Posted on October 15, 2012 by

Judge rules on the ‘equivalent zone’ test in SEPP ARH

We  previously reported on a number of cases in which permissibility of boarding house development has turned on the question of the ‘zone equivalence’ test in cl5(1)(b)  of State Environmental Planning Policy (Affordable Rental Housing) (SEPP ARH).

The appeal against the decision by Commissioner Morris in Chehade v Bankstown City Council [2012] NSWLEC 1122) has now been determined.

Sheahan J handed down  judgement dismissing the developer’s appeal on  21 September 2012: see  Chehade v Bankstown City Council [2012] NSWLEC 221.

LTL acted for the Council.

In summary, His Honour rejected the developer’s argument founded on the notion that the Court should strive to find error in Commissioner Morris’ approach  given that SEPP ARH is beneficial and faculative.

Rather, Sheahan J held that:

46… cl 5 [of SEPP ARH] is formulated in a quite specific way, distinct from the way other provisions relevant to different areas and types of affordable housing (in the other six divisions of Part 2 – [17]) are formulated.

47. Strict adherence to the precise terms of each provision [of SEPP ARH] is clearly mandated by the structure and terms of the instrument itself, and neither works a mischief, nor leads to an absurdity.  In those circumstances it is wrong to go behind the provisions, and to read additional matter into them. [emphasis added]

In other words, there is no reason to refer to zone objectives or any other matter other than that which is mandated by clause 5(1)(b) namely whether the subject [local] land use zone is one in which (in the opinion of the relevant authority) equivalent land uses are permitted to those permitted in that named land use zone.

Full Circle

Commissioner Tuor has now considered the equivalence test once again in Pingola Pty Ltd and Anor v Parramatta City Council [2012] NSWLEC 1270.

Citing Commissioner Morris in the original Chehade decision (at paragraph 35) and Sheahan J in the appeal (at paragraph 36), Commissioner Tuor decided in relation to the Parramatta LEP, that certain zones were also not equivalent (at paragraph 45):

In considering the set of permissible uses in the 2(a) zone under LEP 2001 and the set of permissible uses in the R1 zone under the Standard Instrument there are significant differences, not only in the numerical tally of shared and exclusive uses, but also in terms of the nature of the uses. I am therefore not satisfied that equivalent land uses are permitted in the 2(a) zone under LEP 2001 to those permitted in the R1 or the other named zones under the Standard Instrument. Clause 5(1)(b) is not satisfied

End of the matter?

One might think that Sheahan J’s decision now finalises the question and gives greater certainty to applicants, Councils and the community as to where boarding houses may be located.

This is true to an extent.

But the test still contains a subjective element.  While the exercise of establishing what is permitted in each zone is objective, the element of comparison is qualitative and one which the consent authority undertakes on its own.

Further, the SEPP itself states at clause 5(2):

An assessment made by a relevant authority under subclause (1) (b) applies only in respect of the particular development that is proposed to be carried out and more than one such assessment may be made in respect of the same land use zone.

Therefore, until the Standard Instrument LEP is universally implemented, or the Director General makes relevant declarations as to which zones are equivalent, there will continue to be a question about whether there is a zone equivalence even, potentially, in relation to the same zone in a local government area.

At least now the way in which the test is undertaken has been settled.  But the actual decision in each case is still a matter for individual, subjective, determination.