Caltex Australia Petroleum Pty Ltd v Manly Council

Caltex Australia Petroleum Pty Ltd v Manly Council - [2007] NSWLEC 350 - NSWLEC 2007 case summary — Zoe

[42]

18.2 Works The Purchaser acknowledges and agrees that (a) After the Vendor removes the tanks in accordance with clause 18.1, the Vendor will cause an environmental consultant to reduce the levels of petroleum hydrocarbon pollution in the property caused by the use of the property as a service station, depot or terminal (as the case may be) to a level which does not prevent the use of the property for any use permitted under the zoning of the property existing at the date of this contract… 25 An information memorandum dated November 2005 prepared for the site for the Applicant by CB Richard Ellis, a real estate services company, stated that the benefits of the site to a purchaser would include the potential for further commercial/business development (with Council approval. Council's submissions 26 The presumption of abandonment in s 107(3) applies as there has been no use of the land for a service station since July 2003. The Applicant had abandoned the service station use over the whole of the land by its action in discontinuing that use and removing the tanks, fuel lines, bowsers and part of the service station building in 2004, and undertaking remediation works. The presumption of abandonment in s 107(3) of the EP&A Act cannot be rebutted in light of those objective facts. 27 The Council relied on a number of the Applicant's documents as set out at par 17 - 23 in order to submit that when the Applicant decided to divest itself of the premises in May 2003 it had commenced a process of abandoning the existing use of service station on the site. The operation of the Petroleum Retail Marketing Franchise Act in relation to the termination of the franchisee confirms that, as do the terms of the contract for the sale of land. These decisions and the remediation action of removing all tanks and pipes on the premises rendered its continued operation as a service station impossible unless a further development consent was granted. This was all evidence of abandonment of the use of the existing site as a service station. 28 The development consents allowing the service station use no longer authorise the continuing use (assuming s 107 is subject to them by dint of s 109B(1)) because of the removal of tanks and fuel lines. A new development consent is required if these were to be reinstated. The use cannot be conducted on the land now without a new development consent being obtained. 29 The facts distinguish this case from Woollahra Municipal Council v Banool Developments Pty Limited (1973) 129 CLR 138 (Banool) and Woollahra Municipal Council v TAJJ Investments Pty Ltd (1982) 49 LGRA 123 (TAJJ) in which both discontinuance of existing use and an application to change the use were held not to give rise to abandonment of the existing use. Both cases were decided before s 107(3) was introduced and must be considered in the light of different legislation. The approach of Hope J in Hudak v Waverley Municipal Council (1990) 18 NSWLR 709 (Hudak) which emphasises consideration of objective factors rather than expressions of subjective intention is correct. 30 The subjective intention of the Applicant, as evidenced by contemporaneous statements made by the Applicant's officer, Mr Byrne, in discussion with Mr Richards, was that the site would not be used in the future as a service station. This is supported by the approval of the divestment proposal, which made it clear that the existing use was uneconomic and that the Applicant could sell the land because a competitor (such as another service station proprietor) would not purchase the property for that use. The physical use as a service station ceased in July 2003 and was abandoned at that time.

[43]

Applicant's submissions 31 The Applicant submitted that a relevant subjective intention to continue the existing use can be seen from all of the circumstances of the case and the evidence of Mr Campbell. Between May 2003 when a Notice to Quit was served on the franchisee, P Richards Pty Ltd, and 15 June 2005 when Class 1 appeal proceedings were commenced in this Court against the Council's refusal of an application lodged 20 October 2003 for a carwash/ cafe, all actions were taken in reliance on the right of the Applicant to change the existing use under cl 41(1)(d) of the EP&A Regulation. The development application for a carwash/cafe was lodged in October 2003 shortly after Mr Richards vacated the site in July 2003. It was a development application which could only have been made pursuant to the existing use provisions of the EP&A Act and the Regulations thereunder. The making and pursuing of the development application were consistent with the subjective intention to continue the existing use. 32 Apart from securing the site upon the vacation of the premises by the franchisee in July 2003, the physical works of remediation were undertaken in or around March 2004 while the development application for a carwash/cafe was pending. A suggestion that the site remediation was evidence of abandonment is inconsistent with the pursuit of the pending development application for a carwash/cafe. 33 The site remediation pursuant to SEPP 55 was not inconsistent with the continuance of the existing use. The letter to Council from Mr Simon Caples, Environmental Consultant to the Applicant, dated 14 October 2003, stated that the Applicant intended to maintain the existing use rights on the site. The site was not rendered incapable of being used as a service station. Firstly, there was no physical impediment preventing the re-establishment of a service station with underground tanks and facilities. Secondly, there was no impediment to the lodgement of a development application to re-establish a service station with the facilities which previously existed. Thirdly, there was no requirement that a service station use be carried out on the site with those facilities that were removed in place when regard is had to the essential characteristics of a service station: Drummoyne Municipal Council v Cavallaro (1982) 46 LGRA 416. 34 The development consent for the demolition of existing buildings and related structures (DA 507/03) granted on 20 October 2003 has not been commenced. The subjective intention to continue the use is to be held by the relevant person, that is, the company. Mr Byrne, its employee, could not hold the intention and had no relevant authority to abandon the use. Any statement to Mr Richards that there was not to be any further service station on the site was not a reflection of the intention of the Applicant. The conversations between Mr Byrne and Mr Richards took place prior to the cessation of the use of the land as a service station and prior to the lodgement of the development application for a carwash/cafe in October 2003.

[46]

37 In Hudak, decided under the EP&A Act provisions, the presumption of abandonment in s 107(3) operated. That case concerned premises lawfully used as a residential flat building from 1976 to 1980, after which time the premises were left unoccupied and allowed to deteriorate. The owner of the premises claimed that it was his intention to restore the premises to a habitable state and have them occupied again after certain other problems were resolved. Hope AJA held (Kirby P and Mahoney JA agreeing on the result) at 716 - 717 that: It is difficult to imagine that an existing use will continue indefinitely despite absence of actual use merely because an owner has an intention to carry on the existing use or to resume it at some time in the future. It was suggested that [the owner's] intention would operate to continue the existing use if the delaying factor was related to some consideration relevant to the restoration of the use…I have no doubt that these may be relevant considerations but as it seems to me the existence of an intention based on some such factor should and does not necessarily continue the existing use…As it seems to me, it is necessary to have regard to the whole of the circumstances, including the subjective intention of the relevant person, and to determine whether in the light of all those matters the cessation of actual use proved by the facts is outweighed by an asserted subjective intention to continue the use…[if] years go by without actual use and particularly where the factor said to be delaying a resumption of the existing use is something of an indefinite character…there would be little difficulty in concluding that the cessation of use for a similar period of time involved an abandonment. 38 In Star Property Investments Pty Ltd and Anor v Leichhardt Municipal Council [2000] NSWLEC 235 an application for development consent for the demolition of existing buildings and construction of five townhouses on the premises was refused by the Council. The applicants appealed to this Court, which had to determine whether any existing use rights for wood working purposes had been abandoned. In 1955, development consent for light industry had been granted to the subject land, and various development consents were granted for the site between 1955 and 1970. From 1984 to 1991 various tenants occupied one of the premises, pursuant to leases containing a covenant that the lessee would not use the premises for any purpose other than as a shop or commercial premises and for the carrying on of light industry. Talbot J held at [65] that: …in this instance where the existing use has not been continuous, there is an onus on the Applicants to demonstrate to the Court that at all times they manifested the requisite intention to maintain the existing use and thus that there was no abandonment of the existing use. Talbot J found at [77] - [78] that as the Applicants had not established continuous use, the existing use had been abandoned.

[51]

In the other cases referred to above this Court and the Court of Appeal have held that steps taken to change the use, including the lodgement of a development application and pursuit of an appeal in a court in relation to that application, are steps taken in reliance on an existing use right. Cases such as Dosan , Star Properties and Hairis Architects distinguish between the intention to maintain existing use rights and the intention to rely on those rights to effect a change of use. 43 Accordingly, the steps taken by the Applicant in reliance on existing use rights to change the use of the site to a carwash/cafe, such as lodging a development application and a Class 1 appeal to the Court, do not alone prove there has been any abandonment of the existing use rights on the site by the Applicant. It is necessary to consider all the relevant circumstances in this case. 44 Generally the Council has the onus of proving that the Applicant did abandon its existing use rights. The onus shifts in this case to the Applicant as s 107(3) raises a rebuttable presumption of abandonment on the facts, given that the use ceased in July 2003. It is clear from the evidence that the Applicant did not itself wish to continue the use of the site as a service station after May 2003, given the divestment proposal approved the termination of the franchise agreement and the steps taken to give that effect leading up to the contract for sale for a carwash/cafe in November 2005. Subjective intention to rely on existing use rights 45 The Applicant's case does demonstrate that there was a subjective intention held by the Applicant to rely on the existing use of service station to enable a change to another prohibited use. The statement by the Applicant's consultant Mr Caples in the letter of 14 October 2003 to the Council that reliance was placed on existing use rights demonstrates that intention. It was written well before the 12 month period referred to in s 107(3) expired. 46 Mr Richards' version of the conversation with Mr Byrne on 21 June 2003 that Mr Byrne said there would never be another service station on the site is likely to be correct given that Mr Byrne stated in oral evidence that he could not recall the exact terms of the conversation. Mrs Richards and Mr Yangoyan both confirm Mr Richards' recollection of that conversation. The conversation between Mr Richards and Mr Byrne on 21 June 2003 is not conclusive of the Applicant's subjective intentions in relation to its intention to rely on its existing use rights for a change of use of the site. 47 The evidence of Mr Campbell relied on by the Applicant makes clear that its intentions were to rely on the existing use. Mr Campbell's affidavit evidence was that it was his intention to rely on the Applicant's existing use rights in making the development application for the carwash/cafe. Mr Hobart's evidence is that Mr Campbell had the requisite authority from Caltex to act as he did. However, those statements of subjective intention by the Applicant's consultants do not prevent a finding that the Applicant had abandoned the service station use as an objective fact given other action taken by the Applicant, but should be taken into account.

[53]

49 According to his evidence, Mr Campbell's decision to have the site remediated to a level suitable for uses permissible in the underlying zoning was part of his usual practice when selling a site for the Applicant. The reason for this was to ensure that there was no future liability for the Applicant under the Contaminated Land Management Act 1997 should a site ultimately be used for a "higher" use. As the Applicant's liability for remediation continues after sale, it was both economical and reasonable for a site to be remediated prior to sale. The Applicant's actions under the Contaminated Land Management Act and SEPP 55 are indicative of the Applicant's desire to reduce that risk of future liability, according to Mr Campbell. That explanation of the Applicant's actions does not override the practical outcome that the service station use could not continue without a further development consent being obtained. That statement by Mr Campbell that he would revert to the sale of the site as a service station if need be does not overcome the practical effect of the Applicant's actions. 50 While reliance was placed by the Applicant on statements in the divestment proposal that another operator but not a major brand might wish to continue the operation of the service station, it is the Applicant's actions that are important given that the divestment proposal was to sell the site for a different use and the Applicant took very active steps on the site to achieve that outcome. The conversation between Mr Richards and Mr Byrne on 21 June 2003 is relevant in this context. Mr Byrne's statement that there will never be another service station on the site reflected a relevant view within the Applicant at that time. That view is confirmed by the subsequent actions of the Applicant on the site in removing the underground petrol tanks and taking steps to sell the site for a different use, albeit these plans being unrealised to date. Those actions are further objective evidence of abandonment of the use by the Applicant. 51 Of all the cases referred to, it is the circumstances in Hairis Architects which have some similarity to this case. Talbot J in Hairis Architects at [36] stated that a distinction should be drawn between an intention to maintain an existing use on the land to which it attaches and a subjective intention to rely on existing use rights. In that case his Honour noted the respondent's case (asserting the persistence of existing use rights) was stronger because no relevant use conflicting with the existing use had been physically undertaken on the land since the club use relied on as the existing use ceased in October 1999. 52 In this case, the Applicant has taken action which prevents the resumption by it or anyone else of the use as a service station without a further development consent being obtained. That circumstance must be considered together with its actions in seeking to sell the property for a use other than as a service station, with a contract for sale prepared with the special terms and conditions relied on by the Council (see par 22). Each case must be considered on its own particular facts and I find abandonment has been established. I do not consider a finding of abandonment in this case is in conflict with the findings of Lloyd J in Dosan.

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