Land and Environment Court of New South Wales CITATION : Randall Pty Limited v Willoughby City Council [2004] NSWLEC 295 APPLICANT Randall Pty Limited PARTIES : RESPONDENT Willoughby City Council FILE NUMBER(S) : 11226 of 2003; 10071 of 2004 CORAM: Talbot J KEY ISSUES: Development Application :- proper basis for consideration of economic impacts of the locality - test for characterisation of development Appeal :- Commissioner's duty to give reasons - approach of "fine tooth comb" rejected Environmental Planning and Assessment Act 1979 s 79C, s 79C(1)(b), s 91(1)(d), s 96 LEGISLATION CITED: Land and Environment Court Act 1979 s 56A Sydney Regional Environmental Plan No. 5 (Chatswood Town Centre) cl 5, cl 7, cl 7H Development Control Plan No. 2 - Traffic Requirements for Development Athens and Another v Randwick City Council [2002] NSWCA 83, unreported; Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404; Botany Bay City Council v Farnworth Holdings Pty Limited [2004] NSWCA 157, unreported; Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367; CASES CITED: Cartier Holdings Pty Ltd v Newcastle City Council and Another (2001) 115 LGERA 407; Foodbarn Pty Limited and Others v Solicitor-General (1975) 32 LGRA 157; Kentucky Fried Chicken Proprietary Limited v Gantidis and Another (1979) 140 CLR 675; North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435; Penrith City Council v Waste Management Authority (1990) 71 LGERA 376; Randall Pty Ltd v Willoughby City Council [2004] NSWLEC 83, unreported DATES OF HEARING: 28/05/2004 DATE OF JUDGMENT: 06/11/2004 APPLICANT Mr D J Hammerschlag SC with Mr P R Clay (Barrister) SOLICITORS Moloney Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr J A Ayling SC with Ms H P Irish (Barrister) SOLICITORS Mallesons Stephen Jaques JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 11226 of 2003 10071 of 2004 Talbot J 11 June 2004 Randall Pty Limited Applicant v Willoughby City Council Respondent Judgment Introduction 1 Commissioner Bly has dismissed two appeals in respect of applications made pursuant to s 96 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") to modify development consent No. 1996/0643 granted by Willoughby City Council ("the council") for a multi-storey mixed use development with associated basement car-parking at 24 Anderson Street, Chatswood, known as the Regency ("the land"). The applications relate to condition 41 of the consent, which reads as follows:- 861 car parking spaces are to be provided on site. These spaces are to be physically identified on site, maintained free of obstruction and under no circumstances used for the storage of goods or waste products. Of these 861 spaces, a maximum of 552 are to be allocated to individual residential units. The remaining 59 spaces allocated within the secured residential parking area are to be provided for use by residential visitors to the site. The remaining 250 spaces are to be provided for staff and visitors to the retail and leisure centre and for short-term residential visitor parking. In this respect all 250 spaces are to be maintained as accessible by all these user groups. All car parking spaces are to be managed in accordance with a cap parking plan of management which shall be submitted PRIOR TO RELEASE OF THE BUILDING APPROVAL and be to the satisfaction of Council's Director of Environmental Services. The car parking plan of management shall provide a schedule of fees for the use of the car park and such fees shall be commensurate with other similar car parks in the Chatswood area or as the Director of Environmental Service otherwise directs. (Emphasis added) 2 In matter No. 10071 of 2004 the applicant seeks to change condition 41 by replacing the requirement for 250 spaces to be maintained as accessible by all "these user groups" so that up to 60 spaces may be made available for lease, provided at least 190 spaces are maintained as accessible by all "these user groups". 3 In matter No. 11226 of 2003 the applicant seeks to add a further condition 41A as follows:- Notwithstanding anything to the contrary in the Car Parking Plan of Management referred to in Condition 41, fees may be charged for the first two hours parking. 4 Commissioner Bly dismissed the appeals on 19 March 2004 after a two-day hearing in February. 5 The applicant has exercised its right of appeal pursuant to s 56A of the Land and Environment Court Act 1979 ("the LEC Act"). 6 For convenience, matter No. 11226 of 2003 is referred to as the Fees application whereas matter No. 10071 of 2004 is referred to as the Lease application. 7 In the Fees application it is submitted by the applicant that the Commissioner made four core errors of law:- (a) A failure to apply the test which s 79C(1)(b) of the EP&A Act requires and instead applied a test contrary to authority, namely to rely upon the impact of the proposed modification on private individual traders; (b) A failure to make findings which the appropriate test required him to make, in particular findings which were, or which were sufficiently, linked to the zone objectives specified in cl 7H of Sydney Regional Environmental Plan No. 5 (Chatswood Town Centre) ("SREP 5"); (c) The Commissioner made findings of fact which were, on the evidence, not reasonably open to be made; and (d) The Commissioner placed reliance on an impermissible matter, namely on the existence of the terms of the consent as a basis for his refusal to modify it. 8 It is submitted by the applicant that in determining the Lease application the Commissioner made the following three errors of law:- (a) Placing an onus on the applicant, which it did not have, and by not engaging in the exercise of weighing the relevant positions taken by expert witnesses; (b) A failure to apply the test which s 79C(1)(b) of the EP&A Act requires and instead applied a test contrary to authority, namely by relying on the adverse economic impact on the businesses in the building; and (c) A finding that leasing of any part of the car park would result in those leased spaces not being ancillary to development on or adjoining the land which comprises the whole development known as the Regency. Economic impacts 9 Section 79C(1)(b) of the EP&A Act requires that, in determining a development application, a consent authority is to take into consideration the likely impacts of the development, including "economic impacts in the locality". 10 In Kentucky Fried Chicken Proprietary Limited v Gantidis and Another (1979) 140 CLR 675, Barwick CJ, in the course of defining the permissible scope of a planning authority's consideration, said that in his opinion economic competition feared or expected from a proposed use is not a planning consideration within the terms of the Planning Scheme Ordinance of the Melbourne Metropolitan Planning Scheme. He went on to say, at p 681, that restraint or prevention of economic competition is not part of the orderly and proper planning of the particular zone. He recognised that economic viability of the area may be relevant if it threatened the amenity of the neighbourhood. In the same context Stephen J, a p 687, expressed an opinion that if the shopping facilities presently enjoyed by a community are put in jeopardy by proposed development due to physical or financial causes and the proposed development does not make good that detriment then that is a consideration "proper to be taken into account as a matter of town planning". Stephen J placed considerable significance upon the use of a reference to "facilities" rather than a mere threat of competition to existing businesses. Gibbs, Mason and Aickin JJ agreed with Stephen J. 11 In the course of his judgment (Randall Pty Ltd v Willoughby City Council [2004] NSWLEC 83, unreported) in respect of the Fees application, Commissioner Bly accepted that the proposed fees would most likely have a negative impact on the economic viability of existing and future businesses within the Regency centre. He further observed, in relation to the Lease application, that for reasons similar to those expressed in relation to the Fees application, the denial of general access to 60 parking spaces would have an adverse economic impact on the businesses in the Regency. The impacts identified by Commissioner Bly are, in my opinion, quite distinct from the impacts rejected by the High Court in Kentucky Fried Chicken. The issue of competition between individual traders does not arise. However, what does arise is the prospect of an adverse effect upon the extent and adequacy of parking facilities available to the users of the Regency centre. That, in my view, is a proper town planning consideration for the reasons explained by Stephen J in Kentucky Fried Chicken. The High Court based its decision upon a planning instrument which did not include a provision such as the former s 90(1)(d) and the present s 79C(1)(b) of the EP&A Act. The categories of economic impact that arise for consideration pursuant to s 79C are not closed, except to the extent that it needs to be shown that the impacts occur in the locality. This coincidentally may involve impact on individual traders. In the circumstances of the present case, the economic impacts identified by Commissioner Bly arise, not from competition but, from a reduction in parking accommodation that could have an adverse economic impact on businesses in the locality, namely the Regency centre. There is a helpful discussion supporting this conclusion in Cartier Holdings Pty Ltd v Newcastle City Council and Another (2001) 115 LGERA 407. I am not satisfied that Commissioner Bly relied upon an impermissible matter or failed properly to give the consideration which s 79C(1)(b) of the EP&A Act requires. The objectives of SREP 5 12 Clause 7 of SREP 5 precludes a council from granting development consent unless it is of the opinion that the development is consistent with one or more of the aims of the plan and at least one specific objective of the zone within which the development is proposed to be carried out. The submission of the applicant appears to be that the Commissioner failed to link his findings to specific objectives of the zone. It is correct that the Commissioner does not deal specifically with the objectives of the 3(c1) Business Retail zone, which seek to maintain the retail character of the zone and to consolidate the zone as the retail core of Chatswood. 13 The applicant's complaint is that the Commissioner's finding distils into the conclusion that parkers at the Regency and customers of outlets at the Regency will take their business elsewhere. Even if it can be shown that the Commissioner did make such an assumption, nevertheless the requirement to be satisfied that the development is consistent with at least one specific objective of the zone is no more than a mandatory requirement prior to the granting of a consent. No consent was granted by the Commissioner for the reasons detailed in his judgment so that, in effect, it did not become necessary to satisfy the test of consistency with an objective. It is difficult, therefore, in the context of the outcome in the present case, to understand how the Commissioner made an error of law merely because he failed to consider whether the development would be consistent with an objective of the zone when ultimately the question of a grant of development consent did not arise. The evidentiary challenge 14 The following extracts from the Commissioner's judgment are challenged by Mr Hammerschlag SC, who appears for the applicant:- 21. In relation to the fees application I have been persuaded by the evidence provided on behalf of the respondent. More particularly in relation to economic impacts I accept the evidence of the objectors and Mr Hill that the proposed fees would most likely have a negative impact on the economic viability of existing and indeed future businesses within the centre. I do not accept the argument that because of their limited number and size the businesses in the Regency would not be economically affected by the introduction of a fee for parking. 22. I also accept the evidence of Mr Hallam that the affected parking spaces would be likely to have a lower level of use because the proposed fees would encourage customers to park elsewhere. This would be inappropriate given that the car-parking spaces have been provided in accordance with the consent and in response to the demand likely to be generated by the associated land uses within the development. Also, if the proposed fee for parking has the effect of discouraging use of the carpark this may, as suggested by Mr Pindar result in the carpark being utilised for long-term parking purposes unrelated to commercial uses within the Regency. I also accept the evidence that the proposed fee to park arrangement would most likely result in customers and visitors of the Regency making use of the free short-term parking at Chatswood Chase and Westfield. … 32. Whilst Mr Pindar's separate analysis of carparking requirements may have some merit, I have not been persuaded that the approach taken by Miss de Carvalho and supported by Mr Hallam in applying DCP 2 is incorrect. On this basis I would give determinative weight to the DCP and cannot accept that general access to 60 parking spaces should be denied. 15 It is submitted by Mr Hammerschlag that the finding by Commissioner Bly that the proposed parking fees would most likely have a negative impact on the economic viability of existing and future businesses within the centre, was made in reliance upon the evidence of objectors and the expert, Martin Hill, who conceded that he did not make an independent analysis of the viability of the businesses. Moreover, the finding that customers would park elsewhere is not a relevant finding having regard either to s 79C(1)(b) or the specific objectives of the zone. 16 I have already dealt with the application of principle from Kentucky Fried Chicken and find no fault with the Commissioner's reasoning in that respect. Section 79C(1) deals with or raises the issue of the "likely" impact of the development. It is not a requirement that the consent authority find that there is an actual negative impact. The statutory requirement involves a notion of future performance of the development. Furthermore, the Commissioner received evidence from objectors who told of their experiences when the applicant had operated the car park contrary to the Plan of Management by failing to provide the first two hours free before interlocutory orders were made against it on 17 October 2003. 17 Although a Commissioner may have no less an onerous duty to give reasons for judgment than Judges (Botany Bay City Council v Farnworth Holdings Pty Limited [2004] NSWCA 157, unreported) nevertheless it is not appropriate, as has been said many times, to examine the judgment of a Commissioner with a "fine-tooth comb" in the same way that a court on appeal may examine the reasoning of a trial judge (Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 at 368, North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435 at 442). Even so, the decision of the Court of Appeal in Athens and Another v Randwick City Council [2002] NSWCA 83, unreported demonstrates that the duty to give reasons extends to provide an ability to understand why the decision was made. It does not call for reference to all the evidence or a tedious explanation of every step in the chain of reasoning. 18 I am not satisfied that the Commissioner was in error in making the findings that he did in [21] and [22]. They contain a conclusion based on identified evidence relevant and connected to the requirements of s 79C and the objectives of the zone. 19 The applicant complains that [32] of the judgment contains no finding that Graham Pindar's analysis was incorrect and that no basis is given for not accepting it other than the "implicit onus" that the appellant apparently had to displace the respondent's position. Here again, Mr Hammerschlag submits that the Commissioner did not disclose any reasoning as to why either one of the witnesses, or who, should be preferred. 20 Accepting the caveat identified in Brimbella and Ligon I am not satisfied that [32] discloses an error on the part of the Commissioner. His explanation could have been more elegant and explanatory but nevertheless he discloses that on balance, as a question of weight, he preferred the evidence of Leonie de Carvalho and Christopher Hallam. The Commissioner makes it clear that he gave determinative weight to the provisions of Development Control Plan No. 2 – Traffic Requirements for Development ("DCP 2"). There is no suggestion, implicit or otherwise, that he placed an onus upon the applicant. His words are merely an explanation of the way in which he resolved the issue by placing greater weight on the evidence of the respondent's witnesses. Impermissible matter 21 The applicant argues that the second sentence of [22] (where the Commissioner expresses his opinion that it would be inappropriate if the parking spaces had a lower level of use as a consequence of the imposition of the proposed fees "given that the car-parking spaces have been provided in accordance with the consent") is impermissible in that it relies on the existence of the very instrument sought to be modified as a ground for refusing consent to the modification. With respect to the way in which the argument was put, I have great difficulty in understanding how such an approach is impermissible. 22 Section 96 of the EP&A Act provides a mechanism whereby a development consent already granted may be modified if the requirements of the section are satisfied. In order to properly assess and consider an application made pursuant to s 96 it is generally important to have regard to the perceived reason a condition of consent, that an applicant seeks to modify, was imposed in the first place. 23 Although the existing condition anticipates the prospective submission and approval of a car-parking plan of management, nevertheless it makes specific reference to the availability of 250 spaces. The condition which provides for two hours free parking is part of the Plan of Management. In order to understand how those arrangements should be changed, either in so far as they relate to the specific requirements of the condition of consent or the Plan of Management, it is, in my view, imperative that the consent authority, and hence the Court on appeal, consider the reasons for making the provisions in the first place. The Commissioner does that by recognising that the car parking spaces are provided to meet the likely demand for their use. He then proceeds to support the opinion expressed by Mr Hallam that any change that would result in a lower level of use may have the consequences he identifies. Rather than the reasoning of the Commissioner being impermissible in this respect, I find that it is an essential part of the process in determining the application for modification. The prohibition question 24 The Commissioner concluded that the provision of a number of leased car spaces would result in those spaces comprising a car parking station as defined in cl 5 of SREP 5 and as a consequence would be prohibited development. 25 Car parking station is defined in cl 5 as follows:- …any land (including a building on that land) open to the public and used for the purpose of accommodating vehicles, whether upon payment of a fee or not, but does not include: (a) land (including a building on that land) which is used for parking, being parking that is ancillary to other development on or adjoining that land, (b) a metered zone, or (c) a metered space. 26 Commissioner Bly concluded that if part of the car park is leased for purposes other than those relating to the land uses within the building then the use of those spaces would cease to be ancillary to development on or even adjoining the land "which effectively comprises the Regency development". 27 Mr Hammerschlag says the question is whether a lease of a maximum of 60 car parking spaces out of a total of over 800 in the development, and specifically 250 to serve the businesses on the site and some of the visitors to apartments, has the consequence that the land being used for parking ceases to be ancillary to the Regency development as a matter of fact and degree. 28 Condition 41 expressly provides that 250 spaces are to be provided for staff and visitors to the retail and leisure centre and for short-term residential visitor parking. The Commissioner had evidence that although the 250 spaces would be a deficiency of 48 spaces calculated in accordance with the requirements of DCP 2, nevertheless 250 parking spaces would be an appropriate provision to serve the businesses on the site and some of the visitors to the apartments. He concluded on that basis that all of the leased car parking spaces are required or will be required for those purposes. The argument put to the Commissioner, particularly by Mr Hallam on behalf of the council, was that because the proposed 60 leased car parking spaces would not be generally available for the designated use there would be insufficient parking spaces within the development and in turn this would encourage persons seeking to attend businesses on the premises to go elsewhere. He then found that, as I have already said, that in circumstances where part of the car park is to be leased for purposes other than those relating to the land uses within the building they could not be regarded as ancillary to the development in the terms of the definition. The evidence is that the car park is contained within a separate strata lot. The appeal related only to the 250 spaces specifically mentioned in condition 41. 29 I can find no foundation for the applicant's submission that the Commissioner seemed to equate either a single space or a limited number of spaces with the notion of a car parking station. It is true, however, that the Commissioner did not explain his reasons for concluding that the provision of a number of leased car spaces would result in those spaces comprising a car parking station as defined and as a consequence would be prohibited by the planning instrument. 30 In Penrith City Council v Waste Management Authority (1990) 71 LGERA 376 the Court of Appeal described the task of characterisation at p 384 as follows:- Because the words of the statutory definition may relate to parts only of a development as proposed, it is necessary, in performing the task of characterisation to consider the "character and extent and other features of the activities" proposed to decide whether, properly classified for legal purposes, they fit into the definition against which they are being measured. This is what Glass JA suggested in Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 161. It is what Hope JA said explicitly in CB Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270. 31 The reference to the judgment of Glass JA in Foodbarn Pty Limited and Others v Solicitor-General (1975) 32 LGRA 157 at 161 is the following well-known statement of principle:- It may be deduced that where a part of the premises is used for a purpose which is subordinate to the purpose which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used … 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. 32 In Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 at p 409 Meagher JA made the following qualifying remarks at pp 409-410:- Notwithstanding the principles laid down 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. It is a question of fact and degree in all the circumstances of the case whether such a result ensues or not. When a resident uses his land to park his motor car at his house, he is no doubt not conducting an independent use of car parking; when an employer installs at his factory a canteen for his workers, no doubt he is not conducting an independent use of running a restaurant; when the Clarks grew vegetables for their table they were not conducting an independent use of vegetable growing. But 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 independent with, another use. If a book publisher opens a sales room at his publishing house to sell his products, the selling of books is an independent use although ancillary to the use of publishing. The series of cases dealing with dual uses (of which the decision of this Court in Warringah Shire Council v Caltex Oil (Australia) Pty Ltd (1989) 68 LGRA 206 is an example) illustrate the point: they show that a "convenience store" and a petrol station are two independent uses, although the former is clearly ancillary to the latter. This is a fortiori the case where the "ancillary" use has pre-dated the use to which it is said to become ancillary and when it has done so in circumstances where it was initially not "ancillary" to any other use. 33 It is not clear to me that the Commissioner turned his mind to any question of fact and degree. That is a question that he was required to consider in the course of deciding whether the proposed lease of 60 car spaces was excluded from the definition of car parking station in SREP 5 by reason of [(a)] of that definition. 34 It appears to me that the underpinning reason for the refusal of the appeal in matter No. 10071 of 2004 is that the Commissioner preceded on the basis that the leased car parking spaces would effectively become a car parking station. In my view, therefore, it is appropriate that the matter be referred back to the Commissioner to enable him to consider whether the proposed lease of 60 spaces will create a car parking station as defined applying the relevant principles adopted by the Court of Appeal and reflected in the extracts from the judgment in Waste Management Authority, Foodbarn and O'Donnell set out above. 35 The formal orders that I make pursuant to s 56A of the LEC Act are as follows:- (1) In matter No. 10071 of 2004 the appeal is upheld. (2) Matter No. 10071 of 2004 to be referred to Commissioner Bly for determination having regard to the findings of the Court in that matter. (3) Matter No. 10071 of 2004 is listed for mention before the Registrar at 9:00am on 18 June 2004. (4) In matter No. 11226 of 2003 the appeal is dismissed. (5) In the meantime, the exhibits will be retained. 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.