Supreme Court decision reinforces the importance of correct land use classification

The Supreme Court in Harvis Capital Pty Ltd v Mid-West/Wheatbelt Joint Development Assessment Panel [2020] WASC 205 has invalidated a development approval on the basis that the decision-maker made a fundamental error of law in relation to land use classification.  This decision reinforces the importance of correct land use classification, in both the preparation and determination of development applications.

In this matter, a Development Assessment Panel had granted development approval for a proposed chicken feed production facility on a property in Muchea that was zoned “agricultural resource” under the local planning scheme.

Importantly, in the local planning scheme zoning table, the land use category of “industry – rural” was a D use in the relevant zone (meaning it was legally capable of receiving development approval), but the more general land use categories of “industry” and “industry – light” were X uses in the relevant zone (meaning they were legally incapable of receiving development approval).

The definition of “industry – rural” in the local planning scheme referred to a proposal that comprises “handling, treating, processing or packing rural products”.  The proponent had contended that the chicken feed production facility would involve the processing of rural products and would therefore comprise “industry – rural” land use.

The applicant for judicial review, on the other hand, argued that the chicken feed production facility would involve more than just the processing of rural products and should therefore have been classified as either an “industry” or an “industry – light” land use under the local planning scheme.  The consequence would be that the proposal was legally incapable of receiving development approval and the decision to grant development approval was tainted by jurisdictional error and must be set aside.

The Supreme Court ultimately accepted this argument and found, as a matter of law, that the proposed chicken feed production facility was not a “industry – rural” land use as defined in the local planning scheme.  In particular, by reference to the finer details of the proposed operation, the Supreme Court determined that the proposal was not actually confined to processing rural products and instead proposed using rural products (amongst other items) to manufacture completely different products.

There are a number of useful lessons to be drawn from this Supreme Court decision.

First, the Supreme Court has confirmed that land use classification is ultimately a matter of statutory interpretation.  This means that the intended meaning of a given land use definition must be construed by reference to its broader statutory context.  This context includes the general aims of the local planning scheme, the objects of the relevant zone and the wider legislative context which informs considerations of orderly and proper planning.  By extension, land use classification cannot be approached as a matter of discretion for decision-makers on development applications.

Second, the reasoning of the Supreme Court confirms that land use classification is a matter of substance over form.  Just because planning report supporting a development application contends that the underlying proposal fits a particular land use classification under a local planning scheme, this will not necessarily be the case as a matter of law.  Land use classification will always involve an assessment of the substance of a proposal as against the various land use categories identified by a local planning scheme.

Third, this decision of the Supreme Court will set a precedent to the effect that proposals involving the manufacture of new products should not be granted development approval, for rural areas where the local planning scheme contains an equivalent “industry – rural” land use definition.  This may practically result in rural areas being kept for rural uses, with industrial uses being directed to recognised and properly planned industrial precincts.  It is noted, however, that the “industry – rural” land use definition as considered by the Supreme Court does not appear in many more contemporary local planning schemes.

Fourth, this Supreme Court decision reinforces the importance of proponents getting the question of land use classification right, because making a legal error with respect to land use classification in a development application could potentially expose a development approval to a legal challenge.  When in doubt as to land use classification (including where there are multiple potential categories available), legal advice should be sought.

If you have any questions in relation to matters of land use classification or related planning law issues, please feel free contact us.

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.