REASONS WHY DECISION IS OF INTEREST OR SIGNIFICANCE

This is one of the first gaming decisions applying the new Clause 52.28 of the planning scheme.

APPLICATION - significant, interesting or unusual use or development; application of policy, provision or principle; or circumstances

This case was unusual in that gaming approval had been granted for the proposal by the Victorian Commission for Gaming Regulation, and no appeal had been initiated by Council under the gaming legislation. Instead, Council refused to support the proposal with respect to the planning permit application that followed.

The Langwarrin Hotel already operates 44 electronic gaming machines (EGMs) and seeks approval to install 16 more. The hotel was recently refurbished and offers a wide range of services. The Victorian Commission for Gaming Regulation approved the 16 additional EGMs pursuant to the Gaming Regulation Act 2003. Council could have appealed against this decision but chose not to do so. Council instead refused to support the subsequent planning permit application for the 16 EGMs. In reviewing this refusal, this is one of the first cases where the Tribunal was required to apply the new Clause 52.28 dealing with gaming.

In the final result the Tribunal approved the proposal. This decision:

(a) provides guidance regarding the application of Clause 52.28; and

(b) clarifies the role of the Tribunal vis-à-vis the Gaming Commission in terms of the scope of discretion.

Proposal for 16 additional electronic gaming machines ("EGMs") in Langwarrin hotel, already 44 EGMS in hotel, Council opposing proposal, issues of the level of support for proposal under Clause 52.28 of Planning Scheme dealing with gaming, whether any significant planning problems count against this support, and whether the proposal on balance deserves planning approval; clarification of the role of the Tribunal vis-à-vis the Victorian Commission for Gaming Regulation and explanation of why Clause 11 of the Planning Scheme applies to this type of gaming planning application.

Beretta's Langwarrin Pty Ltd v Frankston CC (includes Summary) (Red Dot) [2009] VCAT 74

The appeal against the Responsible Authority's failure to make a decision in the statutory period is granted. A permit is granted and directed to be issued in relation to the land at 220 Cranbourne-Frankston Road in Langwarrin. The permit shall allow the installation of up to 16 electronic gaming machines (an increase from 44 to up to 60 machines), subject to the permit conditions set out in Appendix A to this decision.

Ms Susan Brennan of Counsel instructed by Bazzani Scully Brand lawyers. Ms Brennan called expert planning evidence from Mr Daniel Soussan of Ratio Consultants.

1. The land at 220 Cranbourne-Frankston Road in Langwarrin features the Langwarrin Hotel. The hotel is situated on a large site of about 2.6 hectares that, apart from the main hotel building, features a large car parking area with associated landscaping and a drive through bottle shop in its north-western corner. The hotel is a large operation which features a main/sports bar and TAB, indoor and outdoor dining areas with a total dining capacity of around 450 patrons, four lounge areas, a children's playground, together with an existing gaming area with 44 existing electronic gaming machines.
2. It is common ground that this hotel has operated for many years on the site, and has recently had the benefit of a major refurbishment apparently costing $8 million. Hence it was accepted by all parties at the hearing of this matter that the hotel is now an upmarket and attractive venue that performs a significant social function within Langwarrin, and which is well run and operated. The Tribunal has inspected the hotel and endorses this assessment.
3. The hotel is situated to the southwest of the main shopping centre in the township. On the opposite side of Cranbourne-Frankston Road to the north is Lloyd Park. To the west and south of the site are open space areas, with the former featuring a creek/drainage reserve and a retirement village further west again. The land to the east (on the other side of Union Road) is a medical centre and a vacant site. We were told at the hearing of this matter that the Applicant is in the process of purchasing this vacant land, with the intention of building a motel facility at a future stage.
4. The Applicant proposes to increase the number of electronic gaming machines ("EGMs") by an additional 16 EGMs, taking the total number from 44 to 60 and increasing the relevant floor area for EGMs from 155.4 to 200 square metres. Ms Brennan indicated at the hearing that gaming machines have existed at the hotel for 10 years or so. The application plans show that there is a "lounge" area available for conversion so as to allow the 16 additional EGMs to be installed, involving only minor internal alterations. The Applicant has indicated that if it receives planning approval for the proposal, it will make a $40,000 additional annual contribution (above and beyond the $40,000 annual community contribution it is already making) to a local community project fund and that it intends to then proceed with building the new motel on the vacant land.
5. By way of context, the Applicant has obtained gaming approval for the 16 new EGMs from the Victorian Commission for Gaming Regulation in its decision dated 12 August 2008. Council had appeal rights against this approval but chose not to initiate any such appeal.
6. In now seeking planning approval for the proposal, the Applicant has sought the Tribunal's review of the Council's failure to make a decision regarding the planning permit application within the statutory 60 day period.
7. The hearing of this matter came before us on 27 October 2008. There were no objectors involved in the hearing. During the hearing we received expert planning evidence from Mr Daniel Soussan of Ratio Consultants who was called by the Applicant. At the hearing Council took the position of opposing the proposal. In particular, Council argued that to justify planning approval for the proposal, the Applicant would need to establish that a "net community benefit" would be created. Council submitted that no such net community benefit will arise, due to community opposition to the proposal, the Langwarrin Hotel being an inappropriate location for 16 additional EGMs, and the municipality of Frankston already experiencing high levels of gaming by metropolitan standards.
8. After the hearing the Tribunal conducted an inspection of the hotel premises and also walked from the hotel to the nearest entrance of the Langwarrin Shopping Centre, taking note of the interface between the two activities.
9. To our knowledge this is the first situation where an applicant has obtained approval for the proposed new EGMs under the gaming legislation without that gaming approval being appealed by Council, but where this Tribunal has then been required to consider the planning merits of the new EGMs including taking into account the relatively new Clause 52.28[1] of the Planning Scheme. Accordingly, while we have carefully considered the previous decisions on point, this review has turned on its own facts and been strongly influenced by the relevant provisions of Clause 52.28.
10. With respect to the contents of the balance of this decision, in the first sections we summarise the key findings of the Gaming Commission decision, clarify the scope of our decision making role, and explain why we have proceeded on the basis that the standard to be met by the proposal is a "net community benefit" pursuant to Clause 11 of the Planning Scheme.
11. In then dealing with the planning issues, we see four key questions which need to be addressed, being:
    • does the appeal site form part of the Langwarrin Shopping Centre?;
    • what are the merits of the proposal when assessed against Clause 52.28 of the Planning Scheme?;
    • if the proposal is assessed favourably against clause 52.28, are there any significant identified problems with the proposal that need to be counter-balanced? We are thinking here notably of the results of a community telephone survey initiated by Council, plus Council's concern whether any new EGMs would be better located in Frankston CAD; and
    • will the proposal ultimately achieve a net community benefit?.
12. In summary, we have found that a strong case exists for the planning approval of the proposal under Clause 52.28. In particular, we see the positive features of the proposal as including the significant buffer area between the hotel and the other nearby uses, the high standard of the fitout and day to day operation of the hotel, the strong evidence as to the high level of public usage of the hotel and demand for additional EGMs, together with the demographic evidence presented to us which indicates that Langwarrin's local community features relatively low levels of social disadvantage.
13. We have given careful consideration to the community survey information provided by Council at the hearing, but have concluded that this information carries less weight than the strong credentials of the proposal under Clause 52.28. With respect to Council's concern whether any EGMs should be better located in the Frankston CAD, we are struggling to see any real force to this argument where:
    • there is no specific local gaming policy in the Planning Scheme to this effect; and
    • the evidence presented to us at the hearing indicates that at peak times there is currently a shortage of EGMs in the hotel, and that the Langwarrin has a relatively low level of social disadvantage.
14. In the final result, we see the proposal as achieving a net community benefit, so as to be deserving of the 16 additional EGMs being given planning approval. We have however endorsed the two step process discussed at the hearing, whereby our approval will initially allow for 8 additional EGMs. The permit conditions will include a condition providing that the other 8 approved EGMs will only be allowed to be installed once the anticipated new motel facility to the east has been constructed by the Applicant to Council's satisfaction.

MAIN FEATURES OF PREVIOUS GAMING APPROVAL OF PROPOSAL

1. As mentioned, the proposal for 16 additional EGMs at the Langwarrin Hotel was approved by the Gaming Commission on 12 August 2008. As there was considerable discussion of this decision at the hearing before us, it is useful to set out some key aspects of this decision. The relevant gambling legislation here is the Gaming Regulation Act 2003, with particular reference to Clause 3.3.7(1) of that Act which provides as follows:
   • (1) The Commission must not grant an application for approval of premises as suitable for gaming unless satisfied that -

(a) The applicant has authority to make the application respect to the premises; and

(b) The premises are or, on the completion of building works will be, suitable for the management and operation of gaming machines; and

(c) The net economic and social impact of approval will not be detrimental to the well-being of the community of the municipal district in which the premises are located.

1. In relation to the contents of the Commission decision, the early section of the decision discusses the recent refurbishment of the hotel and its day to day operations - see paragraphs 13, 14 and 16 which are set out in Appendix B to this decision.
2. Pages 6 and 7 of the Commission decision discusses the following benefits which the Applicant put forward as flowing from the approval of the proposal:
   • if the 16 additional EGMs go ahead, the Applicant will double its existing $40,000 annual contribution to a community project(s); and
   • if the 16 additional EGMs are approved then the Applicant intends to carry out extensive works to the carpark of the hotel and also build a motel with conference/function room facilities on the land on the eastern side of the hotel which the Applicant has recently purchased.
3. At the end of paragraph 21 the Commission states that:

We have no reason to doubt that if the application is granted, the motel project will proceed and that both accommodation and function facilities are needed in Langwarrin which is, as we discuss subsequently, the most advantaged part of the Frankston municipality.

1. The next part of the decision considers the various evidence provides to the Commission regarding the demographic characteristics of Langwarrin compared to the broader Frankston municipality, with the Commission making the following conclusion at paragraph 33.

In summary, our conclusion as to the demographic issues is that the subject hotel is located in the most advantaged part of the City of Frankston and in the area in which any increase in egm expenditure is best able to be accommodated without harm. The surveys showing that the large majority of patrons are from the Langwarrin area is, of course, a significant feature of the applicant's case. Nevertheless, the overall position regarding gaming expenditure within the City of Frankston is a concern.

1. The next few pages of the Commission decision discuss the Court of Appeal decision in the case of Macedon Ranges Shire Council v Romsey Hotel Pty Ltd and the Victorian Commission for Gambling Regulation No 3703 of 2007. Paragraph 38 the Commission comments that:

It is important to note that the Court of Appeal's decision does not support the proposition that the community's opinion will necessarily be decisive. But it is a matter which must be taken into consideration. It is in this context that we must consider the survey which was carried out on behalf of the Council in this matter.

1. The Commission in the following pages then considers certain community surveys which were carried out by Frankston City Council in relation to the proposal for the 16 additional EGMs. In particular, a telephone survey was carried out, with participants being randomly selected from the electronic white pages telephone directory by using the postcode area 3910 which is the postcode for Langwarrin. The Council then collated the results. The opening question in the telephone survey was "Do you support the approval of an additional 16 poker machines being installed at the Langwarrin Hotel". There were also various subsequent questions.
2. Paragraphs 45 and 46, the Commission comments as follows regarding the results of this telephone survey, with particular reference to the first question.
   1. A problem with a survey of this kind, is that respondents were only presented with part of the picture. They were informed the application by the applicant for additional egms, but they were not informed of other matters surrounding the application. In this case we would have thought that the most relevant matters were the applicant's statement, which was emphasised through Mr Beretta's and other witness statements, that if the application was granted and a motel with conference (function facilities) would be built across the road from the hotel. We would have thought also that the offer of the applicant to make the furthest significant contribution to the Langwarrin Community Project might have been mentioned.
   2. The telephone survey produced a response showing that a significant majority of respondents answered no to the first question. We are of the view, given the lack of any additional information in the question, that this is not surprising.
3. However, as per the Court of Appeal's findings in the Romsey decision, the Commission nevertheless stated at the end of paragraph 47 that "We are of the view that a person's belief as to the benefits which may flow from the introduction of any egms is a relevant matter notwithstanding whether that person supports or does not support additional egms"
4. In moving on to the issue of whether the additional 16 EGMs will create additional gaming expenditure, the Commission indicated at paragraph 59 that it was satisfied with an estimate of $1.05m increase expenditure as being reasonable in terms of the additional gaming generated by the proposal. The Commission also accepted that 54% of this $1.05m additional gaming figure would be transferred from other gaming venues already operating within the City of Frankston.
5. The Commission then at paragraphs 70-78 focused on the advantages and disadvantages associated with the proposal - we have set out these paragraphs at Appendix B to this decision. In overview, the Commission accepted that there is a strong case that there is an inadequate number of EGMs presently at the hotel. The Commission saw the Applicant's offer to make a significant annual contribution to a local community project as a positive feature of the proposal, and also gave weight to the Applicant's stated intent to build a new motel on the vacant site to the west if the new EGMs are approved.
6. The Commission took note of the unfavourable survey results presented by Council but regarded these results as carrying limited weight. Rather, the Commission's main reservation about the proposal was the existing level of gaming expenditure across the whole of the Frankston municipality, which is 8% above the metropolitan average. However the Commission ultimately saw the "strongly positive features" of the proposal as deserving approval.
7. The final paragraphs include clarification at paragraphs 79 and 80 that the Commission is approving the 16 additional EGMs on the basis that the second round of 8 additional EGMs will only be available once the proposed motel facilities have been constructed and are ready for occupation.

1. We are mindful that it is not the Tribunal's role to revisit the social/demographic implications of the proposal as have already been considered by the Gambling Commission. Further, we are conscious that the relevant planning permit trigger here is Clause 52.28 of the Planning Scheme. In setting out below the purposes of Clause 52.28, there is a clear intention that the planning decision maker focus on the locational attributes of this type of gaming proposal - see the text which we have highlighted.

To ensure that gaming machines are situated in appropriate locations and premises.

To ensure the social and economic impacts of the location of gaming machines are considered.

To prohibit gaming machines in specified shopping complexes and strip shopping centres.

1. This emphasis on "location" can be contrasted with the finding that the Gaming Commission must make to approve the proposal, being that:

...the net economic and social benefit of approval will not be detrimental to the wellbeing of the community of the municipal district in which the premises are located.

1. In summary, the information we have set out above tells us that it is not our role to be considering whether the Frankston municipality per se should be absorbing additional EGMs. It is clear to us that the Gaming Commission has already found that the net economic and social benefits of the proposed 16 additional EGMs outweighs the reservations which it expressed about the fact that the level of gaming expenditure in the municipality is already 8% above the metropolitan average. Accordingly, to the extent that Mr Rantino put to us that "the proposal should be refused due to excessive gaming expenditure in the whole municipality", this was misguided in that this issue has already been resolved by the Gaming Commission and is beyond the scope of this Tribunal.
2. Rather, it is our role under the Planning and Environment Act 1987 to review:
   • to what extent the proposal can be supported when assessed by Clause 52.28 of the Planning Scheme,
   • any relevant planning issues; and
   • whether on balance the proposal ultimately deserves planning approval.
3. In making our decision, we have made findings on the basis of an empirical understanding of the relevant facts rather than by reference to philosophical or moral values (see Branbeau Pty Ltd v Victorian Commission for Gaming Regulation [2005] VCAT 2606 at para 61). However we discuss later the way in which we have taken into account as a relevant factor the evidence provided to us at the hearing regarding the views of the local community regarding the proposed installation of the 16 additional EGMs.

THE RELEVANCE OF CLAUSE 11 OF PLANNING SCHEME TO OUR DECISION MAKING

1. Clearly the Tribunal may consider any significant likely social and economic effects of the proposal, under Section 60(1A) of the Planning and Environment Act 1987. However there was significant debate during the hearing whether or not Clause 11 of the Planning Scheme is relevant to the exercise of our discretion.
2. We have highlighted below the key passages from Clauses 11.01 and Clause 11.02 of the Planning Scheme (with our emphasis):

11.01 It is the State Government's expectation that planning and responsible authorities will endeavour to integrate the range of policies relevant to the issues to be determined and balance conflicting objectives in favour of net community benefit and sustainable development.

11.02 The State Planning Policy Framework seeks to ensure that the objectives of planning in Victoria (as set out in Section 4 of the Planning and Environment Act 1987) are fostered through appropriate land use and development planning policies and practices which integrate relevant environmental, social and economic factors in the interests of net community benefit and sustainable development.

1. The important point for our purposes is that pursuant to Clause 11, where a planning permit applicant puts forward its case as to the planning merits of a proposal, it must do more than demonstrate that the proposal will not cause any net planning detriment. Similarly, it is not enough for the applicant to demonstrate that the proposal will maintain a "break even" situation in terms of its net community impacts. Rather, it is clear under Clause 11 that an applicant must demonstrate that the proposal will go beyond "break even" to create a net community benefit ie a positive planning outcome. If one was using an old fashioned set of scales to balance on one side the potential negative impacts of the proposal and on the other side the potential positive impacts, the proposal must tip the scales at least 1% towards a positive net community benefit.
2. This can be contrasted to the less onerous benchmark set under the Gambling Regulation Act 2003 which we have already set out above, where Section 3.3.7(1) requires the Commission to at least find that the proposal will not cause any net community detriment. The same test applies in relation to any amendment to any existing venue operator's gaming licence under Section 3.4.20(1)(c) of the 2003 Act.
3. Both the Applicant's advocate Ms Brennan and its planning witness Mr Soussan put forward the view that Clause 11.02 is not applicable to this proceeding, due to the absence of any specific gaming policy in the State Planning Policy Framework ("SPPF"). Following this line of thinking, the benchmark for assessing whether the proposal before us deserves planning approval is the same one used by the Gaming Commission ie we must find the absence of any net community detriment. This line of thinking was contested by Mr Rantino, who argued that Clause 11 applies in the usual way, and on this basis the Applicant must establish a net community benefit on the planning merits.
4. To the extent that this debate regarding the role of Clause 11 is a legal issue, the Tribunal's findings are by Member Martin alone as the Legal Member.
5. The Tribunal's conclusion on this issue is that Clause 11 is applicable, and the Applicant must demonstrate more than the absence of any net community detriment. The Applicant must go beyond break even situation to demonstrate that the proposal will lead to a net community benefit as required by Clause 11. Our conclusions here are consistent with the approach taken in the Tribunal in Walker Corporation & Ors v Wyndham City Council [2007] VCAT 1396.
6. Whilst it is true that the SPPF does not include any specific gaming policy, nevertheless in the Tribunal's view it still contains certain policies relevant to the proposal. For example, at Clause 12.01-2 (under the heading "A more compact city") there are various strategies set out for the development of activity centres, at least some of which are relevant to the proposal. See for instance (with the Tribunal's emphasis) the strategy in the first bullet point of developing a network of activity centres that (amongst other things) "...Is a focus for business, shopping, working, leisure and community facilities". Similarly, Clause 17 of the Planning Scheme dealing with Economic Development includes Clause 17.01 regarding Activity centres. Under Clause 17.01-2 the implementation of activity centre policy should include (amongst other measures) incorporating and integrating "...a variety of land uses, including retail, office, education, human services, community facilities, recreation, entertainment and residential uses where appropriate" (with the Tribunal's highlighting).

1. The site already has the benefit of many previous planning permits associated with the hotel operation - to avoid duplication, we endorse the summary of these permits set out at page 6 of the Council written submission.
2. The appeal site is located within a Business 5 zone. Although they play no role in our decision, the site is also affected by the following overlay controls - a Development Plan Overlay Schedule 1, an Environmental Significance Overlay Schedule 1 and a Special Building Overlay. Langwarrin is designated as a "community centre" in the activity centre hierarchy within the Frankston municipality - see Clause 21.05 of the Planning Scheme.
3. Although there are sections of metropolitan Melbourne where the Victorian Government since 18 October 2006 has introduced regional capped areas for gaming machines, the appeal site does not fall in one of these areas.
4. We have already indicated that the only permit trigger for this proposal is Clause 52.28 dealing with gaming. We have quoted the objectives of this clause above.
5. Clauses 52.28-3 and 52.28-4 prohibit the installation or use of a gaming machine in a shopping complex or strip shopping centre if same is specified in the Schedule to Clause 52.28. Langwarrin Shopping Centre is one of these specified shopping areas under the Schedule - see our discussion of this issue below..
6. Clause 52.28-6 sets out the following decision guidelines in relation to gaming proposals considered under the clause:
   • The State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.
   • The compatibility of the proposal with adjoining and nearby land uses.
   • The capability of the site to accommodate the proposal.
   • Whether the gaming premises provides a full range of hotel facilities or services to patrons or a full range of club facilities or services to members and patrons.
7. The relevant state policies include Clauses 11, 12 and 17, with particular reference to those provisions setting out activity centre policy. There is no state policy in relation to gaming.
8. With respect to Council's Municipal Strategic Statement and local policies, there is a general statement of Council's land use planning visions at Clause 21.03. Paragraphs 47 and 48 of the Council written submission relevantly state as follows.

The MSS notes that the majority of Frankston City's forecast population growth is to occur in the outlying suburbs of Langwarrin and Carrum Downs, and that there are "significant economic development opportunities" in the Frankston to Langwarrin corridor".

The Strategic Land Use Framework Plan identifies the Langwarrin Shopping Centre area as an activity centre and show (sic) Hotel as being within the Frankston to Langwarrin "corridor" where "significant economic opportunities exist".

1. Paragraphs 49 and 50 of the Council written submission explain that the Activity Centre Hierarchy at Clause 21.05 of the Planning Scheme lists five types of activity centre within the nominated hierarchy, with the Langwarrin Centre being classified in the middle category known as "Community".
2. Paragraphs 51-53 of the Council written submission provides information regarding the local activity centre policies from Clause 21.05 and paragraph 54 confirms that the objectives of Clause 21.07-3 dealing with recreation, leisure and tourism include:
   • To provide a wide range of active and passive recreation and leisure opportunities.
   • To promote and facilitate appropriate forms of tourism development.
3. Clause 22.12 of the Planning Scheme contains the Outline Development Plan for Langwarrin, with the relevant objectives at Clause 22.12-2 including:
   • To fund and ensure the timely provision of urban infrastructure and community facilities.
   • To coordinate development and ensure that development is properly integrated.
4. Whilst is it not a statutory document and therefore must be given less weight, Mr Rantino during the hearing referred us to the Council Gambling Policy and Action Plan 2005-2008. This Plan requires an application for the introduction of or change to any gambling activity to demonstrate that "there is a net economic and community benefit that will accrue to the community", in the absence of which Council will not support the proposed new or additional gaming.
5. Paragraph 58 of the Council written submission explains some of the goals of the Policy, and paragraph 59 confirms that the objectives of the "Planning" goal include the following points.

3.7 Respond to gambling applications by requiring a social and economic impact analysis.

3.8 Support a reduction in the number of poker machines in Frankston City.

3.9 Support the equal distribution of poker machines in Frankston City.

1. We now return to the key issues which we identified in our introduction above.

Does the appeal site form part of the Langwarrin Shopping Centre?

1. As mentioned above, Clauses 52.28-3 and 52.28-4 prohibit the installation or use of a gaming machine in any shopping complex or strip shopping centre listed in the Schedule to Clause 52.28. Langwarrin Shopping Centre is one of these specified shopping areas under the Schedule. Hence the proposal has the status of being prohibited if we were to find that the appeal site forms part of the Langwarrin Shopping Centre.
2. We are satisfied that the appeal site is located away from the Langwarrin Shopping Centre (making the proposal a discretionary rather than a prohibited use) given that:
   • the Langwarrin Hotel is situated on the opposite side of Union Road from the Langwarrin Shopping Centre;
   • the hotel is situated on a large land holding with its own substantial provision for car parking; and
   • the land on which the hotel is located has a separate certificate of title compared to the Langwarrin Shopping Centre.

What are the merits of the proposal assessed against Clause 52.28?

First objective of Clause 52.28 - attributes of hotel

1. The first objective of Clause 52.28 requires us to consider whether the proposed EGMs are "... situated in appropriate locations and premises". Hence a critical aspect of our review is the merits and suitability of the Langwarrin Hotel itself, as a venue for 16 additional EGMs. It also needs to be understood that this issue is not about the suitability of the hotel for gaming per se (44 EGMs already exist) but its suitability for 16 additional EGMs.
2. In this regard, Mr Rantino conceded from the outset of the hearing that Council accepts that the Langwarrin Hotel is a very upmarket, attractive and well run establishment, bearing in mind the recent substantial refurbishment of the building. This was confirmed by the Tribunal's inspection of the hotel premises. In particular:
   • The hotel provides a full range of services. Hence even with the installation of the 16 new EGMs, the whole gaming area will still constitute only part of the overall hotel floor area and the range of facilities available. We note that at paragraph 16 of its decision, the Gaming Commission stated that "It must be said that gaming plays a relatively minor role in the operations of this hotel, and this will not change greatly if the application is granted".
   • The hotel has a busy/strong dining aspect, apparently serving in the order of 3500-4000 meals per week, where we were told by the Applicant that it is a common pattern for some evening diners to wish to use the EGMs for entertainment after having their meal.
   • The 16 additional EGMs can be readily accommodated by freeing up the existing lounge area next to the existing EGMs, with only minimal internal alterations involved. This would still leave other lounge areas available to patrons.
   • In terms of the type of patron that the hotel is pitching itself to, with the recent refurbishment and upmarket fitout and appearance, there seems little doubt that the hotel is aiming to boost its patronage to include more affluent patrons.
3. In addition, other suitable features of the Langwarrin Hotel are that it already operates a significant number of gaming machines (ie the 16 new EGMs will not be a brand new activity) and there is strong evidence of a current unmet demand for additional EGMs.
4. In particular, we accept the planning evidence of Mr Soussan (who presented to us in a helpful and credible manner) that the available information indicates that:
   • the refurbishment of the hotel has boosted its patronage, in particular with diners; and
   • with this increased patronage, a tension has arisen in the form of peak periods where the 44 existing EGMs are inadequate to comfortably meet the patron demand for gaming machines.
5. We refer here to the detailed survey information included at the back of the written report of Mr Soussan, which highlighted those periods (typically in the evening, and notably on a Thursday, Friday and Saturday evening) where there is an over-demand for the 44 existing gaming machines. In this regard, we note Mr Soussan's explanation that during these peak periods it is not so much that every single machine is automatically being used, but more that particular patrons may prefer a particular type of and/or example of a EGM. The Tribunal's inspection highlighted that there are different types of EGMS available to use, including one cent, two cent, five cent and one dollar machines. Mr Soussan commented that certain patrons simply have a favourite machine and are prepared to wait if someone else is already using it.
6. Mr Soussan indicated that the practical result is that in peak periods most EGMs are being used plus there can be queuing for the more popular machines.
7. In summary, we are satisfied that the Langwarrin Hotel is very suitable and appropriate hotel premises for 16 additional EGMs to be installed. In making this finding, we rely on the equivalent conclusion reached by the Gaming Commission in its decision[2].

Second objective of Clause 52.28 - likely social and economic impacts on the Langwarrin local community

1. The second objective of Clause 52.28 is "To ensure the social and economic impacts of the location of gaming machines are considered".
2. Having already considered the merits of the Langwarrin Hotel, we see this second objective as turning on the extent of any expected social and/or economic impacts on the Langwarrin local community arising from the 16 additional EGMs, bearing in mind the demographic features of this locality.
3. At page 22 of Mr Soussan's expert report he confirms that the estimated additional non-transferred gaming expenditure that would arise from the 16 new EGMs would be about $484,000 per annum. In addition, there would be another half of million dollars or so annually of gaming expenditure which represents patrons who will switch to the new EGMs rather than using other gaming venues within Frankston municipality.
4. There was no evidence called by Council at the hearing regarding the likely social and economic impacts of this additional gaming expenditure on the local community. For example, no evidence was called regarding the extent to which the proposal will exacerbate any existing level of problem gambling in Langwarrin.
5. The Applicant did call expert planning evidence from Mr Soussan, whose evidence was to the effect that there will be no significant social or economic negative impacts on the Langwarrin local community if the 16 additional EGMs are installed. That is, the Langwarrin local community has some particular demographic features which are favourable in terms of the potential installation of 16 additional EGMs, such as:
   • In relation to the SEIFA Index of Disadvantage, Langwarrin (taking its postcode area) sits within the 25% of least disadvantaged postcode areas in Victoria.
   • Unemployment in Langwarrin is substantially lower than the average figure for Melbourne and Victoria.
   • Household income levels in Langwarrin are more likely to be in the "middle income" category rather than the "lower income" category when compared to the MSD and Victoria.
   • Other statistics at the top of page 21 demonstrate that typical income levels in Langwarrin compare favourably to average income levels in the MSD and Victoria.
6. In summary, we are satisfied that this second objective is met here, given these particular (favourable) demographical characteristics of Langwarrin. This is consistent with the comments of Justice Morris in Branbeau Pty Ltd v Victorian Commission for Gambling Regulation [2005] VCAT 2606, where His Honour at paragraph 33 expresses support for the theory that problem gambling is less likely to result when additional gaming machines are provided in more affluent areas.
7. This finding is also consistent with the conclusion of the Gaming Commission in relation to the characteristics of Langwarrin that:

In summary, our conclusion as to the demographic issues is that the subject hotel is located in the most advantaged part of the City of Frankston and in the area in which any increase in egm expenditure is best able to be accommodated without harm.

1. We do not need to address the third objective of Clause 52.28 since we have found that the Langwarrin Hotel is not located in one of the strip or ordinary shopping centres where a gaming machine is prohibited.

1. We have set out below the three relevant decision guidelines and our comments in relation to each one.
   • The compatibility of the proposal with adjoining and nearby land uses.
2. One of the concerns put forward by Council at the hearing was what Council regards as the close proximity between the Langwarrin Hotel and the Langwarrin Shopping Centre located to the north-east of the hotel.
3. The first point here is that whilst any EGMs are prohibited in the Langwarrin Shopping Centre as per the Schedule to Clause 52.28, we have found that the hotel does not form part of the shopping centre.
4. Hence the issue here is not so much any direct breach of the requirements of Clause 52.28, but more whether a negative factor on the planning merits is the proximity of the hotel to the shopping centre, and whether this proximity might indirectly promote shoppers to gamble at the hotel contrary to what Clauses 52.28-3 and 52.28-4 are trying to achieve.
5. With the benefit of the Tribunal having inspected this interface, the Tribunal is satisfied that the buffer distance and sightlines between the shopping centre and the hotel is adequate for our purposes here. The available sightlines from the nearest shopping centre entrance across to the hotel are quite constrained, due to the screening effect created by the various intervening landscaping and (when the car park is busy) the cars themselves. In addition, the hotel's external signage promoting its gaming facilities is relatively discreet.
6. We otherwise see it as a positive feature of the proposal that the hotel is located on a large site with plenty of surrounding car parking, plus the additional buffer of Union Road to the east, the creek/drainage reserve to the west and the open area to the south of the appeal site. This is hardly a case where the venue for the new EGMs is crammed hard against other sensitive uses.
7. It also does not assist Council's position on this issue that it has no local policy in the Planning Scheme dealing with gaming, that might provide some statutory guidance regarding Council's preferred position for gaming machines.
   • The capability of the site to accommodate the proposal
8. We see this guideline as being comfortably achieved - the hotel site itself is clearly very well placed to accommodate the 16 additional EGMs. There is abundant on site car parking, an existing lounge area that can easily be converted to provide space for the additional EGMs, and (even with the expanded gaming facilities) the gaming aspect will still only constitute part of the overall range of services provided by the hotel.
   • Whether the gaming premises provides a full range of hotel facilities or services to patrons or a full range of club facilities or services to members and patrons
9. Clearly the Langwarrin Hotel meets and will continue to meet this guideline. At page 25 of his written report Mr Soussan indicates that apart from lounge, dining, bottle shop and gaming services, the hotel also offers over the course of a week a bingo night and live music on the outdoor deck. The Tribunal's inspection indicated that one of the indoor lounges is set up for a band and dancing.

1. In summary, for the reasons set out above, we are satisfied that the proposal has strong planning credentials under Clause 52.28. The issue then becomes whether Council has raised any other relevant planning problems associated with the proposal that outweigh this favourable assessment against Clause 52.28.

Are there any significant planning problems with the proposal that weigh against the strong case for the proposal under Clause 52.28?

Results of relevant community surveys regarding gaming

1. As paragraphs 82 to 87 of Mr Rantino's written submission, he discusses various survey work done in the municipality in relation to gaming. After referring to two earlier gaming surveys in the municipality, at paragraph 85 Mr Rantino explains that Council commissioned a fresh survey in response to this permit application for the 16 additional EGMs, involving a telephone survey of 300 randomly selected Langwarrin residents, with the results apparently being that:
   • 72% of respondents do not support the approval of additional machines being installed at Langwarrin Hotel; and
   • 95.4% of respondents saw no benefit for the local community as a result of this increase in EGMs.
2. As mentioned earlier, the Court of Appeal's decision in the Romsey Hotel decision has mandated that where the Tribunal is dealing with a gaming appeal pursuant to the Gambling Regulation Act 2003, it must take into account the community's views as part of exercising its discretion.
3. At paragraph 38 of its decision (see quote above) the Gaming Commission similarly acknowledged that the Romsey Hotel decision has confirmed that community views must be taken into account in gaming appeals, but it also commented that "...the Court of Appeal's decision does not support the proposition that the community's opinion will necessarily be decisive".
4. At paragraphs 45 and 46, the Commission discusses what it regarded as shortcoming associated with this recent telephone survey of 300 Langwarrin residents, with particular reference to the failure to provide the surveyed residents with other very relevant information such as the Applicant's intention (if the proposal is fully approved) to make a significant annual contribution to a Langwarrin community project and to build an adjoining motel. On this basis, the Commission concluded at paragraph 46 that:

The telephone survey produced a response showing that a significant majority of respondents answered no to the first question. We are of the view, given the lack of any additional information in the question, that this is not surprising.

1. The question then arises how a planning review of a gaming proposal should receive and consider evidence as to the local community's views regarding the proposal. To the degree that this raises legal issues, the findings below are by Member Martin alone.
2. As a starting point, with this being a planning rather than a gaming review, the Tribunal considers the findings of the Court of Appeal in the Romsey Hotel decision turn on its own facts rather than being binding in the circumstances here. That is, the Tribunal in a planning review such as this has a discretion rather than being bound to consider evidence as to the local community's views regarding the proposal. This is reinforced by Section 60(1A)(a) of the Planning and Environment Act 1987, which provides that in deciding on a planning application, the decision maker may (if the circumstances appear to so require) consider amongst other things "any significant social and economic effects of the use or development of which the application is made".
3. On this basis, we have taken into account the relevant community surveys referred to by Mr Rantino, notably the results of the recent telephone survey regarding the proposal before us. Clearly these results are not favourable to the proposal. However we ultimately consider that this survey information can only be given limited weight because:
   • it is only one of many planning issues and factors which have been raised by the parties;
   • we share the reservations of the Commission whether inadequate information was provided to the participants in the telephone survey, such that these persons only understood part of the overall nature of the proposal; and
   • whilst Section 60(1A)(a) certainly authorises our consideration of evidence regarding local community views regarding the proposal, there is nothing in this provision indicating that the social and economic implications of the proposal should be elevated above the other relevant planning issues.
4. In summary, we do not see the relevant community survey information as outweighing the strong merits of the proposal under Clause 52.28 of the Planning Scheme.
5. Whilst it is more a secondary consideration, our finding here is reinforced by the Applicant's willingness to accept a permit condition requiring a new Section 173 Agreement which locks in both the existing and the new $40,000 annual contribution to a local community project(s) ie $80,000 in all. This Section 173 Agreement must be prepared and registered prior to the new EGMs being installed, and the amount payable can be adjusted over time on a pro rata basis. The useful comparative table provided by the Applicant during in the hearing, showing information regarding similar financial contributions as part of other approvals of EGMs, indicates that the annual $40,000 contribution offered here is at the generous end of the range.
6. However we consider that caution needs to be exercised in terms of how much "planning merits credit" an applicant can gain by offering a significant annual financial contribution to a local community project as part of proposed new EGMs, lest a community perception begin to develop that the assessment of the application is becoming overly dollar-driven. Whilst we respect the Commission's views where the Commission also gave weight to the intent of the Applicant to build a motel on the adjoining vacant site if the 16 new EGMs are approved, our thoughts are that only modest weight should be given here on the planning merits. With any planning approval of the 16 new EGMs, there would be no binding obligation on the Applicant to build the motel and even well intentioned planning applicants can have plans which change over time.

Would the 16 new EGMs be better located in the Frankston CAD?

1. There was some debate at the hearing regarding whether the better location for 16 additional EGMs would be the Frankston CAD rather than Langwarrin.
2. Mr Soussan's evidence on this issue is found at paragraph 27 of his statement which reads as follows (with the word in italics being Mr Soussan's emphasis).

At the local level, there is no gaming policy for Frankston found in the planning scheme; indeed there is no reference to gaming activity at all. While there is a reference to reinforcing the regional significance and dominance of the Frankston Central Activities District: clause 21.03, there is nothing to support an argument that entertainment facilities are only encouraged in the CAD. Just because a policy encourages a particular outcome or activity in specified locations does not mean that the outcome or activity is discouraged elsewhere: see for example Saxony Property Consultants Pty Ltd and Oceancare Pty Ltd v Manningham City Council (2001) 9 VPR 251 and more recently Karpidis Pty Ltd v Stonnington City Council [2008] VCAT 1093 noted at (2008) 30 VPR 244.

1. We endorse this statement by Mr Soussan. In particular, it goes against Council that there is no specific local gaming policy providing any spatial preference for which part of the municipality new EGMs should be located.
2. However even at a more basic level, it is hard to see why any new EGMs should be quarantined in the Frankston CAD where:
   • Mr Soussan's evidence was that there are 14,000 adults living in the Langwarrin area;
   • there is clear evidence that Langwarrin has a relatively low level of social disadvantage;
   • we think that Langwarrin local residents have a legitimate expectation that there will be a reasonable local provision for their entertainment and recreation preferences (which includes gaming) rather than having to necessarily drive into Frankston CAD to gain access to same. This is reinforced by the fact that (pursuant to Clause 22.12 of the Planning Scheme) the Langwarrin Outline Development Plan includes as one of its objectives (with our emphasis) - "To fund and ensure the timely provision of urban infrastructure and community facilities"; and
   • there is also credible evidence of a current unmet demand for additional EGMs in the Langwarrin Hotel.

Tribunal's finding - the proposal will lead to a net community benefit

1. To recap, we have found that the proposal has a strong case for being approval when assessed against Clause 52.28 of the Planning Scheme. The issue then becomes whether there are any other significant planning problems which count against the proposal.
2. For the reasons set out above, we do not consider either the results of the relevant community gaming surveys or Council's concerns whether the new EGMs would be better located in the Frankston CAD as significantly detracting from the strong case for the proposal under Clause 52.28.
3. Whilst there is no specific state or local gaming policy, to the extent that any other more generic planning policies affect the proposal, we consider the proposal to be consistent with same.
4. Mr Soussan prepared his written report on the basis that the Applicant did not accept that the proposal needs to demonstrate a net community benefit. However when we sought his view on this issue in the course of his presentation to the Tribunal, we consider it appropriate to give weight to his expressed view that if the Tribunal did require net community benefit to be made out, then the proposal meets this test.
5. Whilst recognising that (compared to the Gaming Regulation Act 2003) the bar is set higher in terms of the test that must be applied for a gaming proposal to gain planning approval and acknowledging the particular scope of our discretion compared to the Gaming Commission, we nevertheless consider that in exercising our discretion some positive weight can be given to the Gaming Commission's support for the proposal.
6. On this basis set out in the above paragraphs, we are satisfied that the 16 new EGMs will lead to a net community benefit pursuant to Clause 11 of the Planning Scheme and therefore should be granted planning approval.

1. In conclusion, for the reasons set out above, we have found that the proposal will lead to a net community benefit and have issued orders that a permit issue. However we have endorsed the two-step approach taken by the Gaming Commission whereby our approval will initially only allow for 8 additional EGMs. The permit conditions will include a Condition 1 providing that the other 8 approved EGMs will only be allowed to be installed once the anticipated new motel facility to the east has been built by the Applicant.

1. Unless otherwise agreed in writing by the Responsible Authority the increase in the number of electronic gaming machines allowed by this permit must be staged in accordance with the following:
   • (a) eight (8) electronic gaming machines to be allowed on the premises at/from the date of this planning permit; and
   • (b) eight (8) electronic gaming machines to be allowed on the premises once a motel has been constructed on land situated at 20 Union Road Langwarrin to the satisfaction of the Responsible Authority.
2. The layout of the machines as shown on the endorsed plans must not be altered without the prior written consent of the Responsible Authority.
3. Prior to the installation of any additional electronic gaming machines, the owner of the subject land must enter in and procure the registration on the title to the subject land of an agreement pursuant to S.173 of the Planning and Environment Act providing for:
   • (a) an annual contribution in the sum of $80,000.00 (the Annual Contribution);
   • (b) wherein the first $60,000 is to be distributed to the Langwarrin Community Project. In the event that the Langwarrin Community Project ceases to operate, these funds are to be distributed to like local community group(s) to the satisfaction of the Responsible Authority;
   • (c) plus the remaining $20,000 to be distributed to local community and sporting groups; and
   • (d) such contributions shall as necessary be subject to a pro-rata adjustment from time to time to reflect:
     • any change to government legislation or taxation, including the cessation of the supply of gaming machines by Tabcorp or Tattersalls in August 2012, leading to change in the number of gaming machines in use on the subject land; or
     • any other reduction in the number of gaming machines in use on the subject land; or
     • any other reason the land owner's share of gaming revenue derived from the use of gaming machines on the site is diminished.

Once annually where requested by the Responsible Authority, the owner of the land must provide written confirmation of the most recent Annual Contribution to the satisfaction of the Responsible Authority.

The permit holder must pay the reasonable costs of the Responsible Authority in relation to the preparation and registration of this Section 173 Agreement.

1. This permit will expire if the installation of the new electronic gaming machines is not completed within four (4) years of the date of this permit.

The Responsible Authority may extend the periods referred to if a request is made in writing before the permit expires, or within three (3) months afterwards.

APPENDIX B - QUOTATIONS FROM DECISION ON PROPOSED 16 ADDITIONAL EGMS BY VICTORIAN COMMISSION FOR GAMBLING REGULATION DATED 12 AUGUST 2008

1. Since the previous application, some $8m has been spent on the refurbishment - much more than was proposed. The works has been carried out to high standards (an inspection of the premises by the Commission confirms this). Unusually, the changes to the Sport Bar have lead to much greater patronage than is customary, with the nature of the clientele changing throughout the day and evening. The bistro has attracted more patronage than expected - some 3500 meals are served each week. There is even a portion of the bistro reserved for adults, a recognition that the massive usage of the hotel by family groups can make the atmosphere somewhat rowdy! The bistro also has a children's play area and is every popular during rainy days ...

1. Busiest times in the gaming room coincide with the peak times in the bistro (we will refer, in due course, to the evidence of patronage of the gaming room). Both in the written and oral evidence and in our inspections of the venue we have been impressed by the sheer volume of activity at the hotel.

1. Mr Halstead also provided evidence about what he believes is a large number of patrons who cannot be accommodated in the gaming room. He used the expression "in my opinion, 500 meals into only 44 gaming machines does not fit". Essentially this was the thrust of the applicant's case, and we do conclude that there is a demonstrated need for additional egms. It must be said that gaming plays a relatively minor role in the operations of this hotel, and this will not change greatly if the application is granted.

1. We now turn to consideration of the positive and negative features of this application.
2. In this case, the evidence as to the inadequate numbers of egms at the subject venue is, perhaps, stronger than in any application which has come before the Commission. It is plain that there is a small number of egms relative to the number of patrons who frequent the various parts of the hotel, and particularly the bistro. It must not be overlooked that the legitimate interests of patrons of an entertainment venue who may frequent that venue because of the variety of matters which it provides for entertainment, must be considered. Here, we are absolutely satisfied that there is a smaller number of egms than would be justified by the number of people wishing to use them.
3. In some of the comments which were included in the survey conducted on behalf of Tabcorp as to the hotel's performance, there were references to the refurbishment of the hotel since 2005 and the improvements which have been effected. It is plain that this applicant has made appropriate decisions as to this hotel. It is well run and appears to the Commission to provide a valuable service, particularly for its local residents. This enables us to say with greater confidence that if the applicant does proceed to the erection of a motel and conference facility across the road from the subject venue, it is likely to be well conducted and to be of considerable benefit to the community. We think that the points which were made in evidence about the undesirability of persons travelling a long distance after attending local functions, are well made. For patrons to drive even to the hotels and other accommodations in the centre of Frankston is undesirable if it can be avoided. We suspect that there will be a very high demand for the function facilities and that many of those who stay in the residential accommodation will be attending a function in the premises. We also suspect that it will have considerable value to commercial interests during the week.
4. We also note the applicant's offer of a significant additional payment to the Langwarrin Community Project. This applicant deserves credit for the manner in which it has supported a local, community based organisation which we have no doubt confers considerable value upon the community.
5. Another positive feature of the application is that the subject hotel is situated in the part of the Frankston municipality in which there are fewer disadvantaged people. In fact, the SEIFA index for Langwarrin is extremely high. It is true, however, that the hotel does attract a proportion of its patronage from areas in Frankston which are much more disadvantaged.
6. As to the disadvantages, we believe that the most important is the level of gaming expenditure within the City of Frankston. It is already over the Melbourne metropolitan average by some eight percent, and will be increased by a very small percentage if this application is granted.
7. We have considered the evidence of community opinion. Apart from the limitations of the telephone survey to which we have referred, we note also that there was an extremely small response rate when the Council advertised the survey in the local papers. Only one person requested a copy of the survey. In a number of the matters coming before the Commission, community involvement surrounding an application has been so significant that following such newspaper advertisements there has been a clamour from persons wishing to be involved.
8. The fact that there was not, is not perhaps so surprising. The situation at Romsey, for example, was very different from that which is affecting the residents of Langwarrin. In Romsey their only hotel was faced with the prospect of gaining egms and thus, in the opinion of residents, changing its character altogether. In the current case, the subject hotel already has gaming and the incremental effect of this proposal upon the community will, we suspect, be quite small.
9. Having weighed up the advantages and disadvantages associated with the proposal, we are of the view that the evidence is sufficient to enable us to be satisfied that the net economic and social impact of this proposal will not be detrimental. In reaching this conclusion we are much affected by the proposal for the motel. Whilst we consider that the evidence certainly establishes that the subject hotel has a need for additional egms at the present time, the fact that there is greater than average egm expenditure within Frankston would cause us to hesitate were if not for the strongly positive features of this application.

[1] Which came into effect on 17 September 2007.

[2] See for example paragraph 16 of the Commission as out in the Appendix B below, where the Commission accepted that there is a "...demonstrated need for additional EGMs".