Posted on March 21, 2024 by Liam Mulligan and Alex Graham 6

Characterisation of agricultural land uses involving cultivation and processing – a reminder of the principles

Introduction

In a recent decision, the NSW Court of Appeal once again considered the correct approach to the characterisation of land uses, in this case concerning agriculture. The Court dismissed an appeal from a judgment of the Land and Environment Court (‘LEC‘) which had declared that the respondent, Dolph Cooke, was using two parcels of land in the Northern Rivers Region (‘the site‘) for purposes requiring development consent without that consent having been obtained. 

Background

Mr Cooke held a licence to cultivate low-THC hemp and operated a business selling hemp-infused products. This business involved the growing, harvesting, processing, infusing, and packaging of hemp into products such as olive oil and beeswax. The Council contended that the processing, infusion and packaging of the hemp, in addition to the erection and alteration of structures on the site, required development consent, under the Tweed Local Environmental Plan 2014 (‘TLEP‘) and that consent had not been obtained.

The Council brought civil enforcement proceedings seeking to restrain the alleged unlawful use. At first instance, Pain J found that the use of the land was for the purpose of ‘rural industry‘, being the processing of plant agricultural products for commercial purposes. The use of the site as ‘rural industry‘ required development consent, which had not been obtained by the respondent. Accordingly, the primary judge declared that Mr Cooke had breached s4.2(1)(a) of the Environmental Planning and Assessment Act 1979 (NSW) (‘EPA Act‘) by:

• using the site for the purpose of ‘rural industry‘ without consent, and
• carrying out building works for the purposes of that use. 

Mr Cooke appealed to the NSW Court of Appeal. A number of issues are explored in the judgment but the primary issue we will focus on is the proper characterisation of the use being carried out by the appellant.  

The appellant’s submissions

The appellant submitted that the processing of hemp, and related activities on the site, were ancillary or incidental to either of the following land uses:

• ‘horticulture‘ (being a subcategory of ‘intensive plant agriculture‘), or
• ‘extensive agriculture‘. 

Neither of these uses required development consent to be carried out on the relevant land. The appellant submitted that the primary judge had erred by failing to characterise the use by reference to the processing activities being carried out that were incidental to the cultivation of the hemp plants.

The respondent’s submissions

The respondent submitted that the primary judge had correctly identified the purpose of the activities carried out on the site as ‘rural industry‘ – that is, the production of infused olive oil and other products for commercial sale. The respondent argued that the ‘rural industry‘ land use could not function on the site without the raw hemp materials, erected buildings and the various production activities necessary for the commercial sale of hemp-infused products.

Determination on appeal

The NSW Court of Appeal (per Basten AJA, Ward P and Gleeson JA agreeing) unanimously dismissed the appeal. In summary the Court found as follows.

‘Intensive agriculture‘ was permissible under the TLEP without consent. The only relevant subcategory of ‘intensive plant agriculture‘ under the TLEP was ‘horticulture‘, defined in the instrument as:

“… the cultivation of fruits, vegetables, mushrooms, nuts, cut flowers and foliage and nursery products for commercial purposes, but does not include a plant nursery, turf farming or viticulture“.

Although hemp is a flowering plant, and was cultivated for its leaves on the site, “cultivating” hemp in this case did not constitute the cultivation of cut flowers as per the definition of ‘horticulture‘ in the Dictionary to the TLEP. 

Extensive agriculture‘ was also permissible under the TLEP without consent. It was relevantly defined in the instrument as:

“… any of the following-

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

…

Their Honours agreed that while the growing of hemp alone could be characterised as the ‘production of crops‘, and the word “crop” in subparagraph (a) would include the leaves of the hemp plant, the ordinary meaning of the language in subparagraph (a) would not include the results of processing the crop. 

‘Rural industry‘ was, by contrast, only permissible under the TLEP with development consent. It was (relevantly) defined in the TLEP as:

“… the handling, treating, production, processing, storage or packing of animal or plant agricultural products for commercial purposes, and includes any of the following-

(a) agricultural produce industries,

…

Neither ‘intensive plant agriculture‘ or ‘extensive agriculture‘ expressly contemplated ancillary or incidental activities in their definitions. The Court acknowledged that there may be activities which are ancillary or incidental to the production of a crop – such as harvesting and storing the crop – which involve the use of machinery and trucks. However, it does not follow that those ancillary activities are included within the primary definition of either land use.

The growing of hemp and the subsequent production of hemp-infused products could not be characterised as two separate activities. Both of these activities were part of a single, integrated purpose – being the commercial sale of hemp-infused products. The finding of an integrated purpose meant that the separate uses of the site could not be distinguished from each other. 

It was not necessary to determine whether the activities carried out on the site fell within the definition of ‘rural industry‘. The limited issue for their Honour’s determination was whether the activities fell within the classifications of ‘intensive plant agriculture‘ or ‘extensive plant agriculture‘. The Court found that the primary judge had correctly found that they did not. 

The judgment in Cooke v Tweed Shire Council [2024] NSWCA 50 can be accessed here.

If you have any questions in relation to this decision, please leave a comment below or contact Liam Mulligan on +61 2 8235 9715 or Alex Graham on +61 2 8235 9733.