Land and Environment Court New South Wales

• Medium Neutral Citation: McMahon v Wagga Wagga City Council [2012] NSWLEC 1135
• Hearing dates: 21 May 2012
• Decision date: 25 May 2012
• Jurisdiction: Class 1
• Before: Pearson C

Decision

Appeal upheld

• Catchwords: Development application - Dwelling house - Rural land - Minimum allotment size - Objection under State Environmental Planning Policy No 1 -Development Standards - Conditions
• Legislation Cited: Environmental Planning and Assessment Act 1979; Land and Environment Court Act 1979; State Environmental Planning Policy No 1 - Development Standards; Wagga Wagga Local Environmental Plan 2010; Wagga Wagga Rural Local Environmental Plan 1991
• Cases Cited: Baker v Wagga Wagga City Council [2010] NSWLEC 1293; Chehab v City of Canada Bay Council (2002) 123 LGERA 431; Fortunate Investments Pty Ltd v North Sydney Council (2001) 114 LGERA 1; Ireland v Wagga Wagga City Council [2011] NSWLEC 1047; MacDonald v Mosman Municipal Council (1999) 105 LGERA 49; PDP (Darlinghurst Apartments) Pty Ltd v City of Sydney Council [2005] NSWLEC 41; Wehbe v Pittwater Council (2007) 156 LGERA 446; Winten Property Group Ltd v North Sydney Council (2001) 130 LGERA 79
• Category: Principal judgment
• Parties: Kenneth John McMahon (Applicant); Wagga Wagga City Council (Respondent)
• Representation: Solicitors; Mr T Abbott, Walsh & Blair Lawyers (Applicant); Mr S Simington, Lindsay Taylor Lawyers (Respondent)
• File Number(s): 10882 of 2011

Judgment

1 This is an appeal under s 97 of the Environmental Planning and Assessment Act 1979 (the Act) against the refusal by the respondent Council of a development application DA 10/0253 seeking consent for the stage development of a dwelling ancillary to a deer farming operation on land comprising Lots 17, 19 and 20 DP 757218, 1527 Sturt Highway, Borambola (the site).

2 The site, which is known as "Inverary", has an area of 124.9ha and is located on the southern side of the Sturt Highway approximately 29 km east of the Wagga Wagga central business district. The site slopes gently from higher land located towards the south western corner of the site towards the Sturt Highway boundary in the north and towards the eastern boundary. A creek line traverses the southern section of the site. The site contains scattered vegetation. The improvements on the site include sheds, fencing, stock shelters and stock watering systems and bores. The site is currently used for the grazing of stock, and planting of wheat. The surrounding properties are used for a mixture of agricultural purposes including grazing and cereal cropping.

3 The development application DA 10/0253 was lodged on 20 May 2010 and describes the development as "Stage 1 development application for dwelling ancillary to deer enterprise on agricultural property". The proposed site for the dwelling was identified as being 280 m from the western boundary, 1020 m from the northern boundary (Sturt Highway), 850 m from the eastern boundary and 185 m from the southern boundary. Stage 2 of the development will entail the construction of the dwelling house and is intended to be the subject of a further development application.

4 The site is less than the 200 ha minimum lot size for approval of a dwelling under the applicable planning controls. The issue is whether an objection under State Environmental Planning Policy No 1 - Development Standards (SEPP 1) should be upheld so as to permit the erection of a dwelling on the site. The Council's position is that based on the evidence that has now been provided by the applicant concerning the specific requirements for deer farming, it is appropriate to uphold the objection and grant approval, but only on the basis that conditions are imposed to restrict use and occupation of the dwelling for purposes ancillary to extensive agriculture primarily in the form of deer farming, and to require the registration on title of a restriction as to user to the effect that any dwelling may only be used and occupied by persons carrying out extensive agriculture primarily in the form of deer farming. The applicant's position is that the latter condition is unnecessary, and that the former condition should be more broadly worded.

Background

5 The applicant purchased Lots 17, 19 and 20 DP 757218 in 1995. In 1997 he sought approval for the erection of a dwelling on the site; that application was refused on the basis of non compliance with cl 17 of the Wagga Wagga Rural Local Environmental Plan 1991 (the 1991 LEP).

6 The applicant lodged five further development applications seeking approval for the erection of a dwelling on the site, in 1999, 2000, 2004, 2006 and 2008, each supported by an objection under SEPP 1. Development Application DA 990433 made in 1999 was based on the agricultural potential of the property and the need for a dwelling to manage it. That application was not supported by NSW Agriculture, and consent was refused. Development Application DA 000676 lodged on 8 September 2000 was based on the holding pattern of surrounding properties. The applicant appealed to the Court from the Council's refusal of that application, and that appeal was dismissed (McMahon v Wagga Wagga City Council, No 10501 of 2001, Brown C, 1 February 2002). Development Application DA 04/1431 made in 2004 was based on significant infrastructure established on the land used for the past three years as a deer farm for breeding, finishing and velvet production. That application was refused on the ground that while the activities on the site could ordinarily justify a SEPP 1 objection, the site could be managed from the other property owned by the applicant, "Glenmark", which is some 2 km along the Sturt Highway to the west. The two subsequent development applications made in 2006 and 2008 were refused.

7 The Council's contentions as framed in the Statement of Facts and Contentions filed on 4 November 2011 included that the proposal is inconsistent with cl 17 of the 1991 LEP as the site is less than 200 ha; the objection under SEPP 1 is not well founded; the development is inconsistent with cl 4.2A of the Wagga Wagga Local Environmental Plan 2010 (the 2010 LEP); and it is inconsistent with the zone objectives under the 2010 LEP. The Council contended that insufficient information had been provided relating to the location of the proposed dwelling; and justifying why the development is necessary for the use of the site for the grazing of stock.

8 The applicant provided a report by Mr Michael Ryan dated December 2011 assessing the need for a dwelling to support a deer grazing enterprise, and providing a site plan with proposed location of a dwelling.

9 The matter was the subject of a conciliation conference under s 34 of the Land and Environment Court Act 1979 (the Court Act) on 21 December 2011, which included a view of the site and of Glenmark. The conference was adjourned to enable further financial information to be provided. On resumption of the adjourned conciliation conference the parties reached agreement that the appeal could be upheld and the application approved, however they were unable to reach agreement on the inclusion of two proposed conditions restricting occupation of the dwelling house and use to be ancillary to the use of the farm for deer farming. The conciliation conference was terminated. The parties consented to Pearson C determining the matter under s 34(4) of the Court Act.

Evidence

10 The evidence included, with the consent of the parties, evidence from the site view, and evidence in the conciliation conference with the exception of a letter provided on behalf of the applicant to the Council during the adjournment of the conciliation conference.

11 The documentary evidence included the report provided on behalf of the applicant by Mr Michael Ryan, an agribusiness consultant with qualifications in agricultural science. Mr Ryan's experience relevantly includes business diagnosis and viability assessments. Mr Ryan was not required for cross examination.

12 In his report dated December 2011 Mr Ryan noted that a deer enterprise is a more intensive form of agriculture than the traditional agriculture conducted in the Borambola locality such as grazing of sheep and cattle and annual winter cropping. Deer require strong high boundary fences and specialised handling facilities. Mr Ryan's report included photographs, confirmed on the view, of infrastructure on the site including high boundary fences, electric internal fences and handling facilities including a shed with a stock loading race. Mr Ryan states that such fences and handling facilities recognise that deer are a flighty animal and that traditional fences used to contain sheep and cattle are not sufficient to contain deer. Any livestock operation conducted on Inverary would require frequent checking to ensure stock are secure and contained within paddocks, ensure water supplies are sufficient, manage and respond to natural events such as bushfires and significant floods, and manage pests. Mr Ryan stated that those operations and general husbandry and handling activities for sheep and cattle could reasonably be carried out from Glenmark. In Mr Ryan's opinion there are two primary reasons why an on-farm residence is required for a deer operation. First, deer are high value animals and scarce, and their value makes them sensitive to theft; the McMahons produce trophy deer, namely stags whose antlers have not been removed during velveting, and each trophy stag is worth between $1,200 and $3,000 each; and people living on a property are a strong deterrent against theft. Secondly, velveting is an antler harvesting process which requires frequent handling of stags and is normally carried out twice a year over a three week period: when the antlers are mature there is a 24 - 48 hour window when antlers are ready to be removed to optimise the value of the antlers; and frequent observation and supervision is required as the antlers are prone to getting tangled in fences and causing injury to animals. Based on information provided by Mrs McMahon, Mr Ryan stated that $200,000 has been invested on deer infrastructure.

13 Mr Ryan commented on the profit and loss analysis prepared by Mrs McMahon, which he noted indicated that a return of more than $50,000 could be obtained from the proposed operation at Inveraray, before any wages or debt servicing. Mr Ryan noted, again based on information provided by Mrs McMahon, that Inverary has a groundwater entitlement of 172ML, and that bores have been drilled and cased but not yet equipped.

14 The applicant relied on two statements provided by Mrs Susan McMahon. Mrs McMahon gave oral evidence. In oral evidence Mrs McMahon stated that the applicant has not installed irrigation equipment because such equipment is valuable and needs someone to supervise it. Mrs McMahon stated that she and the applicant had previously managed Inverary from Glenmark. They have managed to grow crops and graze cattle on Inverary. The cropping is looked after by a local contractor who lives up the road and does a lot of local contracting. She and the applicant have lived in Wagga Wagga since 2002. The owner of Inverary could expect to get some return, but not sufficient to support a family. Mrs McMahon agreed that dryland agriculture other than deer farming could be managed from an adjacent or nearby property; however, that would not be ideal, especially with valuable animals. Mrs McMahon accepted that the site is within an easy commute from Wagga Wagga and having a dwelling house would increase its value; it is bigger than a hobby farm property would be, but would be suitable for someone who also worked off farm, or worked from home. A farm of similar size to the site would not need someone working on it full time.

15 The Council relied on a statement of evidence by Mr Cameron Collins, town planner employed by the Council. Mr Collins gave oral evidence. The Council's bundle of documents (exhibit 2) included correspondence from Mr David Davis, Resource Management Officer NSW Industry and Investment, dated 15 September 2010. The Council's bundle also included an objection received during the Council assessment of the development application from the owner of property in the locality, stating that the applicant knew that 200 ha was the minimum requirement to gain a building permit when he purchased the property; allowing a building permit would escalate the value of land prices thus increasing the rates for neighbouring properties; the applicant owns Glenmark which is less than 2 km from Inverary and has a current building permit; and that the building permit for Inverary is for financial gain only given that the applicant is residing and working in Wagga Wagga.

16 In his Statement of Evidence Mr Collins expressed the opinion that subject to the two disputed conditions being imposed on any consent, the objection under SEPP 1 would be well founded; if those conditions are not imposed, the objection should not be upheld because there would be no mechanism ensure that the underlying objectives of the development standard would be maintained.

17 Mr Collins was of the opinion that the underlying and primary objective of the 200 ha minimum lot size development standard is that provided in the zone objectives in cl 9 of the 1991 LEP, namely, "to promote the proper management and utilisation of resources by ... protecting, enhancing and conserving ...agricultural land in a manner which sustains its efficient and effective agricultural production potential". Mr Collins referred to the Macquarie Dictionary definitions of "efficient", meaning "effective in the use of energy and resources", and "effective" meaning "producing the intended or expected result". For an agricultural use to meet those definitions, it has to be both functional and viable on the land. The other relevant and underlying objectives of the standard are those in cl 9(b), (d) and (e)(i).

18 Mr Collins accepted that the applicant has satisfactorily demonstrated that there is a need for a dwelling in order to operate a functional and viable deer farming enterprise on the land, and that while productive deer farming continues on the land, the primary objective of the 200 ha standard would be met. Mr Collins was of the opinion that the use and occupation of the dwelling must be linked to the continued operation of a deer farming enterprise on the land. Occupation and use of the dwelling unrestricted by consent conditions, or at most tied only to any other form of extensive agriculture, could result in either the construction and occupation of a dwelling and an alternative form of extensive agriculture, or construction and occupation of a dwelling and the commencement, and then cessation of deer farming with reversion to an alternative form of extensive agriculture. The ultimate use of the land and dwelling in either scenario would effectively bypass any scrutiny such as that required under SEPP 1 in relation to the underlying objectives of the 200 ha standard.

19 Mr Collins accepted that it is possible that it could be demonstrated that other forms of extensive agriculture could be undertaken viably on the site, however there is no specific evidence demonstrating this and no evidence demonstrating a dwelling is a necessary accompaniment. The applicant had focussed in the development application solely on the use of the land for the purpose of undertaking a deer farming enterprise. Mr Collins agreed that if deer farming ceased it would be unlikely that all forms of agriculture would also cease on the land, however for agricultural production to be efficient and effective the proposed agricultural use of the land had to establish itself as both functional and viable on the land.

20 In oral evidence Mr Collins acknowledged that he had been the Council officer who assessed the development application for a contract agricultural research facility including dwelling permit on land to the south west of Inverary, which was approved in 1996 without a SEPP 1 objection (the Sackett consent). Mr Collins agreed that there should have been a SEPP 1 objection, and that the Sackett consent did not include a restriction to the original activity. Mr Collins' evidence was that this was a poor planning outcome. Mr Collins could not think of any circumstances where the Council had approved a dwelling house in association with an agricultural use. Mr Collins agreed that the conditions restricting use of the dwelling house in two previous appeals to the Court, Baker v Wagga Wagga City Council [2010] NSWLEC 1293 and Ireland v Wagga Wagga City Council [2011] NSWLEC 1047, had been proposed by the Council and agreed to by the parties. In Mr Collins' opinion the conditions imposed in those two decisions would not work in the present application: they both involved intensive agriculture as defined in the 2010 LEP, which requires development consent under both the 1991 LEP and the 2010 LEP, whereas the present application involves extensive agriculture, which does not, and so in the present circumstances there would be no consideration of the legitimacy of any alternative extensive agriculture.

Planning controls

21 The site is in Zone No 1 (Rural) under the Wagga Wagga Rural Local Environmental Plan 1991 (the 1991 LEP). The aims of the LEP relevantly include:

(a) to encourage the proper management, development and conservation of natural and man-made resources within the area to which this plan applies by protecting, enhancing or conserving:

(i) prime crop and pasture land,

(ii) timber, minerals, soil, water and other natural resources,

(iii) localities of significance for nature conservation,

(iv) localities of high scenic or recreational value, and

(v) places and buildings of archaeological or heritage significance, including Aboriginal relics and places,

(b) to replace the existing planning controls with a single local environmental plan to help facilitate growth and development of the land to which this plan applies in a manner which is consistent with the aims specified in paragraph (a) and which:

(i) minimises the costs to the community of fragmented and isolated development of rural land,

(ii) facilitates the efficient and effective provision of amenities and services,

(iii) facilitates a range of residential and employment opportunities in accordance with demand,

(iv) facilitates farm adjustments, and

(v) ensures that the efficiency of arterial roads is not adversely affected by development on adjacent land,

...

22 The objectives of the Rural zone are provided in cl 9:

The objective of this zone is to promote the proper management and utilisation of resources by any one or more of the following:

(a) protecting, enhancing and conserving:

(i) agricultural land in a manner which sustains its efficient and effective agricultural production potential,

(ii) soil stability by controlling and locating development in accordance with soil capability,

(iii) forests of existing and potential commercial value for timber production,

(iv) valuable deposits of minerals and extractive materials by controlling the location of development for other purposes in order to ensure the efficient extraction of those deposits,

(v) trees and other vegetation in environmentally sensitive localities where the conservation of the vegetation is significant to scenic amenity or natural wildlife habitat or is likely to control land degradation,

(vi) water resources for use in the public interest,

(vii) localities of significance for nature conservation, including localities with rare plants, wetlands and significant wildlife habitat, and

(viii) places and buildings of archaeological or heritage significance, including Aboriginal relics and places,

(b) preventing the unjustified development of prime crop and pasture land for purposes other than agriculture,

(c) ensuring that any allotment created for intensive agricultural pursuits is potentially and physically capable, on its own, of sustaining a range of such pursuits or other agricultural purposes as a commercial agricultural operation suitable to the locality,

(d) facilitating farm adjustments,

(e) minimising the cost to the community of:

(i) fragmented and isolated development of rural land, and

(ii) providing, extending and maintaining public amenities and services, and

(f) providing land for future urban development, for future rural residential development and for future development for other non-agricultural purposes, in accordance with the need for that development,

(g) providing for a range of rural living styles in appropriate locations within the area to which the plan applies, and

(h) encouraging the establishment of rural industries within the area to which the plan applies.

23 Development for the purpose of agriculture (other than intensive livestock keeping establishments) is permissible without requiring consent. Clause 9(3) provides that development consent, which would include consent for the erection of a dwelling, cannot be granted unless the consent authority is satisfied that the carrying out of the development is consistent with the objectives of the zone.

24 Clause 10 of the LEP provides:

10 General considerations for development within rural zone

(1) The Council shall not consent to an application to carry out development on land within Zone No 1 unless it has taken into consideration, if relevant, the effect of the carrying out of that development on:

(a) the present use of the land, the potential use of the land for the purposes of agriculture and the potential of any land which is prime crop and pasture land for sustained agricultural production,

(b) vegetation, timber production, land capability (including soil resources and soil stability), water resources (including the quality and stability of water courses and ground water storage and riparian rights),

(c) the future extraction of known valuable deposits of minerals, coal, petroleum, sand, gravel or other extractive materials and localities considered to be prospective for those materials,

(d) the protection of localities of significance for nature conservation or of high scenic or recreational value, and places and buildings of archaeological or heritage significance, including Aboriginal relics and places,

(e) the cost of providing, extending and maintaining public amenities and services to the development, and

(f) future expansion of settlements in the locality.

(2) As well as the matters referred to in subclause (1), the Council shall take into consideration the relationship of the development to development on adjoining land or on other land in the locality.

25 Clause 17(1) of the 1991 LEP provides that the Council shall not consent to the erection of a dwelling house on vacant land in the Rural zone unless the land has an area of 200 ha or more, or falls within one of the three exceptions provided in cl 17(1)(b). It was common ground that the site does not fall within cl 17(1)(b), and does not meet cl 17(1)(a). An objection was made to compliance with cl 17 under State Environmental Planning Policy No 1 - Development Standards (SEPP 1).

26 The site is identified as "prime crop and pasture land" under the 1991 LEP.

27 On 16 July 2010 the Wagga Wagga Local Environmental Plan 2010 (the 2010 LEP) commenced. The site is zoned RU1 Primary Production under the 2010 LEP. Development for the purpose of extensive agriculture is permissible without consent; development for the purpose of intensive livestock agriculture or intensive plant agriculture is permissible with development consent. The relevant definitions are:

extensive agriculture means any of the following:

(a) the production of crops or fodder (including irrigated pasture and fodder crops) for commercial purposes,

(b) the grazing of livestock for commercial purposes,

(c) bee keeping,

(d) a dairy (pasture-based).

Note. Extensive agriculture is a type of agriculture-see the definition of that term in this Dictionary.

intensive livestock agriculture means the keeping or breeding, for commercial purposes, of cattle, poultry, pigs, goats, horses or other livestock that are fed wholly or substantially on externally-sourced feed, and includes any of the following:

(a) dairies (restricted),

(b) feedlots,

(c) piggeries,

(d) poultry farms,

but does not include extensive agriculture, aquaculture or the operation of facilities for drought or similar emergency relief.

Note. Intensive livestock agriculture is a type of agriculture-see the definition of that term in this Dictionary.

intensive plant agriculture means any of the following:

(a) the cultivation of irrigated crops for commercial purposes (other than irrigated pasture or fodder crops),

(b) horticulture,

(c) turf farming,

(d) viticulture.

Note. Intensive plant agriculture is a type of agriculture-see the definition of that term in this Dictionary.

28 Clause 1.8A of the 2010 LEP is a savings provision, and the development application is to be determined as if the 2010 LEP had not commenced.

29 Clause 4.2 specifies the minimum lot size for the erection of a dwelling in the RU1 zone as 200 ha. Clause 4.6 Exceptions to development standards does not apply to development that would contravene cl 4.2A.

30 The Wagga Wagga Development Control Plan 2005 (the DCP) applies to the site.

Applicant's submissions

31 The applicant submits that the SEPP 1 objection should be upheld. The site is located in an area with other small holdings, four of which have dwelling permits probably approved under the existing holding provisions of the 1991 LEP. Deer farming is an intensive activity and requires a dwelling. The central issue is whether the conditions proposed by the Council should be imposed. The applicant proposes condition 4 in the following terms:

Any such future dwelling approved for construction on the subject land shall only be used and occupied for purposes that are ancillary to the operation of extensive or intensive agriculture (as defined in Wagga Wagga Local Environmental Plan 2010) on the land. If no extensive or intensive agriculture is carried out on the land for a continuous period of 12 months, occupation of the dwelling must cease. Occupation of the dwelling may only recommence if evidence satisfactory to the Council is provided, and the Council certifies in writing that it is satisfied, that extensive or intensive agriculture has recommenced, or will recommence, on the land.

REASON: To ensure that any dwelling erected on the subject property for the life of this consent is only used in connection with the use of the land for deer farming as proposed, or if deer farming becomes impracticable for any reason, with other extensive or intensive agriculture. This is to ensure that the land is used in a manner consistent with the primary and underlying objective of the Wagga Wagga Local Environmental Plan 2010 for agricultural land which is to protect, enhance and conserve agricultural land in a manner which sustains its efficient and effective agricultural potential. Section 79C(1)(a)(i) of the Environmental Planning and Assessment Act 1979, as amended.

32 The applicant submits that the present case is similar to Baker and Ireland in which the conditions imposed were similarly broad. In both those cases the applicants had spent considerable money on infrastructure, and there was difficulty in managing the agricultural activity (being a vineyard and an olive grove respectively) without having a dwelling there.

33 The applicant submits that condition 5 as proposed by the Council is not required. If the property is sold, a vigilant conveyancer would be aware of the restriction on use and occupation. The requirement to register a covenant imposes an unreasonable burden on the landholder, as if a further consent was granted to change the activity there would be additional legal work required to change the covenant.

Council's submissions

34 The Council's draft proposed Conditions include condition 2, which provides that the consent does not authorise the erection of a dwelling or associated structure on the land and the erection of a dwelling or associated structure requires a further development consent; and condition 3, which provides that any such future dwelling or structure must be sited a sufficient distance from the ridgeline traversing the site so that no part of the dwelling or structure will protrude above the ridgeline when viewed from the Sturt Highway.

35 The Council proposes conditions 4 and 5 in the following terms:

4.Any such future dwelling approved for construction on the land, shall only be used and occupied for purposes that are ancillary to the operation of extensive agriculture (as defined in Wagga Wagga Local Environmental Plan 2010) primarily in the form of deer farming on the subject land. If no extensive agriculture primarily in the form of deer farming is carried out on the land for a continuous period of 12 months, occupation of the dwelling must cease, and may only recommence if evidence satisfactory to the Council is provided and the Council certifies in writing that it is satisfied that extensive agriculture primarily in the form of deer farming has or will recommence on the land.

REASON: To ensure that any dwelling erected on the subject property for the life of this consent is only be used in connection with the use of the land for deer farming as proposed and more generally in order to protect, enhance and conserve the agricultural land in a manner which sustains its efficient and effective agricultural production potential. Section 79C(1)(a)(i) of the Environmental Planning and Assessment Act 1979, as amended.

5.Prior to any further consent being granted for the erection of a dwelling or any associated building on the land, a restriction as to user in favour of the Council must be registered on the title of the land pursuant to s88E of the Conveyancing Act 1919 in terms satisfactory to the Council to the effect that any dwelling constructed on the land may only be used and occupied by persons carrying out operation of extensive agriculture (as defined in Wagga Wagga Local Environmental Plan 2010) primarily in the form of deer farming on the land and if no such agriculture is carried out on the land for a continuous period of 12 months, occupation of the dwelling must cease and may only recommence if evidence satisfactory to the Council is provided and the Council certifies in writing that it is satisfied that extensive agriculture primarily in the form of deer farming has or will recommence on the land.

REASON: To ensure that any dwelling erected on the subject property for the life of this consent is only be used in connection with the use of the land for deer farming as proposed and more generally in order to protect, enhance and conserve the agricultural land in a manner which sustains its efficient and effective agricultural production potential. Section 79C(1)(a)(i) of the Environmental Planning and Assessment Act 1979, as amended.

36 The Council submits that in the absence of condition 4, consent should be refused. The development application was for a dwelling ancillary to a deer enterprise, and the condition would simply ensure that the dwelling will only be occupied in conjunction with the use for which the erection of the dwelling was said to be ancillary. The Council is now satisfied that the deer farming enterprise is a viable and legitimate use of the land and could be supported, however there has been no assessment of any other form of extensive or intensive agriculture. Failure to impose the condition may render the development a significantly different one from that for which application was made. If the applicant's intentions change, a further application could be made either under s 96 of the Act, or as a fresh development application, which would not be assessed in the context of SEPP 1, but against the objectives of the zone.

37 The Council accepts that there is specific infrastructure for deer farming on the site, and that for that particular proposed use, a dwelling is required due to the intensity of a deer operation and because of the nature and value of the deer. The Council submits that the SEPP 1 objection is only well founded in those circumstances, and based on the evidence that the deer farming enterprise is viable. The Council submits that the evidence is that the land is already priced above prevailing land values established purely on potential farming return because of its location, and the addition of a dwelling will further increase that value; an increase in the value of the land brings with it the increased potential for the land to be used effectively only for a dwelling with only token or marginal agricultural use to substantiate the use of the dwelling.

38 The Council submits that condition 5 is required to ensure that notice of the restriction imposed by condition 4 is given to prospective purchasers. If a subsequent consent authorises a change in the activity, the Court would have power to vary the covenant: Chehab v City of Canada Bay Council (2002) 123 LGERA 431.

Consideration

39 In Wehbe v Pittwater Council (2007) 156 LGERA 446, Preston CJ held (at [37]-[40]), that the Court must be satisfied of three matters before it can uphold a SEPP 1 objection and grant development consent. Those matters are, first, that the Court is satisfied that the objection is well founded (cl 7 of SEPP 1), which places the onus on the applicant making the objection; secondly, the Court must be of the opinion that granting consent to the development is consistent with the aims of the SEPP1 as set out in cl 3 (cl 7 SEPP 1); and thirdly, the Court must be satisfied that a consideration of the matters in cl 8(a) and (b) of SEPP 1 justifies the upholding of the objection.

40 In Winten Property Group v North Sydney Council (2001) 130 LGERA 79 Lloyd J outlined the steps to be taken in considering a SEPP 1 objection:

26. ... it seems to me that SEPP 1 requires answers to a number of questions (not necessarily in the following order). First, is the planning control in question a development standard? Second, what is the underlying object or purpose of the standard? Third, is compliance with the development standard consistent with the aims of the Policy, and in particular does compliance with the development standard tend to hinder the attainment of the objects specified in section 5(a)(i) and (ii) of the EP&A Act? Fourth, is compliance with the development standard unreasonable or unnecessary in the circumstances of the case? Fifth, is the objection is well founded? In relation to the fourth question, it seems to me that one must also look to see whether a development which complies with the development standard is unreasonable or unnecessary, as noted by Cripps J in the Hooker Corporation case.

41 In Wehbe Preston CJ outlined five ways of establishing that compliance with a development standard is unreasonable or unnecessary. The first, most commonly invoked way, is to establish that compliance is unreasonable or unnecessary because the objectives of the development standard are achieved notwithstanding non-compliance with the standard: at [42]. While not expressed in those terms, on my reading of the evidence and submissions that is the basis on which the applicant is seeking to have the SEPP 1 objection upheld in these proceedings. The SEPP 1 objection refers to Mrs McMahon's advice that she and her husband were led to believe by the Council that they could have a dwelling ancillary to a suitable enterprise. Wehbe confirms that it is for the applicant to establish that the objection is well founded.

42 It was common ground that the 200ha minimum lot size in cl 17 of the 1991 LEP is a development standard. I accept the evidence of Mr Collins that the underlying and primary objective of the standard is that provided in the zone objectives in cl 9 of the 1991 LEP, namely, "to promote the proper management and utilisation of resources by ... protecting, enhancing and conserving ...agricultural land in a manner which sustains its efficient and effective agricultural production potential", and that other relevant objectives include promoting the proper management and utilisation of resources by facilitating farm adjustments, by preventing the unjustified development or prime crop and pasture land for purposes other than agriculture, and by minimising the cost to the community of fragmented and isolated development of rural land.

43 It was common ground, and the evidence of Mr Ryan and Mr Collins supports, that a deer farming enterprise is a functional and viable agricultural enterprise on the site, and that infrastructure for the purpose of operating such an enterprise has been erected on the land. Mr Collins accepted, based on the report of Mr Ryan, that deer farming is the highest and best use of the land, and that deer are high value, flighty animals that are prone to theft and need constant handling at key times of the year. It was common ground that there is a substantial difference in terms of viability between the proposed use and an ordinary extensive agricultural land use, because deer farming is a high value land use.

44 The issue is whether the erection, and occupation, of a dwelling house on the site, as opposed to management of a deer farming enterprise from Glenmark or some other adjacent or nearby property, or from further away, is required for the viability of a deer farming enterprise. In his letter to the Council dated 15 September 2010 Mr David Davis, Resource Management Officer, NSW Industry and Investment, notes that that department and its predecessors had maintained the position that Inverary and Glenmark are in such proximity that they are deemed to be a single management unit or holding, and opposition to past development applications was taken after consideration of the increased capitalisation and potential for further subdivision if an additional dwelling was approved. Based on the evidence of Mr Ryan and Mr Collins, I am satisfied that the operation of a viable deer farming enterprise on the land requires the supervision that the erection and occupation of a dwelling would permit. That is in contrast to the present operation of the property for grazing and cropping, which, based on Mrs McMahon's evidence, has been managed for some time on a contract basis by a local contractor.

45 Mr Ryan acknowledged in his report that the creation of a dwelling entitlement will increase the value of the property, however his evidence was that values in the area are already impacted by external influences form the City of Wagga Wagga. Mrs McMahon's evidence was that the investment in infrastructure has been in excess of $200,000, and based on that evidence, Mr Ryan was of the opinion that the property was capitalised by $200,000 over and above that which would be required to operate a more traditional farming enterprise in the area. If the McMahons can establish a successful high value deer farming enterprise on the land the value of the farm would be expected to increase to reflect the increased value of production the property is capable of. That evidence was not disputed. Based on that evidence, I accept the evidence of Mr Collins that while productive deer farming occurs on the land, the primary objective of the 200 ha minimum lot size standard, being to protect, enhance and conserve agricultural land in a manner that sustains its efficient and effective agricultural production, would be upheld.

46 I accept the evidence of Mr Collins, which was not contested on this issue, that if deer farming were to cease it is unlikely that all forms of agriculture would also cease on the land, however for agricultural production to be efficient and effective any alternative agricultural use of the land would have to be established as being functional and viable. I agree that alternative forms of agriculture, whether extensive or intensive, have not been tested in that way.

47 Based on the evidence before me as to the viability of the proposed deer farming enterprise and the particular needs for supervision of such an enterprise enabled by the occupation of a dwelling on the site, I am satisfied that strict compliance with the 200 ha minimum lot size standard is unreasonable or unnecessary, and that the granting of consent would, in the circumstances of this case, be consistent with the aims of SEPP 1 as stated in cl 3 of SEPP 1. There was no evidence to indicate that non-compliance would raise any matter of significance for State or regional planning. While approval of the application would depart from the planning controls in the 1991 LEP, which are maintained in the 2010 LEP, in the circumstances of this case the departure has been justified.

48 The circumstances of this case include the specific evidence as to provision of infrastructure on the property to enable a deer farming enterprise, and the demonstrated need for a dwelling on the property to ensure the viability of such an enterprise. I agree with the Council that there is a risk, should deer farming not commence or continue, that the site could revert to another form of agriculture that might be unviable, or that could readily be conducted without the need for a dwelling on the site, as is the present agricultural activity on the site. In those circumstances I agree that this would not achieve the underlying objective of the 200 ha standard of sustaining efficient and effective agricultural production potential, or achieve the other objective of the zone in cl 9 of preventing the unjustified development of prime crop and pasture land for purposes other than agriculture.

49 Accordingly, I am satisfied that provided a condition is imposed to ensure as far as practicable that deer farming is established and continues on the site, the objection to compliance with the 200 ha minimum lot size development standard in cl 17 of the LEP can, in the circumstances of this case, be upheld.

50 In considering whether the development application should be approved, Mr Ryan's evidence was that the proposed development will enhance the agricultural use of the land as referred to in cl 10(1)(a) of the LEP, and would have no detrimental impact on natural resources, as referred to in cl 10(1)(b). Mr Collins accepted that provided deer farming commenced and continued, the proposed development would be consistent with the objectives of the Rural zone in cl 9(a)(i), (b), (d) and (e). The Council is satisfied that provided the proposed dwelling is located on the site so that no part of it protrudes above the ridgeline traversing the land when viewed from the Sturt Highway, the proposed development meets the requirements of the DCP, including part 5.7.9 14.5.18 Preservation of Hillscapes. The Council proposes condition 3 which would require any future dwelling to be sited a sufficient distance from the ridgeline so that this is achieved. On the evidence before me, I am satisfied that provided deer farming is commenced and continues on the site, the proposed erection of a dwelling ancillary to a deer farming enterprise is consistent with the aims of the LEP, the objectives of the Rural zone, the matters referred to in cl 10 of the LEP, and the requirements of the DCP, and can be approved.

51 The final issue to consider is whether conditions 4 and 5 should be imposed as sought by the Council. I agree with the Council that condition 4 as proposed would ensure that the underlying objective of the development standard is met on an ongoing basis. Condition 4 would also promote consistency with the objectives (a)(i), (b) and (e) of the Rural zone, and accordingly relates to a matter referred to in s 79C(1)(a)(i) and can be imposed under s 80A(1)(a) of the Act. In considering whether condition 4 should be imposed in the form proposed by the Council, or in the broader form proposed by the applicant, it is relevant that the development application sought consent for the erection of a dwelling "ancillary to deer enterprise", and that the evidence has focussed on the necessity of a dwelling for the viability of such an enterprise. I agree with the Council that while it is possible that other forms of viable extensive agriculture could be undertaken on the land, there is no evidence to establish that a dwelling would be a necessary accompaniment to such activity. The decision to grant the Sackett consent in 1996 without a SEPP 1 objection was acknowledged by Mr Collins to have been incorrect, and to have resulted in a poor planning outcome. In my view the decisions in Baker and Ireland relate to the specific circumstances of those cases, and are distinguishable. Both matters involved intensive agricultural enterprises already established on relatively smaller blocks, whereas the present application concerns extensive agriculture proposed to be conducted on a larger parcel of land. I accept the evidence of Mr Collins that if the use of the land is not restricted as proposed in condition 4, the existence of the dwelling could result in the land becoming unreasonably fragmented and not returned to viable agricultural production as part of a larger holding for other extensive agriculture.

52 The applicant submits that condition 4 is unnecessary and unreasonable. In her statement dated 5 April 2012 (exhibit A) Mrs McMahon states that she and the applicant are genuine about deer farming on Inverary and the majority of the property is now ideal for deer and only for deer, however, it is possible to imagine a number of scenarios which might make it necessary to do something other than deer farming. In her statement of 30 April 2012 (exhibit B) Mrs McMahon poses two scenarios: the first in which the applicant dies and she is unable to find suitable labour to replace him so she sells all the deer, where feasible options would include agistment, share-farming or leasing to a neighbour for cropping, grazing or both; the second being something happens to necessitate discontinuation of deer farming and the Council does not agree to a different enterprise that would maintain the effective and efficient agricultural production potential of the land. Mrs McMahon states that agreeing to the conditions would cede power to the Council to make the investment in the house worthless should deer farming become impracticable for any reason. If they wanted to sell Inverary in the future, new owners would have to accept that the Council had the power to force them to vacate the house should deer farming prove impracticable, and such restrictive conditions would effectively render Inverary unsaleable or at least only saleable at bare land prices.

53 In my view, the concerns raised by Mrs McMahon are not justified. The proposed condition 4 reflects the basis on which the development application was made, and on which the SEPP 1 objection can be upheld to permit consent to be granted. Condition 4 provides the owner of Inverary with 12 months to resolve the situation if deer farming ceases for any reason. The form of condition 4 as proposed by the applicant would permit use of the property for extensive agriculture, which would not require development consent, or intensive agriculture, which would. The property is presently being used for extensive agriculture which does not require a dwelling, and which is currently being managed by a contractor. I agree with the Council that ensuring the continued efficient and effective agricultural use of the land consistent with the objectives in cl 9(a)(i), (b) and (e) of the LEP requires the restriction imposed by condition 4 to ensure that the property continues as a viable agricultural enterprise. Condition 4 should be imposed in the form proposed by the Council.

54 The applicant opposes the imposition of condition 5 as being unnecessary and unreasonable. Condition 5 would serve the function of notification to prospective purchasers of the restriction imposed on the use of the dwelling house and the land by condition 4, and could be imposed for that purpose: Fortunate Investments Pty Ltd v North Sydney Council (2001) 114 LGERA 1. Given the significance of the restriction imposed by condition 4, I am of the view that notification to prospective purchasers is important and should not be left to the diligence of any conveyancer acting for a prospective purchaser. The condition would not attempt to limit the ability to obtain development consent in the future, as was the case in MacDonald v Mosman Council (1999) 105 LGERA 49, or duplicate the law providing for enforcement of the provisions of the Act: PDP (Darlinghurst Apartments) Pty Ltd v City of Sydney Council [2005] NSWLEC 41 at [40]. I am satisfied that a condition requiring registration of a covenant would relate to the matters referred to in s 79C(1)(b) of the Act, and can properly be imposed under s80A(1)(a) of the Act. Condition 5 should be imposed as sought by the Council.

Conclusion

55 For the reasons above, I am satisfied that the SEPP 1 objection can be upheld, and development consent granted subject to conditions. The orders of the Court are:

1. The appeal is upheld.

2. The objection under State Environmental Planning Policy No 1 - Development Standards to the application of the development standard in cl17 of the Wagga Wagga Rural Local Environmental Plan 1991 is upheld.

3. Development application DA 10/0253 for the staged development of a dwelling ancillary to a deer farming operation on land comprising Lots 17, 19 and 20 DP 757218, 1527 Sturt Highway, Borambola is approved subject to the Conditions of Consent in Annexure "A".

4. The exhibits are returned except for exhibits 1, 4 and C.

Linda Pearson

Commissioner of the Court

Decision last updated: 28 May 2012