Land and Environment Court of New South Wales CITATION : Doueihi v Randwick City Council [2005] NSWLEC 527 APPLICANT: Michel Doueihi PARTIES : RESPONDENT: Randwick City Council FILE NUMBER(S) : 10732 of 2005 CORAM: Lloyd J Existing Use Rights :- factual determination of whether existing use rights extend to whole site or part thereof KEY ISSUES: Environmental Planning and Assessment Act 1979 (NSW), ss 97, 106 Environmental Planning and Assessment Regulation 2000, Pt 5 LEGISLATION CITED: County of Cumberland Planning Scheme Ordinance, cl 24, sub-cl 26(b) and (c), 31((b)(ii) Randwick Local Environmental Plan 1998, sub-cll 10(2), (3) and (4), cll 26, 49, Schedule 1 Randwick Planning Scheme Ordinance, cl 31; sub-cll 4(1), 24(a) and (d), and 89(c) Armstrong v Ashfield Municipal Council (2002) 124 LGERA 189; Dorrestijn v South Australian Planning Commission (1984) 59 ALJR 105; Eaton & Sons Pty Limited v Warringah Shire Council (1972) 129 CLR 270; Lemworth Pty Ltd v Liverpool City Council (2001) 53 NSWLR 371; Mona Vale Pty Ltd v Pittwater Council (2003) 124 LGERA 449; CASES CITED: North Sydney Municipal Council v Boyts Radio and Electrical Pty Ltd (1998) 67 LGRA 344; Parramatta City Council v Brickworks Limited (1972) 128 CLR 1; Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGERA 305; Shire of Perth v O'Keefe (1964) 110 CLR 529; Steedman v Baulkham Hills Shire Council (1991) 87 LGERA 26; Woollahra Municipal Council v Banool Developments Pty Ltd (1973) 129 CLR 138 DATES OF HEARING: 06/09/2005 DATE OF JUDGMENT: 09/23/2005 APPLICANT: N A Hemmings QC (solicitor) SOLICITORS: Comino Prassas LEGAL REPRESENTATIVES: RESPONDENT: P R Rigg (solicitor) SOLICITORS: Deacons JUDGMENT: - 14 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES LLOYD J Friday, 23 September 2005 LEC No. 10732 of 2005 DOUEIHI v RANDWICK CITY COUNCIL [2005] NSWLEC 527 JUDGMENT Introduction 1 LLOYD J: The applicant, Michel Doueihi, has appealed under s 97 of the Environment and Planning Assessment Act 1979 (NSW) (the "EP&A Act") against the deemed refusal of a development application by Randwick City Council for the re-development of land known as No. 152-156 Barker Street, Randwick (the "site"). 2 The parties have asked the Court to determine the following preliminary question said to be a question of law, separately from any other question in the proceedings: Whether the application filed at these proceedings in respect to the development of the whole of No. 152 Barker Street, Randwick can be determined pursuant to Part 5 of the Environmental Planning and Assessment Regulation 2000 (the " EP&A Regulation ")? 3 Part 5 of the EP&A Regulation applies to the development of land having the benefit of existing use rights. It is apparent, however, that the question that has been raised is one of fact. Background 4 The development application involves a change of the existing use: namely, the demolition of existing dry cleaning business buildings and a brick house on the site and the erection of a mixed development with commercial space located on the ground floor, 18 residential apartments above, and basement parking. 5 The site consists of three allotments known as Nos 152, 154 and 156 Barker Street, Randwick, having a total of approximately 1500 square metres. The house is located toward the front of No. 152 and covers approximately 130 square metres of the front portion of that allotment. The Relevant Facts 6 There is no dispute about the relevant facts. The council concedes that existing use right apply to Nos 154 and 156. The argument is about whether the house on No. 152 also has the benefit of existing use rights. 7 According to the affidavit of Mr S C Pilcher, a licensed master builder, the house is structurally integrated with the other buildings on the site, both through major structural steel roof beams and other structural members, such that the buildings on the site are in fact one joint building unit. The demolition of any of the buildings on the site would have a major structural impact on the remaining buildings rendering them unsafe and at risk of collapse. The walls of the buildings are constructed of single skin brickwork such that if the roof loads were removed the walls would collapse. 8 Since 1943, various parts of the site have been consistently used as a laundry and the council has approved various alterations and additions over time. A 1943 development application plan of No. 152 shows the house with various buildings at the back. The council issued a building approval for the conversion of these buildings at the rear of the house to a dry cleaning business and laundry. A 1946 plan indicates council's further approval of the combination of No. 152 with No. 154, with a joint drive way and a substantial addition to the dry cleaning business on No. 152 extending to No. 154. Later plans show the dry cleaning buildings extending onto No. 156. 9 From 1943 to the present time, the house has been used as a caretaker's/owner's residence, staff accommodation, office, staff amenities and storage for the dry cleaning business and laundry. At no time were any or all of these uses discontinued or the house leased or occupied separately from the dry cleaning business and laundry. The council has provided no consent for any other use of the house other than for a dwelling house. 10 In 1951, the site was zoned "Living Area" under the County of Cumberland Planning Scheme Ordinance (the "Ordinance"). Pursuant to cl 26 of the Ordinance, dwelling houses could be erected or used without consent; however, industries other than local light industries were prohibited (sub-cl 26(c)). Local light industries required consent (sub-cl 26(b)) and were defined under cl 24 of the Ordinance as any light industry which: (a) is carried on in a building whether on one or more floors, or in one or more buildings or in one or more buildings and on adjoining land provided that in each case the floor space of such building or buildings does not exceed 5,000 square feet and provided also that the area of any such adjoining land does not exceed the difference between 10,000 square feet and the area of the portion or portions of the land occupied by the building or buildings; (b) does not require the provision of any essential serve mains of a greater capacity than that required for the normal development of a living area zone; (c) does not, by the carriage of goods or materials, create traffic upon public roads in the neighbourhood likely to create congestion or danger or requiring roads of a higher standard than would be necessary for the normal development of a living area zone. 11 In 1952, Mr Henry Issac Rischin purchased the dry cleaning business conducted on the site, and he and his wife occupied the house whilst operating the business until approximately 1966. For nearly the whole of that time, Mrs Rischin carried out sewing, repairs and stitching in connection with jobs received into the dry cleaning business, at the house. Also during this time, the rear of the house was occupied by an engineer who was carrying out reconstruction and renovation of the boiler and machinery being used in the business. In addition, some equipment and machinery relating to the business was stored within the house. 12 From 1952 to 1966, the dry cleaning business conducted on the site was determined by the council to be local light industry and it provided the required consent. The "sewing, repairs and stitching in connection with jobs received into the dry cleaning business" by Mrs Rischin were also authorised under cl 31(b)(ii) of the Ordinance. Clause 31(b)(ii) of the Ordinance provided: Nothing in the foregoing provisions of this Part shall be construed - … (b) as restricting or prohibiting or enabling the responsible authority to restrict or prohibit - … (ii) the practice by any occupant of a dwelling-house or residential building of a profession, or occupation which does not involve the use of the dwelling-house or residential building for the purpose of an industry. 13 In or about 1970, Westley Dry Cleaners and Launderers Pty Limited purchased from Mr Rischin the dry cleaning business conducted at the site, and shortly after purchased the site. Mr Frederick Lewis Westley, a director and owner of Westley Dry Cleaners and Launderers Pty Limited, and his family used approximately half of the house as a residence, and the remaining half was used as part of the dry cleaning business for the administrative office of the business. The house also contained staff amenities for use by employees of the business, including shower and toilet facilities, which were directly accessible from the main factory part of the business. There was a direct connection between the house at No. 152, and the business buildings at No. 154. In 1996, Mr Westley moved from the house, although it continued to be used a residence for members of the Westley family and also as the administrative office for the business. 14 On 28 April 1978, the Randwick Planning Scheme Ordinance (the "Randwick Ordinance") was gazetted and the site was zoned Residential A2. Pursuant to cl 24 of the Randwick Ordinance dwelling-houses could be erected and used without consent (cl 24(a)), however, industries (other than home industries) and commercial premises were prohibited uses (cl 24(d)). Clause 4(1) of the Randwick Ordinance defined "home industries" as meaning: an occupation carried out in building (not being a dwelling-house or dwelling in a residential flat building) under the following circumstances:- (a) the building does not occupy floor space exceeding 30 square metres and is erected within a curtilage of the dwelling-house or residential flat building occupied by the person carrying on the industry or on adjoining land owned by that person; and (b) the industry does not - (i) interfere with the amenity of the locality by reason of the emission of the emission of noise, vibration, smell, fumes, smoke, vapour, steam, soot, ash, dust, waste water, waste products, grit, oil or otherwise; (ii) involve exposure to view from any adjacent premises or from any public place of any unsightly manner; or (iii) require the provision of any essential service main of a greater capacity than that available in the locality. 15 Thus from 1978, the dry cleaning business conducted on the site was a prohibited use as it was not a home industry pursuant to cl 4(1): cl 24(d) of the Randwick Ordinance. Since that time, the council has acknowledged the lawful continuing use of the site as a dry cleaning business pursuant to existing use rights. However, the use of the house in conjunction with the dry cleaning business for "home occupation" was permitted pursuant to cl of the 89(c) of the Randwick Ordinance. That clause provided: Nothing in this Ordinance shall be construed as restricting or prohibiting or enabling the responsible authority to restrict or prohibit - … (c) home occupation carried on in dwelling-houses. 16 Clause 4(1) of the Randwick Ordinance defined "home occupation" as: an occupation carried on in a dwelling-house or dwelling in a residential flat building by the permanent residents of the dwelling-house or dwelling which does not involve any of the following:- (a) The registration of the building under the Factories, Shops and Industries Act, 1962; (b) The employment of persons other than those residents; (c) interference with the amenity of the neighbourhood by reason of the emission of the emission of noise, vibration, smell, fumes, smoke, vapour, steam, soot, ash, dust, waste water, waste products, grit, oil or otherwise; (d) the display of good, whether in a window or otherwise; or (e) the exhibition of any notice, advertisement or sign (other than a notice or sign exhibited on that dwelling-house or dwelling to indicate the name and occupation of the resident). 17 Clause 31 of the Randwick Ordinance limited the use of buildings or land for more than one purpose to the proportions existing before the appointed day. It provided: Where an existing building or land was used before the appointed day for more than one purpose, any right conferred by this Part to continue the use of the building or land shall not confer right to alter the proportions in which the several parts of the building or land were used immediately before that day unless the consent of the responsible authority is first obtained. 18 Thus from 1978, the proportionate use of the house as a residence and in association with the dry cleaning business was required to remain the same, unless it could be said that the whole of the site could be regarded as a unit the whole of which was devoted to the dry cleaning business. 19 In December 2000, the applicant, Mr Michel Doueihi, as the Managing Director of M & Z Doueihi Pty Limited, purchased the site from Westley Holdings Pty Limited. The applicant continues to use the site as a commercial dry cleaning business, known as "Michel's Dry Cleaners". 20 Since December 2000 until the present, approximately half the house has been directly used for the purpose of the dry cleaning business for office administration and staff amenities, short-term staff/caretaker accommodation, late and early deliveries, and storage of stationary, equipment and materials. The door from the house to the rest of the site is used by staff on a daily basis as direct access. Electricity boxes mounted on the western wall of the house contain power switches for the whole of the site. The eastern driveway of the house is the main delivery area for the business. 21 Currently, the site is zoned Residential 2A under the Randwick Local Environmental Plan 1998 (the "LEP"). Pursuant to the LEP, the use of the house, as a dwelling house, remains permissible (cl 10(2)) and the operation of the dry cleaning business, as an industrial and or commercial use, remains prohibited (cl 10(4)) and its continuing operation relies on existing use rights. 22 The use of the house for the purposes of the dry cleaning business, as a home activity, may be a Schedule 1 Development without consent use pursuant to cl 26 of the LEP or is otherwise permissible with consent under cl 10(3) of the LEP. Clause 49 of the LEP defines "home activity" as: any business, profession or industry carried on in a building or room or a number of rooms forming part of, attached to, or within the curtilage of, a dwelling where: (a) only goods made or produced, or services offered, as a result of the activity or pursuit are displayed, sold or provided; and (b) the primary use of the dwelling is for residential purposes; and (c) the activity or pursuit does not: (i) interfere with the amenity of the locality by reason of the emission of excessive noise, vibration, smell, fumes, smoke, vapour, steam, soot, ash, dust, waste water, waste products, grit or oil or otherwise; or (ii) involve exposure to view from any public place of any matter; or (iii) require the provision of any essential service main of a greater capacity than that available in the locality; or (iv) generate traffic out of keeping with the surrounding area; and (d) the activity is carried out by the permanent resident of the dwelling. 23 Sub-clause 26(2) provides that: Despite any other provision in this plan, the consent of the Council is not required for development that is listed in Column 1 of Schedule 1, subject to the conditions specified in Column 2 of that Schedule and in relation to that development. 24 Thus, use of the house in connection with the dry cleaning business is allowed without consent, provided it is (a) a home activity within the meaning of cl 49 of the LEP, (b) it is within a residential area or business zone, and (c) it involves only the use as an office and does not involve clients visiting or deliveries of goods to the premises: Column 2 of Schedule 1 of the LEP. 25 Based on the above facts, the parties require the Court to determine whether the existing use rights applicable to the dry cleaning business on site extend to the whole of No. 152. The fundamental question for determination is whether the whole of the site, including the house at No. 152 can be regarded as a unit devoted to the use as a dry cleaning business, or whether the house at No. 152 is a separate unit devoted to a separate use to which existing use rights do not apply. Applicant's Submissions 26 Mr N A Hemmings QC, appearing for the applicant, submits that the whole site, including the house at No. 152, has the benefit of existing use rights based on the following contentions. 27 The site comprises a number of contiguous lots which comprise a 'unit' used as a commercial dry cleaning business and laundry: Eaton & Sons Pty Limited v Warringah Shire Council (1972) 129 CLR 270. The dominant or principal use of the site is a commercial dry cleaning business and laundry. At no time since the commencement of the business has the house been exclusively, solely or separately used as a dwelling. The house has, at all relevant times, been an important and integral part of the dominant use of the site as a dry cleaning business. The residential use of the house is ancillary and subservient to the dominant use as a commercial dry cleaning business. 28 Mr Hemmings QC relies upon the following principles in relation to giving effect to existing use rights: · Existing use clauses are designed to preserve and protect existing rights and ought to be liberally construed: Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGERA 305 per McHugh JA (with whom Hope and Samuel JJA agreed); North Sydney Municipal Council v Boyts Radio and Electrical Pty Limited (1998) 67 LGRA 344; Steedman v Baulkham Hills Shire Council (1991) 87 LGERA 26. · The area of land subject to the existing use should be identified in a way which avoids detailed investigations and complicated disputes of facts. · The whole of the land is used for existing use where it has been acquired for and devoted to the purpose of the existing use. · Use includes both physical and passive use and the whole of the land may be said to be used for the existing use although only part was actually physically being used. · The property boundaries are not determinative of the land which may be used: Parramatta City Council v Brickworks Limited (1972) 128 CLR 1. (Reference was also made to Shire of Perth v O'Keefe (1964) 110 CLR 529; Eaton & Sons Pty Limited v Warringah Shire Council (1972) 129 CLR 270; Woollahra Municipal Council v Banool Developments Pty Limited (1973) 129 CLR 138; Dorrestijn v South Australian Planning Commission (1984) 59 ALJR 105). 29 Mr Hemmings QC further relies upon Parramatta City Council v Bolton [1974] 2 NSWLR 241; (1974) 33 LGRA 303, the facts in that case being highly analogous to those in the present case. In that case, Mr Bolton owned a piece of land on which a cottage and a small shed were erected. The shed was used as mechanic's workshop, while the house was used as a dwelling, though in connection with the mechanical business: Mr Bolton kept his office records in the house. Hope JA (Hutley and Samuels JJA concurring) held that the house also had the benefit of the existing use rights which attached to the shed. In particular, His Honour noted (at 313) that: Although mainly used for the purposes of a dwelling house, this building was also used for the purposes of the business, and may perhaps have been capable of being treated in much the same way as the dwelling portion of the combined shop and dwelling, even though the dwelling house was a separate building: cf. Panaretos v Rockdale Municipal Council (1965) 12 LGRA 139. 30 Mr Hemmings QC submits that the Court should not follow Lemworth Pty Limited v Liverpool City Council (2001) 53 NSWLR 371 as that case turned on its unusual and particular facts and the facts in this case are not the same. He submits that there is nothing in the facts in this case which would exclude the house as a discrete part of the land and thus not used for the existing use. (Reference was made to Mona Vale Pty Limited v Pittwater Council (2003) 124 LGERA 449 and Armstrong v Ashfield Municipal Council (2002) 124 LGERA 189). 31 Mr Hemmings QC thus submits that the existing use right should include the house at No. 152, as it has been used for a long period of time in direct use in connection with the operation of the dry cleaning business and is an essential part of the 'unit', which comprises the whole site; and the whole site has been continuously used as a lawful commercial dry cleaning business and laundry. The Council's Submissions 32 Mr P R Rigg, appearing for the council, submits that the house at No. 152 does not have the benefit of existing use rights based on the following submissions: a) The house and its curtilage comprise a significant part of No. 152 and are very much a separate unit or entity from the industrial dry cleaning use; b) The lawful activity at all relevant times within the house was that of a residence and from time to time there was some minor home occupation activity. Moreover, development applications by previous owners described the house as a "private residence" (in the application lodged 13 October 1992: Exhibit 1) or as "owner's residence" (in 1988 plans lodged with council: Exhibit 3), and not as a industrial or commercial use; c) The house is not, and has never been a prohibited use pursuant to the relevant planning controls. The various non-residential activities carried on within the house by the occupants may be described variously as "home occupation" or "home activity" which were permissible without consent. Accordingly, the house cannot be an "existing use" as defined in s 106 of the EP&A Act; d) The decision in Lemworth Pty Limited v Liverpool City Council [2001] NSW CA 389 should be followed and applied such that the house should be regarded as a separate unit of land to which exiting use rights do not extend. Findings 33 In determining whether or not the whole of No. 152 enjoys existing use rights, the Court must adopt a broad and liberal approach: Boyts Radio, Kirby P (with whom Samuels and Priestley JJA agreed). Further, the Court must follow the principles enunciated and adopted as summarised by Mr Hemmings QC in par [28] above. 34 For reasons which follow (pars [35] – [37]), I find on the facts summarised in pars [6] to [23] above that the whole of the site including the house at No. 152 has the benefit of existing use rights. 35 Accordingly, I reject Mr Riggs submission that the house at No. 152 is a separate unit or entity from the industrial dry cleaning and laundry use. It is clear from the facts that although the site comprises three lots, it is a single unit which is dominantly or principally used as a commercial dry cleaning business and laundry: Eaton & Sons Pty Limited v Warringah Shire Council (1972) 129 CLR 270. It is clear that the house is an important and integral part of the use of the site from the following facts: · The dry cleaning business and laundry buildings and the house are structurally integrated, both through steel roof beams and other structural members. · The electricity services, electrical board and main wiring supplying the whole of the site are wired from the house. · There is no fence between No. 152 and the rest of the site, and there is a door from the house to the business which is used by staff on a daily basis as direct access between the two. · The eastern driveway of the house is the main delivery area for the dry cleaning business. · The house has never been exclusively, solely or separately used as a dwelling apart from the rest of site. When it has been occupied as a residence, it has been occupied by the person operating or managing the dry cleaning business · Approximately half the house has been directly used for the purpose of the dry cleaning business for office administration and staff amenities, short-term staff/caretaker accommodation, late and early deliveries and storage of stationary, equipment and materials for at least 30 years. 36 These facts lead me to conclude that the residential use of the house at No. 152 is ancillary and subservient to the dominant use as a commercial dry cleaning business. Moreover, I accept that the facts in this case are substantially analogous to those in Parramatta City Council v Bolton and Anor [1974] 2 NSWLR 241; (1974) 33 LGRA 303 and the Court of Appeal's decision in that case, which is binding upon me, must be followed. 37 Finally, I reject Mr Rigg's submission that the Court should follow the decision in Lemworth. Consistently with Mr Hemmings QC submission, I find that the decision in Lemworth turned on the particular facts of that case, which are not analogous to those in this case. In Lemworth, there was no evidence that any part of the conforming use part of the site (the ground floor) was used in conjunction with in or in reserve for the non-conforming existing use (the first floor). Thus, the Court was able to find in that case that the two uses were distinct and separate uses. In this case, however, it is clear that the whole of the house has been continuously used in conjunction with and as an important part of the dry cleaning business for at least 30 years. Unlike the facts in Lemworth, it has never been separately leased or occupied. Thus, at all relevant times, the house has been an important and integral part of the dry cleaning business. 38 Accordingly, I find that the whole of No. 152 Barker Street has the benefit of existing use rights and the present development application may be determined under Part 5 of the EP&A Regulation. Court Orders 39 The Court determines the preliminary question as follows: Question: Whether the application filed at these proceedings in respect to the development of the whole of No. 152 Barker Street, Randwick can be determined pursuant to Part 5 of the Environmental Planning and Assessment Regulation 2000 (the " EP&A Regulation ")? Answer: Yes. (1) The exhibits may be returned. (2) The question of costs is reserved. I hereby certify that the preceding 49 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. 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