La Vie Developments Pty Limited v Shellharbour City Council

[2010] NSWLEC 1277

Land and Environment Court

of New South Wales

CITATION:	La Vie Developments Pty Limited v Shellharbour City Council [2010] NSWLEC 1277
PARTIES:	APPLICANT La Vie Developments Pty Limited RESPONDENT Shellharbour City Council
FILE NUMBER(S):	30920 of 2009
CORAM:	Moore SC
KEY ISSUES:	CONSTRUCTION AND INTERPRETATION :- Classification of land
LEGISLATION CITED:	Local Government Act 1993, s 515
CASES CITED:	Page v Council of the Shire of Parkes (1991) NSWLEC 4 Cousins v Council of the City of Lake Macquarie (unreported – Matter No: 30252 of 1992) Taylor v Lismore City Council [2005] NSWLEC 146
DATES OF HEARING:	25 June 2010
EX TEMPORE JUDGMENT DATE:	25 June 2010
LEGAL REPRESENTATIVES:	APPLICANT Mr T Sattler, solicitor Sattler & Associates RESPONDENT Mr G Gleeson, solicitor RMB Lawyers with Morton + Harris

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

MOORE SC

25 June 2010

09/30920 La Vie Developments Pty Limited v Shellharbour City Council

JUDGMENT
This decision was given as an extemporaneous decision. It has been revised and edited prior to publication.

1 SENIOR COMMISSIONER: The particular case that I am now hearing involves an appeal against refusal by Shellharbour City Council (the council) to categorise a parcel of land owned by La Vie Developments Pty Limited (the company) which is Lot 81 in Deposited Plan 634605 and located 7 Tullimbar Lane, Tullimbar. The land has an area of a little over 16.5 ha, of which the very largest part is used by a Mr Swan for the purposes of agisting his cattle and a smaller part is used for the purposes of a residence by somebody who is a tenant of the company.

2 S 515 of the Local Government Act 1993 (the Act) sets the context within which I am required to assess whether the land should be categorised as farm land. There are a number of tests, each of which has to be satisfied, but some of which provide two paths for such satisfaction before the land can so be categorised.

3 The first relates to what is the dominant use. The word that is used in the section is “its” dominant use. The “its” clearly relates to the land. In my view, as a consequence, the dominant use therefore relates to the dominant use of the land, not the dominant use by the ratepayer of the land. There is, in this instance, in my view, a significant distinction between the two. The second step needing to be satisfied is that if the dominant use is for farming, that must be a use - that is, the dominant use of this land - must have a significant and substantial commercial purpose or character and further, that the dominant use of the land must have the commercial use or character of being engaged in for the purposes of profit on a continuous or repetitive basis. That is, the use of the land must be carried through to an engagement for the purposes of profit on a continuous or repetitive basis.

4 I am prepared to assume, for the reasons of describing why I have formed the opinion that the appeal should be dismissed, that the dominant use of the land is for farming - that is, the first of the three tests is satisfied - and that the third of the three tests - that is, that the engagement is for the purposes of profit on a continuous and repetitive basis - is also satisfied. I will so assume in this that the dominant use is appropriately determined (for the purposes of this decision) on the basis of the apportionment of area used and that, taking the applicant’s case at the highest, the dominant use is the use by Mr Swan for grazing purposes.

5 I also accept, again taking the applicant’s case at the highest, that that dominant use by Mr Swan is, on the basis of Mr Swan’s evidence, a use by him that generates a profit on a continuous or repetitive basis, albeit a modest profit of a continuous or repetitive nature attaching to this land.

6 I do not accept that the overall profitability of his enterprise across multiple parcels of land has any relevance, save to the extent that that assists him in deriving a profit for the purposes of s 515(1)(b), from this land.

7 I am not, however, satisfied that the nature of Mr Swan’s activity could conceivably be described as having a significant and substantial commercial purpose or character in its use of this land, that being what is required by the preambular elements of s 515 - that is, the dominant use of this land must have a significant and substantial commercial purpose or character.

8 I have been taken to a variety of decisions by members of the Court in the past that have provided a little assistance, but certainly do not provide anything that binds me with respect to the extent to which activities on rural properties or rural activities on other properties could be regarded as satisfying the question of significant and substantial commercial purpose or character.

9 The first of those is the decision of Cripps CJ in Page v Council of the Shire of Parkes (1991) NSWLEC 4 where at, about thirty-five or forty percent of the way through the decision given by his Honour, he said, as is correctly the case here, each matter must be dealt with on its facts and circumstances. He concluded that, in that instance, the grazing of four cows and the cultivation of fifteen acres of crops could not reasonably be said to have a use of a significant and substantial commercial purpose or character.

10 Second, in an unreported decision of (then) Assessor, (now former) Bly C, given on 16 October 1992 in Cousins v Council of the City of Lake Macquarie (unreported – Matter No: 30252 of 1992), in the final substantial paragraph, my former colleague said:

“I have not been persuaded that a forty-hectare farm with fifty head of cattle - with a fifty head herd of stud cattle generating up to $5,800 per annum profit in about three to four years time represents a significant and substantial commercial purpose”.

11 In this instance, the clear evidence of Mr Swan is that the gross annual income that is capable of being attributed to the use of this land for farming purposes is of the order of $6,500; that the annual carrying capacity of this land for agricultural purposes would be the equivalent of twenty-three to twenty-five head of cattle – this being, on its most optimistic on Mr Swan’s evidence, twelve breeding cows and twelve calves (possibly with an additional cow and calf) and the additional cow and calf being taken into account.

12 To take the high point of the applicant’s case, involving the turning off thirteen calves per annum (and, on Mr Swan’s evidence, an average expectable gross return per calf of $500) from that $6,500 figure needs to be deducted a number of outgoings that Mr Swan would have to have for this activity, including some apportionment of broader business costs that he would maintain for transportation and the like, but certainly a number of specific matters that he adverted to would be costs that had to be attributed to the gross profit that would be returned from this site.

13 I have been taken to a decision by my former colleague, Nott C, in Taylor v Lismore City Council [2005] NSWLEC 146 where he held, at para 21, after taking an analysis of the use of the land, that:

“I am of the opinion that there is genuine primary production occurring from the subject land”.

14 Taking, as I do, that being the high point for the applicant on a similar basis to which such a conclusion was drawn by Nott C, I then turn to the fact that on that basis, he held that there is a significant and substantial commercial purpose or character involved in the business, insofar as it relates to the land. Nott C gave no reasons for such a conclusion, apart from saying that it is derived from the facts of the case.

15 Turning my mind, as I do, to the facts and circumstances of the present case, assisted but not bound by the comments of Cripps J and Bly C, I find that the raising of a maximum of thirteen calves per annum for sale from this land, even if it be appropriate to hold that that be the dominant use of the land, a gross profit of $6,500 per annum cannot conceivably satisfy the test of being a significant and substantial commercial purpose or character.

16 The appeal is therefore dismissed. The exhibits, other than the formal papers on the file, are returned.

Tim Moore
Senior Commissioner