Strata subdivision – Kelly v Randwick City Council

On 3 July 2018, the Land and Environment Court handed down a decision which considered the minimum lot size clause in the Randwick Local Environmental Plan 2012.

The law

A local environmental plan (LEP) is a piece of legislation that guides planning decisions for local government areas through zoning and development controls. Each local government area will have one or more LEPs.

The Randwick LEP 2012 contained clauses to controlled the minimum subdivision lot size. Relevantly, it stated (with emphasis added):

4.1A Minimum subdivision lot size for strata plan schemes in Zone R2

(1) The objective of this clause is to ensure that land to which this clause applies is not fragmented by subdivisions that would create additional dwelling entitlements.

(2) This clause applies to land in Zone R2 Low Density Residential.

(3) The size of any lot resulting from a subdivision of land to which this clause applies for a strata plan scheme (other than any lot comprising common property within the meaning of the Strata Schemes (Freehold Development) Act 1973 or Strata Schemes (Leasehold Development) Act 1986) is not to be less than the minimum size shown on the Lot Size Map in relation to that land.

Note.

Part 6 of State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 provides that strata subdivision of a building in certain circumstances is specified complying development.

(4) Despite subclause (3), if the subdivision is of a lot on which there is a dual occupancy (attached):

(a) the size of each lot resulting from the subdivision is not to be less than 400 square metres, and

(b) 1 dwelling must be situated on each lot resulting from the subdivision.

4.1C   Minimum lot size for dual occupancies (attached)

(1)  The objective of this clause is to provide for housing diversity and affordability in residential zones.

(2)  Development consent may be granted for development on a lot in Zone R2 Low Density Residential for the purpose of a dual occupancy (attached), if the area of the lot is at least 450 square metres.

Mr Kelly’s development application and appeal

In October 2017, Randwick City Council gave development consent for the construction of a two storey attached dual occupancy at 84 Austral Street Malabar.

Then, in February 2018, Mr Kelly made a development application to do a two lot strata subdivision on the site. He proposed to do this strata subdivision once the dual occupancy was constructed.

Click here to view the development application on Randwick City Council’s website.

The issue

The issue in this case was around the interpretation of the meaning of the word lot in clause 4.1A of the Randwick LEP 2012.

Randwick City Council believed that “lot” meant “allotment of land”, “land”, or “site area”. They believed that the proposed subdivision would result in two “lots” of 259 square metres, like the sketch below.

 

Screen Shot 2018-07-05 at 7.05.04 pm.png

The Council put forward that clause 4.1A(4) of the Randwick LEP 2012 was a development standard (click here to read more about the difference between prohibitions and development standards). For this reason, the Council said that even though 1 dwelling would be situated on each allotment of land, each lot was 259 square metres in area and would not satisfy the 400 square metre requirement. The Council argued that the strata subdivision application would require a clause 4.6 variation (read more about those here).

Mr Kelly argued that the reference to “lot” was a reference to a “lot in a strata plan”. The draft strata plan show strata lots with areas greater than 400 square metres, as shown in the sketch below. For this reason, Mr Kelly put forward that the development complied with both of the requirements in clause 4.1A(4), and no clause 4.6 variation was required.

Mr Kelly went further, and argued that clause 4.1A(3) was a prohibition, not a development standard. For this reason, a clause 4.6 variation could actually never be sought by Mr Kelly, and to do the strata subdivision it would be necessary for Mr Kelly to satisfy both of the requirements within clause 4.1A(4).

Screen Shot 2018-07-05 at 7.04.29 pm.png

Observations from the Court

The Land and Environment Court considered the arguments from each side and concluded that the word “lot” meant “strata lot” within clause 4.1A. In doing so, the Court agreed with the arguments put forward by Mr Kelly.

The Court applied the findings of the judgment handed down in DM & Longbow Pty Ltd v Willoughby Council. In that case, it was found that the minimum lot size development standard in the Willoughby LEP 2012 applied to strata lots, as well as lots created through the subdivision of land. The wording of the clause in the Willoughby LEP 2012 was different to the wording in the Randwick LEP 2012, but some of the same principles from the case were applicable.

The Court also looked at the intent of clause 4.1A as a whole, and found that it was written in a way to prohibit strata subdivision of any land that could result in strata lots that were less than the minimum lot size. As a result, clause 4.1A(3) was a prohibition, not a development standard, which meant that a clause 4.6 variation could never be given in a situation where the strata lot size was less than the minimum lot size.

When looking at clause 4.1A(4) and how it applied to the proposed development, the Court found that

  • since each strata lot made up an area of 408 square metres, and the minimum lot size was 400 square metres, the proposed development complied with this requirement; and
  • the proposed development satisfied the requirement for one dwelling to be on each strata lot as a result of the strata subdivision.

Overall, the Court found that the proposed strata subdivision was lawful, no clause 4.6 variation was required (or could ever be given), and the development consent could be granted for the proposed development.

Key point to take away from this case

The most important thing to take away from this case is that the determination of the meaning of words in a LEP is a legal question, answered through the legal process of statutory interpretation.

In this case, the issue was answered through an examination of the language used in the Randwick LEP 2012, the Environmental Planning and Assessment Act 1979, and the Strata Schemes Development Act 2015. It also involved a consideration of the findings of the Court in DM & Longbow Pty Ltd v Willoughby Council, and the application of established legal interpretation principles.

If you are unsure about the meaning of words in a LEP, it may be best to speak to your local council, a town planner, or seek legal advice.

If you would like legal assistance, you can also contact Alyce Kliese directly by clicking here.

 

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Alyce is a civil engineer and a practicing lawyer, who has a desire to share her insights on the legal and practical realities of the development industry.

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