Reported Decision : 167 LGERA 1 Land and Environment Court of New South Wales CITATION : Australian Leisure and Hospitality Group Limited v Manly Council [2008] NSWLEC 312 APPLICANT Australian Leisure and Hospitality Group Limited PARTIES : RESPONDENT Manly Council FILE NUMBER(S) : 11098 of 2004 CORAM: Pain J KEY ISSUES: Question of Law :- whether s 39(2) of the Land and Environment Court Act 1979 applies in a modification application under s 96 of the Environmental Planning and Assessment Act 1979 invoking s 125 of the Roads Act 1993 Environmental Planning and Assessment Act 1979 s 96 Land and Environment Court Act 1979 s 39 Local Government Act 1919 LEGISLATION CITED: Manly Local Environmental Plan 1988 Public Health Act 1902 Roads Act 1993 s 125 Water Supply Authorities Act 1987 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685 Australian Leisure and Hospitality Group Ltd v Manly Council [2005] NSWLEC 316 Codlea Pty Ltd v Byron Shire Council (1999) 105 LGERA 370 Connery v Manly Council (1999) 105 LGERA 451 Estate Project Development v Sydney City Council (2005) 141 LGERA 86 CASES CITED: Gibson v Mosman Municipal Council (2001) 114 LGERA 416 Goldberg v Waverley Council (2007) 156 LGERA 27 McDougall v Warringah Shire Council (1993) 30 NSWLR 258 Paino v Woollahra Municipal Council (1990) 71 LGERA 62 Strathfield Municipal Council v Drew (1985) 1 NSWLR 338 Sydney City Council v Claude Neon Ltd (1989) 15 NSWLR 724 Sydney City Council v Ipoh Pty Ltd (2006) 149 LGERA 329 DATES OF HEARING: 20 November 2008 DATE OF JUDGMENT: 21 November 2008 APPLICANT Mr M Wright SOLICITORS Deacons LEGAL REPRESENTATIVES: RESPONDENT Mr B Coles QC with Mr A Pickles SOLICITORS HWL Ebsworth JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 21 November 2008 11098 of 2004 Australian Leisure and Hospitality Group Ltd v Manly Council JUDGMENT 1 Her Honour: Development consent was granted for DA 387/03 by Commissioners Bly and Brown in Australian Leisure and Hospitality Group Ltd v Manly Council [2005] NSWLEC 316 for major alterations and additions to a hotel at 71 The Corso Manly subject to conditions. Part of the application included use of the public footpath in The Corso and Sydney Road adjacent to the Applicant's hotel for outdoor seating and dining. Under cl 14 Pt V Div 1 of the Model Provisions in the Manly Local Environmental Plan 1988 (the Manly LEP) development consent is required for development on a public road, which includes this area of The Corso and Sydney Road. The development consent conditions included condition 50 which stated: (i) Consent is granted for the use of public areas adjoining or adjacent to the subject premises for outdoor seating and dining, in accordance with SK01 (ii) The use of the public areas referred to in condition 50(i) shall be limited to a trial period of 12 months from the date of the commencement of the use. To continue the use after the trial period, a further development application must be made within the trial period. 2 Since the grant of development consent by the Court, the Applicant has made two applications (19 September 2005 and 29 January 2008) under s 125(1) of the Roads Act 1993 for the use of the footpath adjacent to the subject premises for restaurant purposes for a period of seven years. The application under s 125(1) of the Roads Act concerns the use considered by the Commissioners in relation to the pubic footpath adjacent to the Applicant's hotel including by reference to the plan SKO1 referred to in Condition 50(i). Both applications have been refused by Manly Council in reliance on planning grounds as identified in the letters from the Council dated 6 October 2005 and 13 March 2008. As a result, the Applicant is unable to undertake that part of its development consent which authorises the use of the public footpath for a 12 month trial period as provided for by condition 50(ii). The Applicant tendered its application under s 125 of the Roads Act and its solicitor's' letter dated 25 February 2008, which identifies that the reason for making the s 125 application was to enable the twelve month trial period provided in condition 50 to commence. 3 The Applicant has filed a s 96 modification application pursuant to s 96(6) of the Environmental Planning and Assessment Act 1979 (the EP&A Act) seeking an addition to condition 50 to the effect that: (iii) Approval is granted under Section 125 of the Roads Act 1993 (NSW) to use the footway adjacent to the subject premises for restaurant purposes for a period of seven (7) years. 4 The Council has filed a Notice of Motion raising a preliminary point of law for determination. After some argument it became clear that the issue of law intended to be raised is better encapsulated as: Whether on a proper construction s 39(2) of the LEC Act in so far as it refers to powers conferred on the Court for the disposal of Class 1 appeals applies in a modification application under s 96 of the EPA Act invoking s 125 of the Roads Act. 5 Section 39 of the Land and Environment Court Act 1979 (the Court Act) states: (1) In this section, appeal means an appeal, objection, reference or other matter which may be disposed of by the Court in proceedings in Class 1, 2 or 3 of its jurisdiction. (2) In addition to any other functions and discretions that the Court has apart from this subsection, the Court shall, for the purposes of hearing and disposing of an appeal, have all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal. … "Functions" includes powers, duties and authorities, see s 4 of the EP&A Act. Relevant provisions of Roads Act 1993 6 The objects of the Roads Act in s 3 include: (h) to regulate the carrying out of various activities on public roads. 7 Section 4 provides that council is owner of public roads in its area unless otherwise specified. 8 Part 9 Div 1 s 125 of the Roads Act, provides: (1) A council may grant an approval that allows a person who conducts a restaurant adjacent to a footway of a public road (being a public road that is vested in fee simple in the council) to use part of the footway for the purposes of the restaurant. (2) An approval may be granted on such conditions (including conditions as to payments in the nature of rent) as the council determines. … (4) The term of an approval is to be such period (not exceeding 7 years) as is specified in the approval. (5) An approval lapses at the end of its term or, if the part of the footway the subject of the approval ceases to be used for the purposes of a restaurant, when that use ceases. 9 Section 127 provides: While an approval is in force: (a) the use of the footway for the purposes of a restaurant, and (b) the erection and maintenance of structures on the footway in accordance with an authorisation given in respect of the approval, are taken not to constitute a public nuisance and do not give rise to an offence against this or any other Act. 10 Part 9 Div 3 s 138 provides: (1) A person must not: (a) erect a structure or carry out a work in, on or over a public road, or (b) dig up or disturb the surface of a public road, or (c) remove or interfere with a structure, work or tree on a public road, or (d) pump water into a public road from any land adjoining the road, or (e) connect a road (whether public or private) to a classified road, otherwise than with the consent of the appropriate roads authority. Maximum penalty: 10 penalty units. (2) A consent may not be given with respect to a classified road except with the concurrence of the RTA. (3) If the applicant is a public authority, the roads authority and, in the case of a classified road, the RTA must consult with the applicant before deciding whether or not to grant consent or concurrence. (4) This section applies to a roads authority and to any employee of a roads authority in the same way as it applies to any other person. (5) This section applies despite the provisions of any other Act or law to the contrary, but does not apply to anything done under the provisions of the Pipelines Act 1967 or under any other provision of an Act that expressly excludes the operation of this section. 11 In their judgment the Commissioners stated at [9], [20]: 9 The proposal also includes the demolition of the existing walls and windows to The Corso and Sydney Road and the provision of glazed bi-fold doors between the remaining columns. An outdoor eating area under the existing awning in The Corso and Sydney Road is also proposed. 20 The remaining issues can be conveniently grouped into the following main areas: 1) whether the proposed development will create unacceptable social impacts through the proposed hours operation and the use of public space in The Corso and Sydney Road (Issues 1,2 and 6)… 12 There was expert evidence on the social impacts of use of The Corso public areas and lay evidence from members of the public. It is clear from the judgment that development consent was granted for use of the public footpath adjacent to the Applicant's hotel for an outdoor eating area. Council's submissions 13 The Applicant relies on s 39(2) of the Court Act as the basis for making their modification application for amendment of condition 50 but that is not available in this matter. The Commissioners have not considered s 125 of the Roads Act in their decision. The powers under the Roads Act are conferred exclusively on the Council and their power to impose conditions including requiring payment in the nature of rent is unfettered in s 125(2). These are not powers which can be exercised by the Court in a s 97 appeal or this s 96 modification application. On the facts of this case the subject matter of the appeal does not extend to the determination of an application under s 125 of the Roads Act. An approval for footpath seating under the Roads Act is not a matter the subject of the appeal. At its highest the matter extends under s 96(3) to include all the s 79C matters of relevance to the modification application. That cannot extend to the grant of an approval under s 125 of the Roads Act. The application before the Commissioners did not include and could not include an application under s 125 of the Roads Act. The powers and considerations vested in the Council under s 125 of the Roads Act are not intrinsically related to the grant of development consent so as to be part of the subject matter of the appeal. 14 A number of decisions have allowed the exercise of power under s 39(2) to extend beyond the grant of development consent to approval by the Court of some other type where the grant of approval involves the exercise of power of necessarily similar character to the grant of consent. In those matters the exercise of the power was therefore enmeshed with the grant of development consent. In McDougall v Warringah Shire Council (1993) 30 NSWLR 258 an appeal against a refusal of a building approval under the Local Government Act 1919, s 39(2) extended to allow the Court to rescind a resolution preventing the keeping of pigeons under the LG Act. To the extent the resolution impinged on the Council's (and Court's) discretion to grant approval to the pigeon shed, the resolution under the same statutory scheme was the subject of the appeal. This is to be contrasted with Strathfield Municipal Council v Drew (1985) 1 NSWLR 338 where the Court of Appeal held there was no power to grant approval under the Public Health Act 1902 as it was not the subject matter of the appeal and s 39(2) could not extend the Court's powers to give approvals under that Act. Codlea Pty Ltd v Byron Shire Council (1999) 105 LGERA 370 considered the exercise of power under s 39(2) in relation to a development application for the subdivision of land. At issue was whether the Court could exercise the powers of the Council in relation to water services and sewerage services under the LG Act and the Water Supply Authorities Act 1987. Stein JA held that the arrangements in respect of water and sewerage under the Water Supply Act were exclusively the province of the Council and could not be exercised by the Court under s 39(2). 15 Cases such as Connery v Manly Council (1999) 105 LGERA 451, Gibson v Mosman Municipal Council (2001) 114 LGERA 416 and Goldberg v Waverley Council (2007) 156 LGERA 27 are distinguishable. These deal with the exercise of functions under s 138 of the Roads Act pursuant to s 39(2) and concerned development applications for works on land adjoining the road as well as proposed works on the council road. In all these matters the Court held that it had power to exercise the functions and discretions under s 138 as it was relevantly a matter the subject of the appeal for the purposes of s 39(2). Unlike those cases, no part of the development consent for alterations and additions to the hotel in this case requires the making of an application for an approval to use the footpath for a restaurant. It is not an essential component of the development on the adjoining land. 16 Section 125 is different to s 138. Applications under s 138 are not expected for works which would interfere with the fundamental right of passage afforded to members of the public under s 5 of the Roads Act. The use of the road for a footpath restaurant does involve the alienation of the road in conflict with the use of the footpath by the public. The temporary interference with the rights of the public to pass along a public road in a s 138 application are unlikely to give rise to the requirement to pay rent. Section 125 refers to the imposition of conditions requiring the payment of rent and conditions relating to public liability insurance. No part of the exercise of discretions in respect of the primary subject matter obtaining development consent under the Environmental Planning and Assessment Act 1979 (the EP&A Act) involves proprietary rights such as the setting of rent payable for the exclusive use of land in the ownership of the Council for footpath seating. Further s 138 applications under subsections (c), (d) and (e) are expressly provided for as integrated development. This is a textual indicator that the exercise of approvals under s 138 of the Roads Act are necessary in order for development to be carried out and therefore that s 39(2) would apply. 17 There is no right of appeal from s 125 suggesting that it is Parliament's intention that there be no such right of appeal. To enable the Applicant's modification application, which is in substance an appeal against the refusal by the Council of the two s 125 applications made by the Applicant is contrary to that intention. If the Court can consider s 125 in that s 96 modification the situation is anomalous in that a restauranteur who does not require development consent for footpath use and applies under s 125 has no right of appeal. 18 The rights under s 138 and s 125 are different. Section 138 refers to consent to carry out works which aligns with the language of consent used in the EP&A Act. By contrast s 125 is deliberately directed to the power of a council to grant approval to a particular person who is operating a restaurant. 19 The power of a Council to impose conditions on a development consent is limited by s 80A to those matters under s 79C. The Court exercising its powers in a s 97 appeal is also similarly limited. The Court could not in this s 96 modification appeal impose conditions of consent relating to rent and insurance as these are not matters falling within s 79C considerations. Applicant's submissions 20 In McDougall v Warringah Shire Council (1993) 30 NSWLR 258 at 268 Kirby P stated: One reason for adhering to the broad view adopted in Kogarah Municipal Council v Kent is that by s 39(2) jurisdiction is conferred on the Land and Environment Court. It is a superior court of record (s 5(1) of the Land and Environment Court Act). Its judges have the same rank, title, status and precedence as a judge of the Supreme Court (s 9(2) of the Land and Environment Court Act). The traditional view of the common law has been that such a grant of power to a court of such a status should not be narrowly construed but given a wide meaning out of recognition of the wide variety of circumstances with which such a court must typically deal. 21 He confirmed the finding in McDougall that s 39(2) conferred a broad power in Kogarah Municipal Council v Kent (1981) 46 LGRA 334. Section 39(2) is a beneficial and facultative provision; McDougall per Mahoney JA at 271G. The subject matter of the applicant's appeal was the proposed use of the footpath on The Corso and Sydney Road for outdoor dining or restaurant purposes. The subject matter of the present application is precisely the same as the original appeal as that is the purpose for which an approval is to be given under s 125 of the Roads Act. The application is not made in isolation from the development consent as the purpose of the approval is to permit outdoor dining to be carried out under the 12 month trial period approved by the Commissioners. Applying Kirby P's reasoning in McDougall, a council should not be able to frustrate the carrying out of development under a development consent granted by the Court against the Council's wishes by exercising a function in a way that is beyond the reach of the Court (269B). The issue of outdoor dining was exhaustively considered by the Commissioners on the merits. The basis for the refusal of the s 125 applications is on planning grounds. The s 125 application is intimately connected with the subject matter of the s 97 appeal and therefore appropriate to consider in this s 96 modification application. 22 The argument that there is no appeal right in relation to an application under s 125 of the Roads Act in that Act, suggesting it is not amenable to determination under s 39(2), was dismissed in Kogarah Municipal Council v Kent when the Court of Appeal described the submission as an anguished plea rather than an argument (Reynolds JA at 334). That case held the Court can do whatever the council could do to dispose of the appeal under s 39(2). There is no relevant distinction between s 125 and s 138 of the Roads Act. Finding 23 It was agreed by the parties that s 39(2) of the Court Act applies to a s 96 modification application as it does to a s 97 appeal. This is provided for in s 39(1) which states that an appeal includes any matter which may be disposed of in Class 1 proceedings. The parties agreed that the case law as found in McDougall per Kirby J suggesting that s 39(2) has a wide application is to be applied. That view was endorsed by Tobias JA (Hodgson and Santow JJA concurring) in Sydney City Council v Ipoh Pty Ltd (2006) 149 LGERA 329. That approach followed earlier cases such as Sydney City Council v Claude Neon Ltd (1989) 15 NSWLR 724, in which the Court of Appeal held that the Court could consider a development application in relation to a structure which protruded over a public road although the council had not given owner's consent, and also Estate Project Development v Sydney City Council (2005) 141 LGERA 86 which also considered the giving of owner's consent by a council in relation to public land. A more recent thorough analysis of the relevant cases which have considered the application of s 39(2) is to be found in Goldberg at [26] – [43] following which Biscoe J adopted the broad approach [44]. As Biscoe J noted at [29] a narrower approach was taken in Drew (1985), which decision the Council relied on. More recent Court of Appeal and Land and Environment Court cases suggest the broad approach must be applied. 24 I largely accept the Applicant's submissions in holding that s 39(2) does enable the Court to consider the Applicant's modification application to amend condition 50 by seeking approval under s 125 of the Roads Act in the circumstances of this case. The application under s 125 of the Roads Act arises directly from the Court's consideration of the Applicant's development consent and the grant of consent includes the use of the public footpath for outdoor dining. The Council's submission that this was a small or ancillary part of the development is irrelevant. It was part of the development consent granted by the Court. The modification application is in respect of the matter the subject of the appeal as required by s 39(2). It is relevant in this context to refer to Hemmings J in Paino v Woollahra Municipal Council (1990) 71 LGERA 62 where he considered that the functions or discretions that a council has in respect of the matter the subject of an appeal is wider than the precise terms of its decision; Kirby P in McDougall at 264 and Tobias JA in Ipoh at [52] also made that statement. 25 The only reason for making the s 125 Roads Act approval application is to enable the Applicant to give effect to the 12 months trial period provided for in condition 50(i) of the development consent. It is an exercise of a function or discretion of the Council which arises as part of the Court's consideration of the matters arising in the s 97 appeal and consequently also in relation to the modification application. It is not to the point that there was no mention of s 125 of the Roads Act before the Commissioners given their substantive consideration of the use of the public footpath adjacent to the Applicant's hotel. The fact that the Commissioners did not consider s 125 of the Roads Act at the hearing of the s 97 appeal does not prevent the Court doing so in this s 96 modification application because, as agreed, s 39(2) of the Court Act applies to the same (fulsome) extent it did in the s 97 appeal. Had the s 125 Roads Act issue been raised at that hearing I consider the Court could have dealt with it pursuant to s 39(2) of the Court Act. 26 I also reject the Council's submission that the s 96 modification application should not be considered as an application to modify the development consent but rather as an appeal against the Council's decision to refuse the two s 125 Roads Act applications. The Applicant can rely on the statutory scheme in the EP&A Act and the Court Act that includes s 39(2). 27 As submitted by the Applicant the Roads Act provides for the alienation of the road surface for a range of purposes including public gates under Pt 9 Div 2, works and structures under Pt 9 Div 3 (such as street vending consents) and road events under Pt 9 Div 4. The grant of those consents or permits may involve the erection of temporary or permanent structures and the carrying out of activities all of which may limit or impede passage over the road surface. The granting of such consents and permits confers rights inconsistent with unrestricted passage over the surface of public roads. There is no right of appeal conferred under Div 2, 3 and 4 of Pt 9 of the Roads Act. Both s 125 and s 138 are in Pt 9. 28 This is apparently the first case in which s 125 of the Roads Act has arisen as an issue in relation to the application of s 39(2) in a Class 1 appeal. There are three cases referred to in submissions (Connery, Gibson and Goldberg) where the Court has considered s 138 of the Roads Act and held that the Court can exercise the functions of the Council under that section in an appeal (whether under s 97 or s 96 of the EP&A Act) relying on s 39(2) of the Court Act. Contrary to the Council's submissions there is no relevant distinction between these cases and this matter. The circumstances in Gibson and Connery, where development consent was required for proposed works on a council road, are similar to this matter where the use of the public footpath requires development consent. The subject matter of the development application was the same as the subject matter of the s 138 consent in Gibson and Connery, and here. The circumstances in Goldberg were different, as noted at [55]. In Goldberg no development consent under Pt 4 of the EP&A Act was required as the relevant activity fell within Pt 5 of the EP&A Act. Biscoe J held that the Court could exercise the functions and discretions of the council under s 39(2) of the Court Act in relation to s 138 of the Roads Act and as determining authority under Pt 5 of the EP&A Act, applying the broad approach to s 39(2) of the Court Act. 29 Further, there is no relevant distinction between s 138 and s 125 of the Roads Act contrary to the Council's arguments. Both appear in Pt 9 of the Roads Act. Neither have appeal rights. The approval under s 125 is physically and temporally limited to no more than seven years. If the use of public space later ceases under condition 50(i) of the development consent, the approval to use the footpath also ceases by virtue of s 125(2) of the Roads Act. 30 As submitted by the Applicant, the grant of an approval to use part of the public footpath when development consent is sought for precisely that use bears no relationship to the circumstances of either Strathfield Municipal Council v Drew or Codlea v Byron Shire Council. The Council's submissions suggesting that "the heart of the subject matter of the appeal was the grant of development consent for alterations and additions on adjoining land" is an inaccurate description of the proposed development before the Commissioners. The description of the subject matter of the appeal makes clear that the application was also for use of the adjacent public footpath. This was recognised in the Commissioners' judgment. 31 The Council argued that considerations which arise in relation to s 125 are peculiar to the Council, such as the fixing of an amount in the nature of rent. The fixing of an amount in the nature of rent and the imposition of other conditions such as the amount of public liability insurance can be determined by the Court hearing submissions in the same way that it imposes conditions on development consents. The Court has wide powers in s 96 modification applications to impose conditions which are within the issue raised by that application, see 1643 Pittwater Road Pty Ltd v Pittwater Council [2004] NSWLEC 685 at [51], [52]. In other words the Court is not limited to imposing the proposed modification sought by an applicant. The Council can adduce evidence and make submissions to the Commissioner who determines the modification application as to what it believes the appropriate conditions should be. 32 As submitted by the Applicant cases such as Goldberg demonstrate that s 39(2) can apply to functions which give rise to complicated administrative arrangements and decision making. That case had to determine whether the functions and discretions of a council under s 138 of the Roads Act and as a determining authority under Pt 5 of the EP&A Act could be exercised by the Court under s 39(2) of the Court Act. As noted above, Biscoe J held the Court could exercise the council's functions and discretions under s 39(2) in relation to both matters. He considered the processes required by Pt 5 of the EP&A Act could be effected by the Court giving directions to the council had certain matters been undertaken. 33 An application for approval under s 125 in this case does not appear to give rise to complicated consideration in any event. The application form completed by the Applicant shows a set of standard conditions and the calculation of rent based on floor space is shown in an attached schedule. 34 That s 125 of the Roads Act is not referred to in the integrated development consent provisions provides no contextual indicator for the reasons advanced by the Applicant at p 12 par (v) of the Applicant's written submissions. 35 The Council argued that the content of conditions of consent are limited by s 80A of the EP&A Act. Section 80A(1)(a) states that these can be imposed in relation to any matter in s 79C(1). I agree with the Applicant's submission that the Court when determining a s 97 appeal by granting a conditional development consent is not limited only to those matters referred to by s 80A of the EP&A Act when imposing conditions. It is empowered by virtue of s 39(2) of the Court Act to exercise functions and discretions of the Council which may result in the Court exercising more functions in the course of determining a s 97 appeal (or s 96 modification application) than the Council originally did when determining a development application. It therefore follows that the Court is not limited in relation to the conditions of consent it can impose by s 80A of the EP&A Act to matters only relevant to s 79C considerations if conditions necessary to the carrying out of the functions and discretions of the Council pursuant to s 39(2) are required. I am informed by the Applicant's counsel that such conditions are imposed in relation to s 138 of the Roads Act. Conditions can also be imposed in relation to the application of s 125 of the Roads Act in this modification application. 36 I therefore consider the question of law in par 4 should be answered in the affirmative. There is vested in the Land and Environment Court under s 39(2) of the Court Act power to grant approval for a person to use a footpath for the purposes of a restaurant and to exercise any function of the Council under Pt 9 Div 1 of the Roads Act. Costs of the motion 37 The Applicant seeks its costs of the hearing on the question of law proposed by the Council. It has been successful in its arguments. The usual order would be that costs are payable in these circumstances given that the issue is a preliminary question of law, albeit in Class 1 proceedings where on the merit appeal parties generally pay their own costs. I have not heard submissions on costs but would propose to make an order that the Council pay the Applicant's costs of this preliminary hearing on a question of law unless contrary submissions are received from the Council within seven (7) days. 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.