Land and Environment Court New South Wales Medium Neutral Citation: Meerlen Pty Limited v Ashfield Municipal Council [2012] NSWLEC 1264 Hearing dates: 3 September 2012 Decision date: 03 September 2012 Jurisdiction: Class 1 Before: Moore SC Decision: (1)The appeal is upheld. (2)Development Consent 10.2011.176.1 is modified by the deletion of condition 10. (3)That the exhibits, other than Exhibits 1 and A, are returned. Catchwords: DEVELOPMENT CONTRIBUTIONS - basis for imposing; reasonableness Legislation Cited: Environmental Planning and Assessment Act 1979 Cases Cited: Rose Consulting Group v Baulkham Hills Shire [2003] 129 LGERA 165 Category: Principal judgment Parties: Meerlen Pty Limited (Applicant) Ashfield Municipal Council (Respondent) Representation: Mr I Hemmings (Applicant) Ms P Burns (Respondent) Mr D Manca LAS Lawyers & Consultants (Applicant) Ms S Jacobs Maddocks Lawyers (Respondent) File Number(s): 10370 of 2012 EX TEMPORE Judgment 1SENIOR COMMISSIONER: On 22 November 2011 Ashfield Council granted development consent 10.2011.176.1, approving additions and alterations to the Ashfield Hotel premises located at 204 Liverpool Road, Ashfield. 2The hotel is essentially a social operation as it has no residential accommodation. It operates a bottle shop, dining facilities, drinking and socialising facilities, a function room and, importantly for these proceedings, a gaming room. 3The consent that was given in November 2011 did not increase the area of the premises as the totality of the site is presently developed and occupied by the activities of the hotel. What the consent did was to approve, at the ground level, an alteration to the present gaming room by extending it into the present comparatively open courtyard area that is used for smoking and outdoor drinking activities. 4The reasons for extension to the gaming room are to ensure that there is appropriate compliance with smoking regulations and also to improve the general amenity of the space - a space which is presently designed in a fashion that anticipated (but did not achieve) approval for smoking purposes and is otherwise claustrophobic and cramped. 5The consent included a condition that would have required payment to the council of contributions pursuant to s 94 of the Environmental Planning and Assessment Act 1979 (the Act) in the then sum of a little over $99,000. Of that sum, the vast bulk related to contributions for provision of additional parking spaces that are notionally required (on the council's case) as a consequence of the extension of the gaming room space. 6Section 94 of the Act requires that the consent authority, or in this case the Court, be satisfied that the development will or is likely to require the provision of or increase the demand for public amenities and public services within the area. Once that test is satisfied, the way that the money is levied is achieved by considering the nature and scope of the development against the tests that are set out in the council's s 94 Development Contributions Plan that was adopted on 9 November 2010 and effective from the following day. 7There are two elements. The first, for a parking contribution for three parking spaces, runs to approximately $93,000 with the general contributions for other amenities (including the costs of preparation of the plan) being of the order of $5,750 at the time of the imposition of the condition. 8The test that first has to be considered is whether or not there is to be a requirement for the provision of public amenities and services or an increase in the demand for them. I am not satisfied that that test is met by this development. 9I have reached that conclusion for the following reasons. The first arises as the increase in area of the gaming room, however calculated (and there is some mathematical disputation as to whether it should be on one formula twenty square metres, on another ten square metres, or some differing number) necessarily is accompanied by a decrease in the footprint of the open courtyard area that is presently used. 10There is no way I can assess, even taking the evidence given by Mr Barrett, the operations manager for the applicant, at the most disadvantageous for the applicant, that is that there will be an increase in what he described as a better class of patrons for the gaming room (meaning by that not a socio-demographic value but a fiscal evaluation of the overall monetary yield to the premises by the use of the gaming machines) that there would not be at least some offset of some nature by the reduction in use of the outdoor drinking area. 11Although there are before me in evidence head counts taken of the use of the outdoor area and the use of the gaming area over periods of time, it is Mr Barrett's evidence that he does not expect that there will be any increase in the net number of patrons that will be on the premises at any time. In addition, if approaching the matter in a purely practical fashion and accepting Mr Barrett's evidence (as I do) that one should have regard to the permitted uses, there is, in fact, on one reasonable consideration of the layout and the uses following from it, that there would be a net de-intensification of a modest nature of the permitted uses of the premises. 12This arises from the fact that the hotel has a maximum of thirty gaming machines, a number that it is not permitted under the present law to increase, even if it wished to do so, coupled with the fact that the provisions of the premises' Code of Conduct for the gaming room actively seeks to discourage persons who are not actually gaming at the gaming machines from being present in that room. 13As a consequence, it is reasonable to assume that, whilst there might be some minor use beyond that number of that room even if it had thirty persons operating gaming machines, there would be a decrease in the maximum permitted number of persons in the outdoor drinking and socialising area as a consequence of the decreased floor space of that area. 14As a further consequence, I am satisfied that the overall permitted intensity of use of the premises will be decreased, just as I am not satisfied that the overall intensity of actually reasonably expected use will be intensified. For that reason, I do not consider that, standing in the shoes of the council, I can be satisfied that the test under s 94(1) of the Act has been satisfied for the imposition of condition 10 that attaches to the development consent of November 2011 imposing the contributions. 15If I am wrong on that point, there are two separate elements that would require to be considered in what contribution should be imposed if (contrary to my earlier conclusions) such contribution should be imposed. The first is the sum of over $90,000 for the cost of three parking spaces. In this regard, there is a dispute as to how parking provisions of the general Development Control Plan for Ashfield should be applied in part C11. 16I have heard evidence from Mr North on behalf of the council on this and I was little assisted by his evidence as to how that provision of the Development Control Plan, applicable to the premises, should be considered. However, fortunately for the brevity of this judgment, I do not need to go into detail on that point. 17The contributions plan envisages between 2006 and 2020 that there will be a net increase of non-residential development in the Ashfield town centre of 3,813 sq m of gross floor area. The demand is categorised in Table 9 of the Development Control Plan as falling into two categories in the town centre, that is for specialty retailing and general commercial space. 18That 3,813 sq m of gross floor area, in fact, coincides with a calculation of additional car parking spaces of 95.325 (taking advantage of the provisions provided for rounding down and the contributions plan of rounding down numbers below point five to the nearest whole number downwards) brings an anticipated parking demand of ninety five spaces. 19That is proposed to be funded, it is set out in the contributions plan, entirely by levies associated with the anticipated development and does not include any square millimetre of additional development of the premises that are the subject of this application. 20Mr North's evidence here was that he accepted that it was likely, almost inevitable on my understanding of his evidence (such as I was able to draw from it) that any additional parking demand that might arise from these premises was already comprehended in the ninety five spaces proposed to be provided in the new car parking station in Brown Street at Ashfield as the parking that was to be provided in that parking station would be utilised for the purposes of the anticipated non-residential development at hours outside those that would necessitate additional parking for these premises, even on the higher calculation of the council's. 21Whilst there might be some basis for saying that some modest or minute incremental contribution should be made that would be significantly lower than that which is presently proposed by condition 10, I have no evidentiary basis provided by the council as to how I should calculate that or how I could be satisfied what might be any legitimate increase that would be made by this proposed development. 22In the absence of any satisfaction that that increase would be anything other than de minimis in a practical sense, I have no basis upon which, if I am wrong in my earlier general statutory foundation conclusion, for calculating what might be an appropriate parking demand contribution. 23As a consequence, if I am wrong in my general proposition, I am satisfied that on the merits there is no basis upon which any parking demand contribution of any rationally determined nature could be imposed on the applicant. 24I now turn to the question as to whether the contribution that would be required (if I am wrong on the broader proposition) and should be imposed for the other elements of the contribution ones that currently total of the order of $5,750. As I earlier observed, these being for improvements to local roads, local public transport facilities, local open space and recreational facilities, local community facilities and a proportion of the cost of plan preparation and administration. 25The contributions plan itself at (iii) sets out a summary of the total contribution rates per development type that should be applied at the time the plan became effective. It classifies hotels/motels/serviced apartments as being a form of residential development. The evidence that I am given by the council is that the practice of the council (in the sole instance of an application concerning premises that might be regarded analogous in the broadest sense to these that has happened since this plan was adopted) analysed the elements of a development as to whether they comprised bedroom or residential elements to a development or whether they constituted other forms of entertainment cum commercial activities. 26In the single instance of which I have been given evidence, that analysis was applied and I am informed in that evidence that it had been applied consistently on that broad basis in an undocumented and unresolved fashion in the past. 27Accepting that evidence at its highest, it would seem to me that, if I am wrong on the broad proposition about a foundation being not available pursuant to s 94(1), then the maximum contribution that would be capable of being required by the applicant for this development would be the $5,750-odd that is otherwise to be levied as the non-parking s 94 component. 28I have reached that conclusion with some trepidation based on the quality of the evidence that I have. Nonetheless I am satisfied that - it being a non-specifically derived component rather than that which springs from a precision of calculation as is argued with respect to parking - it might be appropriately imposed if I am wrong on the first point. 29I have therefore reached the overall conclusion that the appeal should be upheld and the totality of the condition deleted but if I am wrong in my conclusion on the interpretation of s 94(1) that the appropriate maximum conditional contribution that could be imposed is having a reasonable basis consistent with the power that this Court has as discussed in Rose Consulting Group v Baulkham Hills Shire [2003] 129 LGERA 165 would be for those elements of the contributions that can total approximately $5,750 might be imposed. 30The orders of the Court therefore are that: (1)The appeal is upheld. (2)Development Consent 10.2011.176.1 is modified by the deletion of condition 10. (3)That the exhibits, other than Exhibits 1 and A, are returned. Tim Moore Senior Commissioner 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. Decision last updated: 20 September 2012