Land and Environment Court

New South Wales

Case Name: Mulpha Norwest Pty Ltd v The Hills Shire Council (No 2)

Medium Neutral Citation: [2020] NSWLEC 74

Hearing Date(s): 23 April 2020

Date of Orders: 22 June 2020

Decision Date: 22 June 2020

Jurisdiction: Class 1

Before: Pain J

Decision: See [73] of judgment

Catchwords: APPEAL – separate question of law – statutory construction of floor space ratio in environmental planning instrument

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW) s 1.4Interpretation Act 1987 (NSW) ss 3, 6The Hills Local Environmental Plan 2012 (NSW) cll 4.4, 4.5, 7.12, DictionaryThe Hills Local Environmental Plan 2019 (NSW)Uniform Civil Procedure Rules 2005 (NSW) r 28.2

Cases Cited:

4Nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41Bay Simmer Investments Pty Ltd v State of New South Wales (2017) 222 LGERA 286; [2017] NSWCA 135Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389; [1996] HCA 36Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26Cranbrook School v Woollahra Council (2006) 66 NSWLR 379; [2006] NSWCA 155DM & Longbow Pty Ltd v Willoughby City Council (2017) 228 LGERA 342; [2017] NSWLEC 173Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966] HCA 74Heatscape Pty Ltd v Mahoney (2017) 223 LGERA 66; [2017] NSWCCA 135Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12Matic v Mid-Western Regional Council [2008] NSWLEC 113Mulpha Norwest Pty Ltd v The Hills Shire Council [2020] NSWLEC 7Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28Roden v Bandora Holdings Pty Ltd (2015) 213 LGERA 103; [2015] NSWLEC 191Tovir Investments Pty Limited v Waverley Council [2014] NSWCA 379Wilson v Anderson (2002) 213 CLR 401; [2002] HCA 29

Category: Principal judgment

Parties:Mulpha Norwest Pty Ltd (Applicant)The Hills shire Council (Respondent)

Representation:

COUNSEL:C McEwen SC (Applicant)A Pickles SC (Respondent) SOLICITORS:Addisons (Applicant)Marsdens (Respondent)

File Number(s): 19/317942

JUDGMENT1 The Applicant has filed an appeal in relation to its development application

(DA) for development on land in the Castle Hill area. The determination of a

separate question under r 28.2 of the Uniform Civil Procedure Rules 2005

(NSW) (UCPR) was ordered in these Class 1 proceedings in Mulpha Norwest

Pty Ltd v The Hills Shire Council [2020] NSWLEC 7. The separate question

states as follows:

Whether, on the proper construction of cll 4.4, 4.5 and 7.12 of The Hills Local Environmental Plan 2012, the floor space ratio of the building on the site must be calculated separately for the land within Area A from the remainder of the site.

LegislationEnvironmental Planning and Assessment Act 1979

2 Relevant sections of the Environmental Planning and Assessment Act 1979

(NSW) (EPA Act) provide:

Part 1 Preliminary

…

1.4 Definitions

(1)    In this Act, except in so far as the context or subject-matter otherwise indicates or requires—

…

building includes part of a building, and also includes any structure or part of a structure (including any temporary structure or part of a temporary structure), but does not include a manufactured home, moveable dwelling or associated structure within the meaning of the Local Government Act 1993.

…

land includes—

(a)   the sea or an arm of the sea,

(b)   a bay, inlet, lagoon, lake or body of water, whether inland or not and whether tidal or non-tidal, and

(c)   a river, stream or watercourse, whether tidal or non-tidal, and

(d)   a building erected on the land.

The Hills Local Environmental Plan 2012

3 The Hills Local Environmental Plan 2012 (NSW) (THLEP 2012) referred to by

the parties as in force before 6 December 2019, continues to apply to the

proposed development, pursuant to cl 1.8A of The Hills Local Environmental

Plan 2019 (NSW), which commenced on 6 December 2019) provided:

Dictionary (Clause 1.4)

…

floor space ratio—see clause 4.5.

Floor Space Ratio Incentive Map means the Hills Local Environmental Plan 2012 Floor Space Ratio Incentive Map.

Floor Space Ratio Map means The Hills Local Environmental Plan 2012 Floor Space Ratio Map.

…

gross floor area means the sum of the floor area of each floor of a building measured from the internal face of external walls, or from the internal face of walls separating the building from any other building, measured at a height of 1.4 metres above the floor, and includes—

(a)   the area of a mezzanine, and

(b)   habitable rooms in a basement or an attic, and

(c)   any shop, auditorium, cinema, and the like, in a basement or attic,

but excludes—

(d)   any area for common vertical circulation, such as lifts and stairs, and

(e)   any basement—

(i)   storage, and

(ii)   vehicular access, loading areas, garbage and services, and

(f)   plant rooms, lift towers and other areas used exclusively for mechanical services or ducting, and

(g)   car parking to meet any requirements of the consent authority (including access to that car parking), and

(h)   any space used for the loading or unloading of goods (including access to it), and

(i)   terraces and balconies with outer walls less than 1.4 metres high, and

(j)    voids above a floor at the level of a storey or storey above.

…

Part 4 Principal development standards

…

4.4 Floor space ratio

(1)   The objectives of this clause are as follows—

(a)   to ensure development is compatible with the bulk, scale and character of existing and future surrounding development,

(b)   to provide for a built form that is compatible with the role of town and major centres.

(2)   The maximum floor space ratio for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map.

4.5 Calculation of floor space ratio and site area

(1)   Objectives The objectives of this clause are as follows—

(a)   to define floor space ratio,

(b)   to set out rules for the calculation of the site area of development for the purpose of applying permitted floor space ratios, including rules to—

(i)   prevent the inclusion in the site area of an area that has no significant development being carried out on it, and

(ii)   prevent the inclusion in the site area of an area that has already been included as part of a site area to maximise floor space area in another building, and

(iii)   require community land and public places to be dealt with separately.

(2)   Definition of “floor space ratio” The floor space ratio of buildings on a site is the ratio of the gross floor area of all buildings within the site to the site area.

(3)   Site area In determining the site area of proposed development for the purpose of applying a floor space ratio, the site area is taken to be—

(a)   if the proposed development is to be carried out on only one lot, the area of that lot, or

(b)   if the proposed development is to be carried out on 2 or more lots, the area of any lot on which the development is proposed to be carried out that has at least one common boundary with another lot on which the development is being carried out.

In addition, subclauses (4)–(7) apply to the calculation of site area for the purposes of applying a floor space ratio to proposed development.

(4)   Exclusions from site area The following land must be excluded from the site area—

(a)   land on which the proposed development is prohibited, whether under this Plan or any other law,

(b)   community land or a public place (except as provided by subclause (7)).

…

(6)   Only significant development to be included The site area for proposed development must not include a lot additional to a lot or lots on which the development is being carried out unless the proposed development includes significant development on that additional lot.

…

Part 7 Additional local provisions

…

7.12 Development on certain land within the Sydney Metro Northwest Urban Renewal Corridor

(1)   The objectives of this clause are as follows—

(a)   to support the provision of increased housing around train stations forming part of the Sydney Metro Northwest at densities compatible with the future character of the surrounding area,

(b)   to ensure the provision of a mix of dwelling types in residential flat buildings, providing housing choice for different demographics, living needs and household budgets,

(c)   to promote development that accommodates the needs of larger households, consistent with the demographics and family household structures of The Hills Shire.

(2)   This clause applies to development that involves the erection of one or more buildings that contain dwellings on land identified as “Area A” on the Floor Space Ratio Map [map not included].

(3)   Despite clause 4.4, the consent authority may consent to development on land to which this clause applies with a floor space ratio that does not exceed the increased floor space ratio identified on the Floor Space Ratio Incentive Map [map not included], if the consent authority is satisfied that—

(a)   no more than 25% of the total number of dwellings (to the nearest whole number of dwellings) contained in the development are to be studio or 1 bedroom dwellings, or both, and

(b)   at least 20% of the total number of dwellings (to the nearest whole number of dwellings) contained in the development are to be 3 or more bedroom dwellings, and

(c)   at least 40% of all 2 bedroom dwellings contained in the development will have a minimum internal floor area of 110m2, and

(d)   at least 40% of all 3 bedroom dwellings contained in the development will have a minimum internal floor area of 135m2, and

(e)   the following minimum number of car parking spaces are to be provided for the development—

(i)   for each dwelling—1 car parking space, and

(ii)   for every 5 dwellings—1 car parking space, in addition to the car parking space required for the individual dwelling.

(4)   In this clause—

internal floor area does not include the floor area of any balcony.

Interpretation Act 1987

4 Section 6 of the Interpretation Act 1987 (NSW) states:

Part 2 Words and expressions

6 Definitions to be read in context

Definitions that occur in an Act or instrument apply to the construction of the Act or instrument except in so far as the context or subject-matter otherwise indicates or requires.

Statement of agreed facts

5 The parties provided a statement of agreed facts (SOAF) (attachment and

footnote omitted) as follows:

The Site

3.   The Site is comprised of the whole of one and part of another registered lot:

(a)   2-6 Maitland Place, Norwest is the whole of Lot 22 DP 1034506 (Lot 22).

(b)   40 Solent Circuit, Norwest comprises part of Lot 2105 DP 1201899 (Part Lot 2105).

4.   The Site has been approved to be consolidated into a single lot, to be known as Lot 221 in the subdivision of Lot 22 and Lot 2105 DP 1201899 (Lot 221) pursuant to the development consent granted to DA504/2018/ZA by the Respondent on 27 November 2017. A copy of the plan of subdivision is at Tab 5 of the Agreed Bundle.

5.   The plan of subdivision creating Lot 221 has not yet been registered.

6.   The Site, being unregistered Lot 221, has an area of 4,998m2.

7.   Lot 22 has an area of 2,649m2. [that part of the Site in Area A]

8.   Part Lot 2105 has an area of 2,349m2.[uncoloured area]

9.   An aerial photograph of the Site is at Tab 4 of the Agreed Bundle.

Zoning and floor space ratio controls applying to the Site

10.   The Hills Local Environmental Plan 2012 (THLEP 2012) applies to the Site and the proposed development.

11.   The Site is zoned R4 High Density Residential under THLEP 2012.

12.   Development for the purposes of a residential flat building is permitted in the R4 Zone.

13.   Clause 4.4(2) of THLEP 2012 provides:

The maximum floor space ratio for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map.

14.   Pursuant to the Floor Space Ratio Map FSR_016, a maximum floor space ratio (FSR) of 1:1 applies to the portion of the Site currently comprising

Lot 22. It is also identified on the Floor Space Ratio Map FSR_016 as being mapped “Area A”.

15.   The Floor Space Ratio Map shows the whole of Lot 2105 as being uncoloured, which means that no FSR development standard applies to the portion of the Site comprising Part Lot 2105.

Gross floor area of the proposed development

16.   The proposed building has a total gross floor area (GFA) of 14,903m2, as GFA is defined in THLEP 2012.

17.   The GFA of the proposed building is located exclusively on that part of the Site within Lot 22. [that part of the Site in Area A]

18.   The proposed building’s loading dock, basement and ground floor car parking and a landscaped podium, do not include any calculable GFA and are located on the part of the Site comprising Part Lot 2105. [uncoloured area]

Other provisions of THLEP 2012 applying to Lot 22 (“Area A”)

19.   Clause 7.12 of THLEP contains additional provisions for development that involves the erection of one or more buildings that contain development on land identified as “Area A” on the Floor Space Ratio Map. [Lot 22]

20.   The respondent is satisfied that the specific requirements in paragraphs (a)-(e) of sub-clause 7.12(3) of THLEP 2012 would be met by the proposed development.

21.   The effect of clause 7.12 is that the land within “Area A” comprising Lot 22 has an increased maximum FSR of 3.0:1.

How to calculate the FSR for the proposed development

22.   Clause 4.5 of THLEP 2012 specifies the way to calculate the FSR and site area for the proposed development.

23.   As the Site comprises unregistered Lot 221 in the approved subdivision of Lot 22 and Lot 2105 DP 1201899, the site area may be taken to be the area of Lot 221 in accordance with sub-clause 4.5(3)(a) of THLEP 2012.

24.   Alternatively, if by virtue of Lot 221 being unregistered, the Site is taken to be comprised of two lots, the site area may be taken to be determined according to sub-clause 4.5(3)(b).

25.   No land is required to be excluded from the site area pursuant to sub-clauses 4.5(4) and (5).

26.   The site area includes lots on which significant development is being carried out within the meaning of clause 4.5(6).

27.   Sub-clauses 4.5(7) - (11) are not relevant to the calculation of site area in this case.

28.   The proposed building has an FSR of 2.98:1:1 and complies with clauses 4.4 and 7.12 if the calculation of FSR includes the whole of proposed Lot 221. [Applicant’s case]

29.   The proposed building has an FSR of 5.628:1 and does not comply with clauses 4.4 and 7.12 if the calculation of FSR is confined to the area of the Site within “Area A”. [Council’s case]

6 On the Floor Space Ratio Map (FSR Map) below the Site (consolidated

Lot 221) is outlined in red. The portion of the Site that is in Area A (2-6 Maitland

Place, or Lot 22) is shown in blue hatching. The parties agree that cl 7.12

increases the maximum permissible floor space ratio (FSR) of land within Area

A to 3.0:1 (SOAF par 21). For the portion of the Site that is uncoloured (40

Solent Circuit, or part Lot 2105) no FSR development standard applies (SOAF

par 15).

7 If the Site for the development as a whole is included in the FSR calculation,

the calculation of FSR in accordance with cl 4.5 results in an FSR of 2.98:1,

less than the maximum permitted under cl 7.12, being 3.01:1 according to the

Applicant. If the site area of the development considered for calculating the

FSR does not extend beyond Area A, the FSR in that part of the Site in Area A

will be 5.628:1 which exceeds the permitted FSR in Area A according to the

Council (as reflected in the SOAF pars 28, 29).

Tender bundle

8 The Applicant tendered an agreed bundle containing a statement of

environmental effects, architectural plans and landscape plans prepared for the

DA, aerial photographs of the Site, an approved plan of the subdivision, an

extract of the FSR Map with boundaries of the Site marked on it, and relevant

planning instruments including current and historical versions of THLEP 2012

and relevant FSR Map and Floor Space Ratio Incentive Map (FSR Incentive

Map).

Applicant’s submissions

9 The Applicant submitted that the answer to the separate question is no. Clause

4.5 must be used to inform cll 4.4 and 7.12 so that the FSR includes the whole

development on unregistered Lot 221 currently Lot 22 (that part of the Site in

Area A) and part Lot 2105.

10 Local environmental planning instruments (LEPs) are delegated legislation:

Interpretation Act s 3. General principles of statutory construction apply to

them: Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389;

[1996] HCA 36 at 398. A construction should be preferred that is consistent

with the language and purpose of all the provisions of such instruments:

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355;

[1998] HCA 28 (Project Blue Sky) at [69]. The ordinary and grammatical

meaning of the provisions to be construed will usually correspond with the

legislative intention and will be the meaning adopted in the construction of a

statute: Project Blue Sky at [78]. The language is to be read in context having

regard to the objective which it was designed to promote, however, the primary

focus must remain on the text: Cranbrook School v Woollahra Council (2006)

66 NSWLR 379; [2006] NSWCA 155 (Cranbrook School) at [36]. There is no

general principle requiring laxity or flexibility in construing delegated legislation,

or statutory instruments generally: 4Nature Incorporated v Centennial

Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191 at [107].

Legislative intent is not to be discerned by reference to pre-conceived ideas or

vague notions of what might or might not be desirable. Intent is to be

objectively determined. It is manifested by the use of language (Wilson v

Anderson (2002) 213 CLR 401; [2002] HCA 29 at [8]) in the document to be

construed: Matic v Mid-Western Regional Council [2008] NSWLEC 113 at [8].

11 The maximum FSR for a building on any land is set by cl 4.4 of THLEP 2012.

However, the incentive FSR provision in cl 7.12 operates “despite clause 4.4”

to provide for increased FSR for development on certain land, in this case the

land marked “Area A” on the FSR Incentive Map. When read in the context of

THLEP 2012, the effect of cll 4.4 and 7.12 are to establish the maximum FSR

that applies to land, that is to impose a development standard on land by

reference to maps that form part of THLEP 2012. The maps (and, therefore,

the clauses) reference the result of an FSR calculation, they do not qualify or

inform the manner in which the calculation is to be made yielding that result

(contrary to the Council’s case).

12 How the FSR of a building is to be calculated is determined by cl 4.5 only. The

objectives of cl 4.5 are set out in cl 4.5(1) and are to “define floor space ratio”

and “set out rules for the calculation of the site area of development for the

purpose of applying permitted floor space ratios”. Clause 4.5 refers to “site”,

“site area” and “lot”, not “land”.

13 Clause 4.5(2) provides that the FSR of “buildings on a site is the ratio of the

gross floor area of all buildings within the site to the site area”. Clause 4.5(3)

then defines what is “taken to be” the “site area” as (relevantly) the area of a lot

or lots on which the development is to be carried out.

14 Accordingly, FSR is not defined by the land which is identified for the purpose

of cll 4.4 and 7.12. Rather, it is determined by a comparison of the “gross floor

area of all buildings within the site” and the “site area” (cl 4.5(2)). Properly

construed, the definition of site area defines the site, which is determined by

reference to lots (cl 4.5(3)).

15 It is clear, particularly from cl 4.5(3)(b), that the lots which inform the site area

are parcels of land defined by their cadastral boundaries. The definition of “site

area” practically operates to designate what the site area is. The lots of land on

which development is to be carried out are “taken to be” the “site area” for the

purpose of “determining the site area of proposed development for the purpose

of applying a floor space ratio” under THLEP 2012.

16 It is agreed that the development proposed in the DA is to be carried out upon

Lot 22 and part Lot 2105, which have a combined area of 4,998m2 (SOAF at

pars 6, 7 and 8). That is the site area determined in accordance with cl 4.5(3)

(b). The gross floor area (GFA) of the buildings proposed on Lot 22 and part

Lot 2105 is 14,903m2. As a result, the FSR for the (whole) development

calculated in accordance with cl 4.5 is 2.98:1, which complies with the 3.0:1

FSR control as it applies to Lot 22 (that part of the Site in Area A) because of

cl 7.12 (SOAF at pars 21, 28).

17 A key controversy is what is meant by site area. Clause 4.5(3) must be applied

and requires consideration of the whole lot, not a part of the lot meaning only

lot 22. The area of the Site includes that part of the Site in Area A and the part

that is not in Area A.

18 It is understood that Council's position is that because Lot 22 (that part of the

Site in Area A), when considered in isolation, will have upon it a building that

has a ratio of GFA to land area of greater than 3.0:1 (5.628:1, par 29 SOAF),

this means cl 7.12 of THLEP 2012 will be breached by the development

proposed in the DA. The Council's approach is fundamentally flawed.

19 First, the Council's determination of the ratio of GFA to the land area of Lot 22

(that part of the Site in Area A) is not, by definition, a determination of FSR for

the purpose of THLEP 2012 because it does not apply cl 4.5. It is the

calculation of something else. As cl 7.12 (and cl 4.4) regulates the FSR on land

(and not simply the ratio of building area to any land area), how could it be said

that there could be breach of cl 7.12 (or cl 4.4) if the FSR being applied is not

calculated in accordance with the terms of THLEP 2012? This is what Council

seeks to do.

20 Second, the circumstance that the GFA of the building proposed in the DA

happens to be confined to that part of the building located on Lot 22 (that part

of the Site in Area A) is irrelevant to the determination of the FSR. The

distribution of floor area within the site is irrelevant to the calculation of FSR

when determined in accordance with cl 4.5 (the parties agree that cl 4.5(6) is

satisfied (SOAF par 26).

21 The Council seeks to impermissibly define site area by reference only to Lot 22

(that part of the Site in Area A). Such an application pays no regard to the

function and operation of cl 4.5(3) which specifically and deliberately defines

site area for the purpose of calculating FSR by reference to the lots upon which

a development as a whole is to be carried out. Rather, the Council seeks to

equate the phrase “site area” in cl 4.5(3) with the word “land” in cll 4.4 and

7.12. The distinction between these concepts (site area being particularly

defined and land being used generically in the context of cll 4.4 and 7.12)

ought to be assumed to have been deliberate and the distinction must be

respected when construing the provisions.

22 While it is said that a definition is no more than an aid to the construction of a

statute (Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628; [1966]

HCA 74 at 635) and that the meaning of a definition turns on the context in

which it appears considered as a whole (Cranbrook School at [39], Bay

Simmer Investments Pty Ltd v State of New South Wales (2017) 222 LGERA

286; [2017] NSWCA 135 at [74] per Leeming J), Council's approach to the

construction of cl 4.5 ignores the terms of cl 4.5(3). It would substitute Area A,

which is defined by reference to a map that forms part of THLEP 2012 (and not

determined by reference to the development being carried out at all) as a new

integer in the FSR equation. There is simply no scope for such an

interpretation.

23 The only basis on which areas can be excluded from the calculation of site

area are as provided in cl 4.5(4) and (6) (in this case). There is no infringement

of subcl (6) (noting that all the development relevant to GFA is located on Area

A and the development on non-Area A is not of the kind that is used in the

calculation of GFA).

24 In reply, the words of cl 4.5 are not ambiguous and should be given their

ordinary and grammatical meaning: DM & Longbow Pty Ltd v Willoughby City

Council (2017) 228 LGERA 342; [2017] NSWLEC 173 (DM & Longbow) at [14],

[18] and nor should the Court substitute its preference for a more convenient

operation of the clause and choose an interpretation that better enables that

operation, at [24]. There is a clear difference in language between “land” in cll

4.4 and 7.12 and “site” and “site area” in cl 4.5(3) which must be maintained,

contrary to the Council’s approach: DM & Longbow at [23].

25 Clause 4.5 is not solely a definitional clause, it also has operational effect as it

sets out the rules for the calculation of the site area of development. It has two

stated objectives, being to define floor space ratio and to set out rules for the

calculation of the site area of development for the purpose of applying

permitted FSRs. These provisions apply directly to the calculation of FSR in

cll 4.4 and 7.12. Caution should be exercised before concluding that a

definition should not apply according to its terms: Hastings Co-operative Ltd v

Port Macquarie-Hastings Council (2009) 171 LGERA 152; [2009] NSWCA 400

(Hastings) at [33]-[35], [39].

26 Only cl 4.5 can govern the application of FSR, not land identified on the map in

cl 7.12. Clause 7.12 has no part to play in determining the manner in which the

FSR which it permits is to be calculated. Clause 4.5 mandates the sole method

of calculating the FSR of a proposed development (SOAF par 22). The

assessment of a DA requires consideration of the proposed FSR and must be

done by resort to cl 4.5(3). First the site area must be determined. This is for

the specified purpose of applying permitted FSRs, cl 4.5(1)(b) and (3), being

the permitted ratio in cll 4.4 and 7.12.

27 Site area is comprehensively defined in cl 4.5(3). It is the area of the proposed

development with the exclusion of land identified in subcll (4)-(7). Land within

the Site but to which cl 7.12 does not apply is not one of those exclusions. It

remains part of the site area of the proposed development for the purpose of

applying a FSR fixed by cll 4.4 or 7.12. Site area is not an area identified by

reference to a map, for example the FSR Map. If this had been intended

cl 4.5(3) could have included a rule to be applied in circumstances where a

development site was subject to differing FSRs. The Council impermissibly

amends both the area of the site and the definition of site area so as to

produce a calculation of FSR limited only to that part of the Site in Area A,

which is only part of the site of the whole development. This introduces a new

integer into cl 4.5 for which there is no basis of construction and therefore

impermissibly rewrites THLEP 2012.

28 The Council seeks to ignore cl 4.5(2) and (3) by imposing its own rules for the

calculation of site area where a site consists of parcels of land with different

maximum FSRs. This does not accord with the definition in cl 4.5(2). The

application of permitted FSRs are applied by the rules in cl 4.5(1)(b) and (3).

29 The limits of a site area are not the boundaries on an FSR Map. An applicant

must comply with the maximum FSR in cll 4.4 and 7.12 (subject to cl 4.5) as

calculated in accordance with the stated requirements in cl 4.5.

Council’s submissions

30 The answer to the separate question is yes. The operative provisions in THLEP

2012 are cll 4.4 and 7.12 and these apply in the first instance. Clause 4.5 is not

operative, being definitional only.

31 Principles of construction apply to LEPs as delegated legislation. The text must

be considered: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory

Revenue (2009) 239 CLR 27; [2009] HCA 41 [2009] HCA 41 at [47].

Construction which is consistent with the language and purpose of the

provisions of the instrument as a whole is to be preferred: Project Blue Sky at

[69], [78]. The role of definitions in a statutory instrument is relevant: Cranbrook

School at [38]-[39] per McColl JA citing Gibb v Federal Commissioner of

Taxation at 635 and Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12 at

[103]. A definition does not operate independently, it is an aid to construction.

The approach in Kelly v The Queen was applied in Heatscape Pty Ltd v

Mahoney (2017) 223 LGERA 66; [2017] NSWCCA 135 at [43] (Heatscape).

Section 6 of the Interpretation Act requires that definitions be read in context.

32 Focussing on the words of cl 4.5, it is evident that it fulfils a role only of defining

or determining the way in which FSR is to be calculated. The provision has no

independent operation. It does not set a FSR standard or apply that standard

to any particular land. Indeed, the objective of the clause is stated to be “to

define floor space ratio” and “set out rules for the calculation of the site area of

development for the purpose of calculating floor space ratio”.

33 In this case, cll 4.4 and 7.12 of THLEP 2012 are the substantive enactment

and the operative clauses. They set a maximum FSR for the land to which the

clauses apply. The substantive enactment is the limit on floor space imposed

by cl 4.4, as varied by cl 7.12, applied to the land in Area A.

34 Contrary to the principles of statutory construction outlined above, the

Applicant relies on the essentially definitional effect of cl 4.5 to contend that the

FSR is dictated by the site of the development and not by the land to which the

FSR applies. However, in accordance with the principles of statutory

construction set out above, the definition cannot operate independently to

determine the land to which the clause applies, but must yield to the operative

provision.

35 Analysing the problem by inserting the definition in cl 4.5 into the operative

clauses according to the principle in Kelly v The Queen above at [31],

assuming the Site to effectively be a single lot, albeit that the registration of the

consolidation may not have been effected, results in the following for cl 4.4(2):

The maximum [ratio of the gross floor area of all buildings within the site to the] [area of the lot on which the development is proposed to be carried out] for a building on any land is not to exceed the floor space ratio shown for the land on the Floor Space Ratio Map.

36 In cl 7.12(3), the provision becomes:

Despite clause 4.4, the consent authority may consent to development on land to which this clause applies with a [ratio of the gross floor area of all buildings within the site to the] [area of the lot on which the development is proposed to be carried out] that does not exceed the increased floor space ratio identified on the Floor Space Ratio Incentive Map…

37 In both cll 4.4 and 7.12 the controlling words are “the land” and “the land on the

Floor Space Ratio [Incentive] Map”. The land in both cases is the same as

shown on the relevant map that governs the application of the FSR, not the

definition of “site” under cl 4.5. The consent authority may only grant consent to

development on land to which the clause, whether cll 4.4 or 7.12 applies, not to

land that extends beyond that in the FSR Map or FSR Incentive Map. The

Applicant ignores cl 7.12(2).

38 Contrary to the Applicant’s submission summarised above at [11] that the

maps and clauses reference the result of an FSR calculation rather than

informing it, the map does “qualify or inform the manner in which the

calculation is to be made” because it identifies the land to which the FSR

calculation is to be applied.

39 Again, contrary to the applicant’s submissions summarised above at [21] that

the Council impermissibly defines “site area” by reference only to Lot 22 (that

part of the Site in Area A), the Council does not equate site area with land,

rather the approach required by the definition in cl 7.12 demonstrates that there

are three key words with which to grapple.

40 The first word is the lot on which development is to be carried out. the word

“lot” is not defined, but in context, probably means a lot registered in a current

plan. Clause 4.5(3) makes clear that lot can include more than one lot. Thus lot

comprises the lot or lots on which development is to be carried out. No issue

arises of which lot is the subject of the FSR control.

41 The second key word is “site”. The site is determined by reference to the lot or

lots on which the development is to be carried out. While the site must be the

whole of a lot or lots, there is nothing in the definition of site area that

mandates that it comprise the whole of a site. Firstly, the objective in cl 4.5(1)

(b) suggests otherwise. Secondly, there is a further textual indicator in cl 4.5(4)

that suggests that in some cases only part of a site might be counted, by

providing for exclusions from site area. Thus, context dictates that “site” for the

purposes of applying the definition to an operative clause does not always

have to include the whole of a particular site. Thirdly, subcl (6) specifies that

lots on which significant development is not taking place can be excluded from

the GFA calculation. Fourthly, under cl 4.5(2) the clause can only apply to land

to which the clause applies.

42 The third word “land” is not specifically defined in THLEP 2012. It is defined in

s 1.4 of the EPA Act. The only relevant part of that definition for present

purposes is that land includes “a building erected on the land”. As the definition

of “building” under the EPA Act can also mean “part of a building”, it follows

that in the context of calculating the GFA of a building on a site, it can be done

by calculating the GFA of part of a building on [part of] a site.

43 Moreover, the definitions of “floor space ratio” and “site area” must be looked at

in the context in which they are to be applied. They are only applied for the

purposes of cll 4.4 and 7.12, which unambiguously dictate application by the

FSR Map or the FSR Incentive Map, as the case may be. Land is fixed by one

of these maps. Applying strict principles of statutory construction, permissible

FSR must only be that part of a site on the land to which the clause applies.

44 There is an ascending hierarchy revealed by the composite definition and

operative provision, being that the Site is determined by the whole of the lots

that make up the site area. But when the site area is used to calculate the FSR,

the site area must be adjusted so as to comprise only so much of the Site as is

contained within the land to which the FSR applies or for any other reason

under cl 4.5(4) or (6). The land to which the FSR applies is fixed and

determined by the FSR Map, which is thus the controlling provision and the site

area must yield to the controlling map.

45 It follows that where the Site extends beyond land the subject of one FSR

control into another, in order not to infringe the operative provision in the FSR

control for the land, being the FSR Map, it is necessary to carry out separate

FSR calculations for each part of the Site. Otherwise, a breach of the operative

provision will occur if the GFA on that land shown in the FSR Map exceeds the

permitted amount.

46 Where the site area falls partly on land to which one FSR applies and partly on

land to which another FSR applies, it is necessary to read the word “site” to

mean “part of the site” and to read “building” to mean, consistently with the

EPA Act definition, part of a building. Accordingly, that part of the building that

sits on one part of the Site being the land to which one standard on the FSR

Map applies must be calculated separately to the part of the building on land to

which a different FSR applies.

47 This is not to say that cl 4.5(3) should be ignored, as the Applicant says above

at [22] is the Council’s position, but rather the words must be read in context

having regard to this unusual situation in which the Site extends beyond the

land shown in the FSR Map. It can be seen that the FSR Map respects

cadastral boundaries at the time the map was prepared (agreed bundle at Tab

6, above at [6]). From this it might be inferred that the drafter probably did not

anticipate that a site would not respect cadastral lots and that a site made up of

registered lots would be affected by more than one FSR control. Indeed, the

use of the words “lot” and “site” together in the definitional cl 4.5 is a clear

indicator of this. Accordingly, some flexibility has to be applied to the word

“site” in order to make sense of the provision: Tovir Investments Pty Limited v

Waverley Council [2014] NSWCA 379 (Tovir) at [54]-[55].

48 The Applicant’s approach would, in contrast, allow the definition to govern the

operative clause by allowing the limit on FSR on the land shown in the FSR

Map in cl 7.12 to be exceeded, contrary to cl 7.12. The setting of FSR limits on

maps under cll 4.4 and 7.12 cannot have been intended to be subverted by

enabling an applicant to achieve the FSR limit by setting its own boundaries for

the Site under cl 4.5 that would then dictate the FSR on land beyond that

shown on the map.

49 A further contextual consideration is to be found in the objectives in cl 4.5.

While in this case it is true that the additional site area beyond the land subject

to the FSR control does have significant development on it, and thus would not

infringe the objective in cl 4.5(1)(b)(i), the significant development in this case

does not constitute GFA. By including within the site area parts of a site

beyond Area A that contain significant development, but not GFA, the same

consequence arises as if there was no significant development on that part of

the Site. In other words, the GFA is all contained within that part of the Site in

Area A and no GFA is contained in the parts of the Site beyond Area A. In this

way, the Applicant is effectively extending the area of land to which the FSR

standard applies and using the additional land to reduce its FSR on the land

shown in the FSR Incentive Map.

50 Obviously where a particular site is entirely contained within land having the

same FSR on the FSR Map, no complications arise in the calculation of the

FSR. Ordinarily it might be expected that a site is either coincident or less than

the area of the FSR Map. In those cases, cl 4.5 can be applied to the whole

site without any difficulty. However, where a site extends beyond the

boundaries of land shown in the FSR Map it does not mean that land is

extended by a site divined by an applicant. This would be an entirely

idiosyncratic outcome determined at the whim of an applicant and contrary to

the underlying object of cl 4.5.

51 In this case, cl 7.12(3) operates as an exception to cl 4.4(2) by providing for a

greater FSR on certain land (that part of the Site in Area A) to which the clause

applies. The land at 2-6 Maitland Road is that part of the Site in Area A. It is

that land to which the FSR applies, not the land at 40 Solent Circuit (Part Lot

2105) (see SOAF par 3).

52 Accordingly, cl 4.4 in combination with cl 7.12 on the Site requires the

calculation of the part of the Site, which comprises land within Area A, using

the GFA within that part of the Site. The FSR on that part of the Site is limited

by cl 7.12. As the remainder of the Site is not subject to a FSR standard, the

GFA of the part of the Site at 40 Solent Circuit (Part Lot 2105) does not need to

be calculated.

53 The Applicant relied on Hastings in which the Court of Appeal examined

dictionary definitions that raised separate problems of construction and needed

to be addressed by reference to their own terms: at [18]. The resolution was to

recognise that the definitions did not operate separate to context: at [39]. That

approach should be distinguished because here there is no relevant

independent definition other than for the purposes of the operative clause in

THLEP 2012. In Heatscape the proper construction was defined precisely by

areas shown on the map: at [43]. The same principle must be applied here.

54 The central flaw in the Applicant’s submission is that only that part of the Site in

Area A commands calculation of FSR. Rather, it is the land in the FSR

Incentive Map that governs the calculation of FSR.

Consideration

55 The principles of statutory construction are broadly agreed, that environmental

planning instruments are a species of delegated legislation and should be

interpreted in accordance with general principles of statutory construction:

Collector of Customs v Agfa-Gevaert Limited at 398. Construction which is

consistent with the language and purpose of all provisions is to be preferred:

Project Blue Sky at [69], [78].

56 Firstly, applying the principle of construction that where words are plain and

unambiguous they should be given their ordinary and grammatical meaning per

Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of

Taxation (1981) 147 CLR 297; [1981] HCA 26 at 305 (Gibbs CJ) cited in Roden

v Bandora Holdings Pty Ltd (2015) 213 LGERA 103; [2015] NSWLEC 191 at

[42], cll 4.4 and 7.12 address the same issue and share the same drafting. The

FSR of any building on land (which includes part of a building in light of the

definition in s 1.4 of the EPA Act) must comply with the maximum FSR limits in

the FSR Map in cl 4.4(2). Buildings on certain land can comply with a different

maximum FSR as identified in the FSR Incentive Map referred to in cl 7.12(3).

The objectives of cl 7.12 are specified in subs (1). A portion of the Site is in

Area A identified on the FSR Incentive Map. That the objective of both clauses

is to impose a limit on the maximum FSR on specified land is clear in their

respective objects.

57 For the reasons given by the Council summarised above at [31]-[54] cll 4.4 and

7.12 are the operative provisions in THLEP 2012 for the land specified in the

FSR Map that each clause refers to. There is no principle of statutory

construction which requires these clauses to be read as if needing to

incorporate cl 4.5 which deals with the calculation of FSR based on site area,

not land. Clause 4.5 defines FSR in subs (2) as “the ratio of gross floor area of

all buildings within the site to the site area”. While cl 4.5 specifies a mechanism

for calculating GFA based on site area as specified in subcl (3), that is not

called up by the drafting of cll 4.4 and 7.12. Those clauses stand alone. They

are clear in their terms and capable of application without recourse to cl 4.5.

Essentially cll 4.4 / 7.12 have different work to do compared to cl 4.5, as is

clear from the different language each uses. The Applicant’s submissions to

the contrary set out at [12]-[17] above are not accepted. The site area need not

be determined in order for the FSR limits specified in cl 7.12(3) to apply. The

Applicant’s criticism of the Council set out at [19]-[20] above that it equates the

words “site area” in cl 4.5(3) with “land” in cll 4.4 / 7.12 is misplaced. It is the

Applicant’s approach which impermissibly does that.

58 Secondly, the Council argues that cl 4.5 is a definitional provision, not an

operative provision. I agree that it is in essence definitional in its terms. As the

Council submitted, its role is to define or determine the way that FSR is to be

calculated. The clause does not set standards or have any independent

operation, as the Council submitted. That its role is definitional is clear from its

objectives. That it includes a mechanism for calculating FSR does not change

its essential definitional role. Section 6 of the Interpretation Act provides that

definitions that occur in an Act or instrument apply to the construction of the Act

or instrument unless the context or subject-matter otherwise indicates or

requires. Both parties cited Cranbrook School at [38] where McColl J cited

Gibb v Federal Commissioner of Taxation at 635:

In Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628 at 635, Barwick CJ, McTiernan J and Taylor J stated: “The function of a definition clause in a statute is merely to indicate that when particular words or expressions the subject of definition, are found in the substantive part of the statute under consideration, they are to be understood in the defined sense — or are to be taken to include certain things which, but for the definition, they would not include. Such clauses are, therefore, no more than an aid to the construction of the statute and do not operate in any other way … the effect of the Act and its operation in relation to dividends as defined by the Act must … be found in the substantive provisions of the Act which deal with ‘dividends’”.

59 McColl JA at [39] cited Kelly v The Queen at [103]:

103   As I earlier pointed out, the function of a definition is not to enact substantive law. It is to provide aid in construing the statute. Nothing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to negate the evident policy or purpose of a substantive enactment. There is, of course, always a question whether the definition is expressly or impliedly excluded. But once it is clear that the definition applies, the better — I think the only proper — course is to read the words of the definition into the substantive enactment and then construe the substantive enactment — in its extended or confined sense — in its context and bearing in mind its purpose and the mischief that it was designed to overcome. To construe the definition before its text has been inserted into the fabric of the substantive enactment invites error as to the meaning of the substantive enactment. In so far as the judgment of Megarry J in No 20 Cannon St Ltd v Singer & Friedlander Ltd (109) suggests his Lordship thought that an interpretation or definition clause should be construed independently of the substantive enactment, I think his Lordship erred. The long title to the first Interpretation Act 1850 (UK) (13 & 14 Vict c 21) was “An Act for shortening the Language used in Acts of Parliament”. The long title to the Acts Interpretation Act 1931 (Tas), is “An Act to provide certain rules for the interpretation of Acts of Parliament; to define certain terms commonly used therein; and to facilitate the shortening of their phraseology”. These titles convey the true purpose of an interpretation or definition clause. It shortens, but is part of, the text of the substantive enactment to which it applies.

60 The application of the approach in Kelly v The Queen varied reflecting the

parties’ different arguments. The Council referred to Heatscape in which the

Court of Appeal applied Kelly v The Queen in construing a clause requiring

development consent for works in heritage conservation areas identified on a

map. The Court of Appeal said at [43] that the proper construction required the

definition of “heritage conservation area” to be inserted into the operative

provision.

61 The Applicant relied on Hastings in which Basten JA (Allsop P agreeing at [1])

held that due to particular definitional provisions in a LEP, the approach

identified in Kelly v The Queen was not the only approach to a definitional

provision, in that it was necessary to consider the same term separately from

operative provisions in different parts of the LEP in issue in that case. The LEP

posed particular construction challenges which necessitated such an approach.

The reasoning of the Court of Appeal in Hastings reflects the very particular

drafting of the LEP in question. It is not a statement of universal application

given strong authority in the Court of Appeal and in the High Court in Kelly v

The Queen that the approach to a definitional provision is that such provisions

aid in the construction of the operative provisions.

62 The Council applied the approach in Kelly v The Queen in construing cll 4.4

and 7.12, as extracted at [35] and [36] above, correctly concluding in [37] the

controlling words in cll 4.4 and 7.12 are “land” and “land in the FSR [Incentive]

Map”. The control is not “site” as defined in cl 4.5. The further construction

arguments of the Council considering cl 7.12 concerning “lot” (at [40] above),

“site” (at [41] above), and “land” (at [42] above) confirm this. As the Council

submitted, permissible FSR can only be for that part of a site on land to which

cl 7.12 (or cl 4.4) applies.

63 The Council’s approach correctly applies the approach in Kelly v The Queen,

thereby ensuring that cl 4.5 is an aid to construing the LEP, and no more. I also

agree with and adopt the Council’s submissions in [43]-[46] above, including

that there is a clear hierarchy as between cll 4.4 and 7.12 whereby the site

area in cl 4.5 must be adjusted to be within the land which the FSR controls

those clauses are directed to.

64 Thirdly, the Applicant seeks to have its chosen site area for the development

as a whole, which extends beyond Area A, influence the calculation of FSR for

that part of the Site in Area A as specified on the FSR Incentive Map. As the

Council submitted (see [47]-[48] above), the Applicant relies on the essentially

definitional effect of cl 4.5 to contend that the FSR is dictated by the Site of the

development and not by the land for which FSR is specified on the FSR

Incentive Map. It so happens that different FSR controls apply to the two

different lots of the Applicant’s Site (that part of the Site in Area A or Lot 22 and

non-Area A or part Lot 2105) (SOAF par 3).The Site does not reflect the

cadastral boundaries at the time the FSR Incentive Map was prepared (as

shown on the extract of the FSR Map at Tab 6 of the agreed bundle, above at

[6]). As the Council submitted, where a site extends beyond land identified in

the FSR maps, a separate calculation of FSR is required in order not to infringe

the FSR Map limits resulting in a breach of an operational provision. Site can

include part of a site as the Council submitted and “building” means part of a

building (EPA Act s 1.4). Flexibility in construction is acceptable in applying the

approach in Kelly v The Queen, here in relation to “site”, in order to make

sense of the provision: Tovir (Leeming JA at [54]). The FSR of a building on

land defined on the FSR [Incentive] Map must be calculated separately from

any other land that is part of a development site which falls outside the area

identified on the map.

65 Further support for the correct construction is also identified in the Council’s

submissions concerning textual consideration in [49]-[50] above which I agree

with and adopt.

66 Fourthly, the Applicant’s approach would negate the application of cl 7.12

despite its clear terms is identified by the Council, pointing out at [48] above

that the FSR cap in the FSR Incentive Map will be exceeded. As the Council

stated, THLEP 2012 was not intended to operate so that an applicant could

define its site area by setting boundaries it chooses and applying those

boundaries to dictate the FSR on land shown on the FSR Incentive Map. As

the Council submitted, if the Applicant’s approach to cl 7.12 is applied, the

express provisions of the clause limiting the FSR on specified land, here Area

A, will not be met by that part of the Site in Area A. The limits on the maximum

FSR for the land identified on the FSR Incentive Map (cl 7.12) are exceeded.

That is clear from the SOAF par 29. While the Applicant submitted there was

no breach of cl 7.12 because the Council’s approach is not calculated in

accordance with THLEP 2012, to the contrary, the Applicant’s approach results

in a substantial increase in FSR on the land in Area A, as identified in the

SOAF par 28.

67 The GFA of the proposed building for the purposes of cl 4.5 is confined to that

part of the building on the Site located in Area A (SOAF pars 17, 18) to enable

compliance with the FSR control in cl 7.12.

68 Contrary to the Applicant’s submissions above at [24] citing DM & Longbow at

[24], the appropriate construction of THLEP 2012 I have adopted, accepting

the Council’s construction of the relevant clauses does not reflect the Court’s

view of a more convenient operation of cl 7.12.

69 The Applicant’s criticism of the Council (par 21) for defining “site area” by

reference only to that part of the Site in Area A is misplaced. The Applicant’s

criticism that the Council equates “site area” in cl 4.5(3) with “land” in cll 4.4

and 7.12 does not correctly reflect the Council’s argument. If anything the

Applicant’s approach does this impermissibly, for the reasons I have given

above. To describe the reference to “land” in cll 4.4 / 7.12 as generic, to be

contrasted with “site area” which is particularly defined, is also misplaced.

“Land” in cll 4.4 / 7.12 is specifically defined by a map. I would not describe the

reference as generic but very specific.

70 Contrary to the Applicant’s submission that the Council’s construction adds a

fresh integer into the FSR equation, I consider the Applicant’s approach is an

attempt to do that.

71 That the only basis for excluding areas from the calculation of site area is as

provided in cl 4.5(4) and (6) is only relevant if cl 4.5 applies as a whole. For the

reasons canvassed above, its application must of necessity be modified in

order to give effect to the FSR control in cl 7.12(3).

Conclusion

72 The Council’s answer to the question posed is correct. The land at 2-6 Maitland

Road (Lot 22) is land within Area A. It is the land to which the FSR applies, not

the land at 40 Solent Circuit (Part Lot 2105). Only the GFA of that land is

relevant to the FSR calculations for the purposes of applying cl 7.12.

73 The separate question should be answered:

Yes, on the proper construction of cll 4.4, 4.5 and 7.12 of The Hills Local

Environmental Plan 2012, the floor space ratio of the building on the site must

be calculated separately for that part of the site within Area A from the

remainder of the site.

**********

Amendments

25 June 2020 - typographical error in legal representation, omission of post

nominals to counsel - cover page.

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