Cartier Holdings Pty Ltd v Newcastle City Council and Anor

IN THE LAND AND 40179 of 2000 ENVIRONMENT COURT Pearlman J OF NEW SOUTH WALES 2 August 2001

CARTIER HOLDINGS PTY LTD Applicant v NEWCASTLE CITY COUNCIL First Respondent RESTIFA & PARTNERS PTY LTD Second Respondent

These class 4 proceedings involve a challenge to a development consent granted on 13 June 2000 by Newcastle City Council to Restifa & Partners Pty Ltd ("Restifa").

The applicant, Cartier Holdings Pty Ltd ("Cartier"), seeks a declaration that the council's resolution to grant consent to Restifa's development application is invalid and of no effect, and that the development consent is also invalid and of no effect. It seeks a consequential order that Restifa be restrained from taking any action pursuant to the development consent.

Restifa is acting on behalf of Polo Properties Pty Ltd in connection with a proposal to develop a site known as 23 Steel Street, Newcastle West, located within the boundaries of King, Parry, Steel and Ravenshaw streets. The proposed development is to comprise two residential towers containing 117 apartments, a supermarket intended to be under the aegis of Woolworths, and car parking.

Cartier is the owner of the Marketown shopping centre, which is located opposite the site, and which contains a Bi-Lo Mega Fresh supermarket, as well as a number of specialty shops.

The applicant's challenge arises out of two relevant considerations under s 79C(1) of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"), namely, economic impact and the public interest.

Section 79C(1) relevantly provides as follows: 79C(1) Matters for consideration - general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: (b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality;

As to the challenge under s 79C(1)(b), the economic impact, the applicant claims:

(1) the council misdirected itself or asked itself the wrong question in relation to s 79C(1)(b); and

(2) the council failed to give proper, genuine and realistic consideration to s 79C(1)(b) as it applied to the proposed development; and

(3) the council made its decision to grant consent in an improper manner by unreasonably failing to ascertain facts and material which were readily available to it and centrally relevant to its decision.

As to the challenge under s 79C(1)(e), the applicant claims that the council failed to take into consideration, as a matter of the public interest, the provisions of the draft Newcastle Local Environmental Plan 2000.

Three volumes of documentary material were tendered in evidence. From the contents of those volumes, I set out as follows the critical steps in the process leading up to the grant of development consent.

There were preliminary discussions between representatives of Restifa, and council officers, and the development application, numbered 99/2775, was lodged on 29 November 1999. It was accompanied by a submission from Restifa, and a number of reports. One of them was a statement of environmental effects prepared by Scott Carver Urban Planning ("the Scott Carver SEE"). Another was a document entitled "Economic Impact Assessment of Proposed New Supermarket" dated 16 November 1999 and prepared by Jebb Holland Dimasi ("the JHD report").

The development application was advertised, and, relevantly, the following submissions were received:

(1) A letter dated 20 December 1999 from Colliers Jardine on behalf of Junction Fair Shopping Centre, located about 1.2 kilometres south of the site; (2) A letter dated 20 December 1999 from Elizabeth Thomson on behalf of GIO Wholesale Property Trust, which has an interest in Junction Fair; (3) A letter dated 21 January 2000 from Environmental Resources Management Australia Pty Ltd (ERM) on behalf of Franklins Ltd, the proprietors of a supermarket located at The Store on Hunter Street; (4) Accompanying the letter from ERM, a report entitled "Review of Proposed Supermarket" prepared for Franklins by Leyshon Consulting Pty Ltd dated January 2000 ("the Leyshon report");

(5) A letter from A T Cocks Consulting dated 31 January 2000 ("the A T Cocks submission") on behalf of the owner and tenants of Marketown Shopping Centre;

(6) Accompanying the A T Cocks submission, a report entitled "Review of JHD Report" prepared for A T Cocks Consulting by Ibecon Pty Ltd ("the Ibecon report").

A revised development application was lodged by Restifa in March 2000, accompanied by a further submission and a number of updated reports. One of those was an amended statement of environmental effects prepared by Scott Carver ("the Scott Carver additional report") and another was a report entitled "Economic Impact Study Response to Objections" from Jebb Holland Dimasi.

On 1 May 2000, the council engaged Hill PDA to provide the council with an economic impact assessment. The letter of engagement contained the following request: Could you please undertake a review of all of the above documents and provide Council with independent assessment advice on the likely economic impact of the proposed supermarket in terms of the matters for consideration under the provisions of Section 79C(1)(b) … (economic impacts in the locality).

Cartier wrote to the council on 10 May 2000 ("the Cartier submission") referring to the A T Cocks submission previously lodged on its behalf, and it set out a number of further submissions. It also, on 19 May 2000, made an application for a "public voice session", being an application to address the whole of the council about the proposed development.

On 26 May 2000, Hill PDA furnished its report ("the Hill PDA report").

On 6 June 2000, the council held a public voice session, at which all 13 councillors were present. A representative of Cartier addressed the meeting, as did a representative of ERM. Responses were provided by a representative of Restifa and by a representative of Jebb Holland Dimasi. A transcript of the session was tendered in evidence in these proceedings.

On 9 June 2000, following the public voice session, Cartier wrote again to the council, raising a number of issues, and requesting the council to defer its decision.

The council did not defer its decision. On 13 June 2000, a "development approvals committee meeting" was held, at which all 13 councillors were present. A council officer's report had been prepared ("the council officer's report"), which reviewed the development application and recommended the grant of development consent. The meeting then resolved to grant development consent subject to conditions and subject to the concurrence of the Director of the Department of Urban Affairs and Planning which was required under the Hunter Regional Environmental Plan. A transcript of this meeting was also tendered in evidence.

The Director furnished concurrence, and a formal notice of the determination of the development application under s 81 of the EP&A Act was issued on 7 August 2000.

Cartier's claim is that the council misdirected itself in relation to economic impacts in the locality, and by virtue thereof, it failed to take into consideration a matter which it was bound to take into account, thus vitiating its decision. The basis upon which this was put by Mr Preston SC, appearing for Cartier, may be summarized as follows:

(1) The approach to be taken under s 79C(1)(b) is broader than the approach to be taken under the former s 90(1)(d); (2) The council adopted an incorrect approach to the application of s 79C(1)(b) by ignoring economic impacts upon competitors and individual traders; (3) It did so because, pursuant to advice it received from Hill PDA, it relied on the decision in Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373, which was based on s 90(1)(d);

(4) Furthermore the council failed to identify "the locality", as it was required to do under s 79C(1)(b);

(5) In addition, the council failed to call for the production of further evidence which would have enabled it to undertake a correct assessment of the development application under s 79C(1)(b). 21. The basis upon which Cartier's claim is put raises a number of issues. They are, first, whether s 79C(1)(b) should be construed differently to the former s 90(1)(d); secondly, what is the proper construction of s 79C(1)(b), having regard to relevant authority, including in particular Fabcot v Hawkesbury City Council; thirdly, whether the advice given to the council by Hill PDA was incorrect; fourthly, whether in any event the council misdirected itself in relation to the consideration required by s 79C(1)(b) and, in particular, whether it failed to take into account competition and economic impact upon individual traders; fifthly, whether the council failed to identify "the locality"; and sixthly, whether the council failed to call for further evidence. I deal with each of these issues in turn.

I have set out the relevant parts of s 79C(1) above. For present purposes, it is necessary to keep in mind that one of the matters that the council must take into consideration if relevant is sub-section (b) as follows: (b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality.

That requirement is to be contrasted with the position prior to 1 July 1998 (before the EP&A Act was amended) whereby the council was required to take into consideration, under s 90(1)(d) of the former Act, "the social effect and the economic effect of that development in the locality".

Mr Preston submitted that s 79C(1)(b) is different to s 90(1)(d) in that it requires a broader consideration than was formerly the case. In his submission, this follows from a number of matters. First, s 79C(1)(b) adopts the generic category of "likely impacts of that development", which focuses on impacts per se and is in itself a matter broader in scope than was encompassed in s 90(1)(d). Secondly, "environmental impacts on both the natural and built environments" and "social and economic impacts in the locality" are sub-categories of the generic category, and the generic category is not to be confined by reference to them. Thirdly, s 79C(1)(b) adopts the terms "impacts" rather than "effect", thus suggesting a different consideration from that previously required. Fourthly, it focuses on "likely" impacts, in contrast to s 90(1)(d), and that is also a matter which broadens the consideration. The broadening of scope requires the council to consider economic competition, including economic impact upon individual traders.

In my opinion, it is important to note that s 79C(1) contains five separate considerations in contrast to s 90(1), which listed 27 different criteria of consideration. As was noted in the Second Reading Speech, (which was quoted by Lloyd J in Carstens v Pittwater Council (1999) 111 LGERA 1) the legislature intended to streamline and rationalise the criteria embodied in s 90, and replace them with a "reduced and general list of considerations". It seems to me that, by adopting the expression "likely impacts of that development" in s 79C(1)(b), the drafter obviously intended, having regard to the criteria which that expression replaced, to encapsulate a very broad and general range of impacts. But I am not persuaded that, so far as concerns economic impact, there is any material difference between the consideration required by s 79C(1)(b) and the consideration required by s 90(1)(d). It is true that s 79C(1)(b) uses the word "impacts" whilst s 90(1)(d) uses the word "effect". But I agree with the joint submission of Mr Tobias QC, appearing for Restifa, and Mr Craig QC, appearing for the council, that the two words are synonymous in a planning sense. The consideration that they each express is the same, that is, the economic result or outcome of the proposed development, a matter which may be relevant in determining a development application. Nor do I think that the use of the word "likely" in the opening words of s 79C(1)(b) requires a different construction. Economic impact in itself involves, as do many considerations relevant under s 79C(1), an estimation of likelihood or possibility, because actual impact may not be discernible until the development is completed. Furthermore, there was some debate between the bench and counsel during argument about the effect of the commas in s 79C(1)(b) and whether, properly construed, "social and economic impacts in the locality" is not a sub-category of "likely impacts of that development" but is instead an independent category of consideration. On reflection, I think that is an arid debate, taking the task of construction nowhere. Economic impact is to be considered as an impact of the proposed development in the locality, and it must, as I have explained, import a notion of likelihood. So whether it is an independent category of consideration, or a sub-category of "likely impact" is of no consequence.

It follows from what I have said that s 79C(1)(b) does not require the consent authority to take an approach in consideration of the relevant matter different from the approach formerly taken in the application of 90(1)(d).

The proper construction of s 79C(1)(b) and Fabcot v Hawkesbury City Council

Fabcot v Hawkesbury City Council was a class 1 appeal from the refusal of Hawkesbury City Council to grant development consent to a development application for a Woolworths supermarket to be located outside the town centre of Windsor. One of the issues, numbered 5, was whether the proposed supermarket would have an adverse economic impact on existing and planned retail supermarkets within the Hawkesbury city local government area. That issue fell to be considered under s 90(1)(d).

Lloyd J decided that issue number 5 did not raise a planning or environmental consideration. In so concluding, his Honour said at p378: Similarly, economic competition between individual trade competitors is not an environmental or planning consideration to which the economic effect described in s 90(1)(d) is directed. The Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) are the appropriate vehicles for regulating economic competition. Neither the Council nor this Court is concerned with the mere threat of economic competition between competing businesses. In an economy such as ours that is a matter to be resolved by market forces, subject to the Trade Practices Act and the Fair Trading Act . It is not part of the assessment of a proposal under the Environmental Planning and Assessment Act for a consent authority to examine and determine the economic viability of a particular proposal or the effect of any such proposal on the economic viability of a trade competitor. Moreover, it is at least arguable from the fact that the Trade Practices Act now applies to local government councils, that if a local council were to refuse or to limit a proposal for development on the ground of competition with a trade competitor, it could be guilty of anti-competitive conduct contrary to Pt 4 of that Act.

It seems to me that the only relevance of the economic impact of a development is its effect "in the locality", that is to say, in the wider sense described in Kentucky Fried Chicken Pty Ltd v Gantidis (1974) 140 CLR 675 at 687 …

In the appeal before Lloyd J, two other relevant issues were raised - first, whether sufficient justification had been given as to why the supermarket should not be located in or next to a business zone (issue 6), and whether it would have an adverse economic and social impact on the existing Windsor and South Windsor shopping centres (issue 12). In dismissing the appeal on those grounds, Lloyd J said at p 383: In short, I accept the opinion of Mr Leyshon that there is likely to be a 10 to 15 per cent decline in non-supermarket trading in the Windsor town centre if the present proposal were to proceed. That is to say, the out of town, stand-alone supermarket now proposed will to a significant extent break the synergy or nexus between supermarket and non-supermarket shopping in Windsor. To "marginalise" the non-supermarket businesses in the manner described by Mr Leyshon would clearly put at risk the viability of those businesses. The effect would be as described in Kentucky Fried Chicken v Gantidis : the facilities presently enjoyed by the community in Windsor would be put in jeopardy by the proposed development and the resultant community detriment would not be made good by the proposed development itself. That is a proper consideration to take into account as a matter of town planning. It is a very real risk which, on balance, I am satisfied should not be taken. For these reasons Issues (6) and (12) are resolved in favour of the respondent and this development application should not be approved.

I have dwelt at some length on the decision in Fabcot v Hawkesbury City Council because it was referred to in detail in the Hill PDA report, and it accordingly provides some understanding of the advice contained in that report, a matter to which I will return. However, it is important in this case to properly construe s 79C(1)(b), because Cartier's case is based on a claim that the council misdirected itself in the application of that section.

As can be seen from the passages I have quoted from the decision in Fabcot v Hawkesbury City Council, Lloyd J applied Kentucky Fried Chicken v Gantidis in construing the proper ambit of s 90(1)(d). That was a case which concerned a Victorian planning scheme ordinance which provided that, in determining whether to grant a permit for the use of land, the responsible authority should have regard, amongst other things, to "the preservation of the amenity of the neighbourhood". It is relevant to note that there was no provision equivalent to s 90(1)(d) in the planning scheme ordinance under consideration in this case. The relevant passage which Lloyd J applied is from the judgment of Stephen J at p 687 as follows: If the shopping facilities presently enjoyed by a community or planned for it in the future are put in jeopardy by some proposed development, whether that jeopardy be due to physical or financial causes, and if the resultant community detriment will not be made good by the proposed development itself, that appears to me to be a consideration proper to be taken into account as a matter of town planning. It does not cease to be so because the profitability of individual existing businesses are at one and the same time also threatened by the new competition afforded by that new development. However the mere threat of competition to existing businesses, if not accompanied by a prospect of a resultant overall adverse effect upon the extent and adequacy of facilities available to the local community if the development be proceeded with, will not be a relevant town planning consideration.

I do not think, with respect, that Lloyd J was intending to hold, in Fabcot v Hawkesbury City Council, that economic considerations can never be town planning considerations, and indeed he expressly said so in par 13 of his judgment in Architectural Property Services Pty Ltd v Rockdale City Council [1999] NSWLEC 83. As I understand his Honour's reasoning, he was holding that the economic impact of a proposed development upon private individual traders is not of itself a planning consideration, and what is instead required by s 90(1)(d) is a wider and more general consideration of economic impact in the locality.

The question of the proper ambit of s 79C(1)(b) arose somewhat obliquely in City West Housing Pty Ltd v Sydney City Council (1999) 110 LGERA 262. One of the issues for determination was whether evidence about the economic impact of the proposed development as a matter of "affordable housing" under the relevant regional environmental plan was admissible as relevant under s 79C(1)(b). In holding that it was so relevant, Bignold J took the opportunity to consider some earlier authorities, including Kentucky Fried Chicken v Gantidis. In par 137, his Honour cautioned against reliance upon authorities decided before the enactment of s 90(1)(d), when, for the first time, social and economic effects of a proposed development were expressly stipulated as a consideration to be taken into account in determining a development application. Specifically, Kentucky Fried Chicken v Gantidis was decided under a planning instrument which did not include such a consideration. With respect, I do not understand Bignold J to have been saying that the interpretation and application of s 79C(1)(b) is completely at large. Rather, he was pointing, in par 145, to "the far more comprehensive reach and content of environmental planning under the EP&A Act compared to earlier models of town and country planning legislation …" and in par 137 his Honour categorised "social and economic effects" as "a material planning consideration." (my emphasis).

In my opinion it is the very scope and content of the EP&A Act which provides the most useful guidance in the interpretation and application of s 79C(1)(b). The Court should in the first instance have regard to the context in construing provisions in a statute, not merely after an ambiguity has been identified: per Spigelman CJ in Repatriation Commission v Vietnam Veterans' Association of Australia NSW Branch Inc and Ors (2000) 48 NSWLR 548 at 575 - 576, (and see the authorities there cited). The objects set out in s 5 of the EP&A Act are very wide in their ambit. They include the proper management of land for the purpose of "promoting the social and economic welfare of the community", the orderly and economic use and development of land, and the protection of the environment. That indicates, in my opinion, that the phrase "economic impacts in the locality" is to be understood in an environmental and planning sense. Hence I would agree with Lloyd J in Fabcot v Hawkesbury City Council that the economic impact of a proposed development upon private individual traders is not per se a proper environmental or planning consideration, and I do not think that the decision of Bignold J in City West v Sydney City Council is, properly understood, authority to the contrary. It is simply not competition as such which is encompassed by s 79C(1)(b). It would be unwise to attempt to categorise the type of economic impact which would properly fall to be considered under s 79C(1)(b), for, of course, each case depends upon its own facts, but it is clear, in my opinion, that the section does not require the consideration of economic impact on individual competitors, except to the extent that any impact upon individual competitors, or competition generally, demonstrates economic impact in the locality as an environmental or planning matter.

The Hill PDA report dealt with s 79C(1)(b) by discussing the approach to be taken to its application, and then by discussing the objections raised in the Leyshon report on behalf of Franklins and by the A T Cocks submission on behalf of the owner and tenants of Marketown. The relevant parts of the Hill PDA report are as follows: Pages 2 and 3: In dealing generally with the approach to be taken under s 79C(1)(b), the statement was made that "In the assessment of an application for the expansion of retail space in Newcastle West under the regulations of the act Council is not required … to be concerned with individual traders" . A passage from the judgment of Lloyd J in Fabcot v Hawkesbury City Council was quoted and the reasons for his decision in favour of the respondent council were outlined. The report continued by stating as follows: It would need to be demonstrated that any proposal will direct expenditure away from existing centres and that the centre or centres as a whole would suffer - not just individual traders.

The site is located within the Central Business Zone thus any new trading would in fact 'facilitate the development' of the CBD in accordance with the LEP's objectives rather than draw trade away from the area. Furthermore competition between traders is not a relevant matter for consideration under the EP&A Act, yet many of the objections raised are based on these grounds. Page 3: The Hill PDA report continued under the heading " Responses to Objections Raised". After discussing the criticism of the JHD report contained in the Leyshon report and in the A T Cocks submission, Hill PDA made the following statement: Hill PDA concurs with these points appreciating that additional information in the line of shopper surveys and estimated trading levels are required to assess the impact on the viability of traders. Yet despite these inadequacies, the matter does not appear to be relevant for consideration under the EP&A Act having regard to … Fabcot Pty Ltd vs. Hawkesbury City Council (discussed above) or the relevant local planning instruments. This is because the traders that will be adversely affected are in the same commercial centre as the proposed development and hence the centre as a whole would not be adversely affected. Page 4: The Hill PDA report continued by noting figures demonstrating that trading levels of competing supermarkets could decline, although the level of trading should be sustainable, and that net employment gains would be positive. It then stated that: "Once again however, it is important to stress that the matter of competition between individual traders is not for consideration under section 79C … The Hill PDA report then turned to consider other matters raised in the objections, and it concurred that the proposed supermarket was likely to have an impact "on the surrounding small retail stores" , although it considered that there would be "positive and negative impacts on small retailers but the net effect on the CBD West End is neutral if not positive". Page 5: In its conclusion, Hill PDA noted that the strongest adverse impact would be on competitive traders, and then it made the following statement: Nevertheless under the EPA Act and the relevant local planning instruments made under that Act the question is whether or not the CBD or other existing commercial centres will suffer detrimentally as a whole, whether or not there will be social detriment and, if so, whether or not the development will made good that detriment. The Act and instruments are not concerned about impacts on individual competitors.

I have quoted from the Hill PDA report at length, because it is the lynchpin of Cartier's claim concerning s 79C(1)(b). The conclusions of the Hill PDA report were quoted in the council officer's report to the council, and a copy of the whole Hill PDA report was appended by the council officer. The Hill PDA report was an independent opinion obtained by the council for itself, and it may be inferred, in the absence of evidence to the contrary, that the council heeded the advice provided in that report. If, as Mr Preston submitted, that advice was wrong and misleading as to the proper approach which the law required the council to take in the application of s 79C(1)(b), then that would provide a foundation for the Court to draw an inference that the council asked itself the wrong question.

But I do not think that, properly understood, the advice contained in the Hill PDA report was wrong and misleading. Although its discussion of the proper approach to be taken under s 79C(1)(b) could have been more rigorously and precisely expressed, it did not misstate the law as set out in Fabcot v Hawkesbury City Council. It directed attention to whether "…centres as a whole would suffer - not just individual traders" (p 3) and it repeated that approach in the other passages I have quoted from its report. For the reasons I have outlined, in my view that approach is not incorrect.

The context must also be borne in mind. One of the tasks of the Hill PDA report was to consider the objections which had been raised in relation to economic impact, and those objections had been directed in particular to the potential impact upon two individual traders, namely Franklins and Bi-Lo Mega Fresh. In conformity with the approach it had taken, the Hill PDA report did not focus on the two individual traders but directed its examination to matters concerning a decline in the trading levels of competing supermarkets (including Franklins and Bi-Lo Mega Fresh) and to economic impact on surrounding small retail stores (p 4).

The onus is upon the applicant to show that the council misdirected itself in relation to s 79C(1)(b) and that accordingly it failed to take into consideration a matter which it was bound to consider. That requires proof of the collegiate mind which may depend upon inferences to be drawn from the material actually and constructively before the council at its meeting and in its files (Parramatta City Council v Hale and Ors (1982) 47 LGRA 319). In this case, there is no direct evidence that the council failed to consider economic impact in the locality by ignoring competition generally or by ignoring impact upon individual traders generally, and I do not think that fact can be inferred from the material that was before the council or from the debates which took place at the public voice session or at the council meeting. Nor do I think that the council relied solely upon the Hill PDA report. Indeed, the only available inference to be drawn is that the council considered economic impact widely, in relation to supermarkets generally and in relation also to small traders or specialty shops.

The JHD report was concerned to analyse both the impact of a new Woolworths supermarket upon the performance of other supermarkets in the trade area and the impact of other supermarkets in the trade area on Woolworths. It identified the competing supermarkets as Bi-Lo Mega Fresh at Marketown, Coles at Junction Fair, Franklins and a small supermarket at Hamilton. On p 14 it concluded as follows: This analysis therefore suggests that the trading impacts likely to result from adding a proposed Woolworths supermarket to the site bounded by King Street, Ravenshaw Street, Parry Street and Steel Street would be to lift the average performance of supermarkets in the trade area by increasing the retained level of spending within the trade area. By itself, establishing a new supermarket at the proposed site would not, in our view, necessarily threaten any existing supermarkets with closure.

Both the Colliers Jardine submission and the Elizabeth Thomson submission raised an issue of economic impact specifically upon Junction Fair Shopping Centre, and ERM raised the same issue in relation specifically to Franklins.

The Leyshon report considered that the sales impact of the proposed supermarket on existing supermarkets would exceed the high/very high category and that both Bi-Lo Mega Fresh and Franklins would be adversely affected by the proposal (p 7).

The economic impact upon other shops was squarely raised in other documentation. It was noted as an issue on p 2 of the A T Cocks submission, and the economic impact on small shops was an underlying and repeated theme of the Ibecon report (pp 4, 6, 11, 13 14, 19 and 20). It was also a matter which received some consideration in the Scott Carver additional report, where the conclusion was drawn that there would be an economic benefit to all retailers in the City West area (p 14). In particular, the Scott Carver additional report suggested, on p 18, that "… [t]he proposed supermarket will compliment (sic) the operations of Marketown by providing greater choice and competition, and helping to identify this part of the City as a node for retail activity of this scale and specific type - grocery shopping". The question of the economic impact upon small retailers was raised in the Cartier submission, and the Hill PDA report at p 4 had this to say on that matter: It is agreed with the objectors that the proposed supermarket is likely to have an impact on the surrounding small retail stores. However this impact is not necessarily negative as an extra supermarket may attract more shoppers to the area who purchase spin off goods from the smaller neighbouring retailers. There will be positive and negative impacts on small retailers but the net effect on the CBD West End is neutral if not positive.

There is no dispute between the parties that all this material was actually or constructively before the council. In addition, the councillors had the benefit of debate at the public voice session and the council meeting itself.

As to the public voice sessions, the following matters are relevant:

(a) Mr D Boyer, a representative of Cartier, addressed the meeting and raised the issue of economic impact. He said that Cartier was not relying on competition between supermarkets, but on "… the flow on effect that the reduction in trade and traffic flow to supermarkets has on small shops … it's certain there will be a significant fall in turnovers of other traders within those centres …"; (b) Ms K Halliday, a representative of ERM, noted the potential adverse economic impact on existing supermarkets, and also noted that it was "important for Council to consider for the small operators that are in the business district around the supermarkets in question". (c) Councillor Tol made reference to what he recalled of a decision of Lloyd J in this Court (although without naming the decision) especially in regard to the fact that the council was not to be concerned with the threat of economic competition between competing businesses. Councillor Tol sought a comment, and Mr B Knowles, who is a council officer holding the position of group manager development and environment, replied in the following terms: KNOWLES: The extract that Council Tol referred to is in fact quite correct. That was the comments of Justice Lloyd in the AMP appeal and Councillors may remember there was extensive work done on economic impact. Fundamentally the Court and the law is not too considered, what not considering so much the issue of economic impact between traders, but the economic impact on the centre … Justice Lloyd took a fairly broad assessment of that … in that particular case he was of the view that three or four cinemas close to Newcastle, that would be a matter of competition and not of concern. What was at issue there was the overall viability of the centre and to that extent he considered that there was no impact. So it is that background that the Council needs to consider when it is addressing the issues of economic impact … Hill PDA … have basically provided the response as Councillor Tol has indicated and I have added to tonight. (I note that the reference to "the AMP appeal" is to AMP Investments Ltd v Newcastle City Council [1999] NSWLEC 164).

(d) In response to a query from Councillor Henry about "commercial impact" Mr Knowles again referred to "the AMP appeal", and said that the Court had looked at economic impact as it impacted on the total centre, not on an individual business;

(e) Councillor Piddington was concerned about the effect of the proposed supermarket on the specialty shops in Marketown, and in response to that concern, Mr Boyer stated that "we definitely do think that it is going to affect it in a very serious way" and said that Fabcot v Hawkesbury City Council had been concerned not about competition between supermarkets but about "the fall-out for other shops in the area …".

(f) Councillor Gaudry expressed concern about small traders, and in response Mr Boyer said "… we are just trying to urge there to be some planning so that we don't end up with five or six supermarkets all banging against each other and the fall-out ends up being the small traders". Mr Knowles also responded to Councillor Gaudry, saying that the advice from Hill PDA was that "… there will be an impact on competitive traders, in other words other supermarkets, but that is not the principal issue for Council's consideration it's a competition matter …".

(g) A representative of Restifa and a representative of JHD also addressed the public voice session. The latter pointed out that "… the question of economic impact … is often masquerading for essentially competition effects" and he expressed his opinion that a new Woolworths supermarket would provide more customers in the locality and specialty shops would trade at better levels "…as a result of this additional competition".

Economic impact generally was voiced in comments made at the council meeting at which the resolution to grant consent was passed. Thus, Councillor Henry expressed concern about the impact of the "village character" of Marketown and the Junction Shopping Centre. Councillor Faye thought that some businesses would not do well in the competitive retail environment but also thought that there would be a choice of areas for shopping for the population in the West End. Councillor Tol thought supermarket retailing in the area was confined to Bi-Lo Mega Fresh, Coles in the Junction and Franklins at the Store, and considered that "… Woolworths is entitled to their part of (the) trade …". Councillor McKenzie thought that "… small speciality retail outlets in both the Store area and Marketown (will) be affected and suffer …". Finally, the Lord Mayor, Councillor Tate, expressed his opinion that "… where you see a viable, vibrant, competitive bustling area you find Woolworths and Coles competing for business. This will add that dimension to that area …".

Taking into account the material actually or constructively before the council, and the matters raised in the debate at the public voice session and the council meeting. I am unable to conclude either that the council misdirected itself in relation to s 79C(1)(b), or that it failed to give proper, genuine or realistic consideration to s 79C(1)(b) as it applied to the proposed development.

A further claim by Cartier was that the council was obliged, pursuant to s 79C(1)(b), to define the "locality" and that it failed to do so, with the consequence that it failed properly to take into consideration the economic impact in the locality.

Mr Preston sought to make good this claim in two ways. First, he submitted that the "locality" is a concept that has a physical dimension especially as it is, so far as concerns s 79C(1)(b), relevant to an impact of a proposed development. In his submission, "locality" is not defined by reference to a planning zone or a broad local government area. Yet, he said, that is the approach which was erroneously taken in the Hill PDA report, and hence the council was misled and thus failed to take economic impact properly into consideration. Thus, on p 3 of the Hill PDA report, there is a reference to trading within the central business district ("the CBD"), there is a reference on p 4 to the location of the site within the 3(a) Central Business zone under the local environmental plan, and, finally, the conclusion of Hill PDA was as follows: Given that the proposed development is in the CBD zoned area and will contribute to the vitality of the CBD, as defined by the zoning, then we do not believe there is sufficient grounds to refuse the application in relation to economic impact.

Mr Preston's second submission on this point was that the council failed to define "locality" at all. It was said that it so failed because throughout the material before the council many and differing expressions of "locality" were used, but the council never turned its mind to defining "locality" for itself. Thus, for example, the JHD report variously used the expressions "trade area", "Newcastle region", the "region" and "the general area". Other material, for example, the Scott Carver SEE, used the expressions "central business district" and "the West End". The Cartier submission specifically raised the definition of "locality" as an issue, and submitted that it was not "the whole Newcastle region", nor was it the "central business district" but instead referred to it as "a fairly small area".

I am not persuaded that the council fell into legal error in relation to the concept of "the locality" in s 79C(1)(b). There was a multitude of references to the expression "economic impacts in the locality" in the material before it, including the council officer's report. An inference that it ignored "the locality" could not safely be drawn. Furthermore, nothing in the EP&A Act requires the council to articulate a definition of "the locality", and no inference can be drawn from its failure to do so. Nor can any inference be drawn from the various expressions used in the material to refer to "the locality". Councillors can be presumed to have knowledge and understanding of the area in which the council operates; they would be generally aware of the physical surroundings of the site and of the relationship of the site to other local development, including supermarkets and small shops (see Lakeside Plaza Pty Ltd v Legal and General Properties No 2 Ltd and Anor (1992) 76 LGRA 60 at 65). Indeed, such local knowledge was demonstrated in the comments made by some of the councillors at both the public voice session and at the council meeting.

Cartier's claim is that the council unreasonably failed to ascertain facts and material which were readily available to it and centrally relevant to its decision, and that, accordingly, its decision to grant development consent was made in an improper manner.

In putting this claim, Mr Preston referred to Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155, although he said that the claim was not put simply upon the basis set out in the judgment of Wilcox J at pp 169 - 170. Mr Preston focussed upon the following statements in the Hill PDA report:

(1) The JHD report "fails to provide an appropriate basis on which Council can assess the economic effects of the proposed development" (p 3);

(2) "… additional information in the line of shopper surveys and estimated trading levels are required to assess the impact on the viability of traders." (p 3);

(3) The JHD report "… lacked some key data to provide Council with an accurate basis to determine the likely economic effects of the proposal particularly with reference to the potential adverse impacts on current traders and the viability of those traders to remain trading …" (p 5).

In Mr Preston's submission, this was not material which the council itself should have obtained. Rather, it was material which should have been provided by Restifa, and the council should have deferred consideration of the development application until it was provided, because the council was not able to determine the development application in its absence.

In my opinion, this claim must fail. The statements quoted from the Hill PDA must be read in their context. The first statement above is simply a note of the claim in the Leyshon report and the A T Cocks submission that the JHD report was deficient. The second statement was made in the context of the opinion of Hill PDA that the lack of material was not relevant in view of the approach to be taken as set out in Fabcot v Hawkesbury City Council, and the third statement was made in a similar context. For the reasons I have earlier set out, I do not consider that the Hill PDA report misstated the law. I also note that the Hill PDA report concluded, on p 5, that there were not "sufficient grounds to refuse the application in relation to economic impact". In my opinion, the facts and material which is said by Cartier to be lacking was not centrally relevant to the council's consideration of economic impact under s 79C(1)(b) and its absence does not vitiate the council's decision.

At the time of the council's determination of the development application, the draft Newcastle Local Environmental Plan 2000 ("the draft LEP 2000") was in existence, but it had not been placed on public exhibition. It does not seem to be in dispute that the Director-General's certificate under s 65 of the EP&A Act permitting public exhibition, and the public exhibition itself, took place after the grant of the development consent.

Because the draft LEP 2000 had not been placed on public exhibition, the council was not bound to take it into account under s 79C(1)(a)(ii). Indeed, that is the context in which, in section 5.1.2, the Scott Carver SEE referred to council's preparation of "a new primary planning instrument for the LGA" but that "… the proposal is not assessable under its provisions".

However, Cartier's claim is that the draft LEP 2000 reflected council's policy as at the time of assessment of the development application, and therefore it should have been taken into consideration in the public interest under s 79C(1)(e). Yet no mention of the draft LEP 2000 appears in the material before the council, and in particular no mention of it is made in the council officer's report. In Mr Preston's submission, the draft LEP 2000 was relevant because it evinced an intention on the part of the council to prohibit the use of the site for the purpose of "shops".

Mr Preston relied upon the decision of Sheahan J in Concrite Pty Ltd v South Sydney City Council (1998) 101 LGERA 170, and on the cases there cited. His Honour's decision is authority for the proposition that the expression "the public interest" is wide and general, but in noting at pp 186 - 187 that draft planning proposals which have not been put on public exhibition might be relevant for consideration, his Honour was referring to a former ground of consideration under s 90(1)(q), namely, "the circumstances of the case".

Cartier's claim is not that the council failed at all to take into account "the public interest". Indeed, on the evidence, that claim could not be made, because that head of consideration was expressly raised on p 31 of the council officer's report, and it had been raised in s 5.4 of the Scott Carver SEE. Instead Cartier's claim focuses on the absence of any reference to the draft LEP 2000.

I am prepared to accept that, considering the width of the head of consideration under "the public interest", the draft LEP 2000 may have had some relevance. But the onus is upon Cartier to demonstrate that it was relevant, that as a consequence of its relevance the council was bound to take it into account, and that it failed to do so (see Parramatta City Council v Hale at p 345).

I do not think that Cartier has discharged this onus. In particular, Cartier has not demonstrated that the draft LEP 2000 was in fact an expression of the council's policy. On the contrary, the council's strategic policy was set out in other documents. Thus, in section 5.4, the Scott Carver SEE discussed the planning strategy for metropolitan regions, including Newcastle, put out by the Department of Urban Affairs and Planning in 1998. More specifically, in section 5.1.3, it discussed the "City West Strategy" identified in Newcastle Development Control Plan No 40 - City West ("DCP 40"). The A T Cocks submission also referred to the council's strategic policy for the West End as reflected in the Newcastle Central Area Strategy - March 1992, the Newcastle West End Strategic Development Plan 1995, and DCP 40. In addition, the council officer's report contained the following statement under a heading referring to s 79C(1)(e): The development proposal is consistent with the provisions of Council's Urban Residential Strategy adopted in March, 1998, as well as Council's overall urban consolidation and inner city population maintenance objectives. The proposal also generally complies with the provisions of Council's City West DCP 40.

It can be seen that there was ample material from which the council could take into account its strategic policy as a matter of "the public interest". Hence all that Cartier can point to is the omission from that material of any reference to the draft LEP 2000. But the omission of a reference to the draft LEP 2000 does not establish that the draft LEP 2000 reflected the council's strategic policy for the site and its surrounding area, nor that it was directly relevant to be taken into account in the council's consideration as the "public interest", nor that its relevance was such that a failure ti take into consideration vitiated the council's discussion.

For these reasons, Cartier's claim arising out of s 79C(1)(e) also fails.

I have concluded, for the foregoing reasons, that Cartier's grounds of challenge have not been made out, and that accordingly its application should be dismissed.

(2) The applicant must pay the costs of the respondents as agreed or as assessed.

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