Calardu Warrawong (Home Starters) Pty Limited v Wollongong City Council and Others

THIRD RESPONDENT Jason Stanley McCurry

FOURTH RESPONDENT Bradley Raymond McCurry

KEY ISSUES: Development Consent :- validity of development consent; use as "shop" in tourist area; correct calculation of carparking requirements; possible existing use rights; use of s.25B order

Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Land and Environment Court Act 1979 Wollongong Local Environmental Plan 1990

Bruce v Cole and Others (1998) 45 NSWLR 163 CASES CITED: Clark & Davis v Wollongong City Council & Others (No.2) [2008] NSWLEC 226 Mid Western Community Action Group Incorporated v Mid-Western Regional Council & Anor (No.2) [2008] NSWLEC 143 Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd and Others (1996) 91 LGERA 31

APPLICANT Mr C McEwen, SC SOLICITORS Gadens

LEGAL REPRESENTATIVES: FIRST RESPONDENT Submitting appearance

SECOND, THIRD AND FOURTH RESPONDENTS Mr A Pickles SOLICITORS PricewaterhouseCoopers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40516 of 2008 Calardu Warrawong (Home Starters) Pty Limited v Wollongong City Council and Others

JUDGMENT Introduction 1 His Honour: The three McCurry Respondents secured from the Respondent Council a consent for the "construction of a building comprising one bulky goods retail outlet for use as a boating, fishing and camping store and one shop for use as a Domino's pizza Shop with associated signage [and] parking for 19 vehicles" on land at 115 King Street, Warrawong (Exhibit A1, Tab 46). 2 The Applicant in these proceedings is a Harvey Norman company with retail interests in the vicinity of the subject site (at 119-121 King Street). Harvey Norman lodged an objection (Exhibit A1, Tab 22) to the McCurry development application and now challenges the consent. The consent was granted on or about 28 February 2008, it was advertised in "The Advertiser" on 12 March 2008 (Exhibit A1, Tab 48), and these proceedings were commenced on 27 May 2008, within the three month period stipulated by s.101 of the Environmental Planning & Assessment Act 1979. 3 The Council has filed a submitting appearance, save as to costs, and lodged a copy of its file (Exhibit A2). On the eve of the hearing, the McCurrys conceded that the Domino's component of the consent cannot stand, as the provisions of the Wollongong Local Environmental Plan 1990 (Exhibit A1, Tab 49) in respect of Zone 6(c) - the tourism zone - precludes the development of "shops" other than those "principally servicing tourists". On the other hand, the LEP clearly allows development of "bulk goods sales room or showroom" with development consent. Much of the nearby development is zoned 3(d) Commercial Services. 4 In the light of the McCurrys' concession, the Applicant company does not press its claim that the whole consent is invalid, by reason of an error made by Council in calculating the required carparking, but urges the Court to have regard to that error when deciding what relief to grant. 5 The Applicant company submits that the consent should be either set aside in its entirety, or suspended in its entirety on appropriate terms under s.25B of the Land & Environment Court Act 1979. Section 23E requires the Court to consider, in circumstances of proven or admitted invalidity, the making of an order under s.25B suspending the consent in whole or in part. 6 The McCurrys lodged their Development Application on or about 1 August 2007 (Exhibit A1, Tab 1). Confident of approval, they then entered into an agreement to lease with BCF Australia Pty Ltd to occupy the bulky goods component of their proposed development (Attachment 'A' to Jason McCurry's affidavit 4 September 2008). On receipt of the consent they commenced (with Council approval) construction of the slab upon which the proposed building would be erected. The proposed building is tailored to the design required by BCF. It is prefabricated and already on site, and there is some pressure on McCurrys to have it ready for occupation by 1 October 2008. The work so far has cost "no less than $400,000" (Jason McCurry's affidavit, par 3). 7 I have recently surveyed the authorities and the relevant principles on the making of s.25B orders in my decision in Clark & Davis v Wollongong City Council & Others (No.2) [2008] NSWLEC 226 at pars [5]-[7] and [18]-[26], and I see no reason to repeat or depart from that analysis. I concluded (at [26]) that such relief is discretionary, but that a s.25B order is more likely to be appropriate where only "one discrete component" of a merit assessment process miscarries. Background 8 The subject site is located within an existing precinct of mixed commercial uses, with a predominantly "bulky goods" flavour fronting King Street. The primary objective of the 6(c) zone is to encourage tourist development and other diversified activities that will not prejudice achievement of the tourist oriented development objective, or significantly detract from the character of the locality or the amenity of any existing or proposed development in the locality. 9 The McCurrys contended in their Statement of Environmental Effects (Exhibit A1, Tab 2) that the current economic climate was not conducive to more investment in tourist related development, hence many of the areas zoned for tourist uses under the LEP are now being used for other mainly commercial uses. Tourist uses have been traditionally located on the main north-south arteries which used to provide the main north-south link between Sydney and the South Coast and carried high traffic volumes particularly during holiday times. Following the construction of the F6 South Coast freeway which carried regional traffic, the subject site is now located on a road with limited exposure to holidaymakers. Accordingly, there is an evident lack of genuine "tourist" developments in the local area. 10 Bulky goods salerooms and showrooms are permissible with consent, granted after advertising, and the satisfaction of cl.11 of the LEP. Among the matters upon which Council must be satisfied under cl.11 is the question whether "adequate carparking (if relevant) can be provided and any increase in traffic will be small compared to existing traffic". The challenging applicant in this case, as noted above, remains critical of the Council's approval on the grounds of inadequate parking being provided.

11 The approved development has a floor area of 1392sqm. The ground floor comprises 910sqm of warehouse and 92sqm of pizza shop, plus a loading dock of 90sqm. Within the warehouse area is a proposed mezzanine floor of 300sqm. Carparking for 19 vehicles including one disabled spot was proposed and approved. The pre-existing access and parking arrangements (involving KFC next door) are to continue. 12 A Pizza Hut Restaurant occupied the subject site from 1970 until it was demolished at the end of 2006 (see Exhibit R1 and Exhibit R2). During the hearing "existing use rights" were suggested as a possible alternative source of power for consent to a Domino's outlet in the project, but the Court expresses no view on that matter. See Minister for Urban Affairs and Planning v Rosemount Estates Pty Ltd and Others (1996) 91 LGERA 31. The Carparking issue 13 Clause 11(2)(b) of the LEP requires "adequate" carparking, and DCP 6 (Exhibit A1, Tab 50) provides as follows (at p38): "Car parking provision in accordance with the specification below must be incorporated into any development proposal, whether for new development, change of use, redevelopment or additions. However, on redevelopment, existing spaces must be replaced but extra provision for any current shortfall in special circumstances may be waived. Parking requirement for developments not listed below will be assessed on anticipated traffic generation using State Guidelines as a basis. In exceptional circumstances, preferably supported by a professional traffic engineering study, where Council considers that it is unnecessary and unreasonable for the full standard to be met, it may relax the scale of provision for particular developments. Specifically, where a change of use involves an increase, up to three on-street spaces may be allowed without change provided ample provision is available there. Where a particular development will clearly need more parking than the standard, Council will require it to be provided. Where a developer is unable or unwilling to provide all the parking space on site, Council may consider accepting a contribution to its Car Parking Fund for each parking space not accommodated on site at the rate of 30 square metres of the land value of the subject property. This can be done where Council has provided, or is likely to provide, car parking nearby including surplus on-street capacity. The valuation is that current at the time of approval of the Building Application for the development with a ceiling of $12,000 indexed from 1 July 1991. Cash contributions may be deferred on the submission of a bank guarantee. Developers may make private arrangements to use nearby sites where appropriate provided that Council is a party to any appropriate deed of agreement and substantiating evidence is provided to indicate that there is sufficient capacity to meet the parking requirements.

…. Premises with more than one use have requirements added unless common usage occurs." 14 The DCP "specification" (at pp38-39) requires one space per 60sqm for "Industry/Bulky Goods/Warehouses" and one per 25sqm for "shops". That formula would indicate that 20.17 spaces were required for BCF plus 3.68 for Domino's, making a total parking requirement for the project of 24 or 25 spaces. (For the purposes of calculation the area of any loading dock is not included in "gross floor area" - DCP at p11). 15 The DA sought a dispensation to provide only 19 spaces on the basis that carparking was rarely overcrowded in the King Street commercial precinct and there was reciprocal carparking feasible. It was also suggested in the Statement of Environmental Effects that as the takeaway Domino Pizza business would do most of its trade (approximately 90%) after 7pm when the BCF store would be closed. There would be no need for long term parking for the Pizza Shop as customers rarely took longer than 20 minutes. 16 On 22 August 2007 the then Traffic Engineer of Wollongong City Council (Exhibit A1, Tab 4) noted in respect of the proposal that the parking allocation/calculation was "short", as the Domino's component does not "fall under bulky goods" for the parking calculation. He requested a parking survey for a site of similar size and use. Such a request was included in a general request for additional information from the proponent in a letter dated 11 September 2007 (Tab 5). 17 Amended details were provided and the Council's traffic section raised additional matters which were incorporated in the request for additional information dated 7 December 2007 (Tab 16): "The parking calculations submitted are not for the worst case scenario, being Thursday night shopping. The sales data submitted as a percentage is not acceptable, if a percentage of sales are to be used further documentation is requested from at least 2 other Domino's outlets detailing pick up and delivery numbers for a full day on Thursday…" 18 The proponents' agent responded as follows on 14 December (Tab 17): "Parking We have calculated required parking spaces based on the 'RTA Guide to Traffic Generating Development'. BCF is considered to be a bulky goods retail store requiring 1.5 spaces per 100m2 GLFA and Dominos a take-away food outlet requiring 12 spaces per 100m2 GLFA. As BCF has 1300m2 and Dominos 92m2 a total of 30.54 spaces are required (19.5 for BCF & 11.04 for Dominos). As requested by Council, Thursday night sales analysis from all Domino Pizza stores in Wollongong, including Woonona, Fairy Meadow, Figtree and Warrawong are attached. This shows that peak sales are 47 at approximately 7.30pm. The data shows sales are split to 70% delivery and 30% collection. We calculate that Dominos actually only requires 9 parking spaces rather than the 11.04 suggested by the RTA standards. Our calculation is based on: · Dominos having three delivery drivers on a standard shift who all have vehicles parked at the store simultaneously. · Dominos having three staff at the store who all have vehicles parked at the store simultaneously. · 14 collections (30% of Thursday evening sales) with a standard pick-up wait period of 10 minutes (as advised in Dominos letter which is attached) which requires 2.33 spaces for the hour of 7pm-8pm (on a Thursday). The above calculation is based on a worse case scenario. Often staff members are dropped off and collected by parents, on many busy occasions all three drivers are not at the store simultaneously and often wait time for delivery is less than 10 minutes. Thus less than 9 parking spaces for Dominos may be required at any single time. It is noted that even with Dominos only requiring 9 parking spaces the DA remains 10 spaces below that which is required in the worst case scenario of BCF and Dominos being open concurrently and at the peak busy period. We believe that the additional spaces are adequately provided via the reciprocal parking between stores along this section of King Street. The attached map titled 'Parking Spaces & Walking Distance' shows a maximum distance of 400m from the proposed location for the BCF & Domino stores. It is considered that 400m is an easy walking distance for an able bodied person. Based on the size of a standard parking bay and the size of car parking lots along the front and side of stores within the 400m radius there are calculated to be 310 parking spaces. Council should note: · Due to the large parking area along the side of Domayne the majority of the 310 spaces are actually within 200m of the proposed Dominos and BCF. · The public car park on the opposite side of King Street has not been included in this calculation. Based on these calculations it is considered that the DA provides an appropriate number of car parking spaces." 19 The Harvey Norman objection of 11 January 2008 (Tab 22) focussed on carparking and argued that each project should be self-sufficient or the congestion in the district would be accelerated. In particular, the objection stated: "… Parking is grossly inadequate and does not conform to RTA guidelines in respect of Bulky Goods Showrooms or Fast Food Outlets. We understand Council have adopted these guidelines. The arguments put forward in the Statement of Environmental Effects in respect of parking attempt to play down the lack of parking on the site and they relies (sic) on surrounding parking on other properties as a means of supporting the shortage. … In summary, the provision of only 19 spaces to service a 92sqm take away and a 910sqm Sporting/Lifestyle facility is grossly inadequate, particularly when 50% of these spaces could well be occupied by staff. The alternative situation is that the staff and customer parking for this development will be accommodated on different sites (both our properties). It is inequitable to have other property owners who have conformed to Council guidelines be disadvantaged by applicants who seek to overdevelop sites and are driven by economics rather than sound planning." 20 The new Council Traffic Engineer, Mr Mellor, in a filenote dated 11 January 2008 (Tab 23), said: " The proposed use is likely to generally operate such that peak parking demands does not coincide. However, the Thursday night trading period is likely to generate some conflict in parking demands for the site. The traffic section accepts the information supplied by Dominoes (sic) indicating that this is manageable due to the predominance of deliveries. Furthermore, in the event of limited parking being available adjacent the site, it is likely that parking opportunities will arise elsewhere in the King St complex due to multi-purpose trips to the precinct. · A maximum of 3 car parking spaces shall be marked for the use of Dominos staff and customers only. The remainder of the spaces shall not have signposted or line marked parking restrictions. This requirement reflects the need to maximise parking availability of the entire King St retail complex. · A minimum of 1 bicycle rail shall be provided for the use of Domino's staff. This requirement shall be reflected in the Construction certificate plans." 21 The filenote went on to propose certain conditions which included one requiring the provision of 20 carparking spaces. 22 The Assessment Officer in the Assessment Report dated 16 February 2008 (Tab 38 at p17) said "…those relevant matters for consideration [under] Wollongong Local Environmental Plan 1990 have been satisfied and adequately addressed in the documentation submitted with the application." It recommended that the development application be determined. 23 The Notice of Determination, endorsed 28 February 2008 (Tab 46), required provision of 19 carparking spaces. Consideration 24 The evidence makes clear that the Council decision-maker was fully aware that the proposal provided fewer parking spaces than the DCP would suggest. It is also clear that she was erroneously working on a total requirement of 20.17 rather than 24 or 25 as proper application of the DCP formula would indicate. 25 It would appear that her final assessment focussed on the BCF use, with Domino's users requiring the same spaces at other times. She clearly took into account the projection that peak parking demand for the two uses she was approving did not coincide, and found the proposal for 19 spaces acceptable. That decision was clearly open to the Council, and not unreasonable in the Wednesbury sense. The factual error was not an error in a jurisdictional fact. The Council's duty was to satisfy itself there was "adequate" parking, not a strictly calculated number of spaces. See Bruce v Cole and Others (1998) 45 NSWLR 163 at 187-188. 26 The breach in the granting of the consent is not "technical", but "substantive". However, I see no grounds to either strike down the whole consent, or make a s.25B order affecting the whole consent, and discretionary considerations work in favour of the McCurrys - the small proportion of the consent area affected, the partial construction undertaken with approval, the likelihood of obtaining a replacement consent, and the delay and prejudice resulting to the consent holders if either of the courses suggested by the Applicant is followed. 27 The partial invalidity of the consent attaches only to a use approved for only 7% of the usable retail space in the project, a discrete and severable component. Some form of shop use could legally be approved in place of that which was invalidly approved, or the small area affected could be approved for a different use (such as an expansion of the BCF). 28 A limited s.25B order is the appropriate remedy. See Clark & Davis v Wollongong City Council & Others [2008] NSWLEC 110; Mid Western Community Action Group Incorporated v Mid-Western Regional Council & Anor (No.2) [2008] NSWLEC 143. Conclusion 29 Mr Pickles, who appeared for the McCurrys, has submitted a draft order which appears to me to attend to the matter satisfactorily. His draft includes the reservation of costs and liberty to apply, and I am content to make orders and notations generally in the form he has suggested. Orders 30 The Court, therefore, orders:

1. Until further order, the terms of that part of the development consent to DA 2007/1018 ('the development consent') as relates to the use of part of the proposed building for the purposes of a pizza shop is suspended. 2. Compliance with the following terms will validate the whole of the Development Consent (being re-granted with alterations): (a) the First Respondent imposes a condition of development consent pursuant to s.80(4) of the Environmental Planning and Assessment Act 1979 to the effect that the use of the Dominos Pizza shop is not approved and that the use of the space allocated to Dominos Pizza is to be the subject of a further development application and grant of consent. 3. Liberty to apply on 7 days' notice. 4. Costs are reserved. 5. Exhibits are returned. The Court notes that:

(a) pursuant to s.103(2) of the Environmental Planning and Assessment Act 1979 (NSW), the First Respondent may revoke that part of the Development Consent that is suspended whether or not the First Respondent has complied with the terms specified in order 2(a); (b) pursuant to s.25C(1) of the Land and Environmental Court Act 1979 (NSW), if the terms specified in order 2(a) has been substantially complied with, the Respondents may make an application to the Court for a declaration that the Development Consent is valid and for an order revoking the suspension of the Development Consent; (c) pursuant to s.103(3) of the Environmental Planning and Assessment Act 1979 (NSW), if the terms specified in order 2(a) have been substantially complied with, the First Respondent may revoke the part of the Development Consent suspended and grant a new development consent with such alterations to the revoked consent as the First Respondent thinks appropriate; (d) pursuant to s.25C(2) of the Land and Environmental Court Act 1979 (NSW), if the terms specified in order 2(a) have been substantially complied with and the development consent has been regranted with alterations pursuant to s.103(3) of the Environmental Planning and Assessment Act 1979 (NSW), the Respondents may make an application to the Court for a declaration that the development consent has been validly regranted and an order declaring that the suspended Development Consent has been revoked.

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