> Reported Decision : 126 LGERA 175 Land and Environment Court of New South Wales CITATION : Davem Trading Pty Limited v Willoughby City Council [2003] NSWLEC 91 APPLICANT: Davem Trading Pty Limited PARTIES : RESPONDENT: Willoughby City Council FILE NUMBER(S) : 10783 of 2002 CORAM: Lloyd J Development Application :- appeal - statutory interpretation - change of use - present use prohibited KEY ISSUES: Words and Phrases: - "lawfully being used" Environmental Planning and Assessment Act 1979 s 121B Land and Environment Court Act 1979 Pt 6 r 1(1) LEGISLATION CITED: Supreme Court Rules 1970 Pt 31 r 2 State Environmental Planning Policy No. 4 - Development Without Consent cl 7 State Environmental Planning Policy No. 22 - Shops and Commercial Premises cl 3 and cl 6(1) Bass v Permanent Trustee Co Ltd (1995) 198 CLR 334; CASES CITED: Mavrik Pty Ltd v Tweed Shire Council (1997) 98 LGERA 354; The Firm (Australia) Pty Ltd v South Sydney Council [1999] NSWLEC 5; Woollahra Municipal Council v TAJJ Investments Pty Ltd (1982) 49 LGERA 123 DATES OF HEARING: 07/04/2003 DATE OF JUDGMENT: 05/05/2003 APPLICANT: Mr J R McKenzie (barrister) SOLICITORS: Rodd Peters Lawyers LEGAL REPRESENTATIVES: RESPONDENT: Mr P R Clay (barrister) SOLICITORS: Mallesons Stephen Jaques JUDGMENT: - 5 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 10783 of 2002 Lloyd J 5 May 2003 DAVEM TRADING PTY LIMITED Applicant v WILLOUGHBY CITY COUNCIL Respondent JUDGMENT Introduction 1 This is a separate determination of an issue raised by the respondent, Willoughby City Council ("the council"), in an appeal brought by the applicant, Davem Trading Pty Limited, against the refusal of a development application. (The determination of any question separately from any other question is permitted by Pt 31 r 2 of the Supreme Court Rules 1970, which applies in this Court by dint of Pt 6 r 1(1) of the Land and Environment Court Rules 1996.) The question for determination is whether the consent authority has the power to grant consent to the development application. 2 As a general proposition, questions that turn on disputed facts should not be determined separately (Bass v Permanent Trustee Co Ltd (1995) 198 CLR 334). With some misgivings on my part, I agreed on the urging of both parties to hear the separate question even though some facts are disputed, having been assured that it was in the interests of both parties to do so. 3 The appeal concerns premises at No. 763 Pacific Highway, Chatswood ("the premises"). The applicant has applied to use the premises "for the display, hire and sale of skiing and snow sport equipment and clothing"; that is, for a shop. Under the relevant environmental planning instrument the premises are within a zone in which shops are prohibited (except for certain limited types of shops which are not presently relevant). 4 Accordingly, the applicant relies upon State Environmental Planning Policy No. 22 – Shops and Commercial Premises ("SEPP No. 22"). The aims of SEPP No. 22 are set out in cl 3, as follows: 3 Aims, objectives etc The aim of this policy is to permit within a business zone - (a) the change of use of a building lawfully used for a particular kind of commercial premises to another kind of commercial premises or to a shop; or (b) the change of use of a building lawfully used for a particular kind of shop to another kind of shop or to a commercial premises, even though that change of use is prohibited under another environmental planning instrument, if (c) the consent authority is satisfied the change of use will not have more than a minor environmental effect and is in keeping with the objectives (if any) of the zone; and (d) development consent is obtained for the change of use from that consent authority. 5 The operative clause of SEPP No. 22 is cl 6, which is relevantly as follows: 6 Change of use (1) A person may, with the consent of the consent authority, change the use of a building in a business zone - (a) that is being lawfully used for a particular kind of commercial premises to another kind of commercial premises or to a shop; or (b) that is being lawfully used for a particular kind of shop to another kind of shop or to a commercial premises, even though the proposed change of use is prohibited in that zone under another environmental planning instrument. 6 The council contends, however, that cl 6(1) is not available in the present case because it says that the premises are not being lawfully used for a particular kind of commercial premises, neither are they being lawfully used for a particular kind of shop, being the precondition which must exist before the consent authority may exercise its discretion to consent to the application. The relevant facts 7 Evidence was given by Mr S Kolahdouzan, a co-owner of the premises. He referred to the fact that on 23 May 2000 the council granted development consent to the co-owners to use the premises as a "showroom for computers and computer accessories including peripherals and software". Condition 7 of that consent states: "[a]pproval is for a showroom to be used for display and presentation purposes and not for sale of goods on a retail basis". Thereafter the co-owners commenced using the premises as a computer showroom and one of the co-owners and one employee worked from the premises. Their main activities were to promote the sale of computer software and hardware, and orders were taken therefor. The computers that were ordered were built in accordance with customers' specifications and either delivered to their nominated address or collected from the proprietors' retail shop at No. 452 Victoria Avenue, Chatswood. On occasion computers would be delivered to customers at the subject premises after they were assembled at the Victoria Avenue premises. Under cross- examination, Mr Kolahdouzan conceded that a cash register was set up at the subject premises. This device, however, according to Mr Kolahdouzan, was used "just for the ordering" of merchandise. The business was called "Sydney City Computers" and it operated from the subject premises for two to three months, when it was then moved to other premises. 8 The present applicant was granted a lease of the premises by Messrs Kolahdouzan commencing 1 March 2002 for a term of five years. In about May 2002 the applicant, trading as Paul Reader Snow and Mountain Sports, occupied the premises and commenced the present use as a shop. On about 6 August 2002 the applicant made the development application which is now the subject of this appeal and which the council refused on 27 August 2002. On 4 September 2002 the council served an order on the applicant under s 121B of the Environmental Planning and Assessment Act 1979 ("the EP&A Act) requiring the applicant to cease its use of the premises and to remove signs which have been attached to the walls of the premises. An appeal has been brought against the council's order and which is the subject of separate proceedings in the Court. The submissions of the parties 9 Mr P R Clay, appearing for the council, made the following submissions. (a) Clause 6 of SEPP No. 22 requires a lawful use of the building which is current at either the date of lodgement of the development application or the date of determination of the development application. (b) In either case that use was and remains the present use, which is an unlawful use, which must be ignored. (c) The requirement of a current lawful use is confirmed by a comparison between cl 6 of SEPP No. 22 and cl 7 of State Environmental Planning Policy No. 4 – Development Without Consent ("SEPP No. 7"). The latter allows a change of use from a shop of a particular kind to a shop of another kind where "a building is lawfully used, or has been lawfully constructed to be used for the purposes of a shop of a particular kind". The different wording of cl 6 of SEPP No. 22 thus discloses a requirement that there be a lawful present use of the building. (d) Support for the council's view is found in Mavrik Pty Ltd v Tweed Shire Council (1997) 98 LGERA 354 and The Firm (Australia) Pty Ltd v South Sydney Council [1999] NSWLEC 5. 10 Mr J R McKenzie, appearing for the applicant, made the following submissions. (a) The applicant's development application is consistent with the aims and objectives of SEPP No. 22. (b) Clause 6 is sufficiently satisfied by a change from an approved lawful use to the new use. There is no temporal limitation to actual activities referred to in cl 6 of SEPP No. 22. (c) The approved lawful use was a use as commercial premises. (d) The approved lawful use was taken up and acted upon, and the consent therefor remains as a valid consent which has not lapsed (reference was made to Woollahra Municipal Council v TAJJ Investments Pty Ltd (1982) 49 LGERA 123). (e) The lawful use is that for which the existing development consent was granted to Messrs Kolahdouzan and it is consistent with the intent of SEPP No. 22 that it be the use to which regard must be had for the purpose of cl 6(1). Conclusions 11 I do not derive any assistance from Mavrik Pty Ltd v Tweed Shire Council. Nothing in that case bears upon the question now before the Court. In The Firm (Australia) Pty Ltd v South Sydney Council the question was whether a clause in an environmental planning instrument permitted the use of a terrace house, previously used as a residence, for a commercial purpose (namely, a brothel). The relevant clause was as follows: 37 Non-residential development in Zone 10 (1) The Council must not grant consent to the use, for a non-residential purpose, of a building or land within Zone No 10 which was used as a dwelling house, boarding house, private hotel, or multiple dwelling at the appointed day unless it is satisfied that the building is no larger suitable, or required by the local community for residential purposes. 12 The facts in that case were that the building was vacant at the appointed day but was last lawfully used as a dwelling house, which use had ceased some two years before the appointed day. It was held that it could not be said that the building was used as a dwelling house at the appointed day when such use had ceased some two years earlier, so that the clause did not apply to the building in that case. It is to be noted that the clause required the use to be a use at the appointed day. 13 Similarly, cl 6(1) of SEPP No. 22 requires a lawful use that is current. This follows from the words "is lawfully used…". The additional words appearing in cl 7 of SEPP No. 4 – "or has been lawfully constructed to be used" – do not appear in cl 6(1). The present use by the applicant is that of a shop, which is not a lawful use. The previous use by Messrs Kolahdouzan was a lawful use, but in entering into a lease to the applicant for a term of five years they ceased that use. Moreover, the permitted use under the terms of the lease is "sale, hire and repair of ski clothing and equipment". Under these circumstances it cannot be said that the building "is being lawfully used" for either commercial premises of a particular kind or a shop of a particular kind, as required by cl 6(1) of SEPP No. 22. 14 In arriving at this conclusion, I find Mr Clay's submissions in reply irrefutable. The only artificiality that arises from this situation is caused by the applicant's unlawful use of the subject premises. As Mr Clay submits: "There needs to be some present actual and physical use of a commercial nature. Not … a sufficiently close temporal connection between the use relied upon under cl 6 and the development application. …It otherwise would be to read cl 6, [as allowing a] change of a use that has been approved for a particular kind of commercial premises to another kind of commercial premises." This latter approach would permit the council to ignore a lack of a temporal connection between a legal use of the premises and a development application under cl 6 of SEPP No. 22. In so doing, the consent authority would disregard the words "is being lawfully used" that appear in cl 6 of SEPP No. 22. 15 It follows that the consent authority does not have the power under cl 6(1) of SEPP No. 22 to grant consent to the applicant's development application. 16 The answer to this question is determinative of the appeal. It is thus appropriate that there be an order that the appeal be dismissed. Order 17 The appeal is dismissed. I hereby certify that the preceding 17 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd. Associate Dated: 5 May 2003 ********** 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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