Land and Environment Court of New South Wales A La Turko Pty Limited v Canada Bay City Council [2005] NSWLEC 413 CITATION : This decision has been amended. Please see the end of the judgment for a list of the amendments. PARTIES : Canada Bay City Council FILE NUMBER(S) : 10588 of 2004 CORAM: Lloyd J Appeal :- section 56A of the Land and Environment Court Act 1979 - error of law - existing use rights - abandonment - failure to consider clauses 41 and 42 of the Environmental Planning and Assessment Regulation 2000 KEY ISSUES: Environmental Planning and Assessment Act 1979, ss 106 and 107(3) Environmental Planning and Assessment Regulation 2000, cll 41 and 42 LEGISLATION CITED: Interpretation Act 1987 Land and Environment Court Act 1979 s 56A AMP Henderson Global Investors v Valuer-General (2004) 134 LGERA 426; Brimbella Pty Limited v Mosman Municipal Council (1985) 79 LGERA 367; Coles v Woollahra Municipal Council (1986) 59 LGRA 133; Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 125; Hudak v Waverley Municipal Council (1990) 70 LGERA 130; CASES CITED: Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435; Randwick Municipal Council v Crawley (1986) 60 LGRA 277; Water Board v Glambedakis (1992) 28 NSWLR 694; Waterford v The Commonwealth (1987) 163 CLR 54 DATES OF HEARING: 10/06/2005 DATE OF JUDGMENT: 09/06/2005 APPLICANT: M G Craig QC SOLICITORS: Guy & Associates LEGAL REPRESENTATIVES: RESPONDENT: S A Duggan (barrister) SOLICITORS: Wilshire Webb JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Tuesday, 6 September 2005 LEC No. 10588 of 2004 A LA TURKO PTY LIMITED v CANADA BAY CITY COUNCIL [2005] NSWLEC 413 JUDGMENT 1 On 27 February 2004, Canada Bay City Council refused the applicant's development application for a restaurant and take-away food shop at No. 201 Lyons Road, Drummoyne. The applicant appealed to the Court against the refusal. On 12 January 2005, Commissioner Hoffman made a separate determination of a preliminary question raised in the appeal. The preliminary question is not set out in any notice of motion but arises from par 1 of the Statement of Issues that had been filed by the council's solicitors. That paragraph raised for consideration the following issue: The Applicant has not established that the proposed development is permissible pursuant to Division 10 of Part 4 of the Environmental Planning and Assessment Act 1979 (hereinafter referred to as the "EP&A Act"). 2 Division 10 of Pt 4 of the EP&A Act is headed "Existing uses". The commissioner determined that the existing use provisions of Div 10 of Pt 4 did not extend to the whole of the applicant's land, but only to the front part upon which there are three existing shops. The applicant's development application sought the use not only of the shops as a restaurant and take-away food shop, but also the use of the rear part of the land - occupied by a house, rear yard and detached garage - for the purpose of parking and storage. Since the whole of the land is presently zoned Residential 2(a) under the Drummoyne Local Environmental Plan 1986 (Amendment No. 3) , in which such uses are prohibited, the effect of the commissioner's determination is that the proposed development is prohibited. 3 The applicant now appeals against the commissioner's determination. It is, of course, not open for an appellant to challenge any findings of fact made by the commissioner, since this appeal is limited to a question of law: Land and Environment Court Act 1979 (the "Court Act "), s 56A. Notwithstanding this hurdle, the appellant submits that the commissioner made the following errors of law: (1) The commissioner failed to answer the question that he was requested to answer, namely, whether it was possible to grant consent for the use of the rear part of the applicant's land under cll 41 and 42 of the Environmental Planning and Assessment Regulation 2000 (the " EP&A Regulation "); (2) The commissioner erred in law in finding that there was no evidence that the house, the yard and the garage had been held in reserve for the expansion of the existing use, when there was evidence to that effect; and (3) The commissioner failed to determine the dominant purpose for which the land was used, which the applicant says was for the purpose of shops. Relevant Facts 4 The subject land comprises a typical suburban allotment on which stands a house described by the commissioner as a single storey Federation or Californian bungalow house. In the 1920's three shops were erected in front of the house, fronting Lyons Road, with the rear walls of the shops abutting the front wall of the house. Upon the commencement of the controls under the County of Cumberland Planning Scheme Ordinance on 27 June 1951, the whole of the land was within a "Living Area" zone, within which both dwellings and shops were permissible. On 12 December 1969 the Drummoyne Planning Scheme Ordinance commenced, under which the front part of the land occupied by the shops was reserved as County Road Widening 2(b) and the rear part of the land was zoned Residential 2(a). Shops were permissible with consent under the reservation and it thus follows that the shops were not an existing use, since "existing use" is defined as a use which is prohibited: EP&A Act, s 106. It was not until 7 September 1990 when the Drummoyne Local Environmental Plan 1986 (Amendment No. 3) commenced that the whole of the land was zoned Residential 2(a) and the shops then became a prohibited use and thus an existing use for the purpose of the definition. 5 After hearing evidence from the various owners of the property, from a former tenant of the house, and from nearby and adjacent residents, the commissioner made the following findings of fact, which I summarise in pars [6] - [8] below. 6 Until about 1995 the garage in the rear section of the property was used for storage purposes in connection with the shop (or shops) and the toilet in the garage was used by persons employed in the shop (or shops). The toilet in the garage was removed in about 1995, when the then owner, Mr H Kyrikos, put a toilet in the shop (then used as a single shop), and neither the garage nor the rear yard were thereafter used in connection with the shop (or shops). Since 1978 the house had been rented separately from time to time for residential purposes. The commissioner found that any existing use of the house and rear yard for the purpose of the shops had been abandoned since 1986 and the use of the garage for the purpose of the shops had been abandoned since 1995. This appears from the following paragraphs of the commissioner's reasons: [57] Based on the evidence of the objectors the house, the yard and the garage had not been used in conjunction with the shop for many years. The toilet in the garage had been removed and since around 1995, when Mr Kyrikos put the toilet in the shop, the last historical justification for the garage to be operated with the shop was deleted. After twelve months, abandonment occurred under the current existing use right provisions of the Act. Since 1996 and between 1996 and 2004, the evidence of the local residents and a past tenant of all three items, the house, yard and garage, attested to that abandonment. [58] There was no evidence that the house, the yard and garage had been held in reserve for the expansion of the existing use. 7 The commissioner found (at par [60]) that the house and yard were not used for commercial purposes since the video store in the shops commenced (which was in 1985) and also found that the garage ceased to be used, at the latest, in 1995. The house, rear yard and garage continued to be separately let, however, for residential purposes. 8 The commissioner's ultimate finding of fact, therefore, was that the existing use rights only applied to the existing shops at the front of the site (at par [64]). 9 I now turn to the three grounds that were advanced in this appeal. Ground 1: Failure to consider cll 41 and 42 of the EP&A Regulation 10 Clauses 41 and 42 of the EP&A Regulation provide as follows: 41 Certain development allowed (1) An existing use may, subject to this Division: (a) be enlarged, expanded or intensified, or (b) be altered or extended, or (c) be rebuilt, or (d) be changed to another use, including a use that would otherwise be prohibited under the Act. (2) A use to which an existing use is changed is itself taken to be an existing use for the purposes of the Act and may, subject to this Division, be changed to another use. 42 Development consent required for enlargement, expansion and intensification of existing uses (1) Development consent is required for any enlargement, expansion or intensification of an existing use. (2) The enlargement, expansion or intensification: (a) must be for the existing use, or for a changed existing use, but for no other use, and (b) must be carried out only on the land on which the existing use was carried out immediately before the relevant date. 11 According to the applicant's submission, as I understand it, the applicant relied upon cll 41 and 42 of the EP&A Regulation to authorise the making of the development application. Given the concession as to the existing use rights attaching to the shops, the only relevant inquiry to which the commissioner's fact finding was required to be directed was whether the proposed enlargement, expansion or intensification of the use was to be carried out on land on which the existing use was carried out at the relevant date, being December 1969. (The reference by the applicant to the relevant date as being December 1969 may be incorrect. Shops were a permissible use on the land on which they stood until 7 September 1990, when the shops then became a prohibited use and this may be the relevant date. The difference in the relevant date is, however, immaterial.) 12 As the council submitted, however, cll 41 and 42 of the EP&A Regulation do not arise for consideration unless the land in question had the benefit of the existing use rights. 13 The provisions of the EP&A Regulation cannot override the Act: Interpretation Act 1987 (NSW) s 32; Water Board v Glambedakis (1992) 28 NSWLR 694 at 702. Section 107(3) of the EP&A Act states that "a use is presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months" . The commissioner found that the part of the land containing the house, yard and garage was a separate unit of land to the shops and, although at some stage it was partly used in connection with the shops, such use had been abandoned. These findings of fact are not open to be questioned on an appeal limited to a question of law. Even a wrong finding of fact does not amount to an error of law: Waterford v The Commonwealth (1989) 163 CLR 54 at 77; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 654; Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 125 at 154, 158. In light of these findings of fact, there was no duty for the commissioner to go on and consider the application of cll 41 and 42 of the EP&A Regulation. Ground 2: No evidence that the house, yard and garage had been held in reserve 14 I summarised in pars [6] – [8] above the findings of fact made by the commissioner. The applicant's submission focuses on par [58] of the commissioner's conclusion: " There was no evidence that the house, the yard and garage had been held in reserve for the expansion of the existing use". 15 The applicant submits that there was in fact evidence of intention on the part of a previous owner of the property, Mr Kyrikos, to use the yard and garage for the purpose of the shops. I accept the applicant's submission that the subjective intention of the owner is a relevant factor in determining whether the presumption of abandonment is rebutted: Hudak v Waverley Municipal Council (1990) 70 LGERA 130 at 134, 137. I also accept the applicant's submission that to assert there is no evidence is an error of law, if, in fact, there was not an absence of evidence: AMP Henderson Global Investors v Valuer-General (2004) 134 LGERA 426 at 433-434. 16 The evidence that is said to amount to evidence of intention emerged during the cross examination of Mr Kyrikos and is as follows: Q. So you were renting the shop to get some money and you were renting the house to get some money and that was your only intention. A. I was renting the whole outlet. Q. So your idea in holding the property was as an investment to use for rental purposes. That was your intention. A Yeah. Q You didn't have any intention to sometime come along and knock it all down and build something bigger and better? You just wanted to use it to get rental income. A. Well, every owner in back of his mind there's a question like that. If you own something wouldn't you want to utilise if you had the opportunity, but not that that proceed. Q. In the 30-odd years you owned the property you didn't do anything to try to improve the property by perhaps building a bigger and better shop, did you? A. I did lightly [sic], I spent about $150,000. Q. Just doing the renovations on the shop. A. Yes. Q. But that's still restricting the shop to the area where it is, that was your intention, just to make the shop where it was as good as you could. A. Yes, replace what was there and build, put and aluminium plus veranda plus fix the house inside. Q. Do you feel you did as good as you could in improving that shop to get the best value you could out of it? A. Yeah. Q. And at the same time you were very comfortable just to keep the house as a house because you could get rent out of it? A. Well, look, if someone were to come along and rent it as a doctor's facilities I would give it to him. Q. But you were quite content just to use is as a rental property for whoever come along and paid you the rent you were asking. A. What's on offer, I was open to what's on offer. At the time I didn't have any money to feather my nest. Q. You weren't keeping the house with the idea you were going to do something with it one date later on. You were keeping the house because you wanted to rent it out to whoever it was who came along who paid you the money that you wanted to get for the house. It was an investment and that's all it was. A. One time I inquiry if I can do something. Q. When was that you made that inquiry? A. Inquiry to make, to build, knock it down and build block of units or something, out of curiosity I suppose, not that I had any money. … PATTERSON: Q. Did you ever investigate the zoning of the land? Did you ever look at it and see what you could do with the land, what the potential for the land was? A. From what I see the owner just after me it was – he had the same type of history and of course they build a restaurant that's why I proceed and the restaurant was there for so many years and when I inquiry they asked me about car park and that, even for the other, even if I wan A. From what I see the owner just after me it was – he had the same type of history and of course they build a restaurant that's why I proceed and the restaurant was there for so many years and when I inquiry they asked me about car park and that, even for the other, even if I want to utilise it as three shop they asked me if a car park and in fact the restaurant, Chinese restaurant, he just as it was in the early years I've been there, never, no car park, no nothing. I said in fact, "If he can do why couldn't I?" When I bought the property I bought it as a commercial block of land and I bought it for the fact that he had a house too and it was good for me to put my family also. … Q. Your intention when you were using it as a house was it was to be used as your house, that was your house, nothing more, nothing less. Is that the case? A. Yeah, not the whole section, I mean, the garage we were using, I told you, many times, we were utilising as a storage and parking our car. Q. Yes, I understand that. A. And in fact if I wanted to put more cars at the back I would've, at the back of the block of land. 17 The applicant also relies upon par [29] of the commissioner's reasons, which recite the fact that there was another shop on the opposite corner of Lyons Road and Janet Street, the fact that the council had approved it becoming a restaurant with car parking in the back yard and the fact that Mr Kyrikos said that he thought he could do the same. The applicant also relies upon the evidence of Mr T Tufan-Boga, one of the present registered proprietors of the property. The commissioner noted at par [33] of his reasons that Mr Tufan-Boga intended at the time of purchase to use the loading dock with the garage for a freezer and he only abandoned that plan when the council's staff said that on-site parking was needed. 18 It must be kept in mind, however, that whilst evidence of the subjective intention of the owner may be a relevant consideration on the question of abandonment, it is but one of the circumstances to which regard must be had in determining whether there has been an abandonment of the use: Hudak at 137. A subjective intention to resume a use, although a relevant factor, is not by itself sufficient to rebut the presumption of abandonment under s 107(3) of the EP&A Act . Moreover, the owner bears the onus of showing that there was an intention to continue the existing use: Hudak at 134. The principle was expressed by Hope JA in Hudak in the following terms (at 138): Where a year has passed without actual use, the owner seeking to establish non-abandonment must establish factors sufficient to outweigh the presumption which the passage of time imposes. 19 Hope JA also said (at 137-138): ..where the factor said to be delaying a resumption of the existing use is something of an indefinite character, such as winning the lottery, there would be little difficulty in concluding that the cessation of use for a similar period of time involved an abandonment. 20 The commissioner set out the extensive evidence of non-use of the house, rear yard and garage for the purposes of a shop as observed by nearby and adjacent residents over several years. The commissioner also noted a written statement from Mr Kyrikos (Exhibit E) and the evidence in chief of Mr Kyrikos, none of which contains any reference to an intention to keep the house, the rear of the land or the garage in reserve for the purpose of the shop or of some other use. I thus accept the submission of the council that it was open to the commissioner to find that there was no evidence that the house, the rear yard or the garage had been held in reserve for the existing use. That is, a reasonable understanding of the commissioner's statement in par [58] of his reasons, noted above, is that there was no evidence to satisfy him that the presumption of abandonment had been displaced. If par [58] is read in this way then there is no error of law. 21 Moreover, a reading of the evidence of Mr Kyrikos shows that it does not amount to displacing the presumption of abandonment. As noted above there is nothing in his written statement (Exhibit E) or in his evidence in chief to displace that presumption. In his cross-examination, his admissions that " I didn't have any money too feather my nest" and "if I had the opportunity to utilise something else, get more money, I would ", as well as his enquiry to build a block of units was "out of curiosity, not that I had any money" , are statements of such indefinite character as to be insufficient to displace the presumption. 22 It has been said on many occasions that on an appeal from a commissioner of the Court which is confined to a question of law, the Court should not examine too narrowly the words used in the decision: Brimbella Pty Limited v Mosman Municipal Council (1985) 79 LGERA 367 at 368; or in another way, the "fine-tooth comb" approach should not be employed when examining such decisions: Coles v Woollahra Municipal Council (1986) 59 LGRA 133 at 138, Randwick Municipal Council v Crawley (1986) 60 LGRA 277 at 283 at 302. In North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435, Kirby P warned (at 442) against examining reasons in an overly critical or pernickety way. 23 In applying these principles to the commissioner's finding that there was "no evidence that the house, the yard and the garage had been held in reserve" , in the sense that there was no evidence to satisfy the Court of that fact, then there has been no error of law. That is, there was no evidence which satisfied the commissioner that the house, yard and garage had been held in reserve. In light of the evidence in both the written material that was before him and in the transcript of evidence, it appears that this was the sense in which the commissioner used the words that he did. 24 Accordingly, I do not find any error of law arising under this ground of appeal. Ground 3: Failure to determine the dominant purpose for which the land was used 25 The applicant submits that the question of whether there was a dominant use over the whole of the land or two separate co-existing uses was raised as an issue to be determined by the commissioner. The applicant alleges that the commissioner failed to determine that question. It was the applicant's contention that the proper categorisation was that the use for shops was the dominant use and the use as a dwelling was the subordinate use. 26 It is clear from a reading of the commissioner's reasons, however, that he considered the two parts of the land as separate units, based upon the evidence that was before him. The evidence shows that the house appears to have been separately let and occupied when the shop became a video store in 1984 and was possibly separately let and occupied before that date. The commissioner notes the fact that Ms Bathur gave evidence that she leased the house for 18 months from April 2001 and that the lease included the yard and the garage; and that it was used by her only for residential purposes. This evidence is consistent with the observations of neighbours who also gave evidence and who saw the house, yard and garage being used only for residential purposes since about 1985 or 1986. 27 A reading of par [57] of the commissioner's reasons shows that it is clear that he accepted this evidence and that he regarded the use of the shops on the one hand and the use of the house, yard and garage on the other hand, as two separate and independent uses. This conclusion from the evidence is a finding of fact which rendered irrelevant the question of whether one use was dominant and the other use subordinate. Moreover, being a finding of fact, it is not open to be reviewed on appeal. Conclusion 28 It follows that since no error of law has been demonstrated, the appeal must be dismissed. It also follows that the applicant should pay the respondent's costs of the appeal. Orders 29 The Court orders that: (1) The appeal is dismissed. (2) The applicant pay the respondent's costs of the appeal. I hereby certify that the preceding 29 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. Associate Dated: 6 September 2005 ********** - 1 - 06/09/2005 - Spelling error - Paragraph(s) Date 07/09/2005 - Duplication of text - Paragraph(s) 3 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. 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