the site, which runs east-west. The existing dwelling house encroaches westwards into the Foreshore Area. The proposed new dwelling houses would also encroach westwards into the Foreshore Area. Whilst some of the encroaching buildings, structures and works might meet the description of one or more of the developments specified in cl 6.5(3)(b) of the LEP, the dwelling houses themselves do not meet any of those descriptions. Development consent could therefore not be granted to the new dwelling houses under cl 6.5(3) of the LEP.

  2. The solution, XYZ proposed, was to make a written request under cl 4.6 of the LEP seeking to justify the contravention of cl 6.5(3) of the LEP. XYZ contended that cl 6.5(3) is a development standard, compliance with which is amenable to be dispensed with under cl 4.6. The upholding of a written request would allow the grant of development consent for the new dwelling houses even though they would contravene cl 6.5(3) (see cl 4.6(2)). XYZ accordingly submitted a written request seeking to justify the contravention of the development standard by the new dwelling houses encroaching into the Foreshore Area.

  3. The consent authority, Inner West Council (Council), did not grant development consent to XYZ’s development application. XYZ appealed to the Court against the Council’s deemed refusal. On appeal, the Council raised four contentions, the Commissioner’s dealing with which founds the Council’s appeal under s 56A(1) of the Land and Environment Court Act 1979 (NSW) (Court Act).

  4. First, the Council contended that development consent could not be granted as the proposed development of dwelling houses contravened cl 6.5(3) of the LEP. The Council contended that cl 6.5(3) was not a development standard, but instead prohibited the proposed development in two ways: first, the new dwelling houses were not one of the types of developments specified in cl 6.5(3)(b) and, second, the proposed development did not involve extension, alteration or rebuilding of an existing building wholly or partly in the Foreshore Area. As cl 6.5(3) is not a development standard, cl 4.6(2) of the LEP did not empower the grant of development consent for the proposed development that contravenes cl 6.5(3).

  5. Second, the Council contended in the alternative that if cl 6.5(3) is a development standard, the Court could not be satisfied that XYZ’s written request under cl 4.6, made on 26 September 2024, and prepared by SJB Planning, adequately addressed the matters required to be demonstrated by cl 4.6(3)(a) and (b) because the request failed to address the impact of the proposed development on the heritage significance of the area.

  6. Third, the Council raised the issue of the absence of owner’s consent to the making of the development application. The Council claimed the construction of the new dwelling house on the new southern lot would extend partly onto the adjoining land to the south, Part Lot 1 in DP 198343. This was referred to as a “sliver” of land as it is very narrow strip of land between the otherwise regular lots of the existing residential subdivision on Longview Street. The owner of this sliver of land has not been able to be identified. Nevertheless, the Council contended that the consent of the owner was needed to lodge the development application to carry out development on the sliver of land. This consent had not been obtained.

  7. Fourth, the Council raised an issue concerning a restrictive covenant that burdened the site and benefitted Longview Street, a public road under the control of the Council. The covenant identified a foreshore building line a few metres further westward than the foreshore building line fixed under cl 6.5 of the LEP. Sometime after 1962, the then owner of the site built a dwelling house in breach of the foreshore building line fixed in 1962 under cl 39(1) of the County of Cumberland Planning Scheme Ordinance. To address this unauthorised encroachment of the then foreshore building line, the owner entered into a covenant with the Council on 22 October 1966. The covenant requires the owner to remove the current encroachment of the foreshore building line by the existing dwelling house if the existing dwelling house is demolished or rebuilt and restricts the construction of any new building that encroaches beyond the foreshore building line. As the proposed development will involve the demolition of the existing dwelling house, the covenant operates to prevent construction of the new dwelling houses beyond the foreshore building line identified by the covenant.

  8. The Council contended that this covenant is not covered by cl 1.9A of the LEP, a position accepted by XYZ. Clause 1.9A provides:

“(1) For the purpose of establishing development on land in any zone to be carried out in accordance with this Plan or with a consent granted under the Act, any agreement, covenant or other similar instrument that restricts the carrying out of that development does not apply to the extent necessary to serve that purpose.”

  1. Clause 1.9A does not apply, however, to “a covenant imposed by the Council or that the Council requires to be imposed” (cl 1.9A(2)(a)). The Council contended that the covenant in this case answered this description, having regard to the circumstances in which it was imposed.

  2. The Commissioner hearing the appeal, Commissioner Walsh, decided that:

  1. cl 6.5(3) of the LEP is a development standard;

  2. he was satisfied under cl 4.6(4) of the LEP that XYZ’s written request had adequately addressed the matters required to be demonstrated by cl 4.6(3)(a) and (b) and the proposed development was in the public interest because it was consistent with the objectives of the development standard and the R1 General Residential zone;

  3. owner’s consent to the making of the development application was not required as no development was proposed to be carried out on the sliver of adjoining land;

  4. development consent could be granted for the proposed development notwithstanding that it would encroach westwards beyond the covenant building line; and

  5. development consent should be granted subject to conditions.

The Council appeals the decision

  1. The Council has appealed under s 56A(1) of the Court Act against the Commissioner’s decision. The Council raised six grounds of appeal, largely based on the four contentions it had raised before the Commissioner.

  2. Grounds 1 and 2 concern cl 6.5(3) of the LEP. Ground 1 was that the Commissioner erred in construing cl 6.5(3) of the LEP as a development standard (the development standard ground). Ground 2 concerned the Commissioner’s failure to make a finding under cl 6.5(3)(a) that, for development consent to be granted, the development needs to be an “extension, alteration or rebuilding of an existing building” in the Foreshore Area (the rebuilding of existing building ground).

  3. Ground 3 was in the alternative to grounds 1 and 2. If cl 6.5(3) is a development standard, the Council contended that the Commissioner erred in upholding the written request under cl 4.6 of the LEP seeking to justify the contravention of the development standard in cl 6.5(3) (the cl 4.6 request ground).

  4. Ground 4 concerned the alleged carrying out of the proposed development on the sliver of adjoining land. The Council contended that owner’s consent to the making of the development application was required but not obtained before development consent could be granted by the Commissioner (the owner’s consent ground).

  5. Ground 5 concerned the covenant. The Council contended that the Commissioner, in granting development consent to the proposed development which would breach the covenant, failed to give any proper consideration to the covenant (the covenant ground).

  6. Ground 6 concerned the adequacy of reasons given by the Commissioner for his decision on each of these contentions raised by the Council (the inadequate reasons ground). The Council addressed the inadequate reasons ground in dealing with the other grounds. I will do likewise.

The appeal should be dismissed

  1. I find that the Council has not established any of these grounds of appeal. The appeal should be dismissed with costs.

The development standard ground

  1. The first and second grounds of appeal involve the proper construction of cl 6.5(3) of the LEP. XYZ contended, and the Commissioner accepted, that cl 6.5(3) is a development standard within the meaning of that term in s 1.4(1) of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). The term “development standards” is defined in s 1.4(1) as:

“development standard means provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, including, but without limiting the generality of the foregoing, requirements or standards in respect of—

(a)  the area, shape or frontage of any land, the dimensions of any land, buildings or works, or the distance of any land, building or work from any specified point,

(b)  the proportion or percentage of the area of a site which a building or work may occupy,

(c)  the character, location, siting, bulk, scale, shape, size, height, density, design or external appearance of a building or work,

(d)  the cubic content or floor space of a building,

(e)  the intensity or density of the use of any land, building or work,

(f)  the provision of public access, open space, landscaped space, tree planting or other treatment for the conservation, protection or enhancement of the environment,

(g)  the provision of facilities for the standing, movement, parking, servicing, manoeuvring, loading or unloading of vehicles,

(h)  the volume, nature and type of traffic generated by the development,

(i)  road patterns,

(j)  drainage,

(k)  the carrying out of earthworks,

(l)  the effects of development on patterns of wind, sunlight, daylight or shadows,

(m)  the provision of services, facilities and amenities demanded by development,

(n)  the emission of pollution and means for its prevention or control or mitigation, and

(o)  such other matters as may be prescribed.”

  1. The Commissioner’s reasons for finding that cl 6.5(3) of the LEP is a development standard are stated in [23]-[25]:

“23.   When I examine cl 6.5, it is clear enough that it meets the EPA Act definition of development standard because it fixes a standard in respect of the distance of ‘a building … from (a) specified point’. In the instance of cl 6.5, it establishes a series of points, in the form of a line, which in this case is the foreshore building line, inside of which only certain development would be able to occur (ie in accordance with cl 6.5(3)(a) and (b)). Similarly, it is also the case that cl 6.5 meets the EPA Act definition of development standard because it sets a standard in respect of the ‘location’ and ‘siting... of a building or work’.

24.   When I read the provision contextually (ie mindful of the whole of IWLEP), cl 6.5 should be related to its objectives, which are concerned with preventing development from (1) adversely impacting on natural foreshore processes, and (2) adversely affecting the significance and amenity of the area. Generally, it seems not improbable that these objectives might be achieved without a building being located precisely in compliance with a standardised (ie rather than customised or site specific) setback from, in this instance, Iron Cove.

25.   The proposal is permissible development on the site under IWLEP. Clause 6.5 specifies certain requirements in relation to the carrying out of this permissible development, and in this instance should be determined to be a development standard, subject to the provisions of cl 4.6 of IWLEP. Because some of the queries relating to the considerations pertaining to cl 6.5 involve merits considerations, I will turn back to cl 6.5 and the application of cl 4.6 of IWLEP later in the judgement, after having reviewed relevant merits matters.”

  1. The Council submitted the Commissioner was in error in construing cl 6.5(3) as a development standard as he:

“15.1   incorrectly went directly to the definition of a development standard rather than applying the first test in Strathfield Municipal Council v Poynting (2001) 116 LGERA 319;

15.2   misconstrued the nature of the provision by focussing on a “building line” as opposed to a ‘foreshore area’;

15.3   failed to identify what part of cl 6.5 was a development standard; and

15.4   ultimately resulted in the Commissioner giving the wrong answer to a question of construction of whether the clause was a development standard or prohibition.”

  1. The Council reduced these four points to two errors, one concerning the first question posed by the two-part test in Strathfield Municipal Council v Poynting (2001) 116 LGERA 319; [2001] NSWCA 270 (Poynting) and the other concerning the second question in that two-part test.   

  2. As to the first error, the Council submitted that the Commissioner needed to identify the development that may be carried out with consent on land identified as Foreshore Area. Under cl 6.5(3), the development that may be carried out with consent is limited to the developments specified in cl 6.5(3)(a) or (b). The proposed development of a new dwelling house is not one of those developments. Hence, the proposed development is not permitted to be carried out with development consent on that part of the site within the Foreshore Area. The answer to the first question posed by the two-part test in Poynting, “Does the provision prohibit the development in question under any circumstances?”, is therefore “yes”.

  3. The Council submitted that cl 6.5(3) of the LEP is more in the form of “on land of characteristic X no development may be carried out”, rather than “on such land development may be carried out in a particular way or to a particular extent”: North Sydney Municipal Council v PD Mayoh Pty Ltd (No 2) (1990) 71 LGRA 222 at 234.

  4. The Council submitted that the Commissioner erred by not asking and answering the first question in Poynting before applying the definition of “development standards” in s 1.4(1) of the EPA Act.

  5. As to the second error, the Council submitted that the Commissioner erred in answering the second question in the two-part test established by Poynting by focusing on a “building line” rather than on the “Foreshore Area.” The Council submitted that cl 6.5(3) does not specify a building line in the sense found by the Commissioner of “a series of points forming a line” governing the distance of “a building…from any specified point.” Instead, cl 6.5(3) identifies an area upon which there can be no development except that specified in the subclause. Paragraph (a) of the definition of “development standards” does not apply.

  6. The Council submitted that cl 6.5(3) also does not specify a requirement or standard about the location or siting of a building. Clause 6.5(3) only applies to land identified as “Foreshore Area” on the Foreshore Building Line Map: cl 6.5(2). Where the Foreshore Building Line Map identifies only part of a parcel of land as being within the Foreshore Area, the building on the part of the parcel of land outside of the mapped Foreshore Area is not affected by cl 6.5(3). Clause 6.5(3) does not, therefore, identify where on the land mapped as Foreshore Area any building can be located or sited. Rather, it identifies what development can occur on land identified as Foreshore Area. This requirement logically is prior to the setting of a requirement or standard with respect to the carrying out of that development. Paragraph (c) of the definition of “development standards” also does not apply.

  1. The Council submitted, therefore, that the answer to the second question in Poynting was that cl 6.5(3) is a prohibition, and not a development standard.

  2. The Council submitted in the alternative that even if the Commissioner did correctly construe cl 6.5(3) of the LEP as a development standard, he failed to give adequate reasons to address the principal contested issues regarding cl 6.5(3) and the parties’ arguments on those issues. The Council submitted that in the court below its argument focused on the first question of the two-part test in Poynting. The Council had submitted that this question needed to be determined before the definition of “development standards” became relevant. Yet the Commissioner did not refer to or explain in his reasons how he dealt with this submission. The Commissioner went directly to the definition of “development standards”, rather than addressing the first question of the two-part test in Poynting.

  3. XYZ submitted that the Commissioner’s construction of cl 6.5(3) of the LEP as a development standard was correct and involved a proper application of the definition of “development standards” and the authorities on a development standard. His reasons for so holding were adequate. No error on a question of law is revealed.

  4. XYZ submitted that cl 6.5(3) is a provision of an environmental planning instrument in relation to the carrying out of development, by or under which requirements are specified or standards are fixed in respect of any aspect of that development. In its written submissions, XYZ argued:

“Clause 6.5(3) is clearly a provision of an environmental planning instrument (under (1)). It has application to the carrying out of development (under (2)) in that it operates to allow or not allow consent to be granted for the carrying out of development. It operates, for the purposes of (3), differentially, to apply different standards for any proposed development based on the purposes of what is proposed when proposed on land to which the Map applies. When the development is not for a listed purpose, the standard that is applied is that consent should not be granted for any building (that is, one not extended, altered or rebuilt) when proposed to be erected or constructed on that land shown as the ‘Foreshore Area’ in the Map. This is a requirement in respect of the built form of a building, which is an aspect of the development (under (4)). That aspect is any part of that building that is located a distance from a specified point - in that the Map works to create a line made up of fixed points measured from the foreshore – or applies to control the location or siting of built form within a site when part of the site is affected by the line (for the purposes of (5)).” ([28] of XYZ’s outline submissions).

  1. XYZ submitted that each element of the definition of “development standards” is therefore satisfied. The Commissioner was correct to find that cl 6.5(3) is a development standard as defined.

  2. XYZ further submitted that this construction of cl 6.5(3) as a development standard was consistent with 30 years of authority concerning the characterisation of foreshore building lines as development standards: see, for example, Quinn O'Hanlon Architects Pty Ltd v Leichhardt Municipal Council (1989) 68 LGRA 114; Whitefield v Sutherland Shire Council (1989) 69 LGRA 48; Currey v Sutherland Shire Council (Unreported, 30 November 1989, Hemmings J); Patrial Holdings Pty Ltd v Sutherland Shire Council (Unreported, 29 March 1995, Talbot J); Pascale v Sutherland Shire Council (1995) 87 LGERA 30; Bowen v Willoughby City Council (2000) 108 LGERA 149; Bowen v Willoughby Council [2001] NSWLEC 274; and Groffen v Lake Macquarie City Council [2001] NSWLEC 138.

  3. Importantly, the Court of Appeal (by majority) found a similar provision of an environmental planning instrument to be a development standard in Lowy v The Land and Environment Court of NSW (2002) 123 LGERA 179; [2002] NSWCA 353 (Lowy). The form and structure of cl 6.5(3) of the LEP are in similar terms to the provision considered in Lowy, cl 22 of Woollahra Local Environmental Plan 1995. There, cl 22(2) and (3) prevented the erection of a building between the foreshore building line and the mean high water mark of the waters of Port Jackson, but cl 22(4) allowed development consent to be granted to specified structures in that foreshore area. The majority of the Court of Appeal held that this provision was a development standard: Mason P at [2] and Giles JA at [125]. XYZ submitted that cl 6.5(3) operates in a similar way and is likewise a development standard. The Commissioner was bound by the Court of Appeal’s decision in Lowy to find that cl 6.5(3) is a development standard.

  4. I find that cl 6.5(3) of the LEP is a development standard and the Commissioner did not err in so finding.

  5. The test for whether a provision of an environmental planning instrument is or is not a development standard is a statutory test, as “development standards” is a defined term in s 1.4(1) of the EPA Act. A provision that falls within the definition is a development standard whilst a provision that does not fall within the definition is not a development standard. There is no other test.

  6. In particular, there is no alternative, judicially-developed test that replaces the statutory test. Courts, in categorising a particular provision of an environmental planning instrument as being or not being a development standard, have sought to explain how the definition of “development standards” may be applied. The Court of Appeal’s suggested two-step approach in Poynting is an example. But such judicial exegesis does not and cannot replace the statutory test. Rather, it provides guidance as to how to apply the statutory test to determine whether a particular provision of an environmental planning instrument is to be categorised as a development standard.

  7. That is made clear in the lead judgment of Giles JA in Poynting. Giles JA suggested a two-step approach to the categorisation of a provision as a development standard. The first step was suggested as a screening step “in order that a provision fall within the definition as a development standard” (at [96]). For a provision to fall within that definition, “there must be a development in respect of an aspect of which the provision specifies a requirement or fixes a standard” (at [96]). A provision prohibiting the development in question under any circumstances will not meet this definition of a development standard (at [96]). So too, Giles JA’s formulation of the second step is grounded in the definition of a development standard: “whether the provision specifies a requirement or fixes a standard in relation to an aspect of the (non-prohibited) development.” (at [97]). In explaining this second step, Giles JA expressly stated: “Referring again to the definition of ‘development standards’, there must be a provision in relation to the carrying out of development, and then the provision must specify a requirement or fix a standard in respect of an aspect of that development” (at [97]).

  8. Once this is appreciated, the Council’s argument that the Commissioner erred by going directly to the definition of “development standards”, instead of first applying the two-step approach in Poynting, can be seen to be flawed. The Commissioner asked the right question by inquiring whether cl 6.5(3) of the LEP met the definition of “development standards” in s 1.4(1) of the EPA Act. Application of that definition necessarily required determining whether the development in question (here, dwelling house) was prohibited on the site under any circumstances, which is the first step suggested in Poynting. But the Commissioner addressed that question. The Commissioner correctly found that the proposed development of dwelling house “is permissible on the site given it falls within the R1 Zone” (at [22]).

  9. The Commissioner next found that cl 6.5(3) operates to prevent development consent being granted to that permissible development of dwelling house where the building that is the dwelling house is located wholly or partly on land identified as Foreshore Area. The Commissioner found cl 6.5(3) meets the definition of “development standards” because the subclause specifies a requirement or fixes a standard in respect of an aspect of that development, being the distance of the building from any specified point (within paragraph (a) of the definition) and the location and siting of the building (within paragraph (c) of the definition) (at [23]). In this way, the Commissioner addressed the second question in Poynting.

  10. The Commissioner did not, therefore, misdirect himself or ask himself the wrong question, as claimed by the Council. The Commissioner’s reasons were adequate to disclose why the Commissioner categorised cl 6.5(3) as a development standard.

  11. Moreover, the Commissioner was correct in categorising cl 6.5(3) of the LEP as a development standard. The proposed development is the erection of two buildings for the purpose of a dwelling house. Development for that purpose is permissible with consent on the site, which is zoned R1 General Residential, under the Land Use Table in Part 2 of the LEP. The proposed development, therefore, was not prohibited on the site under any circumstances. This is the answer to the first question in Poynting.

  12. Clause 6.5(3) restricts, however, where on the site development for the permissible purpose of dwelling house can be carried out. Clause 6.5(3) restricts the grant of development consent for development for purposes other than the purposes specified in the subclause, if the development is to be carried out wholly or partly on land identified as Foreshore Area, but not otherwise. Hence, if development for a purpose other than those specified in cl 6.5(3), such as dwelling house, were proposed to be carried out on land wholly outside the Foreshore Area, cl 6.5(3) would not operate to prevent development consent being granted to that development. Clause 6.5(3) only operates to prevent development consent being granted to development for such a purpose if the development encroaches to an extent into the Foreshore Area.

  13. In this way, cl 6.5(3) specifies a requirement or fixes a standard in respect of the location or siting of a building for a purpose permitted with consent under the Land Use Table but which is not a purpose specified in cl 6.5(3). This respect of the location or siting of the building falls within paragraph (c) of the definition of “development standards.” (It might also fall within paragraph (a) of the definition, although this is less obvious). Clause 6.5(3) is therefore a development standard.

  14. Applying this construction of cl 6.5(3) and the definition of “development standards” to the proposed development, cl 6.5(3) specifies a requirement or fixes a standard in respect of the location or siting of the buildings proposed to be erected on the site for the purpose of dwelling house, which is that the buildings are to be located or sited outside of the Foreshore Area.

  15. This conclusion that cl 6.5(3) is a development standard is consistent with nearly all decisions of this Court and the Court of Appeal that have found provisions of environmental planning instruments specifying requirements or fixing standards in relation to foreshore building lines and foreshore areas to be development standards. XYZ referred in submissions to many of these decisions. In particular, the Court of Appeal’s decision in Lowy is persuasive, as the provision considered in that decision is in substance similar to cl 6.5(3) of the LEP. The majority of the Court of Appeal held that the special provisions in cl 22AA and cl 22 of Woollahra Local Environmental Plan restricting the erection of a building between a foreshore building line and the mean high water mark of the waters of Port Jackson (the foreshore area) should not be seen “as prohibitory of development permitted in accordance with the development control table. Rather, the special provisions deal with associated requirements material to the permitted development and regulate the carrying out of the permitted development” (at [122] per Giles JA with whom Mason P agreed at [2]). The finding in Lowy that that cl 22 of the Woollahra Local Environmental Plan was a development standard is not readily distinguishable from cl 6.5(3) of the LEP. Both specify a requirement or fix a standard in respect of the location or siting of a building in a foreshore area.

  16. For these reasons, I reject the development standard ground.

The rebuilding of the existing building ground

  1. Clause 6.5(3) of the LEP excepts from the restriction on the grant of development consent for development on land identified as Foreshore Area two categories of development. The first category is in paragraph (a) and the second category is in paragraph (b). The Council’s primary contention was that the proposed development of dwelling house was not one of the types of developments specified in paragraph (b) so as to be excepted from the restriction on the grant of development consent for that development. This argument informed the development standard ground, which I have rejected above.

  2. The Council’s alternative argument was that the proposed development also did not fall with the first category of development in paragraph (a):

“(a) the extension, alteration or rebuilding of an existing building wholly or partly in the foreshore area.”

  1. The Council argued that the proposed development involved the demolition of the existing buildings of the dwelling house and garage and the erection of two new dwelling houses. The two new dwelling houses were not a “rebuilding” of that part of the existing dwelling house that encroached into the Foreshore Area (the terrace) so as to fall within the exception in paragraph (a); they were entirely new dwelling houses. The proposed development was therefore prohibited by cl 6.5(3).

  2. The Council made submissions on this issue before the Commissioner but the Commissioner did not refer to or determine the issue. The Council submitted that the Commissioner’s failure to address a substantial, clearly articulated argument relying upon established facts is a failure to accord natural justice: Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 197 ALR 389; [2003] HCA 26 at [24].

  3. XYZ submitted that this ground does not raise an error on a question of law in a decision or order of the Commissioner. The Commissioner did not need to, and did not, decide the issue of whether the proposed development of the new dwelling houses was a rebuilding of the part of the existing dwelling house in the Foreshore Area. Evidently it was not, but that did not need to be decided. XYZ’s case was that the operative paragraph of cl 6.5(3) that restricted the grant of development consent to the erection of the new dwelling houses on the site was paragraph (b), not paragraph (a). This restriction was the development standard. The making and upholding of a written request under cl 4.6 of the LEP justifying the contravention of paragraph (b) of cl 6.5(3) lifted the restriction on the grant of development consent to the proposed development. XYZ did not need to, and did not, rely on the proposed development being development in paragraph (a) in order for the Commissioner to be able to grant development consent to the proposed development.

  4. In these circumstances, XYZ submitted the Commissioner did not need to refer to or decide the Council’s argument that the proposed development was not a rebuilding of an existing building within paragraph (a) of cl 6.5(3). Once the Commissioner found that cl 6.5(3)(b) was a development standard, and upheld the cl 4.6 request justifying contravention of the development standard, the Commissioner had power to grant development consent to the proposed development despite the development contravening the development standard. There can be no procedural unfairness in the Commissioner not dealing with the Council’s argument on paragraph (a) of cl 6.5(3) in these circumstances.

  5. I agree with XYZ, for the reasons it gave, that the Commissioner did not err on a question of law in not deciding the issue of whether the proposed development was a rebuilding of an existing building within paragraph (a) of cl 6.5(3). The Commissioner’s finding that cl 6.5(3)(b) was a development standard and upholding of the cl 4.6 request justifying contravention of the development standard, empowered the Commissioner to grant development consent to the proposed development. It was unnecessary to address the Council’s argument that the proposed development did not fall within paragraph (a) as well as paragraph (b). It was sufficient to deal with the parties’ arguments on paragraph (b), as the resolution of these arguments was dispositive. In these circumstances, there was no denial of procedural fairness to the Council. I reject the rebuilding of the existing building ground.

The cl 4.6 request ground

  1. The Council’s cl 4.6 request ground was put in the alternative to the first two grounds. If cl 6.5(3) of the LEP is a development standard, in order for the Commissioner to grant development consent to the proposed development that contravened cl 6.5(3), the Commissioner had to uphold XYZ’s written request under cl 4.6 of the LEP. The applicable version of cl 4.6 was the clause that applied at the time XYZ lodged its development application in 2023, not the current version. Clause 4.6(4) required the Commissioner to be satisfied of the matters in cl 4.6(4)(a). The Council contended that the Commissioner erred on a question of law in finding that he was satisfied that XYZ’s written request had adequately addressed the matters required to be demonstrated by cl 4.6(3)(a) and (b). The matter in (a) is “that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case.” The matter in (b) is “that there are sufficient environmental planning grounds to justify contravening the development standard.”

  2. Starting with the matter in cl 4.6(3)(a), the cl 4.6 request asserted that compliance with cl 6.5(3) was unreasonable or unnecessary because the objectives of cl 6.5 would be achieved, notwithstanding the contravention of the development standard. The objectives of cl 6.5 are stated in cl 6.5(1):

“(1) The objective of this clause is to ensure development in the foreshore area will not—

(a)  adversely impact on natural foreshore processes, or

(b)  affect the significance and amenity of the area.”

  1. The Commissioner found in [61]-[63] he was satisfied that these objectives of the development standard would be achieved notwithstanding the contravention of the development standard:

“61. The test here is whether the applicant’s written request adequately demonstrates that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case. The written request sought to indicate that the objectives of the development standard were achieved, notwithstanding the contravention, a legitimate line of inquiry for this test (mindful of Wehbe v Pittwater Council [2007] NSWLEC 827; (2007) 156 LGERA 446 at [42]-[51]).

62. The objectives of the development standard are indicated at [16]. In relation to the first of these objectives, the written request adequately demonstrates that the development in the foreshore area will not adversely impact on natural foreshore processes by its indication that there would be minimal work at the interface with the mean high water mark and that accordingly natural foreshore processes would be unaffected.

63. In relation to the second objective of the development standard, the written request seeks to argue that proposed development in the foreshore area will not adversely affect the significance and amenity of the area. The written request adequately prosecutes this argument. There are two aspects here: significance of the area and amenity of the area. The “significance” aspect is essentially concerned with presentation to the waterway and here the written request is effective through demonstration of the correlation between the existing improvements in the foreshore area on the site and that which is proposed. The fact of the similarity of the proposal with the presentation of similar other improvements on nearby sites is also argued effectively to justify that there would be no adverse effect on the significance of the area. The amenity aspect is also effectively argued by demonstrating that no significant amenity effects (including with respect to view impacts, solar access, visual privacy) flow from the proposal.”

  1. The Council challenged the Commissioner’s finding and reasons for being satisfied that the second objective would be achieved. The Council argued that “the significance” of the area, referred to in paragraph (b) of cl 6.5(1) of the LEP, includes the heritage significance of the area. The heritage significance of the area is to be ascertained by reference to Sch 5 of the LEP, which identifies the Iron Cove Heritage Conservation Area, and cl 5.10(3) of the LEP, which requires the consent authority to consider the effect of the proposed development on the heritage significance of a heritage conservation area.

  2. The Council submitted that the Commissioner’s consideration of “the significance” of the area in cl 6.5(1)(b) did not include consideration of the heritage significance of the area. The cl 4.6 request did not address the effect of the proposed development on the heritage significance of the area. The Council submitted that the Commissioner erred on a question of law in being satisfied that the cl 4.6 request adequately addressed this issue of the proposed development achieving the objective in (b) by not affecting the heritage significance of the area.

  3. Turning to the matter in cl 4.6(3)(b), the Council argued that the Commissioner applied the wrong test in finding that he was satisfied that the cl 4.6 request had adequately addressed the matter in cl 4.6(3)(b), that there were sufficient environmental planning grounds to justify contravening the development standard in cl 6.5(3). The Commissioner’s reasons for so finding are in [64]:

“The written request argues a number of points to demonstrate sufficient environmental planning grounds to justify contravening the development standard. The first of these points, of itself, demonstrates sufficient environmental planning grounds. This is that the proposed contravention, as an aspect of the overall development proposal, is essentially in character with the existing, generally adjacent, development along the foreshore. That is to say the built form elements in juxtaposition with landscaping and other ancillary development, including contravening elements, is in keeping and compatible with the built form and natural character of the housing which faces the waterway in the site surrounds.”

  1. The Council submitted that the Commissioner’s language of “including contravening elements” indicates that the Commissioner had regard to the proposed development as a whole and not just those elements of the proposed development that contravened the development standard (ie the parts of the new dwelling houses that encroach into the Foreshore Area).

  2. The Council submitted this was to apply the wrong test. As was stated in Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [24]:

“The focus of cl 4.6(3)(b) is on the aspect or element of the development that contravenes the development standard, not on the development as a whole, and why that contravention is justified on environmental planning grounds.”

  1. The Council submitted that, in conformity with this instruction, the Commissioner should have restricted his consideration to those parts of the buildings that encroached into the Foreshore Area, and not considered all of the built form elements of the proposed development. By reaching a state of satisfaction on such a basis, the Commissioner’s satisfaction of one of the preconditions to the grant of development consent miscarried.

  2. XYZ contested that the Commissioner erred on a question of law in being satisfied that the cl 4.6 request had adequately addressed the matters required to be demonstrated by cl 4.6(3)(a) and (b). As to the matter in cl 4.6(3)(a), XYZ submitted that the matter required to be demonstrated by the cl 4.6 request was the general one, that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case and there is no particular way in which this general matter might be demonstrated. The cl 4.6 request chose to demonstrate that matter by showing that the objectives of the development standard in cl 6.5(1) would be achieved, notwithstanding the contravention of the development standard. That is an accepted means of demonstrating that compliance with the development standard is unreasonable or unnecessary: see Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 at [42]-[43]; InitialAction Pty Ltd v Woollahra Municipal Council at [16]-[17]. The Commissioner accepted that this was “a legitimate line of inquiry for this test” (at [61]).

  3. The cl 4.6 request demonstrated that each of the two objectives of the development standard in cl 6.5(1)(a) and (b) would be achieved. The Commissioner summarised the arguments made in the cl 4.6 request in relation to the objective in paragraph (a) in [62] and in relation to the objective in paragraph (b) in [63]. The Commissioner expressed his satisfaction that those arguments were adequate in demonstrating that these objectives of the development standard would be achieved notwithstanding the proposed development contravening the development standard. These were findings of fact not amenable to review on an appeal limited to correcting errors on questions of law.

  4. XYZ accepted that an error on a question of law could arise if both the cl 4.6 request and the Court’s opinion of satisfaction with it were to be based on a misconstruction of the objective: Baron Corporation Pty Ltd v Council of the City of Sydney (2019) 243 LGERA 338; [2019] NSWLEC 61 at [48]. But no such error occurred in this case. The phrase “the significance… of the area” in paragraph (b) of cl 6.5(1) does not necessarily include the heritage significance of the area. The “area” referred to is clearly the “Foreshore Area” identified on the Foreshore Building Line Map: see cl 6.5(2). It is not an area identified as a heritage conservation area on the Heritage Map or in Schedule 5 to the LEP. One of those identified heritage conservation areas is the Iron Cove Heritage Conservation Area. The site is located within the Iron Cove Heritage Conservation Area. The Iron Cove Heritage Conservation Area is not co-extensive with the Foreshore Area, as the former area excludes the waters of Iron Cove.

  5. XYZ submitted that the objective in paragraph (b) of cl 6.5(1) is concerned with the effect of the proposed development on the significance of the Foreshore Area, not on the significance of the Iron Cove Heritage Conservation Area. As a matter of construction, cl 6.5(1)(b) does not oblige, therefore, consideration of the impact of the proposed development on the heritage significance of the Foreshore Area.

  6. That is not to say, however, that a consent authority, in assessing the effect of a development on the significance of the Foreshore Area, cannot consider the heritage significance amongst other forms of significance of land within the area. Clause 6.5(4)(f) of the LEP, for example, directs attention to maintaining different forms of significance, being “the historic, scientific, cultural, social, archaeological, architectural, natural or aesthetic significance,” of the land on which the development is to be carried out and of surrounding land. This shows that the heritage significance of the area is a permissible consideration, but it is not a mandatory consideration.

  7. In these circumstances, XYZ submitted that whilst it would have been permissible for the cl 4.6 request, and the Commissioner in assessing his satisfaction with the request, to have considered the heritage significance of the Foreshore Area, there was no legal obligation to do so. Hence, any failure of the cl 4.6 request or the Commissioner to consider the heritage significance of the area did not involve any error on a question of law. No legal error is involved in not considering a permissible matter, only in not considering a mandatory relevant matter.

  8. XYZ submitted that once it is understood that there is no legal obligation to consider the heritage significance of the area, the Commissioner’s finding that the proposed development will not adversely affect the significance of the area is one of fact alone. XYZ submitted that:

“Once the relevant objective was properly identified in paragraph (b) (as was done at [63] of the Decision) the findings as to what significance to appreciate, and what area that significance is derived from, are each determinations of fact and not law: RebelMH Neutral Bay Pty Ltd v North Sydney Council [2019] NSWCA 130 at [72]-[73], [95].” ([67] of XYZ’s outline submissions).

  1. As to the matter in cl 4.6(3)(b), XYZ submitted that the Council has taken the Commissioner’s phrase, “including contravening elements”, in [64] out of context and applied a “fine-tooth comb” to identify error. The Commissioner was well aware that the relevant focus for deciding whether the cl 4.6 request has adequately addressed the matter required to be demonstrated by cl 4.6(3)(b) was on the proposed development’s contravention of the development standard. The heading immediately preceding [64] and the first sentence of [64] refer to the need for the written request to demonstrate sufficient environmental planning grounds “to justify contravening the development standard”. This draws attention to the proposed contravention of the development standard, that is to say, to those elements of the proposed development that will contravene the development standard. The third sentence of [64] emphasises this focus on the proposed contravention: “This is that the proposed contravention, as an aspect of the overall development, is essentially in character with the existing, generally adjacent, development along the foreshore”. The Commissioner here identifies the proposed contravention “as an aspect of the overall development proposal” and hence distinguishes that aspect from the overall development proposal.

  2. XYZ submitted that this is the context in which the Commissioner used the phrase “including contravening elements” in the fourth sentence of [64]. The Commissioner in that sentence was setting the “contravening elements” in the context of “the built form elements in juxtaposition with landscaping and the ancillary development” to assess their compatibility with “the built form and natural character of the housing which faces the waterway in the site surrounds.”

  3. XYZ submitted that the Commissioner’s assessment of the contravening elements in the context of surrounding development reflected the same assessment undertaken in the cl 4.6 request (in s 3.2.3 at 14-15). For example, the cl 4.6 request compared the encroaching elements of the proposed development with the encroaching elements of the surrounding dwellings that are sited forward of the foreshore building line, showing these in Figure 13. The cl 4.6 request concluded that: “The sitting and alignment of the proposed dwellings and particularly the areas of non-compliance reflect the siting and alignment of immediately adjoining buildings maintaining a compatible scale relationship.” (at 15).

  4. XYZ submitted that, viewed in this context, the Commissioner’s reference to “including contravening elements” did not reveal that the Commissioner applied the wrong test in deciding he was satisfied that the cl 4.6 request adequately addressed the matter required to be demonstrated by cl 4.6(3)(b).

  5. I reject the cl 4.6 request ground. I agree with and adopt XYZ’s analysis of the Commissioner’s reasons. The Commissioner’s reference to “including contravening elements” does not reveal that the Commissioner applied the wrong test by focusing on the development as a whole rather than the elements of the development that contravened the development standard. The Commissioner’s reasons for finding that he was satisfied that the cl 4.6 request adequately addressed the matter required to be demonstrated by cl 4.6(3)(b) were orthodox and adequate.

The owner’s consent ground

  1. The plans accompanying the development application originally showed the new dwelling house on the southern lot (dwelling 1B) extending over the boundary into the adjoining lot to the south. The existing dwelling house already encroached to a small extent on the adjoining land. Whilst that house is proposed to be demolished, a few of the walls of the house are to be retained, including a wall that encroaches slightly on the adjoining land.

  2. In response to the Council raising the contention that the consent of the owner of the adjoining land to the making of the development application was required in light of this retention of the existing wall encroaching on the adjoining land, XYZ proposed an amendment to the plans. The amendment showed a new wall being constructed inside of the retained existing wall and wholly within the boundary of the site. The area in which this internal wall would be built inside the retained existing wall was “clouded” and annotated as “no development zone added.” An addition to the legend showed this area as being “no development proposed”. XYZ filed these amended plans, which became the amended development application for which development consent was sought.

  3. XYZ contended that this amendment ensured that no development would be carried out on the adjoining land. The encroaching wall of the existing house was not to be demolished, only the non-encroaching walls and parts of the existing house. The erection of the new building was to be wholly on the new southern lot and not on the adjoining land. This was to be achieved by erecting a new wall inside of the encroaching, existing wall and wholly on the new southern lot. No other work was to be carried out on the adjoining land.

  4. The Commissioner accepted that the amended plans showed no development on the adjoining land and that the proposed development would be inside and abutting the sliver of adjoining land (at [80]). The Commissioner noted, however, that “there would seem to at least remain a construction uncertainty as to how the proposed development (otherwise on the site and involving demolition works) would physically interface with the position of the existing building located on” the adjoining land (at [80]).

  5. Because of this “construction uncertainty”, XYZ proposed a condition of consent requiring the person acting on the consent to demonstrate to the satisfaction of the Council, prior to any works, that, first, that person has ownership or an interest in the adjoining land to allow for demolition of any encroaching structure and, secondly, that development consent has been granted for demolition of any structures on the adjoining land (at [83]).

  6. The Commissioner found at [86] that:

“The application before me does not include any development on Part Lot 1 DP 198343, therefore no owner’s consent is required. Nonetheless, the relationship with development on this lot is a relevant factor for consideration. Further I am mindful of the Court’s obligation to consider likely impacts, not the subject of the application….”

  1. The Commissioner continued at [87]:

“It is reasonable to consider the implications of the proposed development on the portion of the existing building occupying Part Lot 1 DP 198343. While Council’s approach would have similar effect, I prefer the approach adopted by the applicant which gives more direct recognition of the concern at hand and the means of managing potential impact.”

  1. The approach adopted by the applicant was for the Court to impose the suggested condition of consent requiring, prior to any works, development consent to be granted for demolition of any structures on the adjoining land.

  2. The Council submitted that the Commissioner erred in granting development consent before the consent of the owner of the adjoining land had been obtained. The development application related to any land on which development particularised in the development application is to take place: Al Maha Pty Ltd v Huajun Investments Pty Ltd (2018) 233 LGERA 170; [2018] NSWCA 245 at [9]. Notwithstanding the amendment to the plans to show “no development proposed” on the adjoining land, the carrying out of the proposed development would require work on the adjoining land. The Council referred to the concession by XYZ’s senior counsel at the hearing in the court below that “It’s an inevitable consequence that works in the sliver should occur. The appropriate response to that is a condition” (Transcript 04/10/24, 106). The Council submitted that the Commissioner did not have regard to that concession that work would be required on the adjoining lot, but instead focussed solely on what was shown as the no development zone on the plans. That was to consider a different development to the one in reality proposed by XYZ, which would involve the full demolition of the existing house.

  3. The Council also submitted that the Commissioner’s reasons for dealing with this issue of owner’s consent were inadequate.

  4. XYZ submitted that the Commissioner’s findings that the development application as amended did not include any development on the adjoining land and therefore no owner’s consent was required, were factual and involved no error on a question of law.

  5. The land to which the development application related was only the site and did not include the adjoining land. As the High Court said in North Sydney Council v Ligon 302 Pty Ltd (1996) 185 CLR 470 at 476; [1996] HCA 20:

“When a development application is made for consent to a specified development, the land to which the application ‘relates’ must therefore be the land on which the specified development is proposed to be carried out.”

See further at 479 and Al Maha Pty Ltd v Huajun Investments Pty Ltd at [9], [89] and [94].

  1. XYZ’s development application sought consent to carry out the development of the demolition of existing buildings, subdivision of the existing lot and construction of new dwelling houses only on the site and not on the adjoining land. Although there was a wall of the existing dwelling house that encroaches onto the adjoining land, the development application did not seek consent to carry out any development in relation to that encroaching wall. It was not proposed to be demolished or rebuilt. Demolition was to only occur on the site.

  2. XYZ noted that this proposal to demolish only the buildings and structures on the site, and not on the adjoining land, might lead to “construction uncertainty”, as demolition of the existing dwelling house on the site might jeopardise the stability of the retained wall on the adjoining land. This construction uncertainty prompted XYZ to proffer a condition of consent requiring XYZ, before it can carry out any work in accordance with the development consent, to acquire the adjoining land or an interest in it, so as to allow for demolition of any encroaching structure, and to obtain development consent for the demolition of any structures on the adjoining land. The imposition of this condition would overcome the risk that carrying out the development on the site might impact any structure on the adjoining land.

  3. XYZ submitted that the Council has misinterpreted the so-called concession by XYZ’s senior counsel. The “inevitable consequence” being referred to was that any structure on the adjoining land would inevitably need to be demolished because of the risk that demolition of the existing dwelling house might destabilise that structure. That was the reason XYZ proffered the condition of consent. The concession was not that the development application sought consent for the carrying out of development on the adjoining land; it did not. Moreover, the concession could not be taken as an amendment of the development application; a formal application to amend the development application to carry out development on the adjoining land would have been required.

  4. I reject the owner’s consent ground. The development application sought consent to carry out development only on the site, and not on the adjoining land. That was made clear by the amendments to the plans, which expressly stated that no development was proposed to be carried out on the adjoining land. The land to which the development application relates is limited, therefore, to the site and not the adjoining land. The consent of the owner of the adjoining land to the making of the development application was not required.

  1. The so-called concession of XYZ at the hearing in the court below did not change this position. XYZ’s senior counsel was merely acknowledging the risk, termed an “inevitable consequence”, that the demolition of the existing dwelling house on the site, but not the encroaching wall of the dwelling house on the adjoining land, might destabilise that wall on the adjoining land and lead to the wall needing to be demolished. But development consent was not sought for the demolition of the encroaching wall on the adjoining land. A separate development application would need to be made seeking development consent to demolish the encroaching wall on the adjoining land.

  2. To overcome this risk and to allow for the making of a separate development application seeking consent to demolish the encroaching wall on the adjoining land, XYZ proposed that a condition of consent be imposed requiring XYZ, first, to acquire the adjoining land or an interest in that land to allow for demolition of the encroaching wall and, second, to obtain development consent to demolish the encroaching wall on the adjoining land, prior to XYZ carrying out any works on the site.

  3. The Commissioner’s findings that no development was proposed on the adjoining land and hence that consent of the owner of the adjoining land was not required, were based on the evidence and were factually correct, But even if they were factually incorrect, that would not involve an error on a question of law. The imposition of the condition of consent proffered by XYZ did not change this factual situation. Indeed, to the contrary, it emphasised that development consent was not being granted to the carrying out of any development on the adjoining land and that a separate development consent would need to be obtained to demolish any structure on the adjoining land. The Commissioner’s reasons for making these findings were adequate.

The covenant ground

  1. The site is not only located within the Foreshore Area, it is burdened by a restrictive covenant benefitting the adjacent public road of Longview Street. The covenant identifies a foreshore building line, fixed under the County of Cumberland Planning Scheme Ordinance, located a few metres westwards towards the foreshore from the foreshore building line fixed by cl 6.5 of the LEP. The covenant regulates the encroachment of the existing dwelling house beyond the foreshore building line in two ways.

  2. First, cl 1 provides that:

“No portion of the extensions to the said building erected after the fixing of the foreshore building line and standing between the said foreshore building line and high water mark will be allowed to remain after the said building shall be demolished or ceased to exist or in case of any rebuilding or alteration of the foundations of the building shall have been carried out.”

  1. Second, cl 2 provides that:

“The covenantors will not add to or strengthen any part of the extensions to the said building which encroach the said building line nor do any act likely to strengthen the said encroachment or extend the life of that portion of the building which so encroaches.”

  1. As the proposed development involves the demolition of the existing dwelling house, the covenant operates to prevent the erection of new dwelling houses that extend beyond the foreshore building line identified by the covenant and between that line and the high water mark of Iron Cove.

  2. This operation of the covenant is a matter of private law, not public law. The covenant cannot prevent a consent authority exercising the statutory power in s 4.16 of the EPA Act to determine a development application to carry out development on land burdened by the covenant by the grant of development consent. The covenant can, however, prevent the carrying out of development in accordance with a development consent but in breach of the covenant unless the covenant is disapplied by operation of a provision of an environmental planning instrument made under s 3.16 of the EPA Act (or its predecessor), such as cl 1.9A of the LEP: see Sydney City Council v Ipoh Pty Ltd (2006) 68 NSWLR 411; [2006] NSWCA 300 at [83], [84].

  3. The Council contended, however, that the existence and operation of the covenant was a relevant matter that the Commissioner was obliged to consider in the exercise of that statutory power. The Council relied on s 39(4) of the Court, which provides:

“In making its decision in respect of an appeal, the Court shall have regard to this or any other relevant Act, any instrument made under any such Act, the circumstances of the case and the public interest.”

  1. The Council submitted that the covenant is an instrument made under the Conveyancing Act 1919 (NSW), and hence fell within the description in s 39(4) of the Court Act of “any instrument made under any such Act”: see Chehab v City of Canada Bay Council (2002) 123 LGERA 431; [2002] NSWLEC 220 at [34] (Chehab); Wenli Wang v North Sydney Council [2018] NSWLEC 122 at [22]-[23]. In this way, the Council submitted, the covenant was a mandatory relevant consideration.

  2. The Council submitted that consideration of relevant matters requires “an understanding of the matters and the significance of the decision to be made about them”: Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88 (Weal) at [80]. The Court “had to inform itself sufficiently to be able to take into consideration the matters of relevance to the determination of the development application”: Weal at [80].

  3. The Council submitted that the Commissioner’s consideration of the covenant fell short of what proper consideration of a relevant matter required. The Commissioner’s consideration of the covenant is in [88]-[90]:

“88.   The figures above (from [18]) indicate the location of a building line enforceable by covenant registered on the title of the site. This building line is located near to, but west of, what I call the foreshore building line under IWLEP (a matter considered in detail in this judgement). Council submits that the provisions of cl 1.9A of IWLEP, relating to the suspension of such covenants for the enabling of certain development, do not apply under cl 1.9(2)(a), because the covenant was imposed by Council. Council took me to Rothwell Boys Pty Ltd v Coffs Harbour City Council (2012) 186 LGERA 366, at [37], from which it can be concluded that the grant of a development consent does not impact upon proprietary rights.

89.   The applicant referenced Chehab v City of Canada Bay Council [2002] NSWLEC 220 (Chehab), which for me indicated that consideration could be given to such covenants in the evaluation of development applications. But that the weight to be attached, including whether "proper genuine and realistic consideration" or "significant weight", was a matter for the circumstances of the case: Chehab at [37]-[38]. It was also found that s 39(2) of the Land and Environment Court Act 1979 permits the Court “to release, vary or modify the instrument where the enforceability of the instrument is expressly preserved by an Environmental Planning Instrument”: Chehab at [33].

90.   I do not understand the applicant to have sought, not in these proceedings at least, for there to be a suspension or lifting of the covenant and I make no findings to that effect. As such I do note that the building line covenant remains in effect and the proposed development would be contrary to it. Council argues that it follows that the grant of consent lacks utility. It seems to me this remains to be seen. In saying this, I am not persuaded that the existence of the covenant brings any substantive weight against the proposal. My findings in regard to the IWLEP foreshore building line and the fact of existing building works inside the covenant line are of some relevance to me here (Chehab at [38]). Further decisions are required before it is to be found one way or another, whether the parties to the covenant wish to enforce or suspend its effect. I need look no further into it here.”

  1. The Council noted that the Commissioner found that the proposed development was contrary to the covenant and that XYZ did not seek the suspension or lifting of the covenant in the proceedings (at [90]). But the Commissioner did not address the Council’s submission that the grant of development consent in these circumstances would lack utility, as the covenant would prevent the carrying out of the development, despite the grant of development consent for that development. The Council submitted that the Commissioner’s response to the Council’s submission was inadequate, simply stating: “It seems to me this remains to be seen” (at [90]).

  2. The Council submitted that:

“The Commissioner therefore failed to appreciate that the beneficiary of the covenant, and the party entitled to enforce it, was the very party submitting that the development could not lawfully be carried out because of the covenant, the Council. The cursory dismissal of it being unclear is indicative of a failure to engage with and appreciate the significance of the covenant” (at [85] of the Council’s written submissions).

  1. The Council further submitted that:

“The Commissioner’s further reason that his findings on cl 6.5 are of ‘some relevance’ again suggests a failure to understand the effect of the covenant. Unlike cl 6.5, it was not an issue pertaining to the impacts of the proposal, but going to whether the development could ever be carried out.” (at [86] of the Council’s written submissions).

  1. In these ways, the Council submitted that the Commissioner failed to consider the mandatory relevant matter of the covenant.

  2. XYZ submitted that the Council’s argument amounts to no more than a challenge to the factual findings of the Commissioner about the covenant, including the weight to be given to the covenant. Wrong findings of fact concerning the covenant or misattribution of weight to be given to the covenant do not involve error on a question of law: Chehab at [37].

  3. XYZ noted that the Commissioner was aware of the need to consider the covenant. The Commissioner referred to Chehab, “which for me indicated that consideration could be given to such covenants in the evaluation of development applications” (at [89]). The Commissioner noted, however, “that the weight to be attached, including whether ‘proper, genuine and realistic consideration’ or ‘significant weight’, was a matter for the circumstances of the case: Chehab at [37]-[38],” (at [89]).

  4. XYZ submitted that the Commissioner did in fact consider the covenant. The Commissioner found that “the building line covenant remains in effect and the proposed development would be contrary to it” (at [90]). The Commissioner found that the weight that should be given to the covenant was affected by his “findings in regard to the IWLEP foreshore building line and the fact of existing building works inside the covenant line,” citing Chehab at [38]. There, Pain J had said that “the weight which should be attributed to the restriction as to user will depend on matters such as how the restriction as to user has been enforced in the past. In other words, a Court is likely to give less weight to a restriction as to user that the council has allowed to be modified, varied or revoked numerous times in the past, than one which has been strictly enforced by the council.” This was the purpose of the Commissioner’s cross-reference to his earlier findings in relation to the foreshore building line, including that there are “similar other improvements on nearby sites” inside of the foreshore building line (see at [63]).

  5. XYZ submitted that the Commissioner was entitled to find that he would not give any substantial weight to the covenant as a planning concern in the absence of evidence from the Council about it having been strictly enforced: see Chehab at [38] cited by the Commissioner in [90]. In those circumstances, the Council has not established that the Commissioner failed to consider the relevant matter of the covenant.

  6. XYZ submitted the Commissioner also considered but did not accept the Council’s argument that the grant of development consent lacks utility. The Commissioner expressly referred to the Council’s argument in [90]. The Commissioner’s reason for rejecting it was that it “remains to be seen” whether the grant of development consent will lack utility. The Commissioner noted that: “Further decisions are required before it is to be found one way or another, whether the parties to the covenant wish to enforce the covenant or suspend its effect” (at [90]). XYZ noted that here the Council is the party who can enforce or suspend its effect. The Council may choose not to enforce the covenant if the Court were to grant development consent. The Commissioner did not know whether the Council would wish to enforce the covenant or instead suspend the covenant – that was for another day. This explains the Commissioner’s concluding comment, “I need look no further into it here.” (at [90]).

  7. XYZ submitted the Commissioner was correct to proceed on the basis that the grant of development consent affects planning concerns, but not property rights: Sydney City Council v Ipoh Pty Ltd at [3] and [83]-[84]. The Commissioner was correct, therefore, in noting that other decisions by the parties to the covenant (relevantly, the Council) regarding enforcement or suspension of the covenant, would be required before it could be said that there was no utility in granting development consent.

  8. I reject the covenant ground. The Commissioner did consider not only the covenant but also the Council’s argument that granting development consent to development that contravened the covenant lacked utility. The Commissioner’s findings on these matters were factual and involved no error on a question of law.

  9. The Commissioner found the proposed development would be contrary to the covenant, but that this did not bring “any substantive weight against the proposal.” (at [90]). One reason was the fact that there are existing building works both on the site and nearby sites “inside the covenant line”, a factor held to be relevant to the attribution of weight in Chehab at [38] as the Commissioner noted in [90]. Another reason was that the parties to the covenant (relevantly the Council) may choose not to enforce the covenant or to suspend its effect (at [90]). If either course were to be followed, the grant of development consent would have utility. But that is for another day. The Commissioner did not need to decide that in this case. Viewed in context, the Commissioner’s reasons for addressing this issue are adequate.

  10. The Commissioner’s reasons evidence that the Commissioner did consider the covenant and the proposed development’s breach of the covenant, as well as the Council’s argument that the grant of development consent lacked utility in this circumstance. The Commissioner did not, therefore, fail to consider a relevant matter. The covenant ground has not been established.

Conclusion and orders

  1. The Council has not established any of its six grounds of appeal. The appeal should be dismissed with costs.

  2. The Court:

  1. Dismisses the appeal against the decision and orders of Commissioner Walsh of 28 November 2024.

  2. Orders the appellant to pay the respondent’s costs of the appeal.

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Decision last updated: 30 June 2025

Most Recent Citation
Cases Citing This Decision

1

Ell v Mosman Municipal Council [2025] NSWLEC 1707
Cases Cited

20

Statutory Material Cited

3

Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245
Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245
Baron Corporation Pty Limited v Council of the City of Sydney [2019] NSWLEC 61