Bright Newbay Pty Ltd v Bayside CC [2010] VCAT 1347

Bright Newbay Pty Ltd v Bayside CC [2010] VCAT 1347 - VCAT 2010 case summary — Zoe

[31]

Bright Newbay Pty Ltd purchased the New Bay Hotel in 2007 and is seeking planning and gaming permission to undertake buildings and works to improve the facilities offered at the hotel, which will include offering electronic gaming machines (EGMs) within the hotel for entertainment.
The hotel operates under a general liquor licence, that allows 342 patrons on the premises between the hours of 10.00am and 11.30pm Sundays[1], on Good Friday between 12.00pm and 11.00pm, on Anzac Day (not being a Sunday) between 12.00pm and 1.00am the following day, and all other days (e.g. Monday to Saturday except for those days listed above) between 7.00am and 1.00am the following morning.
It is proposed to refurbish the existing hotel to provide a relaunched bistro area, a sports bar, a new café and lounge area, new function rooms and a new gaming/TAB area. These internal alterations will result in various minor buildings and works to the Bay and New Street façades of the existing hotel building, including frameless electronic glass sliding doors as part of a new entry to the hotel in the Bay street façade that will include an internal airlock and an entry canopy to match the existing canopy on the New Street façade. The proposal also includes the rear bistro area being converted into a gaming room that will contain 50 EGMs.
The planning application was lodged with the Council in August 2009. It was publicly advertised and the Council received 16 objections that raised amenity and parking concerns; the hotel's location within a strip shopping centre; the risk of problem gambling and the appropriateness of new gaming machines in Bayside and the proximity to a number of educational facilities. On 7 December 2009 the Council resolved to refuse the permit application because a net community and social benefit had not been demonstrated to the wider Bayside community; the proposal was detrimental to the community's wellbeing; the location was not compatible with adjoining and nearby land uses within a strip shopping centre; and it failed to meet the tests and requirements of the Bayside Electronic Gaming Machines Policy 2008.
On 15 December 2009, the Council resolved that the application to the Victorian Commission for Gambling Regulation (the Commission) to install 50 EGMs at the New Bay Hotel had not demonstrated there would be a net community benefit. It made a submission to the Commission in these terms in respect of the application to approve the premises as suitable for gaming machines. The Council highlighted concerns regarding the increased gaming machine density particularly in the suburb of Brighton; the potential for an increase in problem gambling; the impact on the neighbourhood character and residents' perception of their community; the diversion of discretionary expenditure away from other businesses; the location of the venue close to the schools and other community facilities; and the impact on residential amenity.
On 1 April 2010, following a full hearing, the Commission determined to approve the New Bay Hotel as a suitable venue for gaming with 50 EGMs. The Commission stated that the issues of detriment raised by the Council did not outweigh the benefits raised by the applicant and found that the net economic and social impact of the approval would not be detrimental to the wellbeing of community.

[34]

Clause 52.28-4 of the planning scheme provides that the installation or use of a gaming machine(s) is prohibited in a strip shopping centre if the schedule provides that a gaming machine is prohibited in all strip shopping centres on land covered by the planning scheme, which this schedule does.[3] The remainder of the clause then characterises a strip shopping centre as being in an area that meets all of four specified requirements.
The parties agreed that the first (business zoning), second (at least two separate buildings on at least two separate, adjoining lots) and fourth (in an area in which a significant proportion of the lots abut a road accessible to the public) of these requirements were satisfied by the subject land. The dispute before us centred on whether the area was one "in which a significant proportion of the buildings are shops". We were taken to a number of Tribunal decisions bearing on this question, including Prizac.
Both parties presented planning evidence as to the appearance, function and characterisation of the buildings forming part of this neighbourhood centre, as delineated by the Business 5 Zone. We also undertook a detailed inspection of the centre midway in the hearing.
We consider that of the 18 buildings comprising the neighbourhood centre, only two are used as shops - a café occupying two tenancies on the south east corner of the intersection and a fireplace sales outlet (albeit connected with a trade supplies component to the rear).[4] The remainder of the buildings are developed and used as offices, service industries, a function centre, two dwellings and other miscellaneous uses that are not in our assessment regarded as shops under the planning scheme definition in clause 74 or on a plain view.
Having regard to the overall number of shops including their position, scale and functioning, we find that they cannot reasonably be regarded as constituting a "significant proportion" of the buildings within this centre, even if this term could be satisfied by less than a majority of buildings being used as such.[5] Instead, we find that they form a minor proportion of the buildings within this centre.
Even when putting the determinative phrase to one side, we strongly doubt that an ordinary person would regard this centre as having the character and function of a strip shopping centre, rather than as a small commercial centre with an office/service focus. This position is reinforced by the relatively light level of pedestrian activity observed within the area by all witnesses and confirmed on our inspection.
We have considered the findings of the Tribunal in Shimmerbridge Pty Ltd v Bayside CC[6] in which Member Komesaroff (as she was then) held that it may be reasonable to have regard to whether certain buildings had been developed to be capable of use as a shop/s. We distinguish this case on its facts, since we consider that this approach is not generally warranted where there is an almost 100% occupancy rate within the centre such that the use of each building is readily apparent, as is the case before us.
In this regard we note that the test in this clause is whether a significant proportion of the buildings "are" shops, which to our mind denotes an intention that this assessment is to be made 'on the ground' at the time of considering an application for the installation and use of gaming machines at a particular premises. Another major distinguishing fact is that the use of land as a shop in the Business 5 Zone would be prohibited, such that any building not currently being used as a shop could not be converted over to such use unless that land was rezoned.
Mr Canavan also submitted that such a finding would be generally consistent with what he considered the intent behind the prohibition on gaming within strip shopping centres. He referred to this as policy to prevent gaming from establishing in centres serving a day-to-day convenience role, whereby exposure to gaming opportunities may be heightened and a decision to gamble might be made more impulsively. We have always understood this to be one plank underlying the policy in clause 52.28, although it is not expressly borne out by the wording of the provision or the documentation during the course of the clause's evolution. In any event, for the reasons outlined below, we do not consider that this neighbourhood centre plays such a role and accordingly, we are not convinced that a gaming component could not be suitably established within it.
It follows that the application before us would not contravene the requirements of clause 52.28-4.

[36]

The Council expressed concern that there are already two gaming venues in the suburb of Brighton, and this proposal will lead to an unacceptable concentration. The fact that there are other gaming venues nearby does not preclude the introduction of new venues. There is no minimum separation distance required between venues, nevertheless we note that the New Bay and Marine Hotels (being the closer venue) will be separated by about one kilometre.
The Council described this proposal as creating a large scale gaming venue in the anchor building of this neighbourhood centre. Having inspected this centre, we think describing the hotel as the anchor is debatable, particularly given our finding in the previous section that this centre has the character of a small commercial centre with an office/service focus. Mr Iles suggested the gaming machines component of the hotel should be innocuous, but we do not agree. There is no such requirement in either the planning or gaming legislation. We are of the view the appropriate way to consider the appropriateness of the New Bay Hotel as a gaming venue is to look at the scale of the use and the layout of the use.
In regard to scale, this is essentially a retrofit of an existing building with a mix of activities. The measurement of the floor area occupied by gaming machines per se is not a good guide of the appropriateness of the premises. In this case, it is acknowledged that the floor area for the gaming is lower than the 25% that used to be a requirement in the planning scheme and that is referenced in the Council's 2010 policy (a matter we will comment further on shortly). The number of machines (50) is the same as the Marine Hotel, the only difference is the amount of floor space dedicated to the provision of the machines. We have inspected both Milanos and the Marine Hotel in Brighton (the other two existing venues). We note these premises have variations in the gaming floor area that creates differing atmospheres at each. However, at the end of the day, the gaming area is but one component of a range of services and facilities offered within each of the premises. This proposal is no different.
In regard to the layout of the premises, we agree with the concern expressed by the Council about the direct accessibility of the gaming room. This is to be contrasted with the Marine Hotel where the gaming room is essentially "internal" to the building. Ms Peterson's evidence was that visibility to the street is not of concern since the gaming room sits behind a smoker's area and Mr Twite's evidence is that there were no significant "ant trails" past this site along New Street such as could be expected along a regular pedestrian route of passage, particularly comprising school children. On questioning by the Tribunal, Ms Peterson agreed that it would be desirable to limit direct access from the street to the gaming room, hence we find that the doorway into the gaming room from New Street should be closed and replaced with a wall. Ms Peterson also indicated a preference for there to be as much separation as possible (having regard to the constraints associated with the layout of the existing premises) between the gaming room and the smoking room. As such, she suggested, and we agree, that closing the door between New Street and the gaming room will have the added benefit of requiring patrons to move through the café to access the smoking room to encourage a greater break in EGM play. Ms Peterson also suggested a change to the wing wall between the proposed cafe and gaming room so that it runs in a east-west direction rather than partly north-south and partly east-west, and we support this change. Aside from these changes, we consider that the layout of the premises and the range of activities offered within it would otherwise be suitable for the introduction and use of 50 EGMs.

[38]

As far as the 2008 policy is concerned, we find it is relevant as it has been adopted by the Council. We agree with the Tribunal's findings in CK & Sons that it should be given little weight because it is not contained in the planning scheme as either a reference of incorporated document; and it has not been through a public consultation or review process, such as a planning scheme amendment process. Further, it has for all intents and purposes been replaced by the 2010 gaming policy that has been adopted by the Council and forwarded to the Minister for Planning for authorisation to form part of a planning scheme amendment.
In regard to the 2010 policy, again we find that it is relevant because it is a Council adopted policy such that it represents the Council's views on the appropriateness of gaming within its own municipality and reflects its current strategic analysis. There are aspects of the policy that we consider are appropriate such as its intent to provide further detail on potentially appropriate (or inappropriate) locations and premises for gaming machines given clause 52.28 is fairly generic and lacking in specific guidance on how to assess this. Clearly, a range of factors will be relevant in considering the appropriateness of a location and, to this extent, factors such as the density of machines and the zoning of the land as well as how close it is to a sensitive use appear to us to be suitable considerations in determining the appropriateness of a location and a premises.
The Council submitted that the absence of a gaming policy in its local section of the planning scheme now essentially means that this 2010 policy should be given greater consideration as it is not contrary to and does not compete with any existing planning policies in the planning scheme. We find this argument flawed for two reasons. Firstly, this argument can only be entertained if there is inherent legitimacy in the policy making process; and secondly, if there are problems with the wording of the policy as drafted, it brings into question the weight that should be given to the policy.
We see a number of potential problems associated with the 2010 policy, including:
- The policy has not been the subject of any consultation with the community. The consultation that has occurred was in regard to the 2008 policy and is, in our opinion, limited. It consisted of three focus group sessions with 15 representatives and did not include a fully representative participation on behalf of the gaming industry[7]. It also included "18 submissions" and we think this description is a little generous given the 18 included two comments in a Leader newspaper and four phone calls[8].
- One of the objectives of the policy is "to ensure that gaming venues achieve a net community benefit". In our opinion, this objective is contrary to clause 11 of the State Planning Policy Framework, which contains an endeavour to integrate the range of policies relevant to the issues to be determined and to balance conflicting objectives within those policies in favour of net community benefit and sustainable development. We agree with the findings in Prizac Investments Pty Ltd v Maribyrnong CC[9] and CK & Sons Pty Ltd v Bayside CC[10] that clause 11 does not set out a particular test, unlike the provisions contained within section 3.3.7 of the Gambling Regulation Act 2003 - that the net economic and social impact will not be detrimental to the wellbeing of the community of the municipal district in which the premises are located. We agree with Prizac that there are different roles and responsibilities under the gaming application and the planning application. It appears to us that this 2010 policy objective may be contrary to the gaming legislation that mandates no net community detriment (as opposed to achieving a net community benefit). Ultimately, we agree with the findings in Prizac and CK & Sons that a proposal does not necessarily fail if an applicant cannot demonstrate a net benefit, particularly in a case where there may be a neutral outcome. At the same time, the objective to balance policies in favour of net community benefit where possible is generally relevant to planning permit applications for the use of land for gaming.
- The policy states that gaming machines should be located more than 800 m from sensitive community facilities including schools, childcare centres, libraries, medical centres, etc. We have some concern about the appropriateness of the inclusion of this threshold distance. Ms Peterson provided a map showing the practical impact of this distance, which when applied to just the schools demonstrate that much of the municipality could not incorporate gaming machines. When other sensitive uses (as found in the Melways) are added in to the map, there is little of the municipality remaining available for gaming machines. We note that Mr Iles acknowledged that this aspect of the policy "may be challenged as it might not be helpful". Mr Iles' opinion was that the threshold distances may be halved. In our opinion, the incorporation of a distance sets an expectation for both Council and the community that may be unreasonable. We note that other gaming policies that exist in local sections of other planning schemes at present tend to include more generic references to have regard to the location of sensitive uses and pedestrian movement, which may be a more appropriate approach. At a minimum, causal linkages between sensitive uses and gaming venues should be investigated further through research, including the sensitivity of uses such as a library, medical centre and the like.
- The Council relied upon the gaming policies contained in the Hume and Greater Bendigo Planning Schemes in support of its policy's inclusion of a requirement to achieve a net community benefit. However, the content of the gaming policies are likely to vary depending upon the socioeconomic profile of the municipal district. For example, Ms Peterson pointed out that the socioeconomic profiles of the municipalities of Hume and Greater Bendigo vary to that of Bayside, hence the content of the policy in general terms would not be readily transferable to a policy that would be geared towards the socioeconomic profile of the municipal district of Bayside. Further, Ms Porritt highlighted that these policies were incorporated into their planning schemes prior to the Prizac and CK & Sons decisions. As such, it seems to us that there should be a review of the existing gaming policies within all planning schemes to ensure that a requirement to achieve a net community benefit is modified to accord with clause 11 and/or the Gambling Regulation Act 2003.

[39]

The key issue of concern to the Council is the accessibility of gaming machines within its community, which is linked to a concern about the opportunity for "convenience gambling". As a result, there were three factors that the Council emphasised in expressing its view that this hotel is not an appropriate location for gaming. They are:
- This neighbourhood centre serves a role of providing for the daily needs of the surrounding community;
- There is pedestrian traffic in the vicinity of this site; and
- It is located close to sensitive uses, particularly schools.
We are not persuaded that this neighbourhood centre focuses on providing for the daily or general convenience needs of the surrounding community. At present, the centre contains (amongst others) a fireplace shop, an art gallery and café, a motor repair business and a range of commercial premises including a large proportion of offices. We are not persuaded by the submissions and evidence that these uses form part of the day-to-day convenience needs of residents. Rather, we agree with Mr Twite that these uses are more likely to be a destination visit for a particular reason - i.e. to purchase a fireplace or a piece of artwork, to meet with a service provider or to have a car serviced. These are goods and services that, in our view, are not daily purchased goods or regular services for most people.
Whilst there is some pedestrian movement along Bay and New Streets, we are persuaded by Mr Twite's evidence that the hotel is not located on an obvious "ant trail". The closest school is Firbank Grammer School, which is located approximately 270 m to the southeast. There was no evidence provided of any regular pedestrian activity associated with the drop-off and pick-up of school students in proximity to this hotel. We note that the Marine Hotel already provides exposure to gaming for sensitive uses in this area including the schools. We find the interviews with the two school principals in this area did not reveal any known problems of gambling amongst their students at present. Ms Colmer and Ms Peterson both gave evidence that there is no causal link associated with underage gambling as a result of the proximity of gambling venues to schools.[11]

[53]

We acknowledge that there is a risk of problem gambling both within this municipality and generally across Victoria whenever additional EGMs are proposed to be introduced in an area. However none of the factors prevalent for problem gambling are evident in the patron profile as identified by Ms Peterson:
- Very high SEIFA index scores;
- Significantly higher than average weekly household income, with a much lower number of low income earners;
- Significantly higher disposable income;
- A well educated community;
- A low level of single parent families;
- Low levels of renting, particularly in social housing;
- High level of home ownership;
- High JSS[19] ranking;
- Low unemployment; and
- Excellent ability to raise emergency funds.
In combination with existing access and the overall density of machines, we do not regard this as a factor sufficient to counterbalance the other positive aspects of the approval.
The operator of this gaming venue has made a commitment to provide community donations on a yearly basis in the order of $50,000 to be distributed to local community groups by an appropriate fund.
Ms Peterson has suggested that a Gaming Management Policy should be prepared prior to the commencement of the operation of the gaming machines as a condition of the planning permit. She also pointed out that the proposal increases employment opportunities and provides a mix of hotel activities.
Importantly, the gaming operator is happy to limit the start of the gaming room to 11.00am and to close the premises at 1.00 am on weekdays and Saturdays and 11.30pm on Sundays, reflecting the hours of approval under the liquor licence for the premises. Ms Peterson pointed out that this would create a break in the opportunity to undertake gaming at this premises of at least 10 hours, which is well in excess of the recommended break of at least 4 hours.
We are persuaded by Ms Peterson's evidence that:
- the proposal will result in a positive social impact on the local community as gaming is a legitimate recreational and entertainment activity;
- donations and contributions will be made to the local community through a Community Fund;
- the risk of a potential increase in problem gambling is limited in part by the lack of any signs of any significant social or economic disadvantage in the area of the likely patron catchment;
- a venue specific Responsible Gaming Manual will be put in place to ensure the venue is appropriately equipped to deal with problem gambling; and
- whilst there is a general feeling across Victoria of concern about gaming, there is no evidence that this venue will have a negative impact on that community.
Hence, we agree with the findings of the Commission that the issues of detriment raised by the Council do not outweigh the benefits raised by the applicant.
Our conclusion, therefore, is that there will be no net economic or social detriment to the wellbeing of the community of the municipal district in which the premises is located.

At a glance

Court

Decision date

Before

Source

Judgment (102 paragraphs)

Bright Newbay Pty Ltd v Bayside CC [2010] VCAT 1347 (11 August 2010)

Bright Newbay Pty Ltd v Bayside CC [2010] VCAT 1347 (11 August 2010)

Parties