THE COMMISSIONER'S JUDGMENT
52The Commissioner summarised the position of each party, at [8]-[9]:
8 Barrak's position is that while the categorisation of the property in the Business CBD sub-category had some logic in 1995 when the Business CBD sub-category reflected the zoning, when regard is had to the changes in planning controls since then, and other factors such as changes in parking controls, there are not reasonable grounds for believing that the property is within the centre of activity that is CBD. Barrak submits that it is sufficient that the zoning of the property has changed. Other factors that would also support the change in sub-category are that the physical uses and built form are materially different to those in the CBD, so that the property can no longer be regarded as being in the CBD; that with such matters as removal of parking meters and changes to parking controls the property is in an area which is not part of the CBD; that the steps taken to review the categorisation of Harris Park land more generally indicate that the Council has not turned its mind to the question of whether the property should continue to be categorised as Business CBD; and that fairness would be relevant in a merits review in deciding that there is no reasonable basis for having the property in the CBD sub-category.
9 The Council's position is that this appeal is not a challenge to the creation of the sub-category, and the Court must take the sub-category as it finds it. It is sufficient that the property is located in the area identified in the Central Business District Centre of Activity rating map. If, contrary to that position, if it is necessary to identify a "centre of activity" for the property to continue to be in the Business CBD sub-category, there are a number of factors which point to the property being within such a centre of activity, including the spatial geography, the diversity of land uses and business in the CBD centre of activity, the exclusion of highly intensive retail activity from the CBD centre of activity, the diverse range of built forms in the CBD centre of activity and the constraints of heritage considerations, the range of levels of public infrastructure and parking restrictions, the inclusion in the centre of activity of a number of natural barriers and dividing lines, the existence of a core or middle area and fringe areas of the centre of activity, and the concentration of businesses rather than residential uses in the centre of activity.
53The Commissioner addressed the legislation, planning controls and rating sub-categorisation over time at [10]-[46]. She observed that the Business General rating sub-category is, and for many years has been, a residual sub-category: at [34], [38], [40]. After considering the nature of the appeal to the Court at [47]-[58], the Commissioner correctly identified the issue in the appeal at [58]:
In my view, having regard to the language used in s 525(3), applying s39(2) of the Court Act, and having regard to the relevant authorities, the issue to be determined in this appeal is whether there are reasonable grounds to believe that the property is not within the Business General sub-category. If there are not, the property should remain in the Business CBD category, there being no other candidate sub-categories.
54The Commissioner considered at [59]-[66], and decided in Barak's favour at [66], that the determination of whether there are reasonable grounds to believe that the Property is not within the Business General rating sub-category cannot be answered merely by reference to a map such as the blue shaded area on the Ordinary Rates map.
55The Commissioner then considered the meaning of "centre of activity" in s 529(2)(d) of the LGA: at [67]-[77]. The Commissioner cited the following authorities: Ranglen Investments Pty Ltd v Fairfield City Council [1996] NSWLEC 192 (Bannon J); Council of the City of Sydney v South Sydney City Council [2002] NSWLEC 129 (Pearlman CJ of LEC); and Marrickville Metro Shopping Centre Pty Ltd v Marrickville Council [2009] NSWLEC 109 (Pain J), upheld on appeal Marrickville Metro Shopping Centre Pty Ltd v Marrickville Council [2010] NSWCA 145, (2010) 174 LGERA 67. The Commissioner accepted the following six propositions put by the Council (Barrak agreed with the first five and now does not challenge the sixth), at [70]-[72]:
(1) The words "centre of activity" should be given their ordinary meaning (Marrickville Metro (Pain J) at [46]; Marrickville Metro (CA) at [79]; and they should not be read down by reference to departmental policies or other extrinsic materials: Ranglen;
(2) The note in s 529(1), which states "[i]n relation to the category 'business', a centre of activity might comprise a business centre, an industrial estate or some other concentration of like activities") is a relevant aid to construction: Marrickville Metro (Pain J) at [47]; however, it should not be read as restricting or overriding the ordinary meaning of the expression "centre of activity": Ranglen;
(3) A centre of activity need not be a centre of "like activities" - it may be comprised of "a number of enterprises involving different activities": Ranglen (in that case including both retail and industrial activities); and Marrickville Metro (Pain J) at [43], that the council may determine a sub-category in respect of a "single site on which several activities are located";
(4) A centre of activity will normally involve "a concentration of activities" within a particular area or around a particular site: Marrickville Metro (Pain J) at [46]; Marrickville Metro (CA) at [79]). While the word "centre" requires some kind of geographical connection between activities carried out on the parcels of rateable land within the sub-category, the connection need not be of any particular kind (it can be large or small, depending on how the council defines it);
(5) A centre of activity may be tightly compressed and homogeneous (for instance, the 100 tenancies in Marrickville Metro, all of which were retail premises and on one lot), or more diverse, for example the more loosely described centre of activity in Ranglen which encompassed a variety of land uses and different geographical areas on each side of The Horsley Drive; and
(6) The label affixed to the category (in this case "Central Business District" or "CBD") is not important - what matters is the characteristics of the area to which the category applies: Marrickville Metro (Pain J at [43]-[44]; Marrickville Metro (CA) at [81]-[84]).
56The Commissioner elaborated on these propositions, at [76]-[77]:
76 Propositions (3), (4) and (5) are critical in considering what is a "centre of activity". The facts in Ranglen and Marrickville Metro illustrate the diversity of factors that might be considered by a council in determining a relevant centre of activity. The "large integrated shopping complex" (as the Marrickville Metro was described by Tobias JA [2010] NSWCA 145 at [79])) occupying a single site is in contrast with the larger area, on both sides of The Horsley Drive, Fairfield, which included both retail and industrial zoning and uses, considered to be a centre of activity in Ranglen. In City of Sydney, the "centre" of population and of activity was a suburb.
77 In my view, the use of the word "activity" in "centre of activity" can encompass a range of different types of activity such as commercial and retail, so that a "centre" of activity may comprise a number of enterprises involving different activities, which need not be "like activities". There must be some geographical connection between the activities carried out on the parcels of rateable land within the area, which would normally involve a concentration of activity within a particular area or around a particular site, so that there can be said to be a "centre". The geographical connection need not be confined or compressed and homogeneous, for example as in Ranglen where the relevant centre of activity occupied different geographical areas on both sides of what Bannon J described as "an important transport link and busy road". The concept of a centre of activity is primarily a geographic one, and requires some agglomeration or concentration of business activity (using the word "business" in its broadest sense) within the specified area.
57The Commissioner turned to the next question: whether there is an area that can properly be regarded as being a "centre of activity", in which the Property is located: at [78]-[103].
58The Commissioner concluded that, when considered together, the zoning provisions of the 2007 LEP and 2011 LEP reflect a centre of business and commercial activity; that it comprises a core, middle and fringe; and that the Property is located in the fringe: at [86], [103], [105]. She was satisfied that there are reasonable grounds for believing that the Property is not within the Business General rating sub-category, and that it can properly be regarded as being within the Business CBD rating sub-category. Accordingly, she dismissed the appeal: at [106].
59In reaching that conclusion, the Commissioner considered each party's submissions. She summarised Barrak's submissions, which primarily emphasised the zoning, at [79]:
Barrak submits that the zoning of the property is fundamental in understanding whether it is within the relevant "centre of activity". Additional factors are the label applied to describe the sub-category; the physical uses and built form which are materially different to those on the northern side of Kendall Street and on the western side of the railway; the removal of parking meters and changes in parking restrictions in the Harris Park area; the way in which the Council approached the rating of Harris Park in 2013; and whether it is fair and equitable to impose the Business CBD rates on the property.
60The Commissioner recorded Barrak's submissions as to the relationship between the Business zoning and rating areas, at [80]-[81]:
80 Considering first the zoning of the property, Barrak submits that the Business zoning under the 1989 LEP was the only reason to create the Business CBD sub-category initially and to include this property in that sub-category. That was reasonable in 1995, when the property was identically zoned to the land in the CBD core and to the north of Parramatta. However, the property is now zoned B1 Neighbourhood Centre, while the land on the other side of Kendall Street, the land in the block between Una Street, Wigram Street, Harris Street and Parkes Street, and the land on the other side of the railway line is zoned B4, while other land closer to the centre of Parramatta is zoned B3. Barrak submits that when the property was placed in the Harris Park Precinct under the Parramatta REP in 1999 a significant change in planning intent occurred. The objectives for the Business zone under Part 4 Precinct 2 - Harris Park Precinct were provided in cl 29F(1) (emphasis added):
(a) to provide opportunities for low scale retail and commercial development which supports surrounding residential development,
(b) to encourage the integration of commercial centres with public transport and pedestrian networks,
(c) to meet the urban design objectives set out in this Part and (where applicable) to comply with the controls for Special Areas as set out in this Part.
81 Barrak submits that the objectives of the City Core, Retail Core and City Edge zones within Precinct 1- City Centre Precinct were markedly different, and the introduction of the REP cannot be regarded as an "administrative carve up". It represented a down-zoning of the property, with the creation of the City Core, Retail Core and City Edge zones, and the separate Harris Park precinct. While the making of the Parramatta REP did not affect ratings, given the Council's resolution in 1995 it ought to have recognised that the making of the REP left its earlier rating decision without a rationale, and that when the REP was made that was a strong indication that the Harris Park precinct was not part of the city centre of Parramatta.
61The Commissioner recorded the Council's submissions in that regard, at [82]:
82 The Council submits that the centre of activity need not, and generally would not, coincide with any local environmental plan boundaries or zoning boundaries, and that the argument that the actual zoning matters in determining ratings sub-categories must fail. First, zoning and rating processes are entirely separate, being effected under different statutes and by different levels of government, and there is no basis for the submission that the ratings sub-category should coincide with zoning boundaries. Secondly, there are several different zonings under the 2007 LEP, and the rating sub-category must be able to accommodate more than one zoning on the applicant's own case. Thirdly, when a comparison is made between the ratings categories and sub-categories and the Harris Park zoning map under the 2011 LEP, there would be many ratepayers situated next to higher zoned land (including B4 land) who are subject to the same rating as the higher zoned land. Fourthly, if the zoning is relevant in the way submitted by the applicant, then the CBD centre of activity boundary does accord with zoning to some extent, as it takes in the B4 Mixed Use zoning within the 2007 LEP and that part of Harris Park zoned B1 Neighbourhood Centre. The Council submits that the legal source of the zoning objectives and restrictions applying to particular property is just an administrative arrangement, stemming in the circumstances here from the re-organisation effected by the Parramatta REP, and that it does not matter whether it is the 2007 LEP or the 2011 LEP that applies, which is underscored by the proposed amendments to the 2011 LEP so that one instrument will apply across the Parramatta LGA.
62The Commissioner accepted those Council submissions, at [83]. She said that there is no basis for a suggestion that rating sub-categories, which depend either on actual use or a spatial criterion, should "necessarily" reflect the zoning:
83 I accept the Council's submissions. The zoning history since the 1989 LEP reflects decisions both of the Council and the NSW Government, the latter primarily in the decision to make the Parramatta REP in 1999 which, among other things, removed the centre of Parramatta from the local planning controls when separate planning controls were applied to Precinct 1-City Centre and Precinct 3-Government. The subsequent planning history, including the addition to the Parramatta REP of controls for the Harris Park Precinct, the continuation of separate controls for the city centre in the 2007 LEP, and the proposed amalgamation of the 2007 LEP and 2011 LEP, reflects the exercise of different legislative powers, at different levels of government, at different times, and for different purposes to those exercised for rating purposes under the LG Act. There is in my view no basis for a suggestion that rating sub-categories which depend either on actual use, or by reference to a spatial criterion, should necessarily reflect the zoning, even if the zoning might be the basis (whether for convenience or otherwise) on which the boundaries of the sub-category are at any point of time determined, or identified...
63Nevertheless, the Commissioner considered that the zoning was a relevant factor and that it generally supported the Council's Business CBD rating sub-category for the Property, at [83]-[88]:
83 ...Further, to the extent that the zoning is significant in determining whether there is a centre of activity, and if so, whether particular land is within that centre of activity, there are two reasons why that is not determinative in the circumstances of this case, and in any event would lend support to the Council's determination that the property is within the relevant sub-category.
84 First, the 2007 LEP and the 2011 LEP need to be considered together to obtain a complete picture of the zoning. The 2007 LEP includes an area in the centre of Parramatta to the east of Church Street and extending as far south as Hassall Street which is zoned B3 Commercial Core, which is surrounding by land zoned B4 Mixed Use. The relationship between the two is made clear in the stated objectives for each zone. Those for the B3 zone include:
·To provide a wide range of retail, business, office, entertainment, community and other suitable land uses which serve the needs of the local and wider community, including...
...
·To strengthen the role of the Parramatta city centre as the regional business, retail and cultural centre, and as a primary retail centre in the Greater Metropolitan Region.
85 The objectives for the B4 zone include:
To support the higher order Commercial Core Zone while providing for the daily commercial needs of the locality, including:
· commercial and retail development,
· cultural and entertainment facilities that cater for a range of arts and cultural activity, including events, festivals, markets and outdoor dining,
· tourism, leisure and recreation facilities,
· social, education and health services,
· high density residential development.
86 The area in which the property is located, at the boundary between the 2007 LEP and the 2011 LEP, has a business zoning, B1 Neighbourhood Centre. While the objectives and permitted uses are not the same as those for either the B3 or B4 zones, the B1 zone includes a range of permissible business and retail uses, including relevantly, a restaurant or café, and prohibits residential accommodation other than specified limited types. When considered together, the zoning provisions in the 2007 LEP and the 2011 LEP reflect an area that has a central core, a surrounding commercial and business area, and an area at the fringe in which the property is located. While the detail of the zone objectives and permissible and prohibited uses, has changed since the 1989 LEP, that is consistent with the approach adopted in that LEP with its 3(f-r) and 3(f) business zones. The proposal to amalgamate the 2007 LEP into the 2011 LEP does not change that.
87 Secondly, having regard to the land that is used for commercial or retail purposes but is not included in the Business CBD sub-category, the land on the eastern side of Wigram Street and extending south along Wigram Street to Marion Street is zoned R2 Low Density Residential. The only form of commercial or retail use permissible with consent in that zone is "neighbourhood shops", and it was common ground that the businesses presently operating in that area, in particular as restaurants, are doing so either as some form of existing use or pursuant to the conservation incentive provision in cl 5.10 of the 2011 LEP. Leaving aside any difference that this might make to the land value and thus to the actual amount of rates paid, the zoning of the subject property as B1 Neighbourhood Centre incorporates higher development potential than is the case for the businesses on the other side of Wigram Street which are zoned R2. It does not suggest that the property, and the other land zoned B1, more properly belongs in the same sub-category as those residential zoned properties.
88 Rather than it being the inclusion of land zoned B1 Neighbourhood Centre in the Business CBD sub-category together with land zoned B3 or B4, if there is an anomaly it would seem to be with the eight lots on the northern side of Marion Street (to the south of the subject property) between Wigram Street and Harris Street that were zoned Residential Conservation 2(g) under the 1989 LEP, re-zoned Business in 2001 under the Parramatta REP, and now B1 Neighbourhood Centre under the 2011 LEP. Those lots are not included in the Business CBD sub-category on the Centre of Activity Map, and for rating purposes, are either Residential or Business General on the Ordinary Rates Map. However, whether or not those properties could be regarded as being in the relevant centre of activity is not a matter that needs to be considered in this appeal.
[emphasis added]
64The Commissioner at [89]-[97] then gave consideration to the additional factors on which Barrak placed reliance, which she had earlier identified at [79]. She did not regard the label attached to the Business CBD rating sub-category as necessarily significant, for the reasons she had earlier provided at [72]: at [89]-[90]. She regarded physical uses and built form, and cohesion, as significant and said that she would consider them in more detail later in her judgment: at [91]. She did not think the changes to parking controls (including removal of parking meters in the vicinity of the Property) or the way in which the Council approached the rating of Harris Park in 2013 supported the proposition that the Property was not within the Business CBD rating centre of activity: at [93]-[96]. She considered that any general concept of "fairness" had a limited role in the context of the appeal: at [97]-[100].
65The Commissioner considered further factors proposed by the Council as relevant in consideration of the characteristics of the asserted centre of activity, and Barrak's response: at [100]-[101]. She concluded that the distance from a centre core would not of itself indicate that the Property is not within the Business CBD Centre of activity; but there must be some geographical connection between the activities carried on. She considered that the area included in the Ordinary Rates map included a diverse range of land uses, business types and built forms; that those in the area which includes the Property and extends towards the centre of Parramatta can generally be described as predominantly business or mixed use rather than solely residential; and that those uses and built forms reflect some geographical factors, but more importantly reflect the zoning history and, significantly, the constraints imposed by the heritage considerations. She observed that there is much less uniformity of built form and uses away from the city centre. She noted that the area on other side of the railway line at the intersection of Marion and Cowper Streets, which is also in the Business CBD sub-category, has a mix of heritage houses, small businesses and residential uses, similar in character to the area where the Property is located: at [102].
66After considering the parties' further submissions, the Commissioner reiterated, at [103]:
I agree with the Council that there is a centre of activity with a core and middle areas and areas around the fringes. While it could not be described as homogeneous, a centre of activity need not be, and can be more diverse. In my view the property can properly be regarded as being within that centre of activity.
67Finally, the Commissioner summarised her conclusions, leading to dismissal of the appeal, at [104]-[106]:
104 The property is within the area identified by the Council in 1995 in its determination of the Business CBD sub-category, initially on the basis of its zoning under the 1989 LEP and since 2000 by reference to the map, as a centre of activity for the purposes of s 529(2)(d) of the LG Act. While I have concluded that inclusion in an area specified on a map would not of itself be sufficient to be satisfied that the property is within the relevant centre of activity, there are a number of factors that establish that there is a centre of activity as shown on that map, and that the property is appropriately included within it. First, while there have been changes in the applicable planning instruments since the 1989 LEP, through the changes made by the Parramatta REP, the subsequent application of the 2007 LEP to the area formerly included within the City Centre and Government Precincts, and the inclusion of the property in the land to which the 2011 LEP applies, the property has retained a business zoning. While I accept that the B1 Neighbourhood Centre zoning is different to the B3 zoning of land in the centre of Parramatta and the B4 zoning of land between that centre and the subject property, it is still a business zoning which permits a range of business and commercial uses. That has to be contrasted with the land in the care bounded by Una, Wigram, Marion and Harris Streets which is zoned R2, much of which is subject to heritage constraints, and where those properties used for commercial purposes are within the Business General sub-category. There is not homogeneity from the other side of Kendall Street towards the centre of Parramatta, either in the zoning (which is B3 at the centre and B4 in the area closest to the subject property), or in the range of built form and uses.
105 The area shown on the Ordinary Rates Map as a centre of activity includes a diverse range of built forms and uses, which can generally be described as reflecting a concentration of business or commercial uses, and including residential uses primarily as part of mixed use development. I accept that the business and commercial uses are more concentrated, and intense, in the central part of Parramatta now zoned B3 than in the B1 zoned area where the property is located. I also accept that overall the area determined by the Council to be a centre of activity is diverse rather than homogeneous. I am satisfied, however, that there is a centre of business and commercial activity that consists of a core, middle and fringe, and that the subject property is located in the fringe part of that centre of activity. While it may be that other properties not included in the Ordinary Rates Map might equally be regarded as being within that centre of activity, that is not the issue in these proceedings. Neither is the issue of whether or not the Council undertakes what might be regarded as an equitable distribution of infrastructure or other service delivery from the revenue derived from the rates.
106 I am satisfied that there are reasonable grounds for believing that the property is not within the Business General sub-category, and that it can properly be regarded as being within the Business CBD sub-category. On that basis, the appeal against the refusal to change the rating sub-category applying to the property from Business CBD to Business General should be dismissed.
[emphasis added]