Land and Environment Court of New South Wales CITATION : Merimbula Nominees Pty Limited v Bega Valley Shire Council [2007] NSWLEC 529 APPLICANT: Merimbula Nominees Pty Limited PARTIES : RESPONDENT: Bega Valley Shire Council FILE NUMBER(S) : 10394 of 2006 CORAM: Lloyd J KEY ISSUES: Appeal :- under s 56A of the Land and Environment Court Act 1979 - appeal limited to an error of law - failure to have regard to centrally relevant material - misinterpretation of a retail economic study - inadequacy of reasons - no error of law LEGISLATION CITED: Land and Environment Court Act 1979, s56A Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430; Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367; Coles v Woollahra Municipal Council (1986) 59 LGRA 133 at 138; Randwick Municipal Council v Crawley (1986) 60 LGRA 271; CASES CITED: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378; Merimbula Nominees Pty Ltd v Bega Valley Shire Council [2007] NSWLEC 107; Misfud v Campbell (1991) 21 NSWLR 725; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 271; Zhang v Canterbury City Council (2001) NSWLR 589; (2001) 115 LGERA 373 DATES OF HEARING: 31/07/2007 DATE OF JUDGMENT: 7 November 2007 APPLICANT: C W McEwen SC and M A Staunton (barrister) SOLICITORS: Spiegel & Associates LEGAL REPRESENTATIVES: RESPONDENT: P J McEwen SC SOLICITORS: M E McMahon & Associates JUDGMENT: - 13 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Wednesday, 7 November 2007 LEC No. 10394 of 2006 MERIMBULA NOMINEES PTY LIMITED v BEGA VALLEY SHIRE COUNCIL [2007] NSWLEC 529 JUDGMENT Introduction 1 HIS HONOUR: The applicant, Merimbula Nominees Pty Limited, appealed against the deemed refusal of development consent by the respondent, Bega Valley Shire Council, for the development of a supermarket of 4,000 square metres at Merimbula. The appeal was heard by Commissioner Hoffman, who dismissed it, thereby refusing the development application: Merimbula Nominees Pty Ltd v Bega Valley Shire Council [2007] NSWLEC 107. 2 The applicant now appeals against the commissioner's decision, this appeal being limited to a question of law: s 56A of the Land and Environment Court Act 1979. 3 The primary issue before the commissioner was whether the establishment of the proposed supermarket in Merimbula was consistent with both existing and proposed planning instruments and policies and the possible impact of the proposed supermarket upon other centres, notably Bega, Tura and Pambula. 4 The applicant contends that the commissioner made the following errors of law: (a) he overlooked or failed to take into account material which was centrally relevant to the proper determination of the issues; (b) he misinterpreted or misunderstood the results of an economic study and thereby misdirected himself as to its conclusion; and (c) he failed to give reasons or gave inadequate reasons for his decision. 5 I note that in its amended statement of grounds of appeal the applicant also relied upon a further error of law, namely a finding that the proposed development would compromise the objectives of the South Coast Regional Strategy - a 25-year land-use strategy prepared by the Department of Planning and adopted by the State government in 2007 - when there was no evidence to support such finding. Mr C W McEwen SC, appearing with Mr M A Staunton for the applicant, stated that this ground fell within ground (c), submitting that the commissioner gave no reasons for that finding. The commissioner's decision 6 The decision of the commissioner sets out the various issues raised by the council and the facts relied upon by the council in support of each issue. 7 The commissioner's decision then sets out the names of those who gave evidence and summarises their evidence, including letters of objection that were sent to the council. The evidence of the joint town-planning expert, Ms D Laidlaw is set out. The various planning controls are noted. The commissioner noted, in particular, the "South Coast Regional Plan" [sic] adopted by the State government; the draft Bega Valley Local Environmental Plan 2002 ("the draft LEP") for which a certificate under s 65 of the Environment Planning and Assessment Act 1979 ('the EP&A Act") had been granted, enabling it to be publicly exhibited; the commercial centres strategy, adopted by the council; and Development Control Plan No. 38 – Merimbula Commercial Centre ("DCP No. 38") approved by the council at its meeting on 23 January 2007, which limits any retail floor space in Merimbula to 1,000 square metres per shop. The commissioner's decision summarises the findings of an economic impact study prepared by SGS Economics and Planning Pty Ltd and the evidence of the traffic engineers. 8 After concluding that it is difficult to find that the traffic impact is sufficient for refusal, the commissioner's decision then turns upon the relevant planning controls, as shown in the following paragraphs: [74] Returning however to the adopted South Coast Regional Plan, the adopted Commercial Centres Strategy of the council and the existing DCP and exhibited draft LEP to restrict new retail shops to 1000 sq m each in Merimbula, plus the intention to prepare a draft LEP for Tura Beach, I note comments in the report to council in February 2007: Council's move to constrain future growth in retail in Merimbula to stores of 1000 sq m or less and to limit expansion of Tura to 6000 sq m should achieve a reasonable balance of adequate facilities for weekly shopping needs for the Merimbula district while ensuring one centre (Bega) retains viability to attract a discount department store……….competition in large supermarkets and a core of bulky goods operations. Both the SGS report and the council's Commercial Centres Strategy warn that council is at a crucial phase and it is vital that the desires of some of the larger chains to locate large floorspace commercial development in Merimbula area be constrained and directed to Bega. [75] It is apparent that the council is going about its role under s 5(a) (i), (ii), (v) and s 5(b) and (c) of the Environmental Planning & Assessment Act 1979, in a responsible manner and has included comprehensive public consultation in doing so. The advent of this application occurred during the process, and therefore it could not be said the council was attempting to frustrate a reasonable proposal. Merimbula has topographic and scenic constraints that have already led to urban growth problems, and the council is dealing with that. [76] I have reached the conclusion that the proposal should be refused for the reasons given in Issues 1(a), 4B and C, 5 and 6, including the further particulars to these issues in Exhibit 24, plus non-compliance with DCP 38 limiting the floorspace of any new retail premises in Merimbula to 1000 sq m. 9 The reference by the commissioner to issues 1(a), 4B and C, 5 and 6 are to the issues and supporting facts which are set out in par [17] of his decision as follows: 1.(a) Whether the development should be approved as the development does not comply with the aims in Clause 2(a) of the Bega Valley Local Environmental Plan (LEP) being to ensure a balanced approach to development which is sensitive to both the economic and social needs of the community. (b) Whether the development should be approved as the development does not comply with the principles in clause 65(1)(a)(xiv) of the LEP being traffic generation and appropriate vehicular access into and around the site. Particulars: A. The development will contribute to and exacerbate existing traffic problems including safety, congestion, and conflict between service access and shopping traffic, conflict between pedestrian access and shopping centre. B. The grades of the vehicle access ramps to the underground car park are excessive and would increase the potential risk for pedestrian and vehicle conflict. C. Volume of traffic generated by the development is unacceptable for Main and Market Streets in particular and for the traffic flows in Merimbula in general. D. The site is considered too constrained for safe manoeuvring of larger delivery vehicles. 2. Whether the development should be approved as there is non-compliance with clause 65(1)(a)(v) of the LEP being the topography and setting of the land and (vi) being the streetscape character of the locality. Particulars: There will be unacceptable overshadowing impacts by the proposed development, particularly there will be overshadowing of the adjoining Merimbula Imlay Bowling Club's eastern bowling green. 3. Whether the development should be approved as there is non compliance with clause 65(1)(a)(ix) being the energy efficiency of the site and any buildings on the site and (xiii) the treatment of stormwater prior to discharge or the use of stormwater. Particulars: The design is environmentally insensitive in relation to wastewater, rainwater, and energy saving devices. 4. Whether the development should be approved because of its non compliance with clause 65(1)(a)(vii) of the LEP being compatibility with the scale and design of neighbouring development and clause 30(2)(a) being an objective of the Zone 3(a) being to encourage a high standard of commercial development, create compact business centres which service the population and visitors and facilitate the expansion of business activities in appropriate locations. Particulars: A. The bulk and scale of development would be out of character with adjoining developments. B. The proposal does not comply with the Council resolution of 26 April 2006 which resolved to exhibit an amendment to LEP 2002 to limit the size of shops and commercial premises in the Merimbula 3(a) zone to 2500 sq m or less. C. The scale of the development is inappropriate for Merimbula and will compromise the objectives of the South Coast Regional Strategy and Council's exhibited draft Commercial Centres Strategy. D. Council is not satisfied that the material submitted with the development application has proven compliance with the requirements of the Regional Development Committee. 5. Whether approval will compromise the South Coast Regional Strategy and Council's exhibited draft Commercial Centres Strategy. Particulars: A. Council's exhibited draft Commercial Centres Strategy clearly presents alternatives for supply of adequate supermarket facilities for the Merimbula area with an adequate site being identified at Tura and with the development of wider regional scale facilities being proposed for Bega as a single logically planned regional centre. B. Approval of the development in this location could in turn lead to further intensification of major retail floorspace in the area with the possible provision of a discount department store. Such development would further compromise and contradict the proposals put forward in the South Coast Regional Strategy and in Council's exhibited draft Commercial Centres Strategy. 6. The proposed development would not be in the public interest due to nearly 600 objections to the proposal. 10 I now turn to each of the grounds of appeal. Failure to have regard to relevant material 11 Mr C W McEwen SC, appearing for the applicant, submits that in refusing the application, the commissioner made no reference to a particular exhibit – Exhibit "P" – and thereby he failed to take it into account. Exhibit "P" is a letter from the Director-General of the Department of Planning to the council dated 3 January 2007. This was a letter sent to the council following the council's notification to the Director-General of its decision to prepare a draft LEP, as required by s 54(4) of the EP&A Act. The letter states that the Department of Planning does not support a restriction on floor space in the draft LEP for the Merimbula and Tura Beach centres and "does not consider there is sufficient strategic justification to support the proposed floor space caps being included in the LEP". The letter also says, however, that it is noted that the council has provided some guidance through the provision of a floor space restriction in a draft DCP. The letter states: "Council should therefore remove the floor space caps proposed for retail development in the centres". 12 The applicant submits that Exhibit "P" was thus centrally relevant to the interpretation of and weight to be accorded to the draft LEP and DCP No. 38, yet the commissioner made no reference to the opinion of the Department of Planning in his decision, leading to the conclusion that he failed to take Exhibit "P" into account and thus misdirected himself as to the weight to be given to those instruments. 13 The commissioner's decision, however, contains express reference to the fact that there were a number of subsequent events – that is, events which occurred after the date of the letter - which he describes in pars [54] and [58] of his decision. These in particular were the adoption by the State government of the "South Coast Regional Plan" [sic], the issuing of a certificate under s 65 of the EP&A Act by the Department of Planning for the draft LEP and the adoption by the council of the DCP No. 38. 14 I have previously noted that the commissioner found that the determinative issues in the case became issues 1(a), 4B and 4C, 5 and 6, which I have set out in par [9] above. The planning instruments to which the commissioner referred and the weight to be accorded to them were thus central to the determination. 15 The reference by the commissioner throughout the decision to the "South Coast Regional Plan" appears to be a misnomer. It is not referred to in any of the issues. I assume it is intended to be a reference to the South Coast Regional Strategy which appears to be a policy document issued by the Department of Planning in January 2007 and which does not have any statutory force. For example, in par [59] of the decision the commissioner refers to the "South Coast Regional Plan" and noted that "on both the South Coast Strategy map and the Biodiversity and Coastal Asset map in the plan the existing urban area of Merimbula is shown in white…". This map appears in the South Coast Regional Strategy document which, as I have noted, is not a regional environmental plan. 16 The duty to give reasons does not extend to every matter of fact or law which was or might have been raised in the proceeding: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385 per Mahoney JA. In another way, the law does not require a judicial officer to make an express finding in respect of every fact leading to, or relevant to, his final conclusion of fact: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 271 per Mahoney JA. It is not necessary to make explicit findings on each piece of evidence, especially if the inference as to what is found is appropriately clear: Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 443 per Meagher JA. Reasons need only be given so far as is necessary to indicate why the decision was made: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd at 388 per Mahoney JA. Nevertheless the duty to give reasons clearly applies to findings on the principal contested issues, or on any issue that is central or critical to the case: Soulemezis at 259 per Kirby P; Misfud v Campbell (1991) 21 NSWLR 725 at 738 per Samuels JA. That is what the commissioner did in this case. 17 In the present case the commissioner's reasons clearly indicate why the decision was made. It was based upon the planning instruments to which he referred, namely the South Coast Regional Strategy (wrongly described by the commissioner as the "South Coast Regional Plan"), the draft LEP (which had been put on exhibition) and the DCP No. 38. The latter two instruments limit the floor space of new retail shops in Merimbula to 1,000 square metres. Moreover, s 79C(1)(a) of the EP&A Act expressly required consideration of the latter two instruments. 18 The letter from the Director-General, being Exhibit "P", is merely a preliminary expression of opinion by a non-party at an earlier stage of the planning process – an opinion which may well change following the public exhibition of and consideration of submissions on the draft LEP. In any event, the letter noted, "that the council has provided some guidance through the provisions of a floor space restriction in a draft DCP". By the time the commissioner came to determine the application the draft DCP had became DCP No. 38 on 23 January 2007. The DCP No. 38 thus became a fundamental element or focal point in the commissioner's determination: Zhang v Canterbury City Council (2001) NSWLR 589; (2001) 115 LGERA 373 at [75] per Spigelman CJ; and it is apparent from a reading of the commissioner's reasons that this was so. 19 The commissioner was entitled to take the view that Exhibit "P" was neither central nor critical, in which case he was not required to specifically deal with it. In the same way, he did not specifically deal with other evidence adduced in support of the proposed development. Since the commissioner found that the determinative issues were those which he identified in par [49] of his decision, namely, the planning controls that applied, then consistently with the principles to which I have referred in par [16] above, it was not necessary for him to deal with every other matter that could be averted to, including Exhibit "P". That is to say, in determining the matter in the way he did, by giving determining weight to the planning instruments, the parties were left in no doubt as to why the decision was made. The question of what weight was to be given to any relevant matter was solely a question for the commissioner. No error of law arises. Misinterpretation of the economic study 20 A retail economic study prepared by SGS Economics and Planning Pty Ltd was in evidence. The applicant submits that the commissioner relied upon the study to support his finding that the development application should be refused. The applicant further submits that the commissioner directed himself to the conclusions in the study and he did not have regard to, or correctly interpret, the analysis within the study. 21 The particular observation made by the commissioner which is challenged by the applicant is his statement at par [64] of the commissioner's decision, that the study says that "the only option" minimising impacts on adjoining shopping centres is Scenario 2. (I understand that Scenario 2 involves a new 3,000 square metre supermarket at Tura Beach.) 22 As I understand the evidence, the retail economic study examines four retail development scenarios and their impacts on the performance of other competing shopping centres. The scenario which produced the lowest impact was Scenario 2. If the commissioner had expressed himself by using different language, that is if instead of using the words "the only option" the commissioner had expressed himself to say that it was the only option producing the lowest impact, then he would have been completely correct. That is what I think the commissioner meant to say, when he said: "The SGS report says the only option that minimises impacts on adjoining shopping centres is Scenario 2…" (at par [64] of the commissioner's decision). 23 It is settled law that a fine-tooth comb approach should not be employed when examining the decisions of lay commissioners for errors of law: Coles v Woollahra Municipal Council (1986) 59 LGRA 133 at 138; Randwick Municipal Council v Crawley (1986) 60 LGRA 271 at 283. That is, it is undesirable in an appeal from a lay tribunal where the appeal court is confined to a question of law to examine too narrowly the words used in the decision, at least unless those words are central to the decision: Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 at 368. 24 For the reason explained in par [22] above, the looseness of expression employed by the commissioner in the present case does not lead to the conclusion that he misinterpreted or misapplied the retail economic study. Failure to give reasons 25 The applicant identifies three matters about which it says that the commissioner failed to give reasons or adequate reasons: (a) the failure to refer to Exhibit "P"; (b) the failure to give reasons for the conclusion that " the proposal should be refused for the reasons given in Issues 1(a), 4B and C, 5 and 6, including the further particulars to these issues in Exhibit 24, plus non-compliance with DCP 38 limiting the floorspace of any new retail premises in Merimbula to 1000 sq m. " (at par [76] of the commissioner's decision); (c) the failure to explain why the commissioner was of the view that the development " will compromise the objectives of the South Coast Regional Strategy" (referring to issue 4C, noted in par [9] above), and why " approval of the development in this location could in turn lead to further intensification of major retail floorspace in the area with the possible provision of a discount department store " (referring to issue 5B, noted in par [9] above). 26 I have already considered the failure of the commissioner to refer to Exhibit "P" in dismissing the first ground of appeal. 27 The relevant principles are described in par [16] above. Moreover, the duty to give reasons is sufficiently satisfied by giving grounds for, and not the detailed reasoning in support of, findings of fact - a broad ouline is sufficient: Solemezis, at 271, 273. The duty to give reasons is satisfied if the losing party understands the grounds upon which the case was lost: Wilki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127 at 136 [59]. 28 I have set out in par [9] above the issues raised by council, to which the commissioner referred in par [76] of his reasons. It is apparent that the issues and the identified particulars describe in a detailed manner the evidence and facts relied upon by the council in apposing the application. Before coming to his conclusion in par [76] of the decision – noted in par [8] above – the commissioner had given detailed attention to the evidence relating to those issues. In particular, the commissioner's decision described the extensive public interest against the proposal (pars [18], [31]-[32], [36] and [57]); the council's planning process (pars [29]-[45], [74]-[75]); the status of the relevant planning instruments (pars [54], [55]); the adoption by the council of the DCP No. 38 limiting retail floor space to 1,000 square metres (par [58]); the adoption of the South Coast Regional Plan (pars [59]-[66]); the economic study which found that Scenario 2, which was for a fresh development at Tura Beach would minimise the impact on adjoining shopping centred (discussed in pars [20] – [22] above); and the fact that the council's adoption of its commercial centres strategy and the DCP No. 38 came after lengthy public consultation (par [54]). 29 The commissioner's conclusions are set out in pars [74] to [76] of his decision, which I have quoted in par [8] above. These conclusions are arrived at after discussing the evidence to which I have referred above. Moreover, as I have noted, the issues and the particulars to which the commissioner has referred in par [76] of his decision contain the evidence and facts which support a refusal of the development application. Avoiding a fine-tooth comb approach to the commissioner's decision, it is evident that the losing party is left in no doubt as to why its case was not accepted. That is, the commissioner accepted the facts asserted in particulars identified in the statement of issues. 30 As to the final complaint about the South Coast Regional Strategy and the further intensification of major retail floor space in the area, it is self-evident that a major development such as the proposed development, away from Bega, would jeopardise the development of that town as a major regional centre for the Shire. Conclusion and orders 31 The commissioner's decision does not disclose any errors of law. It follows that the appeal must be dismissed with costs. The final orders are: (1) The appeal is dismissed. (2) The applicant must pay the respondent's costs of the appeal. (3) The exhibits may be returned. I hereby certify that the preceding 31 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. Associate Dated: 7 November 2007 ********** 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.