In brief - Buyozo Pty Limited v Ku-ring-gai Council [2021] NSWLEC 2 demonstrates an application of the purposive approach to statutory construction in the context of "gross floor area", and is a reminder for developers to ensure the correct definition is being applied at all stages of the development process

The case of Buyozo Pty Limited v Ku-ring-gai Council concerned an appeal by Buyozo Pty Ltd (Applicant) to the New South Wales Land and Environment Court against Ku-ring-gai Council to modify a condition of a development consent and reduce the development contributions payable for the development of a storage shed. The contributions were required under section 7.11 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act).

The Applicant obtained development consent by way of a conciliation conference conducted pursuant to section 34 of the Land and Environment Court Act 1979 (NSW) for the consolidation of three existing lots, alterations and additions to the current warehouse premises to create a self-storage facility and separate commercial premises at 3-5 West Street, Pymble NSW (development consent). 

The development consisted of several storage floors of individual lockable storage units, accessible via corridors on each floor that were connected to several carparks with dedicated loading and unloading bays. 

Condition 30 of the development consent related to the payment of development contributions under section 7.11 of the EP&A Act to the Council in accordance with the Ku-ring-gai Contributions Plan 2010 (KCP). The amount of contributions was based on the "gross floor area" (GFA) of the development.  

As is common in practice, the Applicant lodged a modification application under section 4.55 of the EP&A Act seeking to modify Condition 30 of the development consent in order to reduce the amount of development contributions payable under the KCP. No material change to the development was sought. The subject condition in the development consent required the payment of contributions in the amount of $987,242.37. 

The basis of the Applicant’s modification application was that the calculation of the contributions amount was incorrect because the corridor areas of the development were included in the calculation of GFA, when those areas should not have been included, according to the definition of GFA in the relevant environmental planning instrument. 

The Applicant lodged a Class 1 appeal in the Court against the deemed refusal of the modification application. 

Prior to lodging the modification application with the Council, the Applicant had already paid the contributions to the Council in accordance with the relevant condition. The Applicant had also received an occupation certificate and had commenced use of the premises under the development consent. 

In determining the case, the Court had to decide on the following issues:

  • What statutory interpretation approach should be used in construing "gross floor area" as defined in the Ku-ring-gai Local Environment Plan 2015 (KLEP)?

  • Should corridor areas be excluded from the calculation of GFA under the KCP?

  • Had there been an overpayment of development contributions by the Applicant?

The Court ultimately upheld the appeal and modified Condition 30 of the development consent, reducing the GFA from 11,076 m2 to 8,317 m2. Accordingly, the Applicant was provided a "credit" of $313,091.32. 

Court applies purposive approach in interpreting the term "gross floor area", preferring it over a literal construction 

The definition of GFA in the KLEP relevantly states as follows [underlining added]:

the sum of the floor area of each floor of a building measured from the internal face of external walls, or from the internal face of walls separating the building from any other building, measured at a height of 1.4 metres above the floor… but excludes

(h) any space used for the loading or unloading of goods (including access to it)

The Applicant submitted that the ordinary meaning of the text in the definition of GFA supported a finding that the corridors should be excluded from the GFA calculation. This was because the corridors leading to the entrance of the storage units were spaces used for the purpose of loading or unloading goods. 

The Council submitted that the Applicant’s construction of the term GFA would give rise to different meanings depending on the particular type of development under construction. Accordingly, the GFA would change depending on the purpose for which the term was being considered. 

The Court cited the High Court case of R v A2; R v Magennis; R v Vaziri (2019) 373 ALR 214 at [32]-[37], where the High Court identified the correct approach to statutory interpretation. In that case, the High Court emphasised that a statutory construction, which promotes the purpose of a statute is to be preferred over a literal construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable. 

Consequently, the Court adopted a purposive construction of "gross floor area", and upheld the Applicant’s submissions as to the proper construction of paragraph (h) of the definition of GFA. The Court stated that the issue was a matter of law, and that the opinion of the joint expert planners as to the proper construction of "gross floor area" was irrelevant. 

Corridor areas exempt from relevant GFA calculation because they provided access to spaces where loading and unloading of goods would occur

The Council submitted that since the loading and unloading of goods occurred in the carpark of the premises, the corridors merely conveyed the already loaded or unloaded goods to the storage units. 

The Applicant submitted that the concept of GFA is used in the KCP to measure the demand on public services and amenities against which the contributions are calculated, and to do otherwise would result in excessive contributions being levied, defeating the purpose of the exemptions provided for in the definition of "gross floor area". 

The Court upheld the Applicant's submission, stating that it was consistent with the purposive approach, as opposed to the Council's literal approach to statutory interpretation. 

Council not obliged under the KCP or development consent to refund any credited money in spite of Applicant's overpayment of contributions 

The Court dismissed the Council’s submission that Condition 30 of the development consent had been "spent or exhausted" since the money had already been added to its "pool" of contributions, leaving the Applicant with "nothing left to modify". 

The Court referred to its decision in Agricultural Equity Investments Pty Ltd v Westlime Pty Ltd (No 3) [2015] NSWLEC 75 at [111]-[119] and reiterated that the concept of a development consent being "spent" or "exhausted" was not known to law and contrary to established authorities, in citing Boral Resources (Country) Pty Ltd v Clarence Valley Council & Avard; Cemex Australia Pty Ltd v Clarence Valley Council & Avard (2009) 167 LGERA 134 at [105]-[106].

The Court observed at [43] that to the extent that there has been an overpayment, the Council must take the overpayment into account prior to the imposition of any condition in respect of any future development application, citing sections 7.11(1), (3), and (6) of the EP&A Act. 

Interestingly, the Court also observed in obiter at [43] that the overpayment may give rise to an equitable claim such as that of unjust enrichment, in another court. 

Main takeaway for developers from Court's decision in Buyozo Pty Limited v Ku-ring-gai Council

This case serves as a useful example of statutory interpretation being applied to planning law concepts. The case demonstrates an application of the purposive approach to statutory construction in the context of the "gross floor area" calculations in environmental planning instruments, which accorded with the definition contained in the NSW Standard Instrument. 

As the definition of "gross floor area" can vary, developers should ensure that the correct definition is being applied at all stages of the development process, including the design stage (to ensure that the correct control is being applied), and assessment by the consent authority (to ensure that development contributions are properly levied). Doing so would help to avoid triggering a credit or some form of equitable claim, and ensure the contributions are levied correctly in the first place. 

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2021.

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