Aldi Stores v Newcastle City Council - [2010] NSWLEC 227 - NSWLEC 2010 case summary — Zoe

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Aldi Stores v Newcastle City Council

[2010] NSWLEC 227

Land and Environment Court (NSW)|2010-11-02|Before: Pepper J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2010-11-02

Before

Pepper J

Source

Original judgment source is linked above.

Judgment (241 paragraphs)

[1]

Introduction 1 HER HONOUR: The applicant, Aldi Stores ("Aldi") appeals under s 56A of the Land and Environment Court Act 1979 ("the Act") against the decision of the Senior Commissioner dated 7 June 2010, to refuse a development application (Aldi Stores v Newcastle City Council [2010] NSWLEC 1110 or "the decision"). 2 In the appeal, the council has filed a submitting appearance only. 3 The bases of the appeal are two-fold: (a) first, that the Senior Commissioner erred in his determination that the proper characterisation of the proposed development was for the dual purpose of a "shop" and a "local shop", the latter permissible, the former prohibited; and

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(b) second, that in making his decision the Senior Commissioner denied procedural fairness to Aldi. 4 For the reasons below I have upheld the appeal in respect of both errors. Factual Background Giving Rise to the Appeal 5 The development application made to the council by Aldi on 6 March 2009 ("the DA"), was for the construction and operation of an Aldi food store on land known as 1 Britannia Boulevarde, Fletcher ("the site"). The proposed development was for a new single storey supermarket with associated car parking and signage. 6 The land is zoned 3(a) Local Centre Zone under the Newcastle Local Environmental Plan 2003 ("the LEP"). 7 Within the 3(a) Local Centre Zone, development for the purpose of a "shop" is listed as prohibited development, however, development for a purpose that is not specifically listed as prohibited is permissible with the consent of the council (cl 16 of the LEP). 8 The term "shop" is defined in the LEP as: shop means a building or place that is used for the purpose of the selling by retail, or hiring or displaying for the purpose of selling or hiring, or items (whether goods or materials) but does not include a convenience shop, bulky goods retail outlet, local shop or a sex aid establishment. 9 The term "local shop" is defined in the LEP as: local shop means a shop that: (a) is of a nature and size that is suitable to serve a surrounding population of approximately 5,000 people; and (b) is not a bulky goods retail outlet, convenience shop or sex aid establishment. 10 At the hearing before the Senior Commissioner the council indicated that it would consent to the grant of development consent. Consequently, it did not take an active role in the proceedings. The Findings of the Senior Commissioner 11 Importantly, the Senior Commissioner made findings that: (a) the proposed development was consistent with the zone and the LEP objectives;

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(b) second, the finding by the Court that the evidence and submissions of Aldi that the predominant proposed use of the site was for the purpose of a "local shop" contained an implied admission that there was another separate use being proposed, namely, as a "shop". 35 I have dealt with each in turn. Increased Number of Parking Spaces 36 As discussed above in assessing the additional and separate use of the site other than as a "local shop", the Senior Commissioner had regard to the nature of the proposed vehicle circulation patterns within the site and the extent to which customer parking was proposed to be provided (at [49]). Having determined that the internal traffic arrangements "provides no assistance to me nor comfort to the opponents of the proposal", the Senior Commissioner went on to state that "the same cannot be said for the extent of the parking proposed to be provided on the site" (at [51] and [52] respectively). 37 The Senior Commissioner stated that he was not able to find in any of the material in evidence any explanation as to why an increased number of parking spaces beyond those that would be required by the relevant DCP controls were proposed to be provided on the site. The conclusion that he therefore reached was that this additional parking was necessary to cater for the "out of Fletcher (and thus not local) trade envisaged for the facility" (at [53]). The Senior Commissioner thus emphatically stated (at [57]): …I do consider that the degree to which customer parking is proposed to be provided going be quite significantly beyond anything that would be required by the council's controls is a matter relevant to the conclusion which I have reached - namely that the additional use proposed for the site is as a shop . 38 There can be no doubt that the additional proposed car parking was material to the Senior Commissioner's conclusion that there were two uses proposed to be carried out on the site, one permissible and one prohibited. 39 However, a review of the transcript reveals that this issue was not put to Aldi for comment. While the general issue of permissibility and the more specific issue of internal traffic were put to, and were the subject of comment by, Aldi, the particular issue of the excess parking spaces was not.

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55 I consider that this was impliedly conceded on behalf of Aldi by the description of the local shop use as being the "predominant" one - although I do not consider that this implied concession is essential to support the conclusion that I have, separately, reached on the basis of the Hill PDA report and the oral evidence of Mr. Hack. 45 The Hill PDA report had stated: The proposed ALDI store is expected to trade at around $12m ($8,000/sqm) in its first year of opening (assumed to be in 2012). In all likelihood ALDI in Fletcher will capture some expenditure from Maryland and Minmi but this will probably represent no more than 25% of forecast turnover - around $3m. We would expect that around 75% of ALDI turnover will be generated by the 6,000 residents living in Fletcher. This means that ALDI is expected to capture around 25% of total food and grocery related expenditure generated by the suburb of Fletcher and 4% of its non-food expenditure. This is easily achievable without the need capture further expenditure beyond this point. All retail stores capture some trade from beyond their primary trade area. The intention of the definition of "local shop" under the LEP is to ensure that any shop "predominately" serves the local area (and to exclude large retailers such as department stores and highly specialised shops that rely on larger trade areas for commercial sustainability). In other words to comply with the definition of a "local shop" the major proportion of trade should be generated by the immediate locality of approximately 5,000 people. 46 The transcript demonstrates that the evidence of Mr Hack was to the effect that the primary trade area, that is to say the area where a store "predominantly" catches the majority of its turnover, was the suburb of Fletcher. The proposed store was not intended to "predominately" attract custom from outside its local area. It followed that outside the boundaries of Fletcher, residents would not come into Fletcher as a "predominant" destination for their shopping needs. That is to say, they may come into Fletcher on occasion to shop, but "predominantly" they would shop elsewhere. 47 Aldi submitted that there is no reference in any of the material to the term "predominant use" in the manner in which the Senior Commissioner has applied it in his reasoning in making the decision. Aldi submitted that the Senior Commissioner had misunderstood the use of the term in the evidence and had conflated the predominant use of the proposed development, namely, as a "local shop", with the area where the predominant trade will occur, to erroneously find that there was a further impermissible use. 48 Aldi further complained that it was not given the opportunity to comment on the purported implied admission by it. 49 I am not convinced that the Senior Commissioner misconceived the use of the concept of "predominant use", and therefore, misused it in his reasoning. In my opinion, there is an inextricable and relevant connection between the predominant trading area of the proposed store and its predominant use as a "local shop" or "shop" having regard to the definition of those terms in the LEP. This is particularly so when regard is had to the requirement that the store be "suitable to serve a surrounding population of approximately 5,000 people" in order for it to be characterised as a "local shop". 50 In addition, I do not accept that this alleged misconception amounts to an error of law. At its highest this is an error of fact based on the evidence which, absent unreasonableness (Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at [129] and [130]), cannot be reviewed in an appeal of this nature (Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 at [54]-[55] and [114]).

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51 Furthermore, whether or not Aldi made the implied concession attributed to it, the Senior Commissioner explicitly stated in his reasons that he did not consider that this implied concession was essential to support the conclusion that he had separately reached on the basis of the evidence before him. 52 Finally, even if the Senior Commissioner did misconstrue the evidence, the nature of the error rendered it highly unlikely that the misconception relied upon by him was not put to Aldi for comment and correction. While Aldi characterises the Senior Commissioner's failure to do so as a denial of procedural fairness, this is not correct. Were it otherwise, every erroneous finding of fact not put to a party for comment could, by describing it as a breach of procedural fairness, be transformed into an error of law. Plainly this cannot be the case. 53 I therefore do not find that the second basis upon which it is asserted that the Senior Commissioner failed to afford Aldi procedural fairness has been demonstrated. However, for the reasons given above, the appeal must nevertheless be upheld. Relief 54 Section 56A of the Act states as follows: 56A Class 1, 2 and 3 proceedings - appeals to the Court against decisions of Commissioners (1) A party to proceedings in Class 1, 2, 3 or 8 of the Court's jurisdiction may appeal to the Court against an order or a decision of the Court on a question of law, being an order or a decision made by a Commissioner or Commissioners. (2) On the hearing of an appeal under subsection (1), the Court shall: (a) remit the matter to the Commissioner or Commissioners for determination by the Commissioner or Commissioners in accordance with the decision of the Court, or (b) make such other order in relation to the appeal as seems fit. 55 Having determined that the appeal must be upheld, the Court has the choice of either remitting the matter to the Senior Commissioner for determination in accordance with this decision or, as Aldi submitted, substituting its own judgment for that of the Senior Commissioner and granting the consent, provided that it is satisfied that no further findings of fact are necessary for it to do so (ThainaTown (on Goulburn) Pty Ltd v City of Sydney Council (2007) 71 NSWLR 230 (at [103]), recently affirmed in Kostas v HIA Insurance Services Pty Limited [2010] HCA 32 at [31]-[32]). 56 It is clear upon reading the Senior Commissioner's reasons that no new findings of fact are required in order for the Court to grant development consent under s 56A(2)(b) because all of the necessary findings regarding the merits of the development application were made by him (at [86]). 57 Because the Court accepts Aldi's submissions on characterisation, it is therefore open for the Court to grant consent under that provision as an order that the Senior Commissioner ought to have made had he properly directed himself on all questions of law. 58 In my view, the circumstances of this appeal render it appropriate that the Court grants consent subject to the conditions proposed by the council which were, after discussion and amendment at the hearing, accepted by the Senior Commissioner. To do so facilitates the "just, quick and cheap" determination of the real issues in the proceedings (s 56 of the Civil Procedure Act 2005).