Pending Appeal : Land and Environment Court of New South Wales CITATION : Swansea RSL Club and Rosecorp Pty Limited v Council of the City of Lake Macquarie [2006] NSWLEC 381 APPLICANTS Swansea RSL Club PARTIES : Rosecorp Pty Limited RESPONDENT Council of the City of Lake Macquarie FILE NUMBER(S) : 10196 of 2005 CORAM: Talbot J KEY ISSUES: Development Application :- proper characterisation of proposed development - whether one dominant purpose or two separate uses. Environmental Planning and Assessment Act 1979 Lake Macquarie Local Environmental Plan 2004 LEGISLATION CITED: Liquor Act 1982 Registered Clubs Act 1976 State Environmental Planning Policy 65 – Design Quality of Residential Flat Development Baulkham Hills Shire Council v O'Donnell (1990) 69 LGERA 404; Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157; CASES CITED: North Sydney Municipal Council v Hall & Ors (1987) 62 LGRA 1; Swansea RSL Club & Rosecorp Pty Limited v Council of the City of Lake Macquarie [2005] NSWLEC 755; Warehouse Group (Australia) Pty Ltd v Woolworths Ltd (2005) 141 LGERA 376 DATES OF HEARING: 07/06/2006, 08/06/2006 DATE OF JUDGMENT: 07/07/2006 APPLICANTS Mr M G Craig QC with Mr M D Seymour (barrister) SOLICITORS LEGAL REPRESENTATIVES: Deacons RESPONDENT Mr T F Robertson SC SOLICITORS Council of the City of Lake Macquarie JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Talbot J 7 July 2006 10196 of 2005 Swansea RSL Club & Rosecorp Pty Limited v Council of the City of Lake Macquarie JUDGMENT 1 Talbot J: The Court has already delivered a preliminary judgment in this matter (Swansea RSL Club & Rosecorp Pty Limited v Council of the City of Lake Macquarie [2005] NSWLEC 755). On 31 January 2006 a number of issues were determined as preliminary points generally against the interests of the applicant seeking to obtain development consent in respect of the development described at paragraph 5 of the first judgment. One question was related to whether or not the proposed development could be characterised as a club being a use permissible with consent under the Lake Macquarie Local Environmental Plan 2004 ("LM LEP 2004") in the 7(4) Environmental (Coastline) zone. 2 Following the observations and findings in paragraphs 47 to 67 under the heading "Proposed Residential Flat Buildings" in the preliminary judgment the applicant contends that the issue of whether the whole of the development proposed can be regarded as a club, as defined, has been left open for final determination. Further argument has proceeded on that premise. This second judgment should be read in conjunction with the first. 3 In my first judgment I indicated that I was unable to fathom any reason which would prohibit the club obtaining a certificate of registration in respect of the whole development, that is, I was not persuaded there is an underlying impediment, statutory or otherwise, to the making of an application to the Licensing Court supported by the appropriate plans on the basis that the whole of the premises be registered as a club (see [62] of the first judgment). Further submissions by the respondent have not persuaded me to change that view. 4 Section 9(3)(ii) of the Registered Clubs Act 1976 has the effect that the Licensing Court shall not grant an application for a certificate of registration for a club unless an approved plan of the proposed premises of the club showing clearly the accommodation proposed to be provided in those premises is delivered to the Registrar at least 14 days prior to the day appointed for the commencement of the hearing of the application. An approved plan is defined in s 4 of the Registered Clubs Act as follows: approved plan , in relation to proposed club premises, or a proposed addition to or alteration of club premises, means a plan of the proposed premises, or of the proposed addition or alteration, that accompanies any development consent required under the Environmental Planning and Assessment Act 1979 for the carrying out of the work represented by the plan, or evidence that such consent is not required. 5 The scheme in relation to the registration of a club therefore contemplates that a development consent under the Environmental Planning and Assessment Act 1979 ("the EPA Act") is obtained beforehand. It is not appropriate for this Court to trespass beyond its jurisdiction under the EPA Act to consider the merits of any application before the Licensing Court and to foreshadow the outcome of making such an application. Nevertheless proceeding for the purposes of argument on an assumption that the premises may be capable of registration is not the end of the inquiry under the EPA Act, for the reasons identified by Mr Robertson SC, who appears for the council. 6 The respondent council argues that proposed residential flat buildings (RFB) cannot be lawfully registered as a club or as part of a club. However on the basis that the RFB may be characterised as a club (which is not admitted) Mr Robertson calls up the relevant and familiar principles of characterisation where a use of land has different purposes. The question raised by Mr Robertson is whether the proposal to provide residential accommodation in the form of serviced apartments and dwellings as individual units comprising 96 residential apartments is a dual purpose or independent use as a question of fact and degree. The following well-known passage from the judgment of Glass JA in Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 161 is apposite: Where the whole of the premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged. 7 It is uncontroversial that the Court must concern itself with questions of fact and degree in each case to determine whether one use is subordinate to a dominating use which dictates the characterisation of the development as a whole or if the uses are to be regarded as independent and to operate as individual and separate uses. In this respect the Court is entitled to have regard to the way in which the development application is made and to take into account the proposed use of the land nominated by the applicant for development consent. 8 Mr Robertson also relies upon the principle enunciated by Meagher JA (with whom the other members of the Court agreed) in Baulkham Hills Shire Council v O'Donnell (1990) 69 LGERA 404 at 409-410 that notwithstanding the judgment of the Court of Appeal in Foodbarn: …it does not follow that a use which can be said to be ancillary to another use is thereby automatically precluded from being an independent use of the land… When one use of the land is by reason of its nature and extent capable of being an independent use it is not deprived of that quality because it is "ancillary to" or related to, or interdependent with, another use. 9 Mr Robertson identifies the relevant characterisation principles as follows: a. If there are multiple independent uses of a site, and neither is subservient to the other, inquiry must be made as to the permissibility of each use: Hawkesbury Shire Council v Mitchell (1988) 64 LGRA 235 at 238; Doyle v Newcastle City Council (1990) 71 LGRA 55; RCM Constructions Pty Ltd v Ryde City Council [2004] NSWLEC 266 at [45]. b. If an activity fits into more than one category and one of those categories is the use of land for a permitted purpose and the other for a prohibited purpose, then consent cannot be given to the application: CB Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270 at 272 per Hope JA, 276 per Reynolds JA; subsequently in Egan v Hawkesbury City Council (1993) 79 LGRA 321 at 333 per Cripps JA; Hopkins v Tweed Shire Council (2001) 113 LGERA 406 at [40]; Westfield Management Pty Ltd v Gazcorp Pty Ltd (2) (2004) 135 LGERA 220 at [14]; Liauw v Gosford City Council (2004) 136 LGERA 349 at [19]; see also Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 328 per Mahoney JA. Consent can be given to the proscribed use when it falls within a permitted use if there is, in the relevant LEP and the context, 'some appropriately compelling consideration for the departure from the ordinary and natural meaning of the terms': Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 328-329 per Mahoney JA; Berowra RSL Community and Bowling Club Ltd v Hornsby Shire Council (2000) 114 LGERA 345 at [29]-[30]. c. Contrary to the applicants' submissions, the permissibility of the genus does not render permissible a specific use that is otherwise prohibited: Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 328 per Mahoney JA; Berowra RSL Community and Bowling Club Ltd v Hornsby Shire Council (2000) 114 LGERA 345 at 355-356; RCM Constructions Pty Ltd v Ryde City Council [2004] NSWLEC 266 at [45]. d. If the purpose for the particular use to which the land is devoted is incidental or ancillary to the purpose for which the land may permissibly be used, then it can be disregarded. If, on the other hand, the use does not subserve the other permissible purpose but operates in a way which is independent of and not merely incidental to other purposes and is prohibited, then it should be treated as a separate use, that is, the use of land for a purpose which is prohibited: Foodbarn Pty Ltd v Solicitor General (1975) 32 LGRA 157 at 161. It is a question of fact and degree in all the circumstances of the case whether a use which can be said to be ancillary to another use is thereby automatically precluded from being an independent use of the land. When one use of land is by reason of its nature and extent capable of being an independent use, it is not deprived of that because it is 'ancillary to', or related to, or interdependent with, another use: Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 at 409-410 per Meagher JA (Samuels AP & Clarke JA agreeing); Ashfield Municipal Council v The Australian College of Physical Education (1992) 76 LGRA 151 at 156. 10 The premises must be characterised in planning terms. That process involves an application of the principles identified by Mr Robertson. If the development can be characterised as a club and nothing else, subject to what hereafter appears, it would be open for the Court to exercise its discretion to grant development consent for the purposes of a club in town planning terms even though a further license is required under the Registered Clubs Act and the Liquor Act 1982 or if there is some other statutory requirement that must be satisfied before the applicant is entitled to carry out the proposed club activity. LM LEP 2004 11 Pursuant to cl 15 of LM LEP 2004 residential flat buildings are prohibited in the 7(4) zone. That is because residential flat buildings are not identified as development that may be carried out without consent or only with development consent and therefore fall within the category of development not so listed. 12 There are zones in LM LEP 2004 that expressly permit development for residential flat buildings with development consent (see, for example, zone 2(2) Residential (Urban Living) Zone). 13 A residential flat building is defined in LM LEP 2004 as follows: residential flat building means a building that comprises or includes: (a) 3 or more storeys (not including levels below ground level provided for car parking or storage, or both, that protrude less than 1.2 metres above ground level), and (b) 4 or more self-contained dwellings (whether or not the building is also used for other purposes, such as shops), but does not include a Class 1a building or Class 1b building within the meaning of the Building Code of Australia. 14 In my view as a matter of construction a clear intention is expressed by identifying residential flat buildings as permissible with consent in certain zones while not referring to them in other zones. The intent is that residential flat buildings are acceptable only in the zones where they are permissible with consent and prohibited in any other zone. That dwelling houses are not listed as development permissible with consent in the 7(4) zone is further confirmation that there was an intention to ensure that the coastline environment referred to in the objectives of the zone be respected by limiting the opportunity for development in the zone to the compatible uses nominated in the table under zone 7(4). The 7(4) zone is clearly not a living area or dwelling zone. 15 The use of the apartments for the purposes of a club may bring them within that defined use. The respondent's argument however is that the premises would nonetheless be used as a residential flat building and that would be contrary to the provisions of LM LEP 2004 (North Sydney Municipal Council v Hall & Ors (1987) 62 LGRA 1 at 6). The Development Application 16 In the present case the application form contains the following description: Club, Sports Club, Residential Apartments, Serviced Apartments and Subdivision. 17 The Statement of Environmental Effects which accompanied the development application recognised that State Environmental Planning Policy 65 – Design Quality of Residential Flat Development ("SEPP 65") applied to the residential buildings by including an architect's verification of compliance with the design criteria as required by that planning instrument. In accordance with the design principles of SEPP 65 the proposal was classified as a "high quality residential development". The intended population of the residential buildings is identified by the architects in paragraph 56 of the first judgment. The residential apartments are described as distinct components of the overall development separate to part 1 of the club, including the bowling green; part 2 of the club; the sports club and subdivision. The club building is separately dealt with in section 2.2 of the Statement of Environmental Effects by reference to a total floor area of approximately 7,708 m2 of which the licensed area is 2,687 m2 with a total gross floor area of the registered club as 5,329 m2 with a separate gross floor area for the sports club of 2,379 m2. The accommodation is described in section 2.3 of the Statement of Environmental Effects as follows: The accommodation will be in the form of 96 residential apartments over 5 levels with basement car parking. The apartments will provide a mix of accommodation options. The residential types include bed sitters, one bedroom, 2 bedrooms, 3 bedrooms and 3 to 4 bedrooms. The plans lodged in support of the development application with the Statement of Environmental Effects identify the club building as a sports club and refer to the area in which the RFB are proposed as a residential precinct. 18 The Heritage Impact Statement states that "[t]he intent is to create a distinct village to complement the existing village. The precinct will have its own internal streets/pedestrian walkways and public squares to break up the buildings and to provide attractive landscaped open spaces." A perusal of the supporting plans supports this concept. The sports club and the bowls club are also dealt with as separate entities in the Heritage Impact Statement. 19 It is necessary to have regard to the specific nature and extent of the buildings proposed to be occupied as residential and serviced apartments. There could be examples where the number and size of the units and their intended use may be regarded as part of the overall development, and subsumed within a club use of the land. Mr Robertson uses the example of a motel that may be owned by a club and form part of the premises registered under the Registered Clubs Act. Nevertheless he says the registration would not necessarily change the character of that part of the complex used for accommodation as being anything other than a motel, for planning purposes. 20 In the present case the proposed accommodation buildings are comprised within a complex that is separated from the actual club building and in planning terms will be seen as a separate and distinct array of buildings used for the specific purpose of human habitation. The activities directly associated with the use of the flat buildings, again in town planning terms, will have characteristics that are distinct and discernable from the impacts and consequences associated with a club as that term is normally understood, namely as a place of entertainment for carousing, dining, sporting activities and other forms of recreation. Recognised in that way it is not inappropriate in my opinion to regard the use of the clubhouse and its environs as one use and the use of the residential precinct as a separate and distinct use for the purpose of characterisation of the development in a planning context. Characterisation of the Subject of the Development Application 21 Mr Craig QC, who appears for the applicants, persists with the argument that what is proposed is development for a club. However, the development application and supporting documents do not bespeak of the whole development as a club. The submission in the development application was that because residential flat buildings were a prohibited use the applicant would rely on existing use rights. I held in the first judgment that the applicant could not rely on existing use rights. No amendment has been made to the development application that changes the proposal in that respect. 22 Mr Robertson seizes upon the fact that the applicant has not taken the opportunity to amend the development application in a way that would bring the residential flat buildings within the club proposal. Mr Craig meets the criticism by Mr Robertson in respect of the failure to amend the development application by submitting that the phrase "residential flat building" where used in the development application and supporting documents is a convenient term to describe that component of the club development. I do not read the development application and supporting documents in that way. 23 The following extract from the Statement of Environmental Effects confirms this conclusion: Consent is sought on the basis of existing use right for a residential flat building…In total, 26 of the proposed 96 units do not meet the permanent residence criteria. These are mostly "rear" ie south facing apartments. Consent for these 26 apartments is sought on the basis that they will be serviced apartments ie temporary tourist accommodation only and not residential buildings. Consent for the other 70 apartments is sought on the basis of a residential flat building. 24 At 4.9.2 of the Statement of Environmental Effects the statement is made that the club comprises the registered club, sports club and car parking and that the club buildings are wholly within 7(4) zone and are permitted with development consent under the provisions of LM LEP 2004. Then follows a section explaining the existing use rights that are said to attach to the land followed by the abovementioned details of the proposal. 25 In the circumstances where the development application has already been the subject of an amendment during the course of the proceedings, at a time when the very issue was alive, and the applicant has expressly neglected to take the opportunity to further amend the development application, it is appropriate to treat the subject of the application as being fully and properly described in the application form and the documents included with the Statement of Environmental Effects. Moreover, the applicant has had the benefit of the findings and reasoning published in the first judgment and has since taken the opportunity to re-agitate some of the issues considered during the first hearing. It has addressed the question of the characterisation of the residential component of the development at the second hearing. Yet no amendment has been forthcoming (see [66] of the first judgment). 26 Most telling against the applicant is the representation of the proposal in the development application documents. The development application was lodged on the basis that clubs are permissible within the 7(4) zone whereas the development of the residential flat buildings depended upon the proof of an existing use. If the applicant truly intended that the accommodation form part of the premises registered under the Registered Clubs Act then any reference or dependency upon existing use rights would have been unnecessary. 27 In Warehouse Group (Australia) Pty Ltd v Woolworths Ltd (2005) 141 LGERA 376 Hodgson JA summed up his approach to the question whether a development application was a nullity at [80]-[83]: [80] The application, read with accompanying material, purported to be an application for consent for a bulky goods salesroom, but some of the accompanying material elaborated on what was proposed to be done; and it follows from my decision as to the meaning of "bulky goods salesroom" that what was proposed would not in fact qualify as use as a bulky goods salesroom… [81] However, these indications as to what was proposed were coupled with submissions that this qualified as use for a bulky goods salesroom; and in those circumstances, in my opinion, these indications were not sufficient to make the application something other than what it purported to be, namely an application for consent for a bulky goods salesroom… [83] In my opinion… the problem(s)…could have been overcome by amendment of the application, pursuant to Regulation 55, so as to make it fully comply with both the requirements for a bulky goods salesroom. 28 Basten JA expressly approved the answer to the characterisation question determined by Hodgson JA at [145]. 29 Applying the Warehouse approach by taking into account what was proposed in the application for consent coupled with the material lodged in support I find that what is proposed as to part is a club and a residential flat building as to a further part. Conclusions 30 Based upon Foodbarn and O'Donnell the buildings in the residential precinct, as a matter of fact and degree, should be regarded as residential flat buildings and hence prohibited. In a planning context the residential component is clearly intended to be held in separate ownership by individual investors and treated as a separate and independent use (see [58] of first judgment). It is certainly capable of being an independent use (O'Donnell). The prospect of a lease to the club for its purposes is no more than a device designed to mask the real character of the development (see [65] of the first judgment). In a town planning context the residential accommodation comprises a separate and distinct category of development irrespective of whether it is ultimately brought within the definition of a club. 31 One of the proposed uses, namely for a club, is permissible with consent whereas the other use for a residential flat building is not. Where an integral part of a whole development is prohibited then the application is a nullity and cannot be considered. Accordingly there is no development application upon which to base an appeal and the Court therefore has no jurisdiction to entertain the proceedings. 32 The application must therefore be dismissed. The exhibits may be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.