Australia: 'Existing Use Rights' Watered Down Again & How Hard Would you Fight to Preserve your Property's View

Contents

• 'Existing use rights' Watered Down... Again
• How hard would you fight to preserve your property's view? Part 2

'Existing use rights' Watered Down... Again

By Anthony Whealy and Isabella Ferguson of Gadens Lawyers, Sydney

Two recent Land and Environment Court decisions have further hacked away at the commercial value and practical utility of 'existing use rights' in developing land in NSW. Landowners and developers beware!

Many readers will recall that in March 2006 (see our April 2006 update here) the NSW Government, without any warning, severely restricted 'existing use rights' by regulating that an 'existing use' could no longer be changed to another prohibited use in almost any circumstance. An 'existing use' in planning terms is a use that was lawfully being carried out before it became prohibited by a more modern planning instrument (such as a new LEP). Previously, the Environmental Planning and Assessment Act and Regulations had allowed an 'existing use' to be changed to another prohibited use, meaning that the land had additional, highly valuable development potential and therefore commercial value. Sites which had been purchased and valued on this basis suddenly had less development potential and, in many cases, significantly less value.

To add insult to injury, the Land and Environment Court has recently delivered two judgments which further reduce the utility of existing use rights. In each case, there is a great deal of speculation in legal circles as to whether the decisions were correct. Nevertheless for now - unless and until a higher court comes to re-determine the issues - it must be assumed that these decisions apply to sites having existing use rights. We briefly discuss each decision below:

• In Botany Bay City Council v Parangool, the Court ruled that where a site has existing use rights because of a development consent that granted a particular approval, the existing use rights are strictly limited by the words in that development consent. In that case, the landowner had an old development consent for warehousing of "alcoholic goods", however 'warehousing' had become a prohibited use (by a recent LEP). The relevant tenant, Carlton United Breweries, ceased leasing the premises. The landowner then relied on 'existing use rights' to apply for a DA for general warehousing so that other tenants could use the site, given that 'warehousing' was the broad species (or 'genus') of use, consistent with all previous law on existing use rights. Although the developer was initially successful in an appeal to the Court, that initial decision was overturned on further appeal, with the Judge ruling that "the existing use in the present case was dependent upon the express and limiting terms of the development consent", rather than the broader species of use ('warehousing'). The practical consequence was that unless the landowner could find another tenant who would use the premises expressly for warehousing "alcoholic goods", the existing warehouse could effectively never again be used, and the now-prohibited warehouse would need to be demolished or somehow adapted to a permissible (residential) use.

When development applications are lodged, ideally they ought to now be worded as broadly as possible - for example "warehousing" or "commercial use" rather than identifying any particular client or product or operation on the DA form. However, councils will often require more detail before approving DAs.

• In Iris Diversified Property v Randwick City Council the Land and Environment Court ruled for the first time that where a site having existing use rights applies for a change of use away from a prohibited form of development, to a permissible form of development, all of the local planning controls are to be applied in assessing that DA. Previously, councils throughout NSW have assessed such applications by way of a general merit assessment, under the common belief that local planning controls such as LEPs and DCPs do not apply to sites with existing use rights. This in turn increased the development potential of many sites. Now however, this decision has the effect that the local planning controls apply, even for example where the application is simply to alter or amend an old existing building which could never comply with modern planning controls. As such, councils are entitled to refuse such applications and, where there is a breach of a 'development standard' in a planning control, councils in some cases must refuse these applications, unless a valid SEPP 1 objection is lodged and supported by council).

This decision is currently being appealed to the Court of Appeal.

While these decisions warrant more detailed discussion, it can safely be said that sites having 'existing use rights' (and potentially the commercial value of the sites having existing use rights) have seen better days.

How hard would you fight to preserve your property's view? Part 2

By Anthony Whealy and Gordon Hartley of Gadens Lawyers, Sydney

In our December 2009 update ( click here to read) we reported on proposed laws that would enable landowners to take Land and Environment Court proceedings seeking removal of tall trees/hedges on a neighbour's land that block views or sunlight. Those laws will commence on August 2.

The new laws, gazetted on 4 June by amending the Trees (Disputes Between Neighbours) Act 2006, are designed to overcome situations of 'hedge rage' or 'spite hedges', whereby landowners can generally plant tall dense hedges which block out a neighbour's view or access to sunlight. This has long been an issue with the NSW planning system, because while developers are almost always required to design new buildings so as to reasonably preserve important views and outlooks of neighbours, and to avoid significant overshadowing, the reality is that no DA is even required to plant trees and hedges, even if they are planted at mature heights. This anomaly will now be tempered by the ability, from 2 August 2010, for landowners to commence proceedings asking the Court to order that hedges be removed or lopped (amongst other remedies).

We provide some 'snapshot' comments on the new legislation below:

• The Act only applies to hedges (groups of two or more trees) rather than any single tree which blocks views or sunlight. It is not clear whether those trees must have interlocking canopies but we expect the Court would interpret the Act in that way;
• The Act only applies to hedges with a height of at least 2.5 metres from their existing ground level;
• To apply to the Court based on loss of sunlight, there must be loss of sunlight to a window. Strangely, losses of sunlight to a balcony, terrace or garden are therefore irrelevant.
• On the other hand, the loss of views can occur from any part of a dwelling.
• Even where these tests are satisfied, the Court only has the power to make orders where there is a "severe obstruction" of views or sunlight. This implicitly means that the Court cannot intervene if there is a moderate or even serious loss of views or sunlight. The loss must be "severe".
• As a consequence, and ironically, some applicants may be better off waiting for the hedges to grow larger and denser before commencing action, so that they can meet the "severe" threshold. The bigger the hedge, the better the prospects of success.
• The Court will also have to weigh up a vast number of specified considerations (19 in total) including whether the benefits of the hedge (for example in terms of privacy or aesthetics or quality) outweigh its adverse impacts. This vast list of considerations means that these applications will ironically often be quite complex and require some level of expert evidence, for example on view loss or shadow impacts or town planning or arboriculture.
• An applicant must have made "a reasonable effort" to reach agreement with the neighbour before the Court can make orders. This means it would be necessary to put at least one communication in writing as evidence of a "reasonable effort". Also, 21 days' advance notice of the application must be given in most cases.
• The Court has broad remedial powers ranging from requiring the hedge (or parts of it) to be removed entirely, to having it lopped and maintained at a certain height, to replacement of the trees with another specified species, and includes the payment of costs for carrying out such works. These potential solutions should be kept in mind when making "a reasonable effort" to reach agreement with a neighbour, because in some instances it may not be "reasonable" to insist on full removal of trees/hedges if other solutions are available which are more appropriate and equally effective.

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