SH Camden Valley Pty Ltd v Camden Council

[2015] NSWLEC 104

Land and Environment Court

New South Wales

Medium Neutral Citation:	SH Camden Valley Pty Ltd v Camden Council [2015] NSWLEC 104
Hearing dates:	25 and 26 November 2014, and 3 February 2015; written submissions 27 February 2015, and 17 March 2015
Date of orders:	30 June 2015
Decision date:	30 June 2015
Jurisdiction:	Class 3
Before:	Sheahan J and Brown C
Decision:	(1) The appeals in matters 30509, 30510, 30511, and 30512 of 2014 are dismissed. (2) In matter 30513 of 2014, the Court declares that Lot 2 DP 1175494 is to be categorised “Business”, on and from 19 December 2013. (3) All exhibits are returned. (4) Costs reserved.
Catchwords:	CATEGORISATION OF LAND FOR RATING PURPOSES – what is the relevant parcel of rateable land valued as one assessment – what is the “dominant use” of the parcel of land – statutory construction
Legislation Cited:	Camden Local Environmental Plan 2010 Environmental Planning and Assessment Act 1979 Interpretation Act 1987 Land Tax Management Act 1956 Local Government Act 1993 State Environmental Planning Policy (Sydney Region Growth Centres) 2006 Valuation of Land Act 1916
Cases Cited:	Agricultural Equity Investments Pty Limited v The Hon Chris Hatcher MP, Minister for Resources and Energy, Special Minister [2015] NSWLEC 23 Barrak Corporation Pty Ltd v Parramatta City Council [2014] NSWLEC 177 Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; 151 LGERA 400 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; 147 CLR 297 Council of the City of Newcastle v Royal Newcastle Hospital [1957] HCA 15; 96 CLR 493 Council of the City of Shoalhaven v Elachi [2015] NSWLEC 85 Fairview Estate Vineyard Pty Limited v Mid-Western Regional Council [2005] NSWLEC 555; 143 LGERA 252 Foodbarn Pty Ltd v Solicitor-General (NSW) (1975) 32 LGRA 157 Jakd Pty Ltd v Randwick City Council [1996] NSWLEC 97 Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2010] NSWSC 867; 79 NSWLR 724 McKenzie v Randwick City Council [1996] NSWLEC 41 McLucas v Invocare Australia Pty Ltd [2013] NSWLEC 1054 Meriton Apartments Pty Limited v Parramatta City Council [2003] NSWLEC 309 Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48; 237 CLR 285 Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2007] NSWLEC 182 Newcastle City Council v GIO General Limited [1997] HCA 53; 191 CLR 85 Parramatta City Council v Brickworks Ltd [1972] HCA 21; 128 CLR 1 Peabody Pastoral Holdings Pty Ltd v Mid-Western Regional Council [2013] NSWLEC 86 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 Public Transport Commission of NSW v J Murray – More (NSW) Pty Ltd [1975] HCA 28; 132 CLR 336 Shire of Perth v O'Keefe [1964] HCA 37; 110 CLR 529 Steedman v Baulkham Hills Shire Council (1991) 87 LGERA 26 Sydney City Council v City Centre Developments Limited (1976) 34 LGRA 419 Wuudee Australia Pty Ltd v South Sydney City Council (1993) 80 LGERA 1 Wuudee Australia Pty Ltd v South Sydney City Council (No 2) [1994] NSWLEC 171
Category:	Principal judgment
Parties:	SH Camden Valley Pty Limited (Applicant) Camden Council (Respondent)
Representation:	Counsel: Mr N Eastman, barrister (Applicant) Mr T To, barrister (Respondent) Solicitors: Gadens Lawyers Sydney Pty Limited (Applicant) Swaab Attorneys (Respondent)
File Number(s):	30509 – 30513 of 2014

Judgment

Introduction

1. There are before the Court five separate appeals concerning five existing parcels of land, located off Camden Valley Way, at Catherine Field.

2. The five appeals were brought pursuant to s 526(1)(a) of the Local Government Act 1993 (“the LG Act”) from decisions of Camden Council relating to the categorisation of the five parcels of land for rating purposes, and they were heard concurrently.

3. The five parcels of land were acquired by the applicant in 2009. The inclusion of “SH” in the applicant’s name reflects its links with Japanese-linked developer Sekisui House Group.

4. The five parcels of land form an agglomerated area which is partly within the South West Growth Centres area. This area is experiencing significant infrastructure roll out and upgrading, and consequent residential development, transforming it from rural land to a denser urban character.

5. The relevant parcels of land the subject of these five appeals and the descriptive names adopted by the parties for each appeal are:

• Lot 50 in DP 1175424 (Appeal No. 30509 of 2014) – the “El Caballo Blanco land” (“ECB land”);

• Lots 1 and 6 in DPI 175488 (Appeal No. 30510 of 2014) – the “Sales Office land”;

• Lot 2076 in DP 1161618, Lot 4117 in DP 1173178 and Lot 5 in DP 1175488 (Appeal No. 30511 of 2014) – the “Golf Course land”;

• Lot 757 in DP 1185494 (Appeal No. 30512 of 2014) – the “Subdivision land”; and

• Lot 2 in DP 1175488 (Appeal No. 30513 of 2014) – the “Riparian land”.

6. In general terms, the applicant seeks declarations from the Court that the five parcels of land are to be categorised as “Residential”. The declarations are to be effective from 1 July 2010 for the Sales Office land, the Golf Course land, the Subdivision land, and the Riparian land, and from 6 May 2014 for the ECB land.

7. The Council rejects the view that the five parcels of land can be categorised in the manner sought by the applicant, and maintains that, collectively, the land associated with the five appeals should be categorised as “Business”.

8. It is convenient to consider the appeals as concerning “the ECB land” on one hand, and “the non-ECB land” on the other.

9. Commissioner Brown and I heard this matter together, and I gratefully acknowledge his expertise. We now publish our joint reasons for judgment.

The Statutory Provisions

10. The categorisation of land is a necessary pre-condition to the levying of local government rates under Chapter 15 of the LG Act, which contains a statutory scheme for that categorisation.

11. The Act places land into four categories – “farmland”, “residential”, “mining” and “business” (s 514), but there can also be sub-categories (ss 529 – 531, and see Barrak Corporation Pty Ltd v Parramatta City Council [2014] NSWLEC 177).

12. The presently relevant provisions in Part 3 of Chapter 15 are (some emphasis added):

514   Categorisation of land for purposes of ordinary rates

Before making an ordinary rate, the council must have declared each parcel of rateable land in its area to be within one or other of the following categories:

• farmland

• residential

• mining

• business.

Note. Land falls within the “business” category if it cannot be categorised as farmland, residential or mining. The main land uses that will fall within the “business” category are commercial and industrial.

515   Categorisation as farmland

...

516   Categorisation as residential

(1)   Land is to be categorised as residential if it is a parcel of rateable land valued as one assessment and:

(a)   its dominant use is for residential accommodation (otherwise than as a hotel, motel, guest-house, backpacker hostel or nursing home or any other form of residential accommodation (not being a boarding house or a lodging house) prescribed by the regulations), or

(b)   in the case of vacant land, it is zoned or otherwise designated for use under an environmental planning instrument (with or without development consent) for residential purposes, or

(c)   it is rural residential land.

(1A)     ...

(2)   The regulations may prescribe circumstances in which land is or is not to be categorised as residential.

517   Categorisation as mining

...

518   Categorisation as business

Land is to be categorised as business if it cannot be categorised as farmland, residential or mining.

...

519   How is vacant land to be categorised?

If vacant land is unable to be categorised under section 515, 516 or 517, the land is to be categorised:

(a)   if the land is zoned or otherwise designated for use under an environmental planning instrument—according to any purpose for which the land may be used after taking into account the nature of any improvements on the land and the nature of surrounding development, or

(b)   if the land is not so zoned or designated—according to the predominant categorisation of surrounding land.

520   Notice of declaration of category

(1)   A council must give notice to each rateable person of the category declared for each parcel of land for which the person is rateable.

(2)   The notice must be in the approved form and must:

(a)   state that the person has the right to apply to the council for a review of the declaration that the land is within the category stated in the notice, and

(b)   state that the person has the right to appeal to the Land and Environment Court if dissatisfied with the council’s review, and

(c) refer to sections 525 and 526.

521   When does the declaration of a category take effect?

A declaration that a parcel of land is within a particular category takes effect from the date specified for the purpose in the declaration.

522   When does the declaration of a category cease?

A declaration that a parcel of land is within a particular category ceases when a subsequent declaration concerning the land takes effect.

523   When are the declarations of categories reviewed?

(1)   A council need not annually review a declaration that a parcel of land is within a particular category, but may review a declaration:

(a)   as part of a general review of the categorisation of all or a number of parcels of land, or

(b)   because it has reason to believe that a parcel of land should be differently categorised.

(2) A council must review a declaration if required to do so in accordance with section 525 by a person who is rateable in respect of a parcel of land to which the declaration applies.

524   Notice of change of category

A rateable person (or the person’s agent) must notify the council within 30 days after the person’s rateable land changes from one category to another.

525   Application for change of category

(1)   A rateable person (or the person’s agent) may apply to the council at any time:

(a)   for a review of a declaration that the person’s rateable land is within a particular category for the purposes of section 514, or

(b)   to have the person’s rateable land declared to be within a particular category for the purposes of that section.

(2)   An application must be in the approved form, must include a description of the land concerned and must nominate the category the applicant considers the land should be within.

(3)   The council must declare the land to be within the category nominated in the application unless it has reasonable grounds for believing that the land is not within that category.

(4)   If the council has reasonable grounds for believing that the land is not within the nominated category, it may notify the applicant of any further information it requires in order to be satisfied that the land is within that category. After considering any such information, the council must declare the category for the land.

(5)   The council must notify the applicant of its decision. The council must include the reasons for its decision if it declares that the land is not within the category nominated in the application.

(6)   If the council has not notified the applicant of its decision within 40 days after the application is made to it, the council is taken, at the end of the 40-day period, to have declared the land to be within its existing category.

526   Appeal against declaration of category

(1)   A rateable person who is dissatisfied with:

(a)   the date on which a declaration is specified, under section 521, to take effect, or

(b) a declaration of a council under section 525,

may appeal to the Land and Environment Court.

(2)   An appeal must be made within 30 days after the declaration is made.

(3)   The Court, on an appeal, may declare the date on which a declaration is to take effect or the category for the land, or both, as the case requires.

...

528   Rate may be the same or different for different categories

(1)   The ad valorem amount (the amount in the dollar) of the ordinary rate may be the same for all categories of land or it may be different for different categories.

...

529   Rate may be the same or different within a category

...

(3)   The ad valorem amount (the amount in the dollar) of the ordinary rate may be the same for all land within a category or it may be different for different sub-categories.

...

13. In McKenzie v Randwick City Council (“McKenzie”) [1996] NSWLEC 41, Pearlman J dealt with a s 526 appeal against the 1995 declaration that certain mixed-use land be categorised as “business”.

14. The McKenzie appeal turned on whether the dominant use was for residential accommodation, in circumstances where the “front structure” was a doctor’s surgery and the rear the doctor’s residence.

15. McKenzie requires that the comparison of uses identify the “main” or “principal” use, “in terms of the space occupied, time spent in occupation and layout”: Meriton Apartments Pty Ltd v Parramatta City Council (“Meriton”) [2003] NSWLEC 309 (Pain J); see also Jakd Pty Ltd v Randwick City Council (“Jakd”) [1996] NSWLEC 97 (per Bignold J).

16. In McKenzie, it was argued that the term “dominant use” should be given the meaning given to it in the line of authority based on the judgment of Glass JA in Foodbarn Pty Ltd v Solicitor-General (NSW) (“Foodbarn”) (1975) 32 LGRA 157, especially his Honour’s remarks (at 161 – our emphasis):

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 ... Where the whole of the 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 whether in terms of income generated, space occupied or ratio of staff engaged. The ordinance is nonetheless being disobeyed.

17. Pearlman J commented in McKenzie (our emphasis):

In Foodbarn, Glass JA was dealing with the question of whether a use was prohibited. In answering that question, his Honour held that it is immaterial to inquire whether a use is dominant, if premises are being used for multiple purposes which are independent and no use subserves another. The question of dominance becomes relevant only where the uses are not independent, that is, where one or more uses can be said to be subordinate or subservient to another or others.

The Act here, however, requires the question of dominance to be addressed in every case of categorisation. It stipulates that the inquiry “what is the dominant use of the land?” must be made in order to categorise the land for rating purposes. Therefore, it is necessary for the term “dominant use” to have a meaning which will be relevant in every case, including the case of two or more independent uses of land. In performing the exercise required by the Act, it would be an error to give the term “dominant use” a more restrictive meaning which only had relevance only in a situation where one or more uses are subordinate or subservient to another use.

...

... the alternative meaning of “dominant” as “main” or “principal” is available. It is not an unusual meaning of the word, and construing the word “dominant” in that sense will avoid absurdity and injustice and will accord with the context of chap 15 pt 3 of the Act (Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [[1981] HCA 26; 147 CLR 297].

Accordingly, the term “dominant use” in s 516 must refer to the main or principal purpose for which land is used. If there is one use of land, that use will of course be the dominant use; if there are two or more uses, an inquiry needs to be made as to which of those uses is the main or principal use.

18. Her Honour proceeded to deal with the matter in that way, and concluded that the dominant use of the premises, as in “the main or principal use ... in terms of space occupied, time spent in occupation and layout”, was residential.

19. In 1957, the High Court (per Kitto J) held, in Council of the City of Newcastle v Royal Newcastle Hospital (“Newcastle”) [1957] HCA 15; 96 CLR 493, at 508, that the use of land involves no more than the “physical acts by which the land is made to serve some purpose”. Fullagar J said (at 506) that it was a “fallacy” to assume that “deriving an advantage from the ownership of land is the same thing as using the land”. (See also Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48; 237 CLR 285, at [15]). Taylor J said (at 515):

... the “use” of land will vary with the purpose for which it has been acquired and to which it has been devoted … [but] where an exemption is prescribed by reference to use for a purpose or purposes it is sufficient, in my opinion, if it be shown that the land in question has been wholly devoted to that purpose even though, the fulfilment of the purpose does not require the immediate physical use of every part of the land.

20. In Steedman v Baulkham Hills Shire Council (1991) 87 LGERA 26, Meagher JA analysed the authorities concerning determination of “existing use” rights. He specifically referred to the High Court’s decision Parramatta City Council v Brickworks Ltd (“Brickworks”) [1972] HCA 21; 128 CLR 1, and several cases which followed it, finding (at 27) that such authorities make it:

clear enough ... that the land subject to the determination should be capable of identification as far as possible in a way which avoids detailed investigation and complicated disputes of fact; that land can be used for a lawful purpose without there being an actual physical use of it; that if the land is rightly regarded as a unit and it is found that part of its area was physically used for the purpose in question it follows that the land was used for that purpose; and that if some part of the land was used for mining or extractive purposes, the fact that the balance of the land was held in reserve and intended for future use does not derogate from the fact that in law the whole of the land was used for mining or extractive purposes. ...

21. In Meriton, Pain J had to construe the meaning of the term “its dominant use is for residential accommodation”, in s 516(1)(a). Her Honour referred to Foodbarn, Brickworks, Newcastle, McKenzie, and also to Wuudee Australia Pty Ltd v South Sydney City Council (“Wuudee”), both before Bignold J (No 1) (1993) 80 LGERA 1, and later before Waddell AJ (No 2) [1994] NSWLEC 171.

22. The 1997 DCP relevant in one of the two appeals in Meriton authorised erection of two residential towers, above basement parking, but construction did not commence until, 2001 – 2002. Until July 2001, that site was occupied by an open air car park and a small shed. The second appeal involved a different site, approved in 2002 for a retail/residential project, but formerly occupied by three industrial buildings demolished in March/April 2002.

23. Pain J accepted that planning cases can provide guidance for construing relevantly similar terminology in rating cases. She referred to what Taylor J said in Newcastle (see [109] above), and noted that, in Brickworks, the High Court held (at 21 – 22) that:

It is not enough to bring cl. 32 into operation that land has been acquired with the intention of using it for a particular purpose in the future. On the other hand, it is not necessary, to constitute a present use of land, that there should be a physical use of all of it, or indeed of any of it.

…

if the whole of the land in question was acquired for and devoted to the purpose of quarrying and brick-making, the whole may be held to have been used for that purpose although only part of it was physically used.

24. Her Honour concluded (at [22]):

While intention to use vacant land is not sufficient, as was conceded by Meriton, the purpose of the use of land is manifested by the commencement of building construction the use of which building is for the purpose of residential accommodation.

25. Pain J went on (at [39]) to examine Wuudee.

26. In Wuudee (No 1), Bignold J concluded that the relevant land fell within a business, commercial or industrial zone, because of its potential to accommodate such uses, although it also had potential to accommodate significant residential uses.

27. Waddell AJ held, in Wuudee (No 2), that:

The reference to ‘dominant use’ in [s 516(1)(a)] and consideration of the common form of environmental planning schemes show that if vacant land may be developed for residential purposes, with or without development consent, it must be categorised as ‘residential’. It is not relevant that it might be used, with or without development consent, for other purposes.

28. In Peabody Pastoral Holdings Pty Ltd v Mid-Western Regional Council (“Peabody”) [2013] NSWLEC 86, Preston ChJ was dealing with a costs application in respect of a rating categorisation case which had been settled by consent orders.

29. His Honour found that the Council’s reasoning in favour of categorising the subject properties as “mining” (s 517) was erroneous (see [59] – [60]). He noted (at [63]) that affectation of land is to be distinguished from use, and (at [66]) that a “change in ownership by itself cannot cause a change in the purpose for which land is used ...”. His Honour said (at [72]):

I do not consider that the purpose for which land has been acquired, by itself, is imprinted on the use of the land upon acquisition. First, a mere intention to use land that is to be acquired for a purpose that is different to the purpose for which the land is currently being used is not sufficient to effect a change of use of the land for that purpose upon acquisition. Only when the acquired land is devoted to use for the different purpose for which it was acquired can there be a change in the purpose of the use. The intended purpose of the use of the land must be manifested by the commencement of some activity on the land: [Meriton] at [22] and Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [“Leda”] [2010] NSWSC 867; (2010) 79 NSWLR 724 at [59]-[60].

30. Leda, to which His Honour referred in the paragraph just quoted, was a 2010 decision of Gzell J in the Supreme Court, and concerned land tax exemption provisions applying to “land used for primary production”.

31. Gzell J held that the determination of what land was “used for” was not confined to “actual use for the prescribed end purposes”, and “could cover preliminary activity such as construction, or development preparatory to such use”. His Honour referred to Meriton, with approval. He also noted that the “dominant use” test requires a determination of which use of land is ([69]) “the main, chief or paramount use”, and ([70]) “is a question of fact and degree that may, in the end, be determined as an objective matter of impression, having regard to the facts”.

32. Preston J continued, in Peabody:

80   ... The purpose is the end to which the use of the land is seen to serve. It describes the character which is imparted to the land at which the use is pursued: Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534; Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; (2007) 151 LGERA 400 at [27].

81 Hence, it is not possible to substitute the definition of “mine” from the Dictionary, which is concerned with a particular type of land, for the word “mine” in s 517(1) which is concerned with a particular purpose for which land is used.

82 Secondly, the word “mine” in s 517(1) is qualified by the adjectives “coal” or “metalliferous”. The Dictionary definition of “mine” has no such qualification.

...

84 Thirdly, s 517(1) is only concerned with whether the dominant “use” is for a coal mine, while the defined word “mine” in the Dictionary is concerned with the use of land for mining purposes as well as the holding of land for mining purposes. The concepts of the use of land and the holding of land are different. The legislature defined “mine” in the Dictionary using both the concepts of use and holding of land but, by contrast, only identified in s 517(1) the criterion of use, not holding, of land for a coal mine or metalliferous mine. This must been seen to be deliberate. This deliberate decision to limit categorisation of land as mining only on the basis of use of land and not holding for a mine would be undermined if the word “mine” in s 517(1) had the meaning defined in the Dictionary of including not only use but also holding for any mining purpose.

85 Fourthly, the adjective “dominant” that qualifies “use” in s 517(1) cannot sensibly be applied to a holding of land. ... Land cannot have “its dominant use” for a coal mine or metalliferous mine if it is not used, but is only held, for a coal mine or metalliferous mine. This is a further indicator that land held for a coal mine is not within the ambit of the concept of dominant use of land for a coal mine in s 517(1).

86 Hence, in my view, the Council was in error in this case in considering that the mere holding by Peabody of the properties in question was sufficient to enable categorisation of the properties as mining under s 517 of the LG Act.

...

88   ... The question of whether land is used for a particular purpose is a question of fact and degree in each case. The approach to categorisation of use also depends on the statutory provision under which categorisation is required. The statutory provisions governing categorisation for the purposes of planning law or for determining whether land is exempt from rates are different to those governing the categorisation of rateable land for rating purposes. ...

33. We turn now to apply these provisions and principles to the subject lands.

The ECB land

34. Lot 50 is the site formerly occupied by the “El Caballo Blanco” equestrian themed entertainment facility.

35. While buildings remain on site from that use, it was agreed that it has been unused, uninhabited, unoccupied and untenanted since at least 6 May 2014. It was also agreed that it is “vacant land” for the purposes of s 516(1)(b), although the parties disagreed on the appropriate categorisation.

36. The ECB land is partly zoned R1 General Residential (35%), with the balance of the land zoned RE2 Private Recreation (65%), under the Camden Local Environmental Plan 2010 (“LEP 2010”).

37. The R1 zone objectives are:

•   To provide for the housing needs of the community.

•   To provide for a variety of housing types and densities.

•   To enable other land uses that provide facilities or services to meet the day to day needs of residents.

•   To allow for educational, recreational, community and religious activities that support the wellbeing of the community.

•   To minimise conflict between land uses within the zone and land uses within adjoining zones.

38. The R1 land use table provides:

2 Permitted without consent

Home occupations

3 Permitted with consent

Attached dwellings; Bed and breakfast accommodation; Boarding houses; Child care centres; Community facilities; Dwelling houses; Exhibition homes; Group homes; Home-based child care; Home businesses; Home industries; Hostels; Kiosks; Multi dwelling housing; Neighbourhood shops; Places of public worship; Residential flat buildings; Respite day care centres; Roads; Semi-detached dwellings; Seniors housing; Shop top housing; Any other development not specified in item 2 or 4

4 Prohibited

Agriculture; Air transport facilities; Amusement centres; Animal boarding or training establishments; Boat building and repair facilities; Boat sheds; Camping grounds; Car parks; Caravan parks; Charter and tourism boating facilities; Commercial premises; Correctional centres; Crematoria; Depots; Eco-tourist facilities; Electricity generating works; Entertainment facilities; Extractive industries; Forestry; Freight transport facilities; Function centres; Heavy industrial storage establishments; Home occupations (sex services); Industries; Mortuaries; Public administration buildings; Recreation facilities (major); Research stations; Restricted premises; Rural industries; Rural workers’ dwellings; Service stations; Sewerage systems; Sex services premises; Storage premises; Tourist and visitor accommodation; Transport depots; Truck depots; Vehicle body repair workshops; Vehicle repair stations; Warehouse or distribution centres; Waste or resource management facilities; Wharf or boating facilities; Wholesale supplies

39. The RE2 zone objectives are:

•   To enable land to be used for private open space or recreational purposes.

•   To provide a range of recreational settings and activities and compatible land uses.

•   To protect and enhance the natural environment for recreational purposes.

40. The RE2 land use table provides:

2 Permitted without consent

Nil

3 Permitted with consent

Camping grounds; Caravan parks; Community facilities; Environmental facilities; Environmental protection works; Flood mitigation works; Function centres; Kiosks; Recreation areas; Recreation facilities (indoor); Recreation facilities (major); Recreation facilities (outdoor); Registered clubs; Roads; Signage; Water recycling facilities; Water supply systems

4 Prohibited

Any development not specified in item 2 or 3

The applicant’s submissions

41. Mr Eastman submits that the ECB land is appropriately categorised as Residential. As the land is vacant, the statute does not require a determination of dominant use for the purposes of s 516(1)(a), when there is no use at all. Rather it is vacant land to be dealt with in accordance with s 516(1)(b) and, where necessary, s 519.

42. He contends that the expressions “land” or “vacant land” or “parcel of rateable land” and “zoned”, in s 516(1)(b), should not be construed so narrowly as to require 100% of the land to be residentially zoned in order to qualify. Such a construction would be contrary to the scope, subject matter and purpose of these provisions. Where there is an actual use, the statute does not require that an actual use is to occupy 100% of the land area. It applies a test of dominance, in order for all uses to be assessed by the categorisation to proceed on the basis of that which is dominant. If the narrow construction of s 516(1)(b) were to be adopted, it would be contrary to the approach the statute employs for land with an actual use.

43. Expressly, there is no requirement that all of the parcel of rateable land be zoned or designated for residential purposes. Consequently, it is the applicant’s contention that the parcel of rateable land has the required zoning or designation as long as a more than trivial or de minimis portion of the parcel enjoys that zoning in designation. The R1 zoning, at 35% of the ECB land, is sufficient to satisfy this requirement.

44. In the alternative, Mr Eastman submits that all of the ECB land is, in any event, zoned or otherwise designated for use under an environmental planning instrument for residential purposes. If vacant land may be developed for residential purposes, with or without development consent, it must be categorised as “residential” for the purposes of s 516(1)(b). It is not relevant that it might be used, with or without development consent, for other purposes: Wuudee (No 2).

45. In Meriton, the zone was not described as “residential”, but was instead labeled “City Edge”. This did not matter, as one of the uses that was permitted was a residential use. Accordingly, the land in the RE2 zone may also be used for residential purposes, having regard to the fact that LEP 2010 permits, inter alia, caravan parks within the zone.

46. Also, State Environmental Planning Policy (Housing for Seniors or People with a Disability) 2004 (“the Seniors Housing SEPP”) permits, inter alia, self-contained dwellings. Accordingly, the applicant submits that the Seniors Housing SEPP applies and designates that the land zoned as RE2 within the ECB land for use for, inter alia, self-contained dwellings, which are unarguably a development for a residential purpose.

47. Additionally, the applicant submits that the RE2 land itself is, in the present circumstances, land zoned for urban purposes. In this regard, it should be noted that under the Land Use Table appearing at the end of Part 2 of the LEP 2010, the following uses, inter alia, are permitted with consent in the RE2 zone: Caravan parks; Community facilities; Function centres; Kiosks; Recreation areas; Recreation facilities (indoor); Recreation facilities (major); Recreation facilities (outdoor); Registered clubs; Roads; Water recycling facilities; Water supply systems. In general terms, these land uses are “urban” in nature and are closely associated with cities or towns.

48. The applicant submits that the RE2 land itself is, in the present circumstances, land zoned for urban purposes (cf: Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council [2007] NSWLEC 182 [23]-[24]; McLucas v Invocare Australia Pty Ltd [2013] NSWLEC 1054 [27]; Fairview Estate Vineyard Pty Limited v Mid-Western Regional Council [2005] NSWLEC 555; 143 LGERA 252 [34]).

49. Further, the applicant submits that car parking, community facilities, recreation areas and roads are each types of development that are “development of a kind identified in respect of land zoned as special uses”. This point is illustrated by the provisions of a number of different local environmental plans for other local government areas.

50. The applicant also submits that either of the two relevant tests in s 519 can be met.

51. The first limb test requires that it be categorised “if the land is zoned or otherwise designated for use under an environmental planning instrument - according to any purpose for which the land may be used after taking into account the nature of any improvements on the land and the nature of surrounding development”.

52. Here “any” purpose at least includes the residential purposes permissible on the R1 zoned part of the ECB land. The evidence is that the “nature of the improvements” is that they are derelict and ultimately will be demolished to make way for residential development as set out in the voluntary planning agreement (“VPA”) between the applicant and the respondent. The nature of the surrounding development does include some rural residential uses and it also includes the very significant 1200 lot subdivision for residential purposes, immediately to the south, being the Hermitage. The ECB land very comfortably fits within that description.

53. The second limb is “if the land is not so zoned or designated - according to the predominant categorisation of surrounding land”. If the Court accepted the very narrow construction of these provisions, which in essence requires 100% of the land to be zoned residential, then the applicant contends that this second limb can be met, given that the ECB land shares a significant boundary with the 1200 lot residential subdivision, which is the Hermitage.

54. Consequently, the applicant contends that even though the Court need not go beyond s 516(1)(b), or s 519(a), all of the relevant tests can comfortably be met for the ECB land.

The Council’s submissions

55. Mr To submits that the ECB land as a whole is not “zoned or otherwise designated for ... use for residential purposes” within the meaning of s 516(1)(b), because the majority of the parcel is zoned RE2 in which residential accommodation is not permitted since, firstly, development for the purposes of a caravan park is not a zoning or designation for residential purposes under LEP 2010, and/or is not intended by the statutory scheme to be a basis for residential categorisation; and, secondly, the Seniors Housing SEPP, on its proper construction, does not apply to the RE2 zoned land, as it does not permit the development identified in cl 4(1)(a)(iv) of the SEPP, namely development for the kinds of institutions identified generally in land zoned “special uses”. The ECB land, therefore, cannot be characterised as Residential land under s 516(1)(b).

56. Instead, it is to be characterised under s 519. That requires consideration of the permissible uses, the nature of improvements on the land, and the nature of the surrounding development. The existing improvements are in a derelict state, and have no value, role or purpose. The surrounding development is otherwise non-residential, including the Gledswood Homestead used for weddings and other functions.

57. The permissible future uses of the land are further detailed in the Camden Development Control Plan 2011 (“DCP 2011”). The majority of the ECB land will be used for non-residential purposes, a golf course, and riparian areas. Three smaller areas will be developed for housing.

58. The VPA which applies to the ECB land will require the applicant to carry out both the future golf-course development and the residential development identified in DCP 2011. When developed, the ECB land will predominantly be used for non-residential purposes.

59. Having regard to the zoning, future uses and surrounding development, the ECB land is appropriately categorised “Business”.

Findings – the ECB land

60. In considering the competing submissions, we are not satisfied that the ECB land, for the purposes of s 514, should be categorised as Residential, for a number of reasons. First, and accepting that the ECB land should be regarded as “vacant”, for the purposes of s 516(1)(b), we are not satisfied that the parcel is “zoned or otherwise designated for use under an environmental planning instrument (with or without development consent) for residential purposes”.

61. In coming to this conclusion, the Court acknowledges that having a parcel of rateable land can be problematic when that parcel has two distinct zonings. While Mr Eastman is correct in that s 516(1)(b) does not contain a requirement that all of the parcel of rateable land be zoned or designated for residential purposes where there are two distinct zones, the extent of the zone that allows for “residential purposes” is a relevant and important consideration.

62. We do not accept the submission of Mr Eastman that, if a parcel of rateable land has the required zoning or designation, and such zoning affects more than a trivial or a de minimis portion of the parcel, that parcel can be said to enjoy that zoning or designation.

63. While the test of “dominance” does not arise for vacant land, it is a word used elsewhere in Part 3 of the LG Act. It would seem reasonable that for the parcel to gain the benefit of a zone that would allow the parcel to be regarded as a parcel where it can be used for “residential purposes”, that zone should cover at least 50% of the parcel. There may be instances where a higher or lower percentage could be applied, but there would need to be a compelling argument to support such a variation.

64. In our view, if only 35% of a parcel is zoned R1 General Residential, it is insufficient to conclude that the parcel is “zoned or otherwise designated for use under an environmental planning instrument (with or without development consent) for residential purposes”.

65. Secondly, we are not satisfied that the area of the parcel zoned RE2 Private Recreation is “zoned or otherwise designated for use under an environmental planning instrument (with or without development consent) for residential purposes”.

66. We agree with the submission of Mr To that a distinction can be drawn where residential accommodation is permitted under a local environmental planning instrument and where it is not permitted.

67. Development for the purposes of a caravan park does not connote a zoning or designation for residential purposes under LEP 2010, and/or is not intended by the statutory scheme to be a basis for residential categorisation. Support for this proposition also comes from the zone objectives for the R1 and RE2 zones. The former refers to “housing”, as well as other forms of development associated with housing, such as education, recreation, and community and religious activities. The latter makes no mention of housing or other residential activities.

60. Thirdly, the future use of at least part of the RE2 Private Recreation zone has been determined as part of the ongoing development of the applicant’s land for urban purposes. On 8 May 2012, the Council and the applicant entered into a VPA under s 93F of the Environmental Planning and Assessment Act 1979, for the purpose of facilitating the development of the site for residential accommodation. Under the terms of the VPA, it will be necessary, in the future, to develop a golf course on some of the ECB land, but the applicant has not carried out any works on the ECB land for the purposes of developing a golf course. While such planning agreements may be varied or changed, there was no evidence to suggest that the future use of part of the ECB land would not be used for a golf course.

61. Fourthly, Mr Eastman’s submission that the RE2 land is, in essence, land zoned for urban purposes given the permissible uses in that zone should be given no weight. The submission seeks to insert the term “urban” into the debate, when s 514 recognizes only categories relating to farmland, residential, mining and business. Given its normal meaning, “urban” could easily include both residential and business categories.

62. Fifthly, it was common ground that the ECB land was purchased by the applicant partly for residential development associated with the South West Growth Centre. It is necessary not only to have an intention to use the parcel for residential use, but also that “the purpose of the use of land is manifested by the commencement of building construction” (Meriton, at [22]). In this case, no such building work has been commenced.

63. For these reasons, the ECB land is appropriately categorised as “Business” for rating purposes, as at 6 May 2014.

The Non-ECB land

What are the relevant “parcel[s] of rateable land valued as one assessment”?

72. There is a fundamental difference between the parties regarding the approach to be adopted in categorising the non-ECB land.

73. The difference concerns the relevant time at which to identify the parcel of rateable land, valued as one assessment, and the different approaches produce different results.

The Council’s submissions

74. Mr To submits that the question is one of statutory construction, engaging familiar principles, including those stated in Project Blue Sky Inc v Australian Broadcasting Authority (“Project Blue Sky”) [1998] HCA 28; 194 CLR 355 at [69]-[71] (per McHugh, Gummow, Kirby and Hayne JJ).

75. The Court will also prefer a construction that promotes the purpose or object underlying the enactment: cf. s 33 of the Interpretation Act 1987; recourse to extrinsic materials for this task is permissible: Newcastle City Council v GIO General Limited (1997) 191 CLR 85 at 99 (per Toohey, Gaudron, Gummow); and at 109 – 110 (per McHugh J).

76. One could identify the parcels of land at the time when an application is made under s 525 of the LG Act, from which an appeal under s 526 may be brought. This approach implicitly underlies the applicant’s argument, which focuses upon each parcel of non-ECB land, which was individually valued as one assessment on 19 December 2013, and continued to exist as at 6 May 2014, when the application for re-categorisation was made (from which the present appeal is brought).

77. However, the applicant seeks re-categorisation at 1 July 2010, on which date:

• none of the allotments of land comprised in a parcel of non-ECB land existed, land being part of one or more larger parent allotments; and

• there was no “parcel of rateable land valued as one assessment” corresponding with a parcel of non-ECB land. The first time the parcels of non-ECB land were valued as one assessment was 19 December 2013.

78. Instead, in 2010 there were two parcels of land, each valued as one assessment, namely:

• V-G number 228-1368 comprised of Lot 1 DP 795836, Lot 3 DP 619850 and Lot 1 DP 547127, which included, but extended beyond, the parcel later identified as the Golf Course land; and

• V-G number 229-1368 comprised of Lots 100, 101 and 102 in DP 1153216, which included the parcel later identified as the Sales Office land, Subdivision land and Riparian land, but again with (substantially more) other land.

79. The identification of the relevant parcel of land valued as one assessment significantly changes the factual inquiry into dominant use. The applicant’s approach confines the extent of the inquiry to only the land later described as the non-ECB land, rather than the two larger parcels actually valued as one assessment in 2010, on which further substantial competing uses were being carried on – e.g. motel on the Golf Club land; and grazing on the land south of the Riparian land.

80. Further, from April 2014 onwards, and at the time of hearing before us, neither the Golf Course land nor the Subdivision land existed as parcels valued in one assessment. They had been replaced by new parcels, consequential upon further subdivisions. Despite this, however, the applicant’s case does not proceed upon the basis of all of the current parcels being valued as one assessment, nor on the basis of the parcels valued as one assessment in 2010, but instead focusses on parcels at the intermediate point in time of applying for re-categorisation, which parcels have since been, in part, cancelled.

81. Council contends that the applicant’s approach involves a wrong construction of the statutory scheme, a construction which does not give effect to the statutory scheme in the LG Act as a whole, nor to a harmonious interlocking operation of the LG Act with the Valuation of Land Act 1916 (“the VL Act”), and does not promote the purpose underlying the statutory scheme for rating.

82. There is nothing in the text, scope or purpose of Chapter 15 of the LG Act to suggest that a parcel of land can, for rating purposes, be re-identified retrospectively:

• the key provisions regarding categorisation expressly depend upon the parcel of land having been identified, and categorised, before an annual rate is set: ss 494, 514, 516 – 519.

• s 527 expressly provides for an adjustment of rates following a change in categorisation of an identified parcel of land, including after appeal.

• rates are levied by reference to identified parcels of land: s 546, particularly sub-section (4).

• concessions are available for parcels of land used, or able to be used, in particular ways: ss 585 – 590.

• particular provision is made for the prospective adjustment of rates, if land becomes exempt from rating, and/or following subdivision and sale: ss 572 – 573.

• there is no provision in Chapter 15 for any adjustment of rates for a retrospective change in the identity of a parcel of land.

83. The interlocking operation of the VL Act with the LG Act also does not suggest that retrospective change of an identified parcel of land requires a retrospective change in category.

84. An absence of retrospectivity for rating purposes, except in very limited respects, is long-standing: see the analysis in Sydney City Council v City Centre Development Limited (1976) 34 LGRA 419, at 427 – 431 (per Wootten J).

85. Section 61A, to which His Honour referred in that decision, was repealed in 1978, when the commencement of the rating year was moved from 1 January to 1 July.

86. There are consequences of the applicant’s construction that reinforce the dissonance with the interlocking statutory schemes. It is highly implausible that the legislature can have intended that the identification of the relevant parcel of land, for the purposes of s 516(1), could be:

• ambulatory by reason of administrative actions of the Valuer-General to redefine a parcel of land valued as one assessment, whether in response to applications by land owners, or on his/her own initiative;

• (arbitrarily) self-selected by an applicant from an historical sequence of parcels, valued as one assessment, by applying for a declaration at a particular time, irrespective of whether the parcel continues to exist or not; and/or

• in effect, “manipulated” by an applicant land owner alienating the land in particular ways.

87. Council submits that there is a fundamental and inherent temporal element in the exercise called for by s 516(1)(a) that requires the dominant use to be ascertained by reference to the parcel of land that was, as a fact, valued as one assessment in the valuing year in which it is contended a residential category is to apply.

88. An important distinction to note is that the time at which a parcel of land that was, as a fact, valued as one assessment is not the same as when a valuation of the parcel is made at a later date, to ascertain a value at an earlier (“back-dated”) time.

89. In the present circumstances, there were two parcels of land that were, as a matter of fact, valued in the valuing year for 1 July 2010. These are the relevant parcels, from which one could ascertain a dominant use for each at that time.

90. For later times there are parcels valued as one assessment (depicted in Appendix 4) that would be the correct starting point to ascertain a dominant use.

91. These present appeals, however, are brought in respect of the non-ECB parcels. Each of those parcels was first valued as one assessment on 19 December 2013 (in the valuing year commencing 1 July 2013). From that date it is correct to look at the uses (and only those uses) carried on each parcel of non-ECB land, to ascertain the dominant use of each parcel.

The applicant’s submissions

92. Mr Eastman submits that the construction underpinning the Council’s position, as just detailed, has little regard to the actual words of the statute, defies common sense and has no support from any authority.

93. Section 516, read on its own, indicates that “[l]and is to be categorised as residential if it is a parcel of rateable land valued as one assessment and …". The Council contends that it is only the historic parcels which can be categorised when one seeks a retrospective review of categorisation.

94. The applicant submits that, when read either on its own, or together with ss 521, 523, 526 and 527, there is no support for that position in the statutory language.

95. Sections 521 and 522 deal with the timing as to when a declaration of category takes effect. Council or the Court can give retrospective (or future) effect to a declaration of category. Section 523 allows categories to be reviewed by the council, s 525 allows a person to apply to the council for a change to a category, and s 526 allows for a right of appeal from that decision. Section 527 then imposes an obligation on the council to make appropriate adjustments to rates.

96. Here, where the Valuer-General determined, under s 34 of the VL Act, that there were to be new rateable parcels, which were to have retrospective effect from 1 July 2010, the relevant parcels now before the Court are each “a parcel of rateable land valued as one assessment”.

97. This allows, if necessary, either a council-initiated (s 523), or applicant-initiated (s 525), review of category, which can be declared to have retrospective effect (s 521), and for which rates can then be commensurately adjusted (s 527).

98. In this case, the Court has before it an appeal under s 526, in which the applicant presents to the Court, in separate proceedings, five parcels of rateable land, each valued as one assessment. The Court must deal with what the applicant has presented to it.

99. Accordingly, there is no warrant for reading the actual words of the legislation to support the Council’s construction. There is no purposive or contextual support for it either, on the basis of the description of the manner in which the legislation operates, as described in the preceding paragraph. It would lead to an absurdity, in so far as there is an alteration to the rateable parcel, with retrospective effect (like there was here, back to 1 July 2010), which would be entirely meaningless because the categorisation exercise can only pertain to historic parcels. In this case it would rob the applicant of any benefit achieved from the Valuer-General’s decision on 18 March 2014 to change the parcels with effect from 1 July 2010.

100. Further, the Council’s construction not only has no support in the authorities, and of itself would mean that its own approach in this case (namely, in relation to its acceptance up until now that the Golf Course land was “residential” from November 2013) was wrong.

101. Furthermore, the inconsistency of the Council’s approach is exemplified by its submission (in paragraph 71) that, from 19 December 2013, “it is correct to look at the uses ... carried on each parcel of non-ECB land to ascertain the dominant use of each parcel”. It is entirely unclear why the Council should now fix upon this date, given its argument against retrospectivity (which the applicant does not accept).

102. The Court had the benefit of four affidavits (8 October 2014, 27 October 2014, 24 November 2014 and 25 November 2014) from Craig D’Costa who was a consultant development manager from 21 December 2010, and later a project director with the Sekisui House group of companies. He gave evidence that the current parcels were recognized by the Valuer-General as a consequence of objections made in 30 December 2013 (8.10.14, par 84), and 30 January 2014 (par 92). The parcels must have been created by the Valuer-General after 30 January 2014 (and before or on 18 March 2014, when the Valuer-General’s decision was notified to the applicant: 8.10.14, par 93).

103. The material date cannot be the date that the Valuer-General administratively recognized that its earlier decisions were in error, and, in the present circumstances, the applicant submits the material date is the latter of these two dates:

1. the date of the valuation, being 1 July 2010; or

2. the date on which the Court accepts the dominant use of a given parcel of rateable land valued as one assessment was for residential accommodation.

Findings

104. Put shortly, the Council submits that the relevant non-ECB parcels are those that were “actually” valued as one assessment by the Valuer-General at the date to which the category is sought to be backdated – in this case, 1 July 2010.

105. In contrast, the applicant argues that the relevant parcels are those which were identified by the Valuer-General in his valuation of the land on 19 December 2013, which was then backdated to 1 July 2010.

106. The approach to be preferred depends on the proper construction of the words “parcel of rateable land valued as one assessment”, as they appear in s 516(1). Under the principles of statutory construction well-known to the Court, the meaning and effect of provisions must be determined “by reference to the language of the instrument viewed as a whole”: Project Blue Sky, at [69].

107. For the reasons that follow, we are of the opinion that the Council’s construction should be preferred.

108. Pepper J recently stated, in Agricultural Equity Investments Pty Limited v The Hon Chris Hatcher MP, Minister for Resources and Energy, Special Minister [2015] NSWLEC 23, at [34]:

As has been confirmed by a plethora of recent High Court decisions, the task of statutory interpretation begins and ends with a consideration of the text of the statute to be construed. The language must be considered, however, in its context. This includes ascertaining the objective intention, or purpose, of Parliament in enacting the legislation. The context may also include an examination of the legislative history of the statute and any relevant extrinsic materials, but these aids cannot displace the meaning of the text.

109. Similar comments were made by Biscoe J, in Council of the City of Shoalhaven v Elachi [2015] NSWLEC 85, at [54]:

The task of construction must begin with a consideration of the text itself. No particular theory or rule of statutory interpretation including that of purposive construction, can obviate the need for close attention to the text and structure of the relevant provisions

110. Both parties in the appeal submitted that the text of Chapter 15 of the LG Act supports their construction.

111. In reality, the provisions themselves offer no guidance on the issue one way or the other, a point eventually acknowledged by Mr To, in his submissions of 17 March.

112. We do not agree with Mr Eastman that the power of councils and the Court to declare a category with retrospective effect (ss 521 and 526(3)) necessarily means that retrospectively identified parcels can be used in the “dominant use” inquiry under s 516. Those provisions say nothing about the identity of the parcel in respect of which “dominant use” is to be determined. They just as easily support the Council’s construction, in that they simply empower the decision maker, with the discretion, to declare retrospectively when a “category” comes into effect in respect of those parcels “actually” valued as one assessment at the backdated time, as opposed to parcels retrospectively identified by a backdated valuation.

113. Nor is the power of the Council to make an adjustment for rates already paid (s 527) necessarily supportive of either construction. It is a simple recognition of the fact that rates may be paid “in advance for a rating year, and re-categorisation during the course of a year may result in a need for adjustment for rates already paid”, (Council’s additional subs, par 7).

114. However, although there is no clear indication in the text, the context in which the words appear supports the construction propounded by the Council.

115. We first turn to consider the bi-lateral operation of Chapter 15 of the LG Act and the VL Act.

116. Under the VL Act, the Valuer-General may alter the parcels valued as one assessment with retrospective effect, by making a valuation which is then backdated (ss 14B, and 20(3)(b)). The applicants have the benefit of a backdated valuation (to 1 July 2010).

117. Mr Eastman submitted that, if the categorisation of land is anchored to the historical parcels actually valued as one assessment at the back-dated time, the applicant will be “robbed” of any “benefit” derived from a back-dated valuation, and this is an absurd result which should be avoided: Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; 147 CLR 297.

118. Mr To responded that a retrospective change in the “identified parcel of land” under the VL Act does not necessarily lead to a retrospective change in the identity of the parcel the focus of the s 516 inquiry.

119. We agree with Mr To.

120. Firstly, the applicant is not “robbed” of the “benefit” of a back-dated valuation. The Land Tax Management Act 1956, in contrast to Chapter 15 of the LG Act, expressly permits retrospective reassessment of the “average value” of land, by reference to backdated valuations (ss 9, 9AA, 9(5)). This “average value” provides the basis for the levying of land tax.

121. Secondly, ss 61 and 62 of the VL Act envisage a “prospective” rating regime, whereby rates are generally based on the valuations last notified, and in force before the start of the rating year, and the use of “back-dated” valuations as a basis for levying rates is prohibited (Council’s subs, par 58).

122. Having concluded that the Council’s construction is not inconsistent with the bi-lateral operation of the VL and LG Acts, contrary to the applicant’s submissions, we now address other relevant contextual considerations.

123. In our opinion, when the competing constructions are considered in light of the underlying objective of the rating regime, the Council’s construction should be preferred.

124. Section 33 of the Interpretation Act states:

In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.

125. Mr To submitted that the evident purpose of the rating regime is “to provide a system of finance for local government that aims to be transparent and fair, or equitable” (applicant’s subs, par 73). We accept this description of the objective, in the absence of any assertion to the contrary.

125. Mr To submitted that the applicant’s construction would undermine this objective, because it (Council’s subs, par 73):

73.1 Permits ‘self-selection’ of the parcel of rateable land (through the mechanisms discussed above [s 27 VL Act]: the timing of a declaration application made to a council, by engaging mechanisms under the VL Act to separating or combining parcels, and by alienating or consolidating ownership of land) to be used as the reference point for the dominant use enquiry, which undermines transparency and objectivity in the rating system;

73.2 Permits, in effect, a retrospective redistribution of the rate burden amongst rate payers. It is self-evident that a reduction in rate income will tend to result in a correspondingly greater burden on other rate payers, and inequity a temporal sense in that the income from which services may be may be provided to future ratepayers is also correspondingly reduced.

127. A hypothetical scenario illustrating how the categorisation of land could be manipulated, if the applicant’s construction were adopted, was provided by Mr To (Council’s subs, par 62):

62.1 Assume a land developer has owned for 40 years a large amount of land, valued as one assessment. Assume further that half the land is used for a golf course, and the other half being held for future subdivision, with earthworks carried out on a small area of this half to make the land suitable for residential subdivision and, eventually, sale. Assume further still that the dominant use of the parcel would, because of the golf course use, not be for residential accommodation, such that the parcel is categorised business.

62.2 Some time later, the developer chooses to lease the part of the land used for golf course to another, perhaps related, entity. Upon such lease, the Valuer-General would be required to produce a valuation of the leased land separately: section 27(1) of the VL Act. A further consequence is that a new parcel would also be created comprising the residue, the intended subdivision parcel.

62.3 The developer then applies for a declaration that the intended subdivision parcel (not being leased gold course land) be categorised ‘residential’, not from the time the new parcel is valued as one assessment, but from the earlier time when subdivision work was first carried out.

62.4 The identification of the relevant parcel valued as one assessment, and therefore the assessment of dominant use for the purposes of section 516(1) would depend on the actions of the land owner/developer in alienating a part of its landholding. None of the uses of the parent parcel would have changed, only the identification of the parcel.

128. Mr Eastman did not assert that such conduct would not be permitted if the applicant’s construction was preferred, nor did he submit that it supported the underlying objectives of the rating regime.

129. We are satisfied that a construction permitting such conduct is antithetical to a “fair”, “transparent” and “equitable” rating regime, and we are, therefore, required by s 33 of the Interpretation Act (see [124] above), to prefer the construction advanced by the Council.

130. We are fortified in this conclusion by the following remark of Gibbs J in Public Transport Commission of NSW v J Murray – More (NSW) Pty Ltd [1975] HCA 28; 132 CLR 336, who said at 350, “where two meanings are open…it is proper to adopt that meaning that will avoid consequences that appear irrational and unjust”.

131. Accordingly, the “parcel[s] of rateable land valued as one assessment” for the purpose of determining “dominant use” under s 516(1)(a), are those parcels that were “actually” rated as one assessment, at the time the category was sought to be backdated.

The appropriate categorisation – what is the dominant use?

132. Having found in favour of the Council’s approach to the categorisation of the land for rating purposes, we accept the submissions of Mr To, although many of them are non-controversial, as they rely on factual information drawn from Council files on the many development applications submitted over time, on aerial photographs, and on observations from people familiar with the land.

133. We did not understand that there was any dispute that the relevant parcels of rateable land were, as at 1 July 2010, V-G number 228-1368 and V-G number 228-1369.

134. Mr To describes the activities, as at 1 July 2010, as the “continuous use of the golf club, motel, golf course, transmission line and the pastoral land”. He submits that there is sporadic use of the remaining land in the parcel for discrete works to facilitate the exhibition village and western detention basin but the extent of the works is essentially limited to a small area of the rateable parcel. (This is as illustrated on Sheet 1 of Appendix 4 of his submissions and the December 2009 aerial photograph).

135. Mr To further submits that there were several competing uses – commercial land development (evidenced by the civil and other subdivision works being carried out), the golf course, the golf club, motel, the transmission line, and the grazing/agricultural uses of the land to the south of the Riparian land. He, however, submits that the Court would not conclude, as at 1 July 2010, that the dominant use of rateable parcels V-G number 228-1368 or V-G number 228-1369 is residential.

136. To identify the dominant use, McKenzie ([13] – [18] above) requires that the comparison of uses identify the “main” or “principal” use. This factual determination is to be made “in terms of the space occupied, time spent in occupation and layout”: Meriton; see also Jakd.

137. In this case, much of the evidence focused on the individual areas, identified in the applicant’s appeals, that make up the non-ECB land, that is the Sales Office land, the Golf Course land, the Subdivision land and the Riparian land.

138. To determine the dominant use of V-G number 228-1368 and V-G number 228-1369, an assessment needs to be made of the collective use of these areas rather than the use of each individual area, as suggested by the applicant. The factual determinants in McKenzie are not relevant in this case, although the identification of the “main” or “principal” use still is. It is a subjective assessment, based on the amount of area used for a particular activity and the type of activity.

139. We agree with Mr To’s description of the collective area for a number of reasons.

140. First, the aerial photograph (Exhibit R1, Tab 34) is a useful snapshot of the activities conducted on the land around 1 July 2010. The aerial photograph is dated May 2010, but additional cadastral information has been superimposed to reflect later activities. The golf course occupies the largest area of the land, although the extent of the golf course use was not agreed at 1 July 2010.

141. D’Costa stated, in his affidavit of 8 October 2014 (at par 36), that:

The area that was used as a golf course was progressively reduced as the use of the Hermitage Subject Land increased:

(a)   The portion of the golf course known as ‘Area 2’ ceased to be used for that purpose on 17 Sept 2009. The (sic) coincided with the commencement of the early works package.

(b)   The portion of the golf course known as ‘Area 1’ ceased to be used for that purpose on 3 February 2011.

(c)   None of the Hermitage Subject Land was used for a golf course from 1 August 2011.

142. Area 1, Area 2 and Area 3 are shown superimposed on an aerial photograph, dated 29 December 2009, in D’Costa’s affidavit of 27 October 2014. The legend to the aerial photograph describes Area 1 as Holes 1-9, Area 2 as Holes 10-18 and Area 3 as Holes 19-27. The effect of Mr D’Costa’s evidence is that, of the 27 holes available, holes 10-18 were not available after 17 September 2009 and holes 1-9 were not available after 1 August 2011.

143. We accept Mr To’s submission that, prior to 1 August 2011, limited parts of the golf course were taken for development purposes, but an 18 hole golf course remained in use until August 2011.

144. While D’Costa states that Area 1 and Area 2 ceased to be used as a golf course because of development activities, this conclusion is difficult to reconcile with correspondence with the lessee of the golf course, Rugby League Country Club, whose CEO, Doug Jones, had described the effect of each vacation of land (Exhibits R1 and R2), as leaving parts of holes 1-9 and 10-18 (from 27) of the golf course “not fully operational”. The areas identified for development activities are significantly smaller than Areas 1 and 2, identified by D’Costa.

145. Also, the aerial photographs 29 December 2009 and May 2010 do not support D’Costa’s claims. If D’Costa’s evidence were to be accepted, to the effect that Area 2 (holes 10-18) were not available after 17 September 2009, this should be observable on the May 2010 aerial photograph. A comparison between the two aerial photographs shows little, if any, change to the area being redeveloped, and supports the proposition that part of Area 2 was still part of the golf course at May 2010. Both aerial photos also show considerable amounts of car parking in the golf club car park. There was agreement that upon the third vacation notice taking effect on 1 August 2011, the decision was made to cease all golf from the site.

146. We are satisfied that 18 golf holes remained operational, even though not contiguous, as at 1 July 2010.

147. The May 2010 aerial photograph shows the Subdivision land largely occupied by the golf course dam, and what appears to be fill from the subdivision to the north. Some civil works were carried in this area by June 2013, including removal of the golf course dam. Consent (in the form of complying development certificates) was first granted for dwelling houses, from about April 2014 onwards, and construction of housing commenced on the Subdivision land at about that time, and was underway at the time various applications for declarations of a new category were made, on 6 May 2014. As at 1 July 2010, the Subdivision land could not be said to have a dominant use as Residential.

148. The May 2010 aerial photographs show the Riparian land undeveloped, with vegetation only along the creek line, and a Transmission Line Easement. While there may be an argument that, at a later time, when the sewer lines and detention basin are constructed for the residential use of the land within the Riparian Land, a Residential categorisation may be appropriate, there could be no suggestion that a Residential categorisation is appropriate at 1 July 2010.

149. With respect to the Sales Office land, we agree with Mr To that there can be no basis for a Residential categorisation. The operation of the Sales Office was described in the Statement of Environmental Effects, lodged originally for the exhibition village, and re-lodged with DA 745/2010, in the following way (Exhibit A3, fol 672):

The temporary marketing suite is for the purpose of marketing and sales of land throughout the remainder of the site until such time as a more permanent facility is constructed in the vicinity of the Entertainment Precinct at the northern end of the site. It is envisaged that this temporary suite would be required in this location for approximately five years.

150. While the ultimate use of this area is likely to be residential, as at 1 July 2010 the land was to be used as a sales office for the marketing and sale of land, and not for residential accommodation.

Conclusion

151. We have, therefore, concluded that the applicant’s appeals should be dismissed.

152. Firstly, in relation to the ECB land, the land is not “zoned or otherwise designated for use under an EPI … for residential purposes”, such as to make it residential under s 516(1)(b) (see discussion above at [60] – [71]).

153. Secondly, in relation to the non-ECB parcels, the applicant’s appeals suffered from an inherent temporal difficulty, namely, that those parcels had not actually been valued as one assessment, as at 1 July 2010, the date to which the applicant sought to have the residential categories backdated.

154. The applicant’s arguments relied upon the Court’s determining the dominant use over each of those five parcels separately, and that approach is incorrect.

155. In fact, the dominant use inquiry, under s 516(1)(a), should take place by reference to only the two parcels which were actually valued as one assessment at 1 July 2010 (see [104] – [131] above).

156. As is clear from our discussion above (at [132] – [150]), the dominant use over each of those two parcels, as at 1 July 2010, was not for residential accommodation.

157. As requested by counsel for the respondent, the question of costs will be reserved.

Orders

158. The Orders of the Court are:

1. The appeals in matters 30509, 30510, 30511, and 30512 of 2014 are dismissed.

2. In matter 30513 of 2014, the Court declares that Lot 2 DP 1175494 is to be categorised “Business”, on and from 19 December 2013.

3. All exhibits are returned.

4. Costs reserved.

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Decision last updated: 30 June 2015