Borazio v Melbourne City Council [2010] VSC 620

1 This is an application under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') for leave to appeal and, if leave be given, an appeal against a decision of the Victorian Civil and Administrative Tribunal ("VCAT") constituted by Senior Member Byard, given on 7 December 2009, in Melbourne City Council v Borazio.[1]

2 The decision of VCAT was given upon an application by the Melbourne City Council under s 114 of the Planning and Environment Act 1987 in respect of an alleged contravention by the applicant of the Melbourne Planning Scheme, namely the use of the applicant's premises at 22 Drewery Place, Melbourne as a "tavern" within the meaning of the Melbourne Planning Scheme without a planning permit required by the scheme.

3 The use of land in the relevant zone as a tavern, as defined, requires a permit under the planning scheme, but use as a restaurant, as defined, does not.

4 It was common ground that there was no planning permit to use the land as a tavern. The Tribunal's presently relevant findings and reasoning are set out in paragraphs 18-45 of the decision, as follows:

"18. The position of Mr Borazio is that his use of the land is as a restaurant, and not as a tavern. The position of the responsible authority, as explained by Ms Porritt on its behalf, is that the use of the land is as a tavern, and not as a restaurant. However, I do not accept that the use must necessarily be one or the other of those uses. It is quite possible for land to be used for more than one land use purpose under a planning scheme. Admittedly, activities that are ancillary to a single dominant use, are part of that use. Nevertheless, there can be situations where various activities constitute more than one land use where neither is ancillary to the other.

1. It follows from this that it is entirely possible for the use of this land to be as a restaurant and as a tavern. In those circumstances the restaurant use is lawful requiring no permit, but the tavern use is currently unlawful unless and until a planning permit is obtained.
2. Both "restaurant" and "tavern" are defined in the planning scheme. Land use terms are found in cl 74 of the planning scheme. The distinction between them has a degree of subtlety, and calls for some careful consideration. Indeed, there was some debate about the terms and meaning of these expressions at the beginning of the hearing. I understood consensus to be reached between myself and the two representatives of the parties on this point.
3. Amongst the reasons why some careful consideration is necessary is that both land uses can involve the provision of food and alcoholic drinks for consumption on the premises.
4. Both restaurant and tavern are varieties of a wider land use term namely "Food and drink premises". Food and drink premises are defined as follows:

Food and drink premises

Land used to prepare and sell food and drink for immediate consumption on, or off, the premises.

1. Food and drink premises is a subset of a yet wider land use of "Retail premises". That land use term is defined as follows:

Retail premises

Land used to:

(a) sell goods by retail, or by retail and wholesale;

(b) sell services; or

(c) hire goods.

24. The land use "Restaurant" is defined as follows:

Restaurant

Land used to prepare and sell food and drink, for consumption on the premises. It may include:

(a) entertainment and dancing; and

(b) the supply of liquor other than in association with the serving of meals provided that tables and chairs are set out for at least 75% of patrons present on the premises at any one time.

It does not include the sale of packaged liquor.

1. That is the defined meaning for the purpose of the planning scheme. I think that in ordinary English restaurant involves the concept of serving meals with or without liquor. Although this definition refers to the word "meals" the essential definition is the first sentence quoted above which refers to the sale of "food and drink", rather than necessarily "meals".
2. The essence is the sale of food and drink for consumption on the premises. However, the definition goes on to refer to some other things that might be described as optional extras. The land use does not cease to be restaurant because of the provision of entertainment or dancing. They are specifically included in the definition. However, entertainment and dancing are not necessary, and a land use can just as well be restaurant without either of them.
3. Under this definition, there can be a further optional extra whereby liquor can be supplied without meals providing the ratio of tables and chairs to patrons is observed.
4. The gist of the land use is the preparation and sale of food and drink for consumption on the premises.

29. The definition of tavern is:

Tavern

Land used to sell liquor for consumption on the premises. It may include accommodation, food for consumption on the premises, entertainment, dancing, amusement machines, and gambling.

1. Here the essential element is sale of liquor for consumption on the premises as opposed to the restaurant with its preparation and sale of food and drink for consumption on the premises.
2. Tavern also has its optional extras and these include food for consumption on the premises along with entertainment and dancing. These extras can be included and their presence will not exclude the concept of tavern. However, they are not essential to the concept and a place can be just as much a tavern without any of them.
3. A place of business that is simply a bar with no food would be a tavern but not a restaurant. Nevertheless, a tavern may have food for consumption on the premises as with a restaurant. Restaurant can sell liquor without meals providing the formula is met. The distinction between the two concepts lies in the meaning of the first sentences in each of the respective definitions.
4. The evidence called on behalf of the responsible authority, standing alone, would be indicative of tavern rather than restaurant. It indicates the presence of significant numbers of patrons who are drinking alcohol but with little or no food at all, and with hardly any evidence of proper meals eaten at tables with knives and forks as opposed to snacks and nibbles eaten with the fingers. Even snacks and nibbles are rare enough. It is admitted that there is a proper commercial kitchen, but it was uninhabited during most of the inspections and was not in use. Photographs so [scil. show] it cleaned up as if not being used or as having been cleaned up after use.
5. Most of the inspections were late at night after 10 pm and in proximity to the hours of 10.30 pm to 1.00 am the following day.
6. There were two inspections at lunchtime. Again, there was no great evidence of meals or diners, although three people in chef or kitchen attire were observed.
7. It is evident from their evidence that the planning enforcement officers who conducted inspections on behalf of the responsible authority concentrated on patrons drinking and the absence of eating, and did not pay great attention to the stocks of food available on the premises, available [sic] to kitchen staff or to the activities of kitchen staff when they were observed.
8. There was little or no evidence as to discussions with or admissions by Mr Borazio or managers conducting the business on his behalf when he was absent.
9. Judging on the evidence called on behalf of the responsible authority, and relying on that evidence alone, I would conclude that the use of the land was as a tavern and not a restaurant. The almost minimal presence of food, and that almost never being in the form of substantial meals, together with the condition of the kitchen at the time of the late night inspections indicate significant socialising and drinking but only very minor and ancillary eating.
10. However, other evidence was given by and on behalf of Mr Borazio. This includes photographs and other documents indicating the presence of significant amounts of food consistent with the preparation of meals and with the consumption of food on the premises being a significant part of the land use. Mr Borazio also relies on other indications of food available for consumption on premises including specials written up on a mirror and menus.
11. The evidence called on behalf of the responsible authority includes only two visits at lunchtime and none at all during what would normally be peak time for dinner at a restaurant namely a period of approximately 6.30 pm to 9.30 pm. I accept Mr Borazio's evidence that 7 pm to 9.30 pm or thereabouts is peak at his place with diners finishing up their meals at around 9.30 pm to 10 pm or perhaps onto 10.30 pm. According to him, kitchen staff get busy on cleaning up after orders for meals recede. The possibility of ordering food continues for a while, even during cleaning up, although the range available becomes limited. Nevertheless, on all the evidence from both sides I find that activities later at night changeover from the preparation and provision of meals to [scil. for] consumption on the premises to the provision and consumption of liquor on the premises with this later [scil. latter] being predominant for the last 2 ½ hours or thereabouts, leading up to closing time at 1 am.
12. I accept that the definition of restaurant does not require patrons to leave immediately upon finishing their food. Indeed, the perhaps somewhat loose definition in relation to the 75% ratio means that a restaurant can operate simply as a bar in relation to a proportion of its patrons who need not eat food at all.
13. While I accept that, I nevertheless find, on the evidence in this case, that for a significant period in the order of 2 to 2 ½ hours late at night and in the first hour of the morning the premises and the activities thereon do not meet or satisfy the definition of restaurant, but do satisfy the definition of tavern.
14. If patrons carried over drinks and coffee after eating for a moderate period, that would still come within restaurant. On the evidence in this case, and my findings in relation to it, I ask myself whether this holding over after food supply ceases or is drastically curtailed for as long as 2 or 2 ½ hours, as compared with a carry over period of 30 or 45 minutes, does not in fact constitute a second land use as tavern. I consider the "tavern" period to be too considerable to be regarded as a mere incidental of the restaurant use.
15. I do not think that the evidence called by the responsible authority is sufficient to prove on the basis of the balance of probabilities having regard to the seriousness of the consequences that might flow, that there is no restaurant here. On the other hand, the vital question is not whether this is a restaurant, but whether the business is or includes a tavern. I do not think that the tavern activities for so substantial a period as 11 pm to 1 am is merely an ancillary or subsidiary part of the restaurant. I think it constitutes a separate use as a tavern. As such, it requires planning permission, and conduct of the business in its presence [scil. present] style, in my opinion, requires a planning permit for use as a tavern. In the absence of such a permit, the current use as a tavern is a contravention of the planning scheme warranting the making of enforcement orders.
16. I propose to make an enforcement order that the use of the premises as a tavern cease after 30 days from the date of the order. This affords Mr Borazio a breathing space to decide whether to modify his activities to stay within the definition of restaurant without also straying into use as a tavern, or whether he will seek permission for use of the premises as a tavern."

5 In paragraph 18 of its decision set out above VCAT said that:

"It is quite possible for land to be used for more than one land use purpose under a planning scheme."

6 That is plainly correct. Clause 64.01 of the Melbourne Planning Scheme provides:

"If land is used for more than one use and one is not ancillary to the other, each use must comply with this scheme."

7 The applicant's proposed notice of appeal as amended sets forth the following grounds upon which the applicant relies:

"1. The Tribunal erred in law in misdirecting itself as to: -

(1) the requirements and elements of a restaurant under clause 74 of the Melbourne Planning Scheme ... in characterising the use of the land under the Planning Scheme

(2) the requirements and elements of a tavern under clause 74 of the Melbourne Planning Scheme ... in characterising the use of the land under the Planning Scheme.

(3) the correct characterisation of the (use of the) land under the Melbourne Planning Scheme -

(a) erred in law in finding that for a significant period in the order of 2 to 2 ½ hours late at night and in the first hour of the morning the premises and the activities thereon do not meet or satisfy the definition of restaurant, but do satisfy the definition of tavern.

(i) if patrons 'carried over' drinks and coffee after eating for a moderate period, that would still come within restaurant; but

(ii) a 'holding over' after food supply ceases or is drastically curtailed for as long as 2 or 2 ½ hours, as compared with a carry over period of 30 or 45 minutes, constitutes a second land use as a tavern.

(c) erred in law in finding, and identifying, the period in the conduct of the business on the premises between 11.15 pm and 1 am, alternatively between 10.30 pm and 1 am to be 'the tavern period', to be too considerable to be regarded as a mere incidental of the restaurant use.

(d) erred in law in identifying the business conducted on the premises between 10.30 pm and 1 am to constitute 'tavern activities'.

(e) erred in law in finding that the activities conducted on the premises between 11.15 pm and 1 am, alternatively between 10.30 pm and 1 am to:-

(ii) be 'tavern activities' for a substantial period;

(iii) not be an ancillary or subsidiary part of the restaurant;

(iv) constitute a separate use of the premises as a tavern;

(v) be a contravention of the planning scheme, warranting the making of enforcement orders;

(vi) require planning permission, and a planning permit for use as a tavern;

(vii) changeover from the preparation and provision of meals for consumption on the premises to the provision and consumption of liquor on the premises with this later [sic] being predominant for the last 2 ½ hours or thereabouts, leading up to closing time at 1 am.

(f) erred in law in finding that the land use included use as a tavern; and

(g) erred in law in finding a tavern business is conducted from the premises;

(h) erred in law in finding that the vital question is not whether this is a restaurant, but whether the business is or includes a tavern.

1. The Tribunal erred in law in misdirecting itself as to the test to be applied in determining the use of the land as a: -

1. The Tribunal erred in law in determining the use of the land as a: -

1. The VCAT member erred in law in finding that it is entirely possible for the use of the land to be as a restaurant and as a tavern.
2. The VCAT Member erred in law in failing to give Judgment for the Appellant."

8 The proposed notice of appeal goes on to state the questions of law upon which the appeal is proposed to be brought as follows:

"6. Did the Tribunal, as a matter of law

(1) misdirect itself: -

(a) as to the requirements and elements of a restaurant under clause 74 of the Planning Scheme in characterising the use of the land under the Planning Scheme;

(b) as to the requirements and elements of a tavern under clause 74 of the Melbourne Planning Scheme ... in characterising the use of the land under the Planning Scheme;

(c) as to the correct characterisation of (the use of) the land under the Melbourne Planning Scheme;

(d) as to the test to be applied in determining the use of the land as a: -

(2) err in finding that it is entirely possible for the use of the land to be as a restaurant and as a tavern.

(3) err in failing to give Judgment for the Appellant."

9 There was no dispute between the parties as to the principles applicable to an application for a grant of leave to appeal under s 148 of the VCAT Act.[2]

10 For the most part, the grounds set out in the proposed notice of appeal do not raise any question of law as distinct from questions of fact. The proposed notice also includes considerable repetition and numerous conclusory assertions not amounting to "grounds" of any kind.

11 In any event, the applicant has not made out any error of law in the Tribunal's decision.

12 The parties filed detailed written outlines of submission in advance of the hearing. At the hearing the applicant's counsel concentrated on paragraph 22 of his outline which reads:

"It is submitted the correct approach should have been for the Tribunal to determine:

(a) Whether the premises were being used to prepare and sell food and drink for consumption on the premises (as contended by Mr Borazio, and as the evidence disclosed) or for the sale of liquor for consumption on the premises;

(b) If the answer to that question was 'yes' then, it is submitted, that was the end of the matter (see, for example, inter alia, paragraphs 24 to 31 of the Judgment ...) and, having regard to the definitions of 'Tavern' and 'Restaurant' in the Melbourne Planning Scheme, the Tribunal was not then entitled to go off, as it did, and undertake the analysis, and make the findings, it did at, inter alia, paragraphs 42 and 43 of the Judgment, more particularly in the context of, and having regard to, the observation at paragraph 41 of the judgment, and in its disregard of the other criteria of 'restaurant' use articulated as set out in Clause 74 of the Melbourne Planning Scheme;

(c) further, and alternatively, if the Tribunal determined that, in the course of being used for the preparation and sale of food and drink for consumption on the premises, the evidence disclosed that liquor was being supplied other than in association with the serving of meals, the issue for the determination of the Tribunal then became, and was, whether, on those such occasions / at those times, there were tables and chairs set out for at least 75% of the patrons on the premises at any one time;

(c) [sic] if the answer to this last question was 'yes', the premises continued to be used as a restaurant on those such occasions/at those such times;

(d) if the answer to the question was 'no', then the premises, at those such points in time/on those such occasions, were not being used as a restaurant, but for some other use (which may or may not have required a permit, depending on the identified use at those times/on those occasions)."

13 This submission of the applicant was crystallised by the applicant's counsel at the hearing during his reply. He submitted that once it is accepted that land in question was used as a restaurant within the meaning of the planning scheme for most of the day up until a particular point, then, provided only that the 75% requirement is met, the land must be held to remain a restaurant for the rest of the day and evening unless there is a deliberate and complete or near complete shutting down of the capacity to serve meals at or about that point.

14 In other words, the applicant says "once a restaurant, always a restaurant", unless there is a bright line change during the day or evening. I do not accept that submission. Each case is to be considered on its own merits. Here the Tribunal considered a great deal of evidence relating to the way in which these particular premises were regularly used, and arrived at conclusions that were clearly open to it. And, as the Tribunal said, the question was not whether the premises were being used as a restaurant, but whether they were being used as a tavern, subject only to the question whether any use other than restaurant use was merely ancillary to restaurant use.

15 The issue does not necessarily turn on the number of hours per day that the relevant premises are used in particular ways. Subject to the ancillary use provision, land use will not be or remain solely a restaurant use unless the use of the land falls within the definition of "restaurant" and there is no other relevant use. That is to say, if premises used for a restaurant are being used for a particular further purpose, and use for that particular purpose would generally require a permit, a permit will indeed be required unless the further use is merely ancillary. The Tribunal referred to the provisions of the planning scheme to this effect. The plaintiff has not in his submissions put forward anything to justify the suggestion in the proposed notice of appeal that the Tribunal misunderstood or misinterpreted the notion of "ancillary use" for the purposes of the planning scheme.

16 Counsel for the plaintiff placed some emphasis on the abovementioned 75% provision. However that provision is not part of the definition of "tavern", but rather is part of the definition of "restaurant". In any event, as the Tribunal said, the provision merely represents an "optional extra" for a restaurant. Because of the provision, use of land as a restaurant may "include" the supply of liquor other than in association with the serving of meals provided that the specified ratio of tables and chairs to patrons is observed. However, to be or remain a "restaurant", the land must still answer the description in the first part of the definition, namely "[l]and used to prepare and sell food and drink, for consumption on the premises". Further, as Francis Bennion says[3]:

"Whatever meaning may be expressly attached to a term, it is important to realise that its dictionary meaning is likely to exercise some influence over the way the definition will be understood by the court. It is impossible to cancel the ingrained emotion of a word merely by an announcement."[4]

Hence it was appropriate for the Tribunal to indicate that the extended part of the definition of restaurant means that a restaurant can operate simply as a bar in relation to a "proportion"[5], as distinct from all or most, of its patrons. But, having duly found that the provision and consumption of liquor on the premises was "predominant"[6] for some 2½ hours until closing time of 1.00 am on a regular basis, the Tribunal was entitled to determine that the use of the premises during that period was as a "tavern", as defined, and was not merely ancillary to restaurant use.

17 In that regard, it is useful to notice what was said by the Tribunal in Thomas Anderson Design Pty Ltd v Mornington Peninsula Shire Council[7] in relation to the difference between a restaurant and a tavern. In particular, the Tribunal said:[8]

"The proposed change of use represents a fundamental change to the activities conducted on the land and in the patrons who attend the premises. The current activities are focused on the preparation and consumption of food where, in the majority of cases, liquor would be consumed as an incidental part of having a meal. Patrons attending the premises for the sole purpose of consuming liquor are likely to be in the minority. By its very nature, a tavern is the complete reverse of this. The majority of patrons would be attending for the purpose of consuming liquor rather than a meal. This raises issues of patron behaviour and also of expectations in respect of the form of entertainment provided on the premises. In our view, by its very nature, a venue which caters primarily for the consumption of liquor carries with it the potential for the generation of noise and disturbance that would adversely effect the adjoining properties and surrounding area."

"For example, the nature of a restaurant is patrons staying at a venue and enjoying a meal with perhaps tables turning over twice, whereas a tavern may have people arriving and leaving more frequently and/or all arriving and leaving at the same time."

19 It was a repeated theme of the submissions made by counsel for the applicant that it was an error for the Tribunal to impose, in effect, a requirement on premises' managers to "put the clock" on diners from a particular point of time, here about 9:30pm, and require them to leave within no more than 45 minutes on pain of having the premises redesignated as a tavern instead of a restaurant. That is a mistaken analysis of the Tribunal's decision. It is not a question of what an individual diner does but rather, what is the proper characterisation of the purpose of the use of the premises overall, taking into account all persons present on the premises during the period or periods in question. The question of how long, in general, diners stay on the premises after they have finished their meal and the question whether they consume alcoholic beverages during that time are not irrelevant for the purposes of characterising the purpose for which the premises are used, but this aspect is to be considered along with the numbers and activities of non-diners and all other relevant considerations. VCAT made no error of law in this regard, or at all.

20 So far as the question of leave to appeal is concerned, in deference to VCAT's view that there was a need for close attention to the subtle distinction between "restaurant" and "tavern", and because there is, as far as I know, no previous Supreme Court decision relating to that distinction, I am prepared to grant leave to appeal to the applicant. But in my view, there was clearly no error of law in the decision of the Tribunal and for the reasons set out above the appeal will be dismissed.

[1] [2009] VCAT 2524.

[2] See Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331.

[3] Francis Bennion, Statutory Interpretation, 3rd edition, 1997, p 434.

[4] Citing Richard Robinson, Definition (1952), p 77.

[7] [2009] VCAT 2325, particularly at paragraphs 27-31.

[8] [2009] VCAT 2325 at [27].