New South Wales Court of Appeal CITATION : Gazcorp Pty Ltd v Westfield Management Pty Ltd & Anor [2004] NSWCA 63 HEARING DATE(S) : 3 March 2004 JUDGMENT DATE : 31 March 2004 JUDGMENT OF : Handley JA at 1; Giles JA at 2; Pearlman AJA at 34 DECISION : 1. Appeal allowed to the extent of reformulation of orders (2) and (3) made on 16 January 2004 but otherwise dismissed; 2. Set aside orders (2) and (3) made on 16 January 2004 and in lieu thereof order: "(2) The first respondent abstain from carrying out, or causing the carrying out of, or permitting, authorising or suffering the use of the property at No 12, lot 121 in deposited plan 87692, Orange Grove Road, Warwick Farm for he purpose of a shop or shops otherwise than in accordance with the development consent 4891/00 granted on 18 September 2001, or such other valid development consent as may be granted with respect to the property."; 3. Stay the operation of order (2) substituted by order 2 for twenty-eight days from today's date; 4. Appellant pay respondents' costs. CATCHWORDS : Development consent - use as warehouse clearance outlet - within listed non-permitted development of a shop - not otherwise listed - whether a development "not referred to" in the instrument - construction of LEP - injunctive relief stayed for 28 days - whether miscarriage of discretion in declining to grant longer stay. ACR Trading Pty Ltd v Fat Sel Pty Ltd (1987) NSWLR 67; CASES CITED : NRMCA (Qld) Ltd v Andrew (1993) 2 Qd R 706; Tynan v Meharg (1998) 101 LGERA 255; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335. Gazcorp Pty Ltd - Appellant PARTIES : Westfield Management Pty Ltd - First Respondent Kent Street Pty Ltd - Second Respondent FILE NUMBER(S) : CA 40090/04 COUNSEL : N Hemmings QC - Appellant M Craig QC & R Lancaster - Respondents SOLICITORS : Allans Arthur Robinson - Appellant Mallesons Stephen Jaques - Respondents LOWER COURT Land & Environment Court JURISDICTION : LOWER COURT LEC 40699/03 FILE NUMBER(S) : LOWER COURT Lloyd J JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40090/04 LEC 40699/03 HANDLEY JA GILES JA PEARLMAN AJA Wednesday 31 March 2004 GAZCORP PTY LTD v WESTFIELD MANAGEMENT LTD & ANOR Judgment 1 HANDLEY JA: I agree with Giles JA. 2 GILES JA: Gazcorp Pty Ltd ("Gazcorp"), the owner of 12 Orange Grove Road, Warwick Farm ("the property"), received from Liverpool City Council ("the Council") development consent for the change of use of a warehouse building on the property from a bulky goods warehouse to a warehouse clearance outlet. Westfield Management Ltd ("Westfield") obtained from the Land and Environment Court a declaration that the development consent was unlawful and void and restraining orders the effect of which was to prevent the use of the warehouse building as a warehouse clearance outlet. Gazcorp appealed, contending that the judge erred in making the declaration or, if the development consent was invalid, in declining to postpone the operation of the restraining orders for a significant period. Validity of the development consent 3 Clause 9 of the Liverpool Local Environmental Plan 1997 ("the LEP") provided (where it had a tick I use the symbol "v", for want of a tick in available symbols) - " 9. Development which is allowed or prohibited within a zone (1) Unless otherwise provided by this plan, the Table to this clause specifies for each zone: (a) development which may be carried out without consent where "v*" is shown corresponding to that development, and (b) development which may be carried out only with consent, where "v" is shown corresponding to that development. (2) Development referred to in the Table to this clause is prohibited in a zone if "v*" or "v" is not shown corresponding to that development. (3) Development which is not referred to in the Table to this clause may be carried out only with consent (except within the 6(c) zone, in which any such development is prohibited). (4) The Council may grant consent to development only if the Council has regard to the following: (a) the general objectives and other objectives of this plan, (b) the objectives of the zone in which it is proposed to be carried out, and (c) the other provisions of this plan." 4 In the Table to cl 9 ("the Table") there were set out columns for the various zonings, and against a list of forms of development there was indicated by a tick or a tick and an asterisk for each zoning the forms of development which could be carried out without development consent or only with development consent, or (by no entry), forms of development which were prohibited. 5 The property was zoned 4(b) Industrial-Special ("the zone"). 6 Amongst the listed forms of development ticked for the zone was "Bulky goods sales or showrooms". The definitions in cl 6 of the LEP included - " Bulky goods salesroom or showroom means a building or place used for the sale by retail or auction, or the hire or display, of any of the following: (a) furniture, or (b) electrical goods, or (c) toy and sporting equipment, or (d) office furniture, or (e) hardware, or (f) outdoor products, or (g) floor coverings, or (h) automotive parts and accessories, or (i) lighting, or (j) antiques and second-hand goods, or (k) kitchen or bathroom showrooms, or (l) tiles (floor, ceiling or wall)." 7 On 18 September 2001 the Council granted development consent for the property for "refurbishment of existing industrial building and conversion into 8 units for bulky goods/warehousing". It was common ground that this was intended to, and did, engage the permitted form of development last mentioned. 8 The listed forms of development also included "shops". That form of development was not ticked or ticked and asterisked for the zone. It was therefore prohibited. "Shop" was defined in cl 6 of the LEP - "Shop" means a building or place used for selling items, whether by retail or auction, or for hiring or displaying items for the purpose of selling or hiring them (whether the items are goods or materials)." 9 On 15 November 2002 the Council granted development consent for the property for "change of use from existing bulky goods warehouse to a warehouse clearance outlet". "Warehouse clearance outlet" was not a listed form of development. 10 The judge found - "The building has been subdivided into approximately 63 tenancies ranging from about 24 square metres to about 1,000 square metres, from which a vast range of merchandise is sold, including clothing, footwear, kitchenware cutlery and china, crystal and glassware, Manchester, jewellery, haberdashery, toys, sporting goods, and perfume, cosmetics and accessories. The tenants include such well-known names as Fletcher Jones and Staff Pty Ltd, David Jones Ltd, Reuben F Scarf (Retail) Pty Ltd, Oroton Group (Australia) Pty Ltd and Bohemia Crystal Pty Ltd. The building was officially opened as a warehouse clearance outlet by the Minister for Infrastructure and Planning and Minister for Natural Resources, the Hon Craig J Knowles MLA, at a ceremony on 21 November 2003 by the unveiling of a plaque and the cutting of a cake." 11 Gazcorp conceded that the use of the property as a warehouse clearance outlet fell within the definition of "shop" through the activities of many of the traders selling merchandise, although postulating that the activities of some of the traders might not have been in accordance with the development consent and quarantining that from the question of validity of the development consent. 12 Gazcorp submitted that the use of the property as a warehouse clearance outlet was nonetheless not prohibited. In its submission, it was open to the Council to grant the development consent for use as a warehouse clearance outlet pursuant to cl 9(3) of the LEP, because it was a form of development "not referred to in the Table". It described use as a warehouse clearance outlet as an innominate form of development, and said that the purpose of cl 9(3) was to permit the Council to grant development consent to such unlisted forms of development if it saw fit provided that cl 9(4) was satisfied. 13 Gazcorp pointed out that some discrete forms of development were permitted although falling within the definition of "shop". For example, the listed forms of development included "convenience stores", meaning a shop selling a variety of small grocery goods, "local shops", meaning a small shop trading principally in groceries, smallgoods and associated convenience items and primarily serving the surrounding residential area, and "service stations", meaning a building or place used for the sale by retail of motor vehicle fuels and lubricants. A bulky goods salesroom or showroom is another example. These can be regarded as species of a genus. 14 Gazcorp submitted that this showed that use of the property falling within the definition of "shop" was not irretrievably prohibited. The purpose of cl 9(3) of the LEP, it said, was to add to this express recognition of discrete and listed forms of development by enabling the Council to consent to other discrete but unlisted forms of development, whereby there could be flexibility in planning control. It referred to the Strathfield Local Environmental Plan No 86 ("the Strathfield LEP") as an illustration of a general prohibition expressly subject to stated permitted forms of development and to a general power to consent to forms of development "which by virtue of their nature, the services provided, or the products produced, distributed or sold, are in the opinion of the Council, appropriately located in this zone". It said that cl 9 was a poorly drafted attempt to achieve the same objective. 15 Whatever other planning instruments might seek to achieve and say, we must adhere to the words of the LEP. It may be said, however, that cl 9(4) of the LEP would not provide control over granting of consent pursuant to cl 9(3) equivalent to the already attenuated control over the general power in the Strathfield LEP. Clause 9(3) is understandable as an attempt to deal with the unforeseen, but its generality stands against it being a widely available dispensing power. 16 That listed species of shop were expressly permitted although falling within the definition of "shop" does not mean that other unlisted forms of development were open to development consent pursuant to cl 9(3). Rather, it suggests to the contrary: where species of a genus were permissible, the species were listed. 17 A warehouse clearance outlet could have been listed as another species of shop. It was not. The fact that it was not does not mean that it was a form of development not referred to in the Table. The planning function of cl 9 and its Table can not be avoided by armchair creation of unlisted forms of development as species of a listed genus. As the judge said, acceptance of Gazcorp's submission could lead to absurdities - "If the submission be correct, then a supermarket, which is not referred to in the table, would be permissible with consent pursuant to cl 9(3). Similarly, a department store, which is not referred to in the table, would be permissible as a discrete type of development. Even a specialised kind of shop, such as a pharmacy, would be permissible. But all of these uses are kinds of shops. The submission would make nonsense of the definition of a shop." 18 Clause 9(3) is readily explicable as an attempt to deal with the unforeseen, doing work other than that for which Gazcorp contended. The listing of forms of development did not purport to be exhaustive. Even if the author of the LEP had striven for completeness, experience would have taught that completeness might not have been achieved. Forms of development can be postulated which did not fall within any of those listed. Two arising in argument were an aquarium and a crematorium. There was inconclusive debate over an aquarium being within the listed form of development of an educational establishment and a crematorium being within the listed form of development of business premises. Other suggestions were made. That this occurred fully endorsed the role of cl 9(3) as a provision for the unforeseen, obviating strained interpretations of listed forms of development. The words "not referred to in the Table" did not mean carved out of a form of development listed in the Table. Exercise of discretion 19 The judge did not accept that, in the exercise of his discretion under s 124 of the Environmental Planning and Assessment Act 1979 ("the Act"), he should decline to make any restraining order. In the exercise of that discretion he postponed the operation of the orders, to the extent that he postponed them for twenty-eight days to allow Gazcorp and the traders selling merchandise in the warehouse building "some time to re-arrange their affairs in an orderly way". 20 The judge made the orders on 16 January 2004. On application to this Court, on 2 February 2004 Handley JA ordered that proceedings on the judge's orders be stayed until the determination of the appeal and for a period of twenty-eight days thereafter. The hearing of the appeal was expedited, and took place on 3 March 2004. 21 On appeal Gazcorp did not dispute the making of the restraining orders, although drawing attention to a difficulty in their form to which I will come. It submitted that the orders should be postponed for not less than six months from the present time. 22 It was not in dispute that the discretion under s 124 of the Act may be exercised by postponing the effect of injunctive relief "to soften, according to the justice of the particular circumstances, the application of the rules which, though right in general may produce an unjust result in the particular case" (Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 341). The circumstances in which this may be done include where it is thought appropriate to allow the party acting illegally to obtain a suitable development consent and bring the illegality to an end (NRMCA (Qld) Ltd v Andrew (1993) 2 Qd R 706 at 713; ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 84-5; Tynan v Meharg (1998) 101 LGERA 255 at 259). 23 The basis for Gazcorp's submission was rather protean. In the beginning Mr Hemmings QC said that "on the evidence he had before him, I concede that [the judge] would say 28 days was adequate", and the submission appeared to rest upon additional evidence proffered in this Court. Mr Hemmings said that this Court should re-exercise the discretion without finding appealable error in the judge's exercise of discretion. But Gazcorp's submissions thereafter were directed to error in the judge's exercise of discretion. It was said that "when you look at all the circumstances together, when you aggregate them, this is a case where the discretion miscarried". Even then no appealable error in the exercise of the judge's discretion of the kind first described in House v The King (1936) 55 CLR 499 at 505 was asserted. The submission was in effect that the judge's exercise of discretion was, as later described in House v The King, "unreasonable or plainly unjust … [so that] the appellate court may infer that in some way there has been a failure property to exercise the discretion which the law reposes in the court of first instance". 24 Westfield opposed the reception of the additional evidence. It was received conditionally, its admissibility and significance to be dealt with in submissions. I will defer consideration of the additional evidence for the time being. 25 The judge summarised Gazcorp's submissions - "16 Mr Hemmings QC submits that in any event, the Court would not, in the exercise of its discretion, grant the relief sought by the applicants. A number of grounds are relied upon. First, it is submitted that the breach is purely technical, relating to the interpretation of a contradictory and ambiguous planning instrument which is not drafted in conventional form and open to a contrary interpretation which the council itself adopted. Secondly , the applicants delayed in commencing and prosecuting this action. Thirdly, the applicants are potential trade competitors but claim no hardship to themselves. On the other hand, there would be considerable inconvenience to the first respondent and to the various occupiers of the building and their employees if the relief claimed were to be granted. Fourthly, there is an overall public benefit in allowing the development to continue, particularly its economic benefit, which has the support of the local council. Fifthly , the council adopted a draft local environmental plan on 17 December 2002 by which it is proposed to amend the LEP to insert a new definition of "outlet centre" and to expressly allow the development of an outlet centre on the site of this development. Lastly, it is submitted that an injunction should be either refused or suspended to allow the draft amendment to the LEP to be made and to allow the council to regulate the use." 26 The judge did not regard Gazcorp's breach of the Act as merely technical, and was plainly correct. He did not consider that Westfield delayed in bringing or prosecuting the proceedings, and no reason has been shown to disagree. His Honour saw little weight in the third and fourth of Gazcorp's grounds, being rightly mindful that planning control depends on the orderly enforcement of the planning law and that economic benefit can not be allowed to prevail over planning control. Of most relevance to postponement of the orders, he said as to the fifth ground - "24 Finally, I refer to the fact that a draft amendment to the LEP has been exhibited and which, if made, would permit the development in the present case. The draft amendment was exhibited as recently as 17 December 2003. However, the council is yet to receive submissions on the proposal. The council has also to consult and to receive responses from a number of government departments. In particular, it is not known what attitude will be taken to the draft amendment by the Department of Infrastructure, Planning and Natural Resources." 27 Although the judge did not say so expressly, he must have considered that whether and when the LEP would be amended was so uncertain that postponement of the orders pending suitable development consent, and the concomitant open-ended failure to enforce the planning law, was not appropriate. It should not be overlooked that, even if the LEP were amended, the grant of suitable development consent did not automatically follow. It could generate dispute of its own, and even if granted will not have retrospective effect. I do not think that error in the judge's attention to Gazcorp's grounds or his Honour's weighing of them was shown. Nor in my opinion was the judge's assessment of an appropriate postponement of the orders so unreasonable or unjust as to demonstrate miscarriage of his discretion. 28 The additional evidence proffered by Gazcorp was an affidavit of Mr Philip Tolhurst, Manager of City Development of the Council, sworn on 3 March 2004. Mr Tolhurst updated the amendment of the LEP - "3. Exhibition of the said draft LEP closed on 2 February 2004. 4. Council received submissions on both sites the subject of the said draft LEP. 5. Council has consulted with all relevant government departments in particular the Department of Infrastructure, Planning and Resources (DIPNR) has been consulted. 6. Neither DIPNR nor any other government department has raised objection to the rezoning of the subject land. 7. Parliamentary Counsel has advised that the said plan may legally be made. 8. I have prepared a draft report which recommends the making of the draft LEP. The report will be considered by Council on 22 March 2004." 29 The affidavit was provided to Westfield only on the day of the hearing. Mr Craig QC said that, had it been received earlier, he would have made further investigations in order to explore and test it, but that he "want[ed] the matter resolved". He submitted that the affidavit was in such general terms that its weight was difficult to assess, for example the consultation with government departments was unknown, that DIPNR had not raised an objection said little as to the merits of the amendment and the pros and cons in the draft report bearing upon its acceptance by Council were unknown. He submitted that the affidavit did not take matters much further and would not have materially altered the judge's conclusion. 30 I agree with these submissions. The affidavit brought only a degree of certainty to little of the uncertainty in the prospects of amendment of the LEP and, just as important, the grant thereafter of suitable development consent. I do not think that, if received, it would impugn the judge's exercise of his discretion or on a fresh exercise of discretion lead to a different conclusion. In my opinion, the additional evidence should not be received, but if it were received it would not bring success in the appeal. The form of orders 31 The orders made by the judge were - "(2) The first respondent abstain from carrying out, or causing the carrying out of, or permitting, authorising or suffering the use of the property at No. 12, lot 121 in deposited plan 876962, Orange Grove road, Warwick Farm for the purpose of a shop or shops. (3) The first respondent abstain from carrying out, or causing the carrying out of, permitting, authorising or suffering the use of the property at No. 12, lot 121 in deposited plan 876962, Orange Grove Road, Warwick Farm for the sale, hire or display of anything other than furniture, electrical goods, toy and sporting equipment, office furniture, hardware, outdoor products, floor coverings, automotive parts and accessories, lighting, antiques and second-hand goods, kitchen or bathroom showrooms and tiles (floor, ceiling or wall)." 32 The proscribed use in order (3) was founded on the definition of "shop", and the exception thereto was taken from the definition of "bulky goods salesroom or showroom". There was development consent for the use of the property as a bulky goods salesroom or showroom, and the intent of proscribing use as a shop save as a bulky goods salesroom or showroom is clear enough. However, order (2) could conflict with order (3), in that order (2) could preclude use of the property as a bulky goods salesroom or showroom. It was accepted that the orders should be reformulated to remove this difficulty. Orders 33 1. Appeal allowed to the extent of reformulation of orders (2) and (3) made on 16 January 2004 but otherwise dismissed; 2. Set aside orders (2) and (3) made on 16 January 2004 and in lieu thereof order – "(2) The first respondent abstain from carrying out, or causing the carrying out of, or permitting, authorising or suffering the use of the property at No 12, lot 121 in deposited plan 87692, Orange Grove Road, Warwick Farm for the purpose of a shop or shops otherwise than in accordance with the development consent 4891/00 granted on 18 September 2001, or such other valid development consent as may be granted with respect to the property." 3. Stay the operation of order (2) substituted by order 2 for twenty-eight days from today's date. 4. Appellant pay respondents' costs. 34 PEARLMAN JA: I agree with Giles JA. ********** Last Modified: 03/31/2004 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.