existing use that is contrary to lease purpose clause (ACT) or zoning. Town
planning legislation usually allows the use until sale or disposal by
the current owner.
Reproduced with permission of Neustein Urban:
Following nearly 20 years of relative stability, existing use rights
have been the subject of change over the past two and a half years.
According to the Department of Planning1, change has been brought about
by the move to a standard LEP template with its reduced number of zones
and the consequent possibility that unlimited numbers of existing use
right properties might be created. This paper examines the basis for
the Department's actions and describes the situation that is now
beginning to emerge as new comprehensive LEPs are brought forward for
What are existing use rights?
S106 of the EPA Act describes existing uses as lawfully commenced uses
which are subsequently prohibited by an Environmental Planning
Instrument. S107 describes the situation under which such uses are
extinguished – essentially by abandonment or the unlawful replacement
of the uses. Thus, the corner bakery, petrol station or smash repair
shop in the midst of a residential area is usually an existing use as
defined in the Act. The underlying purpose of defining existing uses is
to control historical and now non-conforming uses, allowing such uses
to continue in spite of zoning (land use) changes until they cease for
McHugh JA in Royal Agricultural Society of NSW v Sydney City Council (1987) 61 LGERA 305 explains the purposes of the provisions as follows
'The object of "existing use"
provisions in town planning legislation is to permit the continuation
of the use of land for any purpose for which it was used immediately
before the passing of the legislation even though the terms of the
legislation prohibit that purpose wholly or partly or upon conditions.
The rationale of these saving provisions is that it is unjust to
deprive an owner of the right to use his land for an existing purpose.'
Changing existing uses
Prior to about 1986, changes to existing uses were permitted as long as
such uses were not enlarged by more than 10% of their floor areas and
new uses had a lesser environmental impact. This sought to encourage
the swapping of very non-conforming uses to less non-conforming uses eg
industrial to light industrial or commercial uses within residential
zones, or even all the way to conforming uses. Presumably, concern
about the slow rate of take up of these provisions led to the removal
of the 10% limit and the totally unfettered swapping of prohibited
uses, until March 2006.
Traditionally, existing uses were very tightly defined in a series of
court cases prior to the proclamation of the EPA Act in 1980.
Subsequently, the Courts interpreted existing uses more broadly. In Royal Agricultural Society of NSW v Sydney City Council (1987) 61 LGERA 305 McHugh JA states
Because "existing use" provisions are
incompatible with the main objects of the legislation of which they
form part, the courts have had to develop principles which reconcile
the right of owners to have the full benefit of the existing use of
land with the right of the local authority to enforce the conflicting
objectives of town planning legislation. The courts have done so by
refusing to categorise an "existing use" so narrowly that natural
changes in the method of using the land or carrying on a business or
industry will render an existing use right valueless.
McHugh JA's analysis thus suggested that some degree of change was permitted, even without further approvals. Kirby P in North Sydney Municipal Council v Boyts Radio and Electrical Pty Ltd and Ors (1989) 67 LGRA 344 (CA) reinforces that view
'the general approach to be taken is
one of construing the "use" broadly. It is to be construed liberally
such that confining the user to precise activity is not required. What
is required is the determination of the appropriate genus which best
describes the activities in question'.
Beyond the natural change which did not require approval, was the
deliberate change which met the controls of the time and which was
council-determined on a merit basis. An example of the merit based
approach, pre 2006, is the group of shops completed about 2-3 years ago
in Oxford Street, Paddington, opposite Victoria Barracks. Here, in a
Residential 2(b) zone under the Woollahra LEP 1995, a service station
was replaced by an equally prohibited group of retail uses, of higher
floor space. On a merit basis, this was the ideal use for the land,
reducing the gap between shops in one of Sydney's best shopping strips
and eliminating a service station that had been the subject of
controversy in the locality (due to its large LPG tank). Elsewhere,
service stations in residential zones were swapped for townhouses or
low rise apartment blocks, closer in function to the uses surrounding.
The results were appropriate to the need for gradual change and the
slow phasing out of non-conforming uses inimical to the land use within
which they stood.
However, the swap of land uses in the Paddington example was no longer
possible after March 2006 as the floor space increased by much more
than 10% and the uses permitted were equally prohibited.
March 2006 restrictions on existing use rights
The EPA Amendment (Existing Uses) Regulation 2006 which came into force on 29 March 2006 amended the EPA Regulation so that:
an existing use could no longer be changed to another prohibited use (unless the zoning was also changed to permit that use)
enlargement of existing uses was limited to 10% of gross floor area
an existing use could only be changed to a use that was permissible in the zone.2
The change was gazetted without any notice to the development industry
or the professions, with a guide note published days later. This was
clearly a blitzkrieg strike! Its immediate impact was to greatly
devalue properties holding existing use rights. As noted above, the
purpose of the change was to prevent a general outbreak of existing use
rights for properties caught up in the change from older LEPs to the
standard LEP which had, by that time, been adopted. The change was
further justified by the Department's analysis of the treatment of use
swapping by councils and the Land and Environment Court which were
said3 to have resulted in unacceptable environmental consequences. In
some measure, the concern for the degree of close fit between the very
reduced set of zones in the standard LEP and the wide spread of uses
already existing in LGAs was justified.
Local government took a very restrictive view of the provisions of the
regulatory change, refusing to accept the legal position outlined in
the cases cited above. In a development which was the subject of my
firm's attention in early 2006, existing use rights to sell carpet were
said by the local council to prohibit any other type of retailing than
floor coverings. Even a swap to vacuum cleaner sales would have been
prohibited, as would conversion to a local grocery, etc. In a second
case at the time, we found a client operating a vehicle service
training facility unable to occupy an industrial unit which had been
used for the distribution of medical products.
Some suggested the use of SEPP 4 – Development without consent to
remedy the situation. However, the very narrow provisions offered help
to few applications and this was seen as an inadequate approach.4
At that time, a further problem arose as a consequence of the staged DA
process. Meriton, which had then recently won a Court approval for the
swap of existing caravan park use to residential development, subject
to further DAs for the individual buildings, was unable to implement
the approval. Pressure built on the Department to reign in the more
restrictive council practices.
February 2007 further amendment
On 9 February 2007, minor but important amendments were made to the
Regulations. The "Meriton" problem was cured by transitional
arrangements allowing the development of staged projects and even
fitouts. The swapping of "commercial" and "light industrial" uses was
facilitated, subject to conditions. "Commercial" and "light industrial"
uses were defined as per the standard instrument. Swapping was allowed
between commercial uses, between light industrial uses and from light
industrial to commercial but only for uses not more than 1,000 sqm in
area. Minor alterations and additions were permitted. Enlargement was
limited to 10%, rebuilding prohibited as was intensification of use.
All of these conditions were designed to increase the pace of
transforming non-conforming uses to permitted uses in line with zoning
Land uses under the standard instrument
By restricting the flexibility of existing uses, the Department
invariably placed more pressure on the need for compatibility between
existing uses and the new zones. Such pressure was already high due to
the need for local councils to manipulate their existing zones into the
new and reduced suite of zones. Whilst my initial response to the
reduced suite of zones was that this would introduce flexibility, this
is proving not necessarily true. For example, bulky goods retailing is
not a mandatory use in any of the light industrial/ employment/
enterprise zone. Thus, if a council wishes to allow bulky goods
retailing, it must tag bulky goods retailing onto a zone, potentially
allowing the spread of bulky goods throughout the zone. The only other
alternative is to schedule individual sites for that use – such
schedules are at odds with the inherent simplification sought by the
adoption of the standard instrument. By placing individual sites with
special land uses within the schedule, we will create a block by block
zoning plan, sacrificing flexibility for micro control not justified by
any planning philosophy.
Critics of the unfettered, broad land use zones will, no doubt, call
for tighter control to avoid the spread of retail/ bulky goods
retail/commercial/office uses within zones taking no account of
infrastructure (especially transport) or the viability of existing
centres. It seems we may need to resolve the inherent conflict between
centralised and decentralised retail and commercial uses before we
embark on a micro-managed planning regime.
Conflict between existing uses and the new zones
Nowhere is the potential for problems better illustrated than a recent
client case. My firm had been asked to prepare a DA for a new tenant
going into a 15 year old bulky goods retail centre. During the course
of our usual investigations, we found that a draft LEP had not only
been through its s65 exhibition, but was already with the Department
for final checking and gazettal. Imagine our surprise and our client's
dismay to find the new zoning for the area was IN1 General Industrial
and bulky goods retailing was no longer permitted.
Our reading of the regulations was that all types of bulky goods
retailing swap were prohibited, whether or not over 1,000 sqm. Council
officers had the view that swapping between uses was permitted subject
only to the usual merit assessment. In the end, the Department advised
that swaps under 1,000 sqm were permitted but those over this figure,
the three major tenancies of the centre, could not be changed. The
problem was solved by consigning the site to the schedule at the end of
the LEP with an additional permitted use of bulky goods retailing.
Instead of the more flexible and simple system envisaged by the authors
of the standard instrument, we seam to be heading towards micro-managed
land use planning with all of the bad connotations implied by the term
"micro-managed". We have abandoned the flexible Warringah LEP model
(which offered much) and substituted an over-rigid system which will
come to rely more and more on rezoning as a means to solve
An immediate solution would be to free up the regulations restricting
the flexibility of existing uses. Whilst this represents back tracking
on past amendments, this seems a far easier solution than reviewing the
standard instrument or moving to another zoning model. Instead of the
previous unlimited flexibility given to existing use rights, swapping
of uses could be made totally open (subject to merit assessment),
restricted to maximum 10% enlargement and with the proviso that the new
uses must be complementary to the surrounding zoned uses. There should
be no limit on gross floor area. With such flexibility, we could avoid
problems due to the misalignment of existing and proposed uses, avoid
micro-managed land use zones and encourage commercial flexibility.
1 Pers comm., Yolande Stone, Department of Planning at EPLA Twilight Seminar, mid 2006
2 NSW Department of Planning, 'Planning Circular 06-007 Changes to Existing Use Rights' 31 March 2006
3 Stone op cit
4 Kim Bauer, Existing use rights: Analysing recent changes, Cityscape, April 2007