Minimum lot sizes under SEPPs – UPG v Blacktown City Council

On 9 June 2020 the Court of Appeal handed down a decision which considered the interaction of minimum lot size clauses across two State Environmental Planning Policies.

The law

Section 3.28(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) states:

3.28 Inconsistency between instruments

(1) In the event of an inconsistency between environmental planning instruments and unless otherwise provided—

(a) there is a general presumption that a State environmental planning policy prevails over a local environmental plan or other instrument made before or after that State environmental planning policy, and

(b) (Repealed)

(c) the general presumptions of the law as to when an Act prevails over another Act apply to when one kind of environmental planning instrument prevails over another environmental planning instrument of the same kind.

The State Environmental Planning Policy (Affordable Rental Housing) 2009 (Affordable Housing SEPP) relevantly states (with emphasis added):

22 Development may be carried out with consent

(1) Development to which this Division applies may be carried out with consent.

(4) A consent authority must not refuse consent to development to which this Division applies on either of the following grounds

(a) site area

if—

(i) the secondary dwelling is located within, or is attached to, the principal dwelling, or

(ii) the site area is at least 450 square metres,

(b) parking

if no additional parking is to be provided on the site.

(5) A consent authority may consent to development to which this Division applies whether or not the development complies with the standards set out in subclause (4).

Appendix 4 of the State Environmental Planning Policy (Sydney Region Growth Centres) 2006 (Growth Centres SEPP) relevantly states (with emphasis added):

4.1AC   Minimum lot sizes for secondary dwellings in Zone R2 Low Density Residential and Zone R3 Medium Density Residential

(1)   This clause applies to land in the following zones—

(a)   Zone R2 Low Density Residential,

(b)   Zone R3 Medium Density Residential.

(2) The minimum lot size for a secondary dwelling on land in Zone R2 Low Density Residential is 450m2.

(3) The minimum lot size for a secondary dwelling on land in Zone R3 Medium Density Residential is the minimum lot size for the principal dwelling in conjunction with which the secondary dwelling is established as determined in accordance with clause 4.1AB, 4.1AE or 4.1AG.

The development application and Land and Environment Court appeal

On 10 August 2018, Universal Property Group (UPG) lodged a development application with Blacktown City Council (Council) for the construction of a secondary dwelling located within a principal dwelling at 17 Lennox Street, The Ponds. The land was in the R2 Low Density Residential zone and had a lot size of 250 square metres.

Council was deemed to have refused the development applicaton, and on 5 December 2018 an appeal was lodged with the Land and Environment Court.

In the Land and Environment Court:

1. Council resisted UPG’s application on the basis that the land was below the minimum lot size standard of 450 square metres set by clause 4.1AC of the Growth Centres SEPP.

2. UPG submitted that clause 22(4)(a) of the Affordable Housing SEPP prevented the Council refusing consent to the proposed secondary dwelling on the basis of “site area”. In summary, this was because:

a. Clause 22(4)(a) of the Affordable Housing SEPP specifically provides that:

22 Development may be carried out with consent

(4) A consent authority must not refuse consent to development to which this Division applies on either of the following grounds—

(a) site area

if—

(i) the secondary dwelling is located within, or is attached to, the principal dwelling, or

(ii) the site area is at least 450 square metres,

b. Council could not refuse consent to its development if “the secondary dwelling is located within, or is attached to, the principal dwellingorthe site area is at least 450 square metres“. UPG were of the view that the two limbs were not cumulative and that Council could not refuse consent if one or the other were satisfied. Since the secondary dwelling was located within the principal dwelling, it was UPG’s submission that the development application could not be refused even though the lot size was less than 450 square metres.

c. The Affordable Housing SEPP was inconsistent with the Growth Centres SEPP with respect to the minimum lot size. Under section 3.28 of the EPA Act there is a general presumption in the EPA Act that State Environmmental Planning Policies prevail over local environmental plans, and the Growth Centres SEPP was based on the standard local environmental plan and operated as the local environmental plan over the land. The preferred view was that the Affordable Housing SEPP was to prevail.

Determination of the Land and Environment Court

On 21 November 2019 the judgment was handed down by the Land and Environment Court. The decision was written by Justice Moore. Justice Moore accepted that there was a conflict between the two clauses and stated (with emphasis added):

Whilst it is correct that the Growth Centres SEPP is an earlier environmental planning instrument than the Affordable Rental Housing SEPP, that simplistic proposition does not have regard to the fact that the specific provision imposing the limitation in cl 4.1AC of the Precinct Plan was inserted by an amendment to the Growth Centres SEPP, made some nearly five years after the coming into effect of the Affordable Rental Housing SEPP. In this context, a proper understanding of timing makes it clear that the Precinct Plan provision is to be regarded as reflecting a later drafting intention than that of the earlier Affordable Rental Housing SEPP provision.

Second, whilst it is true that the Affordable Rental Housing SEPP provision relates to a narrower housing typology of secondary dwelling than the all‑embracing secondary dwelling typology contained in cl 4.1AC of the Precinct Plan, this narrowing is not as significant as the relevant geographic comparison of the two provisions’ areas of operation. The Affordable Rental Housing SEPP operates on a statewide basis. On the other hand, the Precinct Plan is confined to a specifically limited geographic area defined by the mapping giving effect to it. In this sense, properly viewed, I am satisfied that the Precinct Plan is of a far more restricted and specific compass than the conflicting provision in the Affordable Rental Housing SEPP.

The combination of these two factors weighs overwhelmingly in favour of cl 4.1AC of the Precinct Plan displacing the contradictory provision in the Affordable Rental Housing SEPP. This conclusion is, in my view, irresistible.

The consequence of this is that cl 4.1AC of the Precinct Plan operates as a development standard which, unless displaced as discussed below, acts as a barrier to approving the Company’s development proposal for the site.

Justice Moore made orders which allowed UPG to approach the Land and Environment Court by 13 December 2019 and provide a clause 4.6 variation request to the minimum lot size standard (click here for more on clause 4.6 requests). UPG went on to appeal against the decision of the Land and Environment Court.

The Court of Appeal – Supreme Court of NSW

In the Court of Appeal, UPG submitted that if there was any inconsistency between the Affordable Housing SEPP and the Growth Centres SEPP, then the Affordable Housing SEPP prevailed. If there was no inconsistency, then the Affordable Housing SEPP continued to be operational according to clause 22.

On 9 June 2020 the Court of Appeal dismissed the appeal. All judges on the bench determined that there was no conflict between the clauses in the Growth Centres SEPP and Affordable Housing SEPP.

The majority (Justice Basten and Justice Gleeson) held that:

1. Claims of contradictions between provisions coming from one legislative source (such as the State Government in State Environmental Planning Policies) should not be accepted unexamined. There is a “very strong presumption” that a legislative authority does not intend to contradict itself.

2. The principal at point 1 means that there is a preference to the interpretation of legislative instruments in a way that is consistent with other instruments, where a different interpretation would create inconsistency. That is, there is a preference to interpret the Affordable Housing SEPP and Growth Centres SEPP in a consistent way.

3. An implied intention that the Affordable Housing SEPP varied the Growth Centres SEPP requirements as to minimum lot size should not be found in circumstances where there is no actual contradiction between the two instruments. The text and structure of the Affordable Housing SEPP did not support the conclusion that it sought to vary the Growth Centres SEPP. 

4. If the provisions were assumed to be inconsistent, Justice Moore was correct to conclude that clause 4.1AC of the Growth Centres SEPP was not impliedly repealed by clause 22 of the Affordable Housing SEPP, given that clause 4.1AC was inserted into the Growth Centres SEPP nearly five years after the commencement of the Affordable Housing SEPP.

In addition, Acting Justice Emmett observed that the terms “lot size” and “site area” as used in the Growth Centres SEPP and the Affordable Housing SEPP referred to distinct concepts, and since each dealt with different matters, in his view there was no inconsistency between the two planning requirements. The minimum lot size requirement of clause 4.1AC was therefore applicable and the Council was obliged, absent a clause 4.6 variation request, to refuse consent to the proposed development on that ground.

Key point to take away from this case

Claims of contradiction between State Environmental Planning Policies should be examined closely. There is a strong presumption that SEPPs are not contradictory.

Posted by

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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