Ai v The Council of the City of Newcastle

Land and Environment Court (NSW)|2003-03-18|Before: Pain J, Mr J

The Applicant's grounds of appeal are as follows:
The Commissioner erred in finding that "residential, is an innominate use, that requires consent only where consistent with the objectives of the zone" under Newcastle Local Environmental Plan 1987 (NLEP).
The Commissioner should have held that the residential occupation of a building within Zone No. 4(a) Light Industrial is "prohibited development" within the meaning of the Environmental Planning and Assessment Act 1979.
The Commissioner failed to have regard to the fact that the residential occupation of the residences adjoining the appeal site were "prohibited development" within the meaning of the Environmental Planning and Assessment Act 1979 which was an essential or relevant consideration in the assessment of the proposed development under clause 6.1(a) of Newcastle DCP 46 (DCP 46).
The Commissioner failed to have regard to the fact that the residential occupation of the residence located at 5 Denney Street Broadmeadow adjoining the appeal site was unlawful.
The Commissioner erred in distinguishing between "residential occupancies" and "residential use" in his application of clause 6.1(a) of DCP 46 where no such distinction was relevant to the appeal.
The Commissioner erred in failing to consider in his determination of the appeal: (a) the amenity impacts of the proposed location of the brothel; (b) the circumstances of the case which would argue for a relaxing of the distance requirement imposed by DCP 46; and (c) that residential occupancies are prohibited in the 4(a) Light Industrial Zone.

Relevant Legislation The LEP 4. The site is zoned No 4(a) (Light Industrial Zone) under the Newcastle Local Environmental Plan 1987 (the LEP). Clause 12(2) and (3) provide: (2) Except as otherwise provided by this plan, in relation to land within a zone specified in the Table to this clause, the purposes (if any) for which development - (a) may be carried out without development consent; (b) may be carried out only with development consent; and (c) is prohibited, are specified under the headings "Without development consent", "Only with development consent" and "Prohibited", respectively, appearing in the matter relating to the zone.

(3) Except as otherwise provided by this plan, the Council shall not grant consent to the carrying out of development on land to which this plan applies unless the Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out. 5. The Table to cl 12 provides for Zone No 4(a) (Light Industrial Zone):

Objectives of zone The objectives are - (a) to facilitate the development of a wide range of industrial service and storage activities which do not have a materially detrimental effect on the amenity of adjoining residential areas; and (b) to allow commercial, retail or other development only where it is - (i) * * * * (ii) compatible with an industrial environment; (iii) unlikely to prejudice the viability of existing commercial centres and where it has been demonstrated to the Council's satisfaction that suitable land for the development is not available in any commercial centre; and (iv) not prejudicial to the intent of objective (a), or is primarily to provide personal services to persons occupied or employed in activities otherwise permitted in the zone.
Without development consent Nil.
Only with development consent Any purpose (which, in the opinion of the Council, is consistent with the objectives of this zone) other than a purpose included in Item 2 and 4 of the matter relating to this zone.
Prohibited Advertising structures; caravan parks; dwellings (other than those used in conjunction with industry and situated on the same land as the industry); clothing stores; educational establishments; hospitals; industries (other than light industries); institutions; large retail markets; mines; motels; roadside stalls; supermarkets; tourist facilities.

Brothels are permissible with consent in Zone No 4(a). Dwellings (other than those used in conjunction with industry and situated on the same land as industry) are prohibited development. Clause 9 of the LEP defines "dwelling-house" as meaning: a building containing one but not more than one dwelling, but does not include an attached dwelling or cluster housing

The LEP does not contain a definition of "dwelling". The Environmental Planning and Assessment Model Provisions 1980 (the Model Provisions) provide: dwelling means a room or suite of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile

DCP No 46 8. The Newcastle Development Control Plan 46 (DCP 46) relevantly provides in clause 6.1: a) A brothel, sex aid establishment or sexual entertainment establishment is not to be located in a position which may detract from the amenity of residential occupancies and, in this regard, the entrance or exit doorway to or from any such premises is not to be closer than 150 metres from the entrance to premises used as a dwelling within a Residential zone. Note: Council may relax this requirement by up to 50% in respect of premises used as a dwelling within a Commercial or Industrial zone, including shoptop housing or inner-city residential apartments; b) The entrance or exit doorway to or from a brothel, sex aid establishment or sexual entertainment establishment is not to be closer than 200 metres from a church, hospital, school, community facility or any place where children or young people are likely to regularly congregate, including railway stations or major bus stops c) … The EP&A Act 9. Section 79C(1) of the Environmental Planning and Assessment Act 1979 (the EP&A Act) provides: In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: (a) the provisions of: (i) any environmental planning instrument, and … (iii) any development control plan … that apply to the land to which the development application relates, (b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality, (c) the suitability of the site for the development, (d) any submissions made in accordance with this Act or the regulations, …

Relevant facts 10. The site is located between No 5 and No 9 Denney Street. Both premises are residentially occupied, No 5 Denney Street being occupied by tenants. The evidence at the hearing, which the Council tendered, was that the owner of No 9 Denney Street did not object to the use of the site as a brothel. The owner of No 5 Denney Street did object to the use of the site as a brothel. I also note that the Applicant did not tender any evidence at the hearing before the Commissioner, but relied on evidence tendered by the Council. Should the Commissioner have held that residential occupation was prohibited in Zone No 4(a) and that residential occupation of No 5 Denney Street was unlawful and not relevant to his consideration under DCP 46? (Ground 1, 2, 4, 5 and 6(c))

There are essentially two issues that arise under this ground: (1) Whether residential occupation is prohibited development in Zone No 4(a) (2) Whether the Commissioner should have had any regard to the fact that No 5 Denney Street was unlawfully residentially occupied in applying DCP 46.
I note that although the site is located between No 5 and No 9 Denney Street, it appears that no issue arose at the hearing as to lawfulness of the use at No 9 Denney Street (that owner indicating no objection to the proposal). The issue of lawfulness of use only arose in relation to No 5 Denney Street.

The owner of No 5 Denney Street did object to the Applicant's proposal. The Applicant's arguments therefore mainly focussed on the unlawfulness of the use of No 5 Denney Street as a residence.

At par 10 the Commissioner stated: Residential, is an innominate use, that requires consent and only where consistent with the objectives of the zone.

At par 39 the Commissioner stated: The other adjacent dwelling at No 5 Denney Street was vacant when the application was lodged, is now residentially occupied by tenants and the owner Mr Thorne does object to the proposed use of a brothel next door. No 5 Denney Street was formerly used for commercial purposes, and there is some doubt as to whether the present residential use is authorised. If the present residential use were reactivated on the basis of prior residential use, that former residential use would need to have been a [sic] legally approved under the present planning instrument, which was gazetted 5 June 1987. The council records show that the last approved use of that property was office and storage [Exhibit 1 Tab 5 Appendix A: Letter from the council dated 23 January 2002 under DA No 92/0437 approved 6 October 1992]. Mr Tobin however, submitted that as cl 6.1(a) of DCP46, refers to "residential occupancies" and not to residential use, No 5 Denney Street is residentially occupied and Mr Thorne's objection to the brothel is valid and would stand. I accept that submission.

Issue 1. Whether residential occupation is prohibited in Zone No 4(a) Applicant's submissions 16. The Applicant submitted that any residential occupancy within Zone No 4(a) was prohibited development, contrary to the findings of the Commissioner at par 10 of his judgment (see par 14). 17. Clause 12 of the LEP states that the Table to that clause specifies the purposes for which development may be carried out without development consent, only with consent and development which is prohibited. The Table for Zone No 4(a) specifies no development is permissible without consent and prohibits "dwellings (other than those used in conjunction with industry and situated on the same land as the industry)". Permissible development is limited to uses which are not prohibited and which in the opinion of the consent authority are consistent with the objectives of the zone.

The definition of "dwelling house" in the LEP and "dwelling" in the Model Provisions (which the Applicant submits is incorporated in the LEP because the LEP does not contain a definition of dwelling) are set out above at par 6 - 7. The Applicant submits that any use of a suite of rooms as a separate domicile constitutes a dwelling which is therefore necessarily prohibited in Zone No 4(a) by the Table to cl 12 of the LEP. The Commissioner referred to No 5 Denney Street as a "dwelling" in his judgment. The finding of the Commissioner was wrong. Respondent's submissions
The Commissioner's statement at par 10 of his judgment is not clearly wrong. "Residential" does not appear in the prohibited use section of the Table for Zone No 4(a). Prohibited uses include "dwellings (other than those used in conjunction with industry and situated on the same land as the industry)". Other forms of housing contained in the dictionary, such as "attached dwelling", "duplex residential building", "dwelling-house" and "residential flat building", do not appear in the prohibited use section for Zone No 4(a). Arguably the prohibited use of "dwellings …" in Zone No 4(a) could have two meanings. Firstly, other forms of residential housing referred to in the dictionary are not prohibited, such that the Commissioner's statement in par 10 of his judgment may be correct. Secondly, it could have the meaning contended by the Applicant, namely that any residential building involving a dwelling is prohibited. However, this issue was not presented to the Commissioner and he did not determine it.

Furthermore, the Respondent submitted that the reference in par 10 of the Commissioner's judgment to "residential" being an innominate use that requires consent, cannot affect the outcome because any decision as to permissibility of No 5 Denney Street (or No 9 Denny Street) under the LEP was not necessary for the factual decision reached, on the issues and evidence presented for adjudication (see issue 2 below). Issue 2. Whether the Commissioner should have had regard to the fact that No 5 Denney Street was unlawfully residentially occupied in applying DCP 46? Applicant's submissions
The Applicant submitted that the Commissioner erred by failing to consider that the only residential occupancies within 75m of the site are prohibited. As residential occupancy is prohibited development within Zone No 4(a) its lawfulness is either expressly or impliedly required by the LEP and DCP 46 to be taken into account in assessing the proposed development against the locational requirements of the DCP, even where the numerical locational standards are not met. By failing to take into account that residential occupancies are prohibited in Zone No 4(a) the Commissioner failed to take into account a relevant consideration.

The distinction made by the Commissioner at par 39 of his judgment between a "residential occupancy" and a "residential use" is a false one. In circumstances where the LEP prohibits dwellings and permits brothels, and where evidence was before the Court suggesting that the use of No 5 Denney Street was unlawful, the Court was in error to hold that the fact that DCP 46 refers to "residential occupancies" rather than "residential use" relieves the Court of the requirement of considering whether the residential use is lawful or not. The Applicant submitted that a "residential occupancy" is necessarily a "residential use" for the purposes of applying the planning instruments and relied on Wyong Shire Council v Ardi Pty Limited (2000) 112 LGERA 85 at [17] in support of that submission.

Furthermore, having regard to the stated objectives of DCP 46, an unlawful residential occupancy is unlikely to be a "residential occupancy" within the meaning of DCP 46 at all.

In response to submissions made by the Respondent that the Applicant cannot raise the unlawfulness of the use at No 5 Denney Street in the appeal, the Applicant submitted that it is only necessary for it to seek development consent for the use it proposes. The Applicant should not have to seek declaratory relief for unlawful residential occupation of neighbouring properties.

The Applicant is not asking the Court to take a fine tooth comb approach as the Respondent submitted, but merely questioning whether the Commissioner has discharged his function under s 79C(1) of the EP&A Act.

Respondent's submissions 26. The Respondent submitted that it was unnecessary for the Commissioner to have regard to the lawfulness of the residential occupancy of No 5 Denney Street, but he nevertheless referred to the matter within the limits of the evidence and issues raised (see par 39 of the Commissioner's judgment).

The Commissioner found that the dwelling at No 5 Denney Street was residentially occupied. This fact was not disputed. Clause 6.1 of DCP 46 provides that a brothel must not be located in a position which may detract from the amenity of residential occupancies. In particular, clause 6.1 had the effect that the entry or exit doorway of a brothel was not to be closer than 50% of 150m, i.e. 75m, from premises used as a dwelling in an industrial zone. The Commissioner found, at par 26, that the front door of the brothel was less than 75m from the front gates of No 5 and No 9 Denney Street. These facts were directly relevant to the three issues of fact identified in the Council's statement of issues (referred to at par 35 of the Commissioner's judgment as the three issues that arose for determination).

There was no issue identified by either party as to whether the occupation of No 5 Denney Street was permitted on any basis or whether it enjoyed existing use rights. The Applicant did not adduce evidence which could have enabled such an issue to be determined, nor did the Applicant identify a question of law to that effect in accordance with the Land and Environment Court Rules 1996 (the Court Rules) Pt 13 r 14. The Applicant states that there was evidence to show that the use was unlawful, namely a letter as to the last approved use contained in the Council's bundle (exhibit A). The Applicant did not tender any evidence at the hearing and the evidence relied on by the Applicant is not sufficient to prove unlawful use.

In the absence of proper or sufficient evidence the Commissioner was not in a position to decide such a question, even if it had been permissible to introduce such an issue at the merits hearing. Further, to do so would have had the potential to affect the rights of persons who were not parties to the proceedings - the occupant and the owner. The Commissioner correctly abstained from making a finding about that matter: see par 39 of the Commissioner's judgment.

The Commissioner accepted that No 5 Denney Street was residentially occupied for the purpose of DCP 46, a fact that was either accepted or beyond dispute on the evidence. In doing so the Commissioner directed himself to the correct question for determination. There is no error of law in coming to a conclusion of fact of that kind: Randwick Municipal Council v Crawley (1986) 60 LGRA 277. It is not open to the Applicant to raise, after the decision, a new issue.

Furthermore, in relation to the Applicant's argument that the Commissioner erred in distinguishing between "residential occupancies" and "residential use" (in the second last sentence of par 39) the Respondent submitted there is no appealable error because firstly, the Applicant is taking a pedantic reading of the Commissioner's judgment and is guilty of adopting a "fine tooth comb" approach: see Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 at 368 per Kirby P). Secondly, for the reasons discussed earlier, there is no error of law. Thirdly, there is no error which could affect the outcome of the case on the evidence and issues presented. The Commissioner's reasoning in par 39, after raising doubt as to whether residential use at No 5 Denney Street was authorised and noting that cl 6.1(a) of DCP 46 uses the phrase "residential occupancies", was clearly indicating that No 5 Denney Street was, as a matter of fact, within that description. The categorisation of the use of that land as a category of development under the LEP was not necessary or possible for the Commissioner to decide.

The Respondent further submitted that, while the Applicant's submissions focus on No 5 Denney Street, there were two separate bases for the decision, namely that the proposal was between two dwelling houses (No 5 and 9 Denney Street) and there was no suggestion that No 9 Denney Street was affected by unlawfulness. The Commissioner was therefore not persuaded that No 9 Denney Street should be ignored. (In response the Applicant submitted that as the person occupying No 9 Denney Street did not object, the residential occupation of No 9 Denney Street was a question of weight for the Commissioner.)

Finding

Whether residential occupation is prohibited in Zone No. 4(a)
As I have already noted there are essentially two issues that arise in relation to these combined grounds (grounds 1, 2, 4, 5 and 6(c)). For the reasons outlined below, the Applicant fails on the second issue and consequently it is not necessary for me to decide this first issue because, as the Respondent submitted, regardless of the Commissioner's statement in par 10 of his judgment on the permissibility of residential use in Zone No 4(a), it was not relevant to his overall finding (see par 38 below). Further, I accept the Council's submission (at par 19 above) that the Commissioner may be correct, but in any event the issue was not raised for his determination. This issue reflects an unnecessarily pedantic reading of the judgment. 2. Whether the Commissioner should have had regard to the fact that No 5 Denney Street was unlawfully residentially occupied in applying DCP 46?
The Commissioner was required to consider residential occupation as a relevant aspect of his decision (in the context of cl 6.1(a) of DCP 46). It is relevant in assessing the merits of the case to consider whether that residential occupation is unlawful. However, in my opinion, the unlawfulness of the residential occupation can only be considered if it has been proven at law that the residential occupation is unlawful. In this respect, it must be recognised that Commissioners of this Court have limited powers. They are unable to make a finding of law and therefore unable to determine whether or not a use or occupation is lawful. Further, this question was not raised by the Applicant for determination at the merits hearing.

The Respondent submitted that the proper course for the Applicant was to raise the issue of the lawfulness of the occupation of No 5 Denney Street separately, and in advance of the merit hearing, as a question of law in the Class 1 proceedings. I agree with the Respondent that this is a legal issue which requires separate determination. As the rights of third parties who were not parties to the proceedings would be affected by any such decision and it is likely that declarations as to the unlawfulness of the use or occupation would be sought, then it would probably be more appropriate that Class 4 proceedings be commenced.

The Applicant argued that it would essentially be unfair for an Applicant to have to seek declaratory relief for unlawful residential occupation of neighbouring properties when it applies for development consent for the use of its premises (see par 24 above). However, in my opinion, if the Applicant wants the Court to take into account the unlawfulness of the residential occupation of a neighbouring property, it must firstly prove by proper means that as a matter of law the occupation is unlawful. In the absence of such proof the Court is not entitled to take such a matter into account. As the Respondent noted, in the context of the EP&A Act the use at No 5 Denney Street could have been subject to existing use rights or a consent issued under a previous planning instrument.

Does an error arise because of an alleged distinction made by the Commissioner at par 39 between "residential occupancy" and "residential use"? In the circumstances I do not consider it necessary to decide whether "residential occupancy" and "residential use" are one and the same for the purposes of applying the DCP. Even if it could be said that the Commissioner erred in distinguishing between "residential use" and "residential occupation" in applying cl 6.1(a) of DCP 46, that error was not a material one because, for the reasons I have already given, the Commissioner was not entitled to consider any issue of unlawfulness of "residential occupation", or "residential use". Therefore, No 5 Denney Street did nevertheless (in the absence of a legal finding of unlawfulness of that residential occupation) satisfy the requirement of residential occupation for the purposes of cl 6.1(a) of DCP 46.

Therefore, in the absence of a finding at law that the residential occupation was unlawful, the Commissioner was correct in not taking into account the alleged unlawfulness of the occupation at No 5 Denney Street. Furthermore, in relation to Issue 1 above, I accept the Respondent's submission at par 20 above that even if the Commissioner erred in par 10 of his judgment in holding that "residential" is an innominate use that requires consent, that finding does not affect the outcome of the Commissioner's decision because the Commissioner could not consider the alleged unlawfulness of the occupation at No 5 Denney Street in applying DCP 46 in any event.

Accordingly, the Applicant must fail on Grounds 1, 2, 4, 5 and 6(c). Ground 3: The Commissioner failed to have regard to the fact that the residential occupation of the residences adjoining the appeal site were "prohibited development" within the meaning of the Environmental Planning and Assessment Act 1979 which was an essential or relevant consideration in the assessment of the proposed development under clause 6.1(a) of Newcastle DCP 46 (DCP 46). Applicant's submissions
The error made by the Commissioner in finding that "residential occupancies" are permissible in Zone No 4(a) prevented his assessing, as he was required to do, the Zoning Table within the LEP as a relevant statutory instrument, and the relevance in particular of residential occupation being prohibited in that zone.

The Applicant argued the Commissioner's approach to DCP 46 was incorrect. The LEP and its objectives should have been given greater weight by the Commissioner. The LEP permits brothels but prohibits residential occupation in Zone No 4(a). The Commissioner effectively applied the DCP so that it reversed the LEP. If one has regard to the zone objectives and planning tables collectively it is apparent that they permit residential use in one place and industrial use in another. Paragraph 1(b) of the objectives for Zone No 4(a) (see par 5) was a relevant consideration which the Commissioner did not have regard to. The Commissioner did not consider whether the proposal was compatible with the residential requirement and how the proposal should be considered in light of the 1(b) objective. Instead the Commissioner only had regard to the DCP locational requirements.

Respondent's submissions 42. The approach taken by the Commissioner was correct. The Commissioner established that the proposal was permissible development and then sought to apply the provisions of DCP 46 to the site, as the Commissioner was required to do. The approach was not inconsistent with the LEP. The Applicant's submissions on this ground seem to relate to the question of whether No 5 Denney Street should be disregarded because it offended DCP 46 or the LEP.

Finding 43. I agree with and adopt the submissions of the Respondent in relation to this ground. Once establishing that the proposal was permissible development, the Commissioner was quite correct to then apply the provisions of DCP 46 as he did. The Applicant's arguments reflect a "fine tooth comb" approach to the Commissioner's judgment as identified and rejected in Brimbella.

In relation to the part of the Applicant's submissions set out above in the second half of par 41 from "Paragraph 1(b) of the objectives for Zone No 4(a) … was a relevant consideration" onwards, in my opinion, that argument, if relevant, was really appropriate to an argument under Ground 6, namely that the Commissioner failed to take into account a relevant consideration as required by s 79C(1) of the EP&A Act (being cl 12(3) of the LEP), and not Ground 3.

Accordingly, the Applicant fails on Ground 3. Ground 6(a) and (b) alleged error on basis of failure to consider amenity impacts and circumstances requiring relaxation of the distance requirement imposed by DCP 46 i.e. other matters under s 79C(1) of the EP&A Act Applicant's arguments
The Council had identified three issues for determination by the Commissioner, which were set out at par 35 of the Commissioner's judgment as follows:
The premises does not meet the objectives and locational requirements for a brothel under the development guidelines of Council's Code for the Regulation of Brothels and Other Sex Industry Establishments - DCP 46.
The proposed development is likely to adversely impact upon the amenity of residential premises and other non-residential establishments in the locality.
Having regard to the foregoing, approval of the application would not be in the public interest.

The Applicant particularly relies on par 60 of the Commissioner's judgment, where (under the heading "Adverse impact upon the amenity") the Commissioner stated "[i]t is not necessary for me to decide this issue as the application fails for locational reasons as described above" to argue the Commissioner had failed to consider amenity impacts.

The Applicant submitted that there are two parts to cl 6.1(a) of DCP 46. Firstly, there is a policy standard that the Applicant must meet, namely that a brothel "is not to be located in a position which may detract from the amenity of residential occupancies". Secondly, there is the numerical standard. The Commissioner looked at the numerical standard in deciding that the proposal did not meet the locational requirement, but failed to consider amenity impacts and circumstances requiring relaxation of the standard.

The Applicant submitted that the Commissioner erred in law by failing to consider whether additional circumstances, such as factors reducing the likely amenity impacts of the proposal, required a relaxation of the locational standard in DCP 46. Evidence tendered by the Council at the hearing had been relied upon by the Applicant to show that the occupant at No 9 Denney Street consented to the use, the use at No 5 Denney Street was unlawful and that essentially the site was an ideal location for the brothel, especially when regard was had to the objectives of DCP 46. These were relied on by the Applicant at the hearing as reasons why the numerical standards should be relaxed.

The Applicant submitted that the Commissioner was required by s 79C(1) of the EP&A Act to consider the amenity impacts and without having done so the Commissioner's determination of the development application was ultra vires. Parramatta City Council v Hale (1982) 47 LGRA 319 was relied on in support of this submission where at 335 Street CJ stated: … it is contended that the council failed to take into consideration the topics of parking, traffic and access, being topics directly included within the matters the council was bound by s. 90(1) to take into consideration. The challenge is of a failure sub modo on the part of the council. Each of these topics was, technically speaking, dealt with in the council's decision. It is the manner in which this was done which is relied upon as establishing the invalidity.

The Applicant further submitted that the Commissioner was required to exercise his discretion to assess whether the DCP 46 locational standard should be applied in the circumstances of the case. The Applicant relied on Zhang v Canterbury City Council (2001) 115 LGERA 373 at [74] - [75] in support of this argument. Spigelman CJ (Meagher and Beazley JJA agreeing) stated: A development control plan is not an "environmental planning instrument". (See definition in s4 [of the EP&A Act]). Accordingly, the requirement in s 80(2) that a consent authority "must refuse" an application that would "result in a contravention of" such an instrument does not apply to a development control plan. Furthermore, the proscription, by s 76B, of any development prohibited by an environmental planning instrument, does not extend to a prohibition in a development control plan. Nor can such a plan contain a "non-discretionary development standard" which, if complied with, would take away a consent authority's discretion under s 79C(2).

The consent authority has a wide ranging discretion - one of the matters required to be taken into account is "the public interest" - but the discretion is not at large and is not unfettered. DCP No 23 had to be considered as a "fundamental element" in or a "focal point" of the decision-making process. A provision so directly pertinent to the application for consent before the council as was cl 4.0 of DCP No 23 was entitled to be given significant weight in the decision-making process but was not, of course, determinative.

The Commissioner was required to consider the matters under s 79C(1) of the EP&A Act. While the DCP locational standard does form the focal point for assessing the locational requirements for a proposed brothel and is entitled to be given significant weight, it is not determinative (per Spigelman CJ in Zhang at [75]; see also Bignold J in Ervin Mahrer & Partners v Strathfield Municipal Council [2002] NSWLEC 47 at [165]), and the other matters identified in s 79C(1) must, where relevant, also be taken into account. To determine the development application without "proper, genuine and realistic consideration" (Weal v Bathhurst City Council (2000) 111 LGERA 181 at 185) of those matters is an error of law that will vitiate the decision (see also Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 at 292).

There is no assessment in the judgment of the factors that might argue for the DCP 46 locality requirement to be relaxed which provides what Giles JA describes in Weal (at 201) as an "understanding of the matters and the significance of the decision to be made about them, and a process of evaluation, sufficient to warrant the description of the matters being taken into consideration". The Commissioner expressly indicated that he considered it unnecessary to consider them.

The fact that a numerical standard in a DCP is breached is not the end of the matter. If this were the case, a DCP standard would have the same effect as an environmental planning instrument and a development standard respectively. Where a development standard has been breached in an LEP that is the end of the matter, unless a SEPP 1 objection has been successfully lodged. However, where a standard in a DCP is breached, the consent authority is obliged to consider the other matters in s 79C(1) to consider whether development consent should be granted, notwithstanding that a DCP standard has been breached. This is the correct approach and is supported by the approach taken by Commissioner Brown when the matter is Zhang's case was returned to him for consideration.

The Commissioner's enquiry ended once he had formed the opinion that the proposal did not meet the locational requirements. In doing so, he failed to consider relevant considerations as required by s 79C(1) of the EP&A Act and fell into legal error.

Furthermore, in response to the Respondent's submissions that the Commissioner dealt with all the evidence and issues that arose, the Applicant submitted that no reasons are given in relation to amenity in the Commissioner's reasons for his decision so that they are not proper reasons for his decision and that constitutes an error of law. The Applicant relied on Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 73 LGRA 47 at 76 and Russo v Kogarah Council (1995) 86 LGERA 300 at 306 in support of this submission. In Yates Handley JA stated: The duty of a judicial officer to hear and determine a claim made in judicial proceedings conducted before that officer is also an incident of the judicial process. Since breaches of the duty to give proper reasons and to observe procedural fairness involves errors of law, there seems every reason to hold that a breach of duty to hear and determine a claim made in judicial proceedings also gives rise to such an error.

Respondent's submissions 57. The Respondent submitted there was no basis for the Applicant's assertion of the alleged failure to decide the effect on amenity of residential premises and other non-residential establishments in the locality. The issue was set out in the judgment (par 35), the objectives of the locational controls in DCP 46 were noted (par 17), the relationship between the locational requirements and the potential land use conflicts in the locality were included as part of the discussion of the impact on No 5 and No 9 Denney Street (par 43) and a whole section of the judgment was entitled "Adverse Impact upon the Amenity" in which a public submission and other objections were discussed (par 47 - 60) and this included specific further consideration of No 5 and No 9 Denney Street (par 51 - 54, 57 and 58).

As to the Applicant's submissions that the Commissioner failed to assess whether the DCP 46 locational standard should be applied in the circumstances of the case, the Respondent made the following submissions. The Commissioner was clearly of the view that it was as a matter of fact unacceptable to locate a brothel with an entrance within 21.1m of the front gate of (and next door to) No 5 Denney Street when DCP 46 required at least 75m separation, similarly with No 9 Denney Street (22.7m to the front gate). This issue was clearly considered to be determinative, and warranted refusal. It did not warrant the relaxation of the numerical DCP requirement by over 70%. Furthermore, as the Commissioner discussed, there were other objections and a further breach of locational requirements under DCP 46 (a cycleway frequented at times by children was 70.8m from the brothel when cl 6.1(b) of DCP 46 required 200m separation from "any place where children or young people are likely to regularly congregate").

In Zhang, the Court of Appeal held that a Commissioner who substituted a more generalised view of the appropriateness of a brothel in terms of location and proximity to sensitive land uses for which a DCP provided a numerical distance separation "standard" (200m walking distance), and approved a development application for a brothel adjacent to a church, fell into error of law. This was held to be so because the Commissioner was inferred not to have taken into consideration the numerical standard of the DCP. The Court of Appeal held that "[t]his approach could only be supported if the discretion was entirely at large, that is, that there were no "standards" of any character which the decision-maker had to take into account" (at [76]). Furthermore, the Court of Appeal held that the standard ought to have served as a focal point for, or constituted a fundamental element in the Commissioner's deliberation (see [76] - [77]). The Respondent submitted, relying on Zhang, that if the numerical standard (which has been fixed following public involvement) is not met one can presume that the location will be unacceptable. In the present case, the Commissioner was clearly conscious of and applied the locational standard in the DCP and treated that standard as a focal point for and as a fundamental element in his deliberations to lead to the conclusion that the development application ought to have been refused.

In this case the Commissioner set out the standard in his judgment and then entered into a fact finding exercise. The fact of residential occupation was not disputed and it was found that the standard was not met for No 5 and No 9 Denney Street. The Commissioner dealt with all possible issues as can be seen from his judgment.

Finding 61. At par 46 the Commissioner held that the proposal did not meet the locational requirements of DCP 46 and therefore "the brothel should be refused consent." At par 60 under the heading of "Adverse impact upon the amenity", the Commissioner stated "[i]t is not necessary for me to decide this issue as the application fails for locational reasons as described above." Although the Commissioner set out all of the evidence and issues in relation to the amenity issue, it is clear that he made no finding on the issue of amenity and in this regard I am unable to accept the submissions of the Respondent. It is clear from the paragraphs of the Commissioner's judgment that I have referred to that the Commissioner clearly thought that, as the proposal did not meet the locational requirements in DCP 46, refusal was warranted without consideration of the further factors raised by the parties which were required to be considered under s 79C(1) of the EP&A Act. The Commissioner erred in taking this approach.

My conclusion is supported by par 74 - 77 of Zhang, particularly at par 74 -75. These two paragraphs were set out in the summary of the Applicant's submissions at par 51 above. As the Court of Appeal recognised, a DCP is not an "environmental planning instrument" as defined in s 4 of the EP&A Act. Thus, unlike an LEP, where a proposal contravenes a DCP or prohibition or "standard" in a DCP, the result is not automatic refusal. The discretion of the consent authority remains (see Zhang at [74]). Furthermore, the Court of Appeal in Zhang recognised that the consideration of the DCP in that case was a "fundamental element" or "focal point" in the decision making process and was entitled to be given "significant weight" "but was not, of course, determinative" (at [75]). In the present case the same may be said, namely that the Commissioner was to have regard to the provisions of DCP 46 and was entitled to consider them as a "fundamental element" in the decision making process. However, failure to comply with the provisions of DCP 46 was not determinative of the matter and did not automatically lead to the refusal of development consent. The Commissioner was required to take into account other relevant considerations, including other relevant factors in s 79C(1) of the EP&A Act, in assessing the merits of the matter and determining whether development consent should be granted. As I have already noted, the Commissioner failed to do so and thereby committed an error of law which is sufficient to vitiate his decision.

For completeness, I should note that the Applicant's arguments in relation to the failure to consider amenity and whether the numerical standard should be relaxed appeared to be based on two separate grounds. Firstly, that the "policy standard" contained in cl 6.1(a) of DCP 46 required the Commissioner to consider amenity as well as the numerical standard. Secondly, that s 79C(1) of the EP&A Act required the Commissioner to consider amenity. It will be apparent that my finding has been based on the conclusion that the Commissioner was required to consider the issue under s 79C(1). I am not convinced that the wording of DCP 46 operates in the manner contended for by the Applicant, namely that if the numerical standard was not satisfied the Commissioner had to nevertheless consider amenity based on the so called "policy standard" contained in cl 6.1(a) of DCP 46. However, as I have held that the Commissioner was required to consider the issue of amenity and whether the standard should be relaxed pursuant to s 79C(1) of the EP&A Act, this issue is of little consequence in this context.

The facts of this case are the converse to those in Zhang in that here the DCP has been applied exclusively and rigorously as the sole basis for the Commissioner's decision to refuse the development in question. To find the Commissioner's approach invalid, given the clear words of cl 6.1(a) of DCP 46, may appear to be adopting a "fine-tooth comb" approach to his decision but Zhang makes clear that while a DCP standard should be a fundamental element or focal point in the decision making process, it should not be the only basis for a decision in circumstances where other factors under s 79C(1) are objectively relevant.

I also note that had the Commissioner considered in his reasoning the other relevant matters required by s 79C(1) of the EP&A Act, he may nevertheless have come to the conclusion that on the merits the DCP 46 requirements should not be relaxed and development consent should be refused. However, as I have already discussed, the Commissioner did not consider the other relevant matters in his reasoning and erred in that respect.

Accordingly, ground 6(a) and 6(b) are upheld and the decision of the Commissioner should be set aside on this basis only. I will therefore remit the matter to Commissioner Watts for rehearing in accordance with the findings given in this judgment.

Costs 67. The only submission made in relation to costs was by the Respondent, namely that the appeal should be dismissed with costs. However, I am upholding the Applicant's appeal and in the circumstances I therefore consider it appropriate to reserve the question of costs so that the parties may put submissions on the issue.

Orders 68. The Court orders that:

The Applicant's s 56A appeal is upheld.
The decision of Commissioner Watts dated 22 October 2002 is set aside.
The matter is remitted to Commissioner Watts for rehearing in accordance with the findings in this judgment.
The question of costs is reserved.
The exhibits may be returned.

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.

CITATION : Ai v The Council of the City of Newcastle [2003] NSWLEC 123 APPLICANT Xiao Ping Ai PARTIES : RESPONDENT The Council of the City of Newcastle FILE NUMBER(S) : 10314 of 2002 CORAM: Pain J KEY ISSUES: Appeal :- s 56A appeal - whether Commissioner erred at law - proposed brothel development - whether residential occupation is prohibited development in Zone No 4(a) under Newcastle Local Environmental Plan 1987 - whether the Commissioner should have had any regard to the fact that a neighbouring property was unlawfully residentially occupied in applying DCP 46 - whether the Commissioner should have had greater regard to the zone objectives - Commissioner held that the application failed based on a locational requirement in the DCP - whether the Commissioner should have considered other relevant matters under s 79C(1) Environmental Planning and Assessment Act 1979 s 79C Environmental Planning and Assessment Model Provisions 1980 LEGISLATION CITED: Land and Environment Court Act 1979 s 56A Land and Environment Court Rules 1996 Pt 13 r 14 Newcastle Local Environmental Plan 1987 cl 9, cl 12 Newcastle Development Control Plan 46 cl 6.1 Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367; Ervin Mahrer & Partners v Strathfield Municipal Council [2002] NSWLEC 47; Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291; Parramatta City Council v Hale (1982) 47 LGRA 319; CASES CITED: Randwick Municipal Council v Crawley (1986) 60 LGRA 277; Russo v Kogarah Council (1995) 86 LGERA 300; Weal v Bathhurst City Council (2000) 111 LGERA 181; Wyong Shire Council v Ardi Pty Limited (2000) 112 LGERA 85; Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 73 LGRA 47; Zhang v Canterbury City Council (2001) 115 LGERA 373 DATES OF HEARING: 18/03/2003 DATE OF JUDGMENT: 05/28/2003

(2000) 111 LGERA 181

(2001) 115 LGERA 373

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Judgment (61 paragraphs)

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Cases Cited (7)