City of Holdfast Bay v Glenelg Backpackers Resort P/L & Needs No ERD-02-180 [2002] SAERDC 80

On 4 June 1991 signage was approved under the Planning Act, for 2 signs on the premises: one addressing the nature of the accommodation, and the other advertising the restaurant facility.

In 1996, a general facility licence was sought, and obtained. At the end of the day, the Council did not oppose the grant of the licence. The grant of this licence enabled persons who were not staying in the backpackers' accommodation, to enjoy a drink from the bar, without the drink being ancillary to a meal. The general facility licence was sought by the respondents, to enable those persons staying at the premises to bring along guests, including "friends or relations that the backpackers have met or known in Adelaide", to "enjoy a drink and a discussion and also the entertainment" provided (the quotes are from paragraph 10 of the affidavit sworn by Geoffrey Needs on 21 August 1996).

The Council does not assert that the grant of the general facility licence constituted a change of use of the basement part of the premises. As Mr Beamond, counsel for the Council, submitted:

"There was no change of use proposed, just an increase in the number of people who might attend as part and parcel of the activity of providing accommodation to backpackers." (transcript, page 60).

However, the Council alleges that the Development Act has been breached in that the use of the basement has now changed, because members of the public, who are neither guests of the backpackers, whether friends or relations or otherwise, are attending at the basement of the premises to enjoy the facilities there provided.

It would appear that the Council in its decision of 19 September 1997, approximately one year after the grant of the general facility licence, sought to assert its view that attendance at the basement by members of the general public, without invitation from any person staying in the backpackers' accommodation, would constitute a change of use of the premises. It did this by attaching a "note" or "condition" to the Development Authorisation granted on 19 September 1997.

It was asserted that the "note" attached to the 1997 development authorisation under the heading "Provisional Planning Rules Consent Condition(s)" was a condition whereby the basement area of the premises could not be used by the general public without a further development approval. I do not accept that this constituted a valid provisional development plan condition attaching to that development authorisation. My reasons are as follows:

On the face of the Decision Notification Form it was indicated that provisional development plan consent had been granted on 27/8/1997 (in addition to the grant of provisional building rules consent on 19/9/97) and under the heading: "No. of Conditions" were the words "not applicable".

The following appeared, on the second page of the Decision Notification Form, under the heading "Provisional Planning Rules Consent Condition(s):

1. NOTE: The basement area is to be used by guests staying within the building only and not be available to the general public without the further Development Approval of Council".

The proposed development was described on the face of the Decision Notification Form as "internal alterations (to basement walls)", and thus, without more, the application was for development authorisation in the nature of building rules consent, being development in the nature of building work, where no change of use was proposed.

The documents evince no intention to change the existing approved use of the building, or in particular the basement of the premises.

A condition to be valid, must fairly and reasonably relate to the development the subject of the approval: Twenty-Seven Properties Pty Ltd v Corporation of Noarlunga (1975) 11 SASR 188. The "note" or purported condition does not relate to the development the subject of the application.

A planning authority cannot use its powers for an ulterior object, no matter how laudable is that object: Twenty-Seven Properties Pty Ltd (above). It appears that the Council has sought to limit the use of the premises, despite having no power to do so, in the circumstances.

The facts do indicate that the public was encouraged to attend in the basement of the premises and not discouraged from doing so. I have arrived at this conclusion after a consideration of the following evidence:

Paragraph 7 of the affidavit of Geoffrey Robert Needs sworn 21 August 1996.

The reference in the letter from Needs' solicitors dated 23 August 1996, to the effect that tourists admire the historic building and "call in and seek to have a drink".

The advertising variously for "Glenelg Beach Resort" and "Backpackers Resort" in The Guardian Messenger on 11/11/98, 16/12/98 and 8/8/01.

The footpath signage inviting the public to enter (photographs dated 14/4/00 and 7/12/00).

The window signs advertising bar and cafe facilities in the basement, to passers-by (4 photographs dated 7/12/00), to use internet and other facilities.

The gig guides indicating that various bands would be playing at the premises (12/4/00, 11/1/01 and 24/1/01). While the premises may have appeared in the gig guides without the knowledge of the respondents, as asserted by counsel for the respondents, the fact of its appearance might suggest that the respondents did not discourage this form of advertising.

The affidavit of Juan Carlos Buzzetti sworn 6 July 2001.

The affidavit of Alan Edward Osborne sworn 30 July 2001.

I make it clear that in reaching my conclusion, I have not considered the transcript of the hearing in this Court before Commissioner Hodgson on 28 May 2001. What may have been conceded there, by counsel, is not relevant to my determination of the status of the purported condition.

Members of the public who were not, or not linked to, those persons enjoying short-term accommodation in the premises have attended at the premises. Was that contrary to the approved use of the premises?

Assuming the approved use of the premises is as a backpackers' hostel and a restaurant, the members of the public attending the premises to dine in the restaurant (café), even though they are not benefiting from the short-term accommodation provided at the premises, would be attending the premises consistent with the approved uses of the premises. However, if the members of the public who attend the premises (but who are not staying there in the short term accommodation provided) do so merely to enjoy the bar facilities, the pool table or the other facilities and/or the entertainment provided in the premises, then they would not be attending the premises consistent with the approved uses of the premises, unless the facilities and entertainment are incidental to the use of the premises as a restaurant and backpackers' accommodation.

If the approved use of the premises is as a backpackers' hostel only, those members of the general public attending the premises (but who are not staying in the short-term accommodation provided) would not be attending the premises consistent with the approved use. I reach this conclusion, because historically, a backpackers' hostel would have been a facility which would provide short-term board and lodging to those ordinarily described as "backpackers". Is a backpackers' hostel to be likened to other forms of short-term accommodation for travellers, such as a hotel and motel? The latter forms of accommodation almost inevitably include a facility variously termed a restaurant or dining room, which is for the benefit of the travellers enjoying the short term accommodation provided in the facility, but also available for use by members of the general public. It would be fair to say that a restaurant or dining room would ordinarily be regarded as reasonably incidental to the use of premises as a motel or hotel.

It is interesting to note that the respondents market the premises as "Glenelg Beach Resort", which is also described as a "backpackers' resort".

I suspect that the confusion which has led to the dispute underlying these proceedings arose from each party having a different understanding of what is meant by a backpackers' accommodation facility (to use neutral terminology). It appears to me that the Council may have considered that what it had approved in 1990 was a variation to a backpackers' accommodation facility, which provided facilities only for backpackers (including kitchen facilities and dining area), except in the restaurant, which was open to the public. On the other hand, the respondents, upon obtaining an interest in the premises in March 1995, perhaps considered that the premises were approved for use for short-term accommodation facilities for backpackers, together with other uses incidental to that use, and that the grant of the general facility licence would provide greater benefits for the backpackers.

On the evidence (agreed documents only) and from the view which I took at the invitation of both counsel, it appears that the following are the facts with respect to the character and use of the basement part of the premises:

The entire basement area has low illumination and a gloomy, "grunge" atmosphere, with a strong odour of cigarettes.

Persons resort to the basement part of the premises for a number of purposes including:

for the preparation and consumption of their own light meals;

for the consumption of light meals ordered by them and prepared by or on behalf of the management;

to peruse brochures and/or plan and/or book travel and visits to places of interest;

to participate in organised activities (generally at night); and

No part of the basement is used for a purpose that is separate and independent from the use of the whole of the premises for short-term accommodation by backpackers.

Clearly, no part of the basement part of the premises is established as a restaurant, in the sense that it is physically separate and distinct from the use of the whole of the premises as a backpackers' accommodation facility. The entire basement is of an open-plan nature; with different areas set up for different purposes, but no part of the basement is closed off from any other part with perhaps the exception of the kitchens, and of course, the toilet facilities. There is no separate "nightclub" use of the basement. While one part of the basement might be used on some evenings, in the manner of a "nightclub", that would not constitute a separate and distinct use of part of the basement, given that there is no means of closing off that part of the basement being used as a "nightclub".

Thus, I am satisfied that the use of the whole of the basement is intertwined with the use of the balance of the premises, namely as a backpackers' short-term accommodation facility. However, it is clear that in addition to the use of the premises by those backpackers enjoying the benefit of the accommodation provided in the premises, the public also resorts to, and is encouraged to resort to, the basement part of the premises. The greatest use of the basement part of the premises is on Friday and Saturday nights when the average attendance as at February 2001, was said to be approximately 110 persons and it is conceded by the respondents that a significant number of those attending the premises on these nights are members of the public who are not staying in the accommodation provided in the premises. It has been acknowledged on behalf of the respondents that the split between residents and non-residents on Friday and Saturday nights is approximately 50:50.

The Council has made it clear that it does not oppose members of the general public attending the basement part of the premises at the invitation of those persons enjoying the accommodation provided in the premises, accepting in so doing, that this would not take the use of the premises outside the approved use. However, the Council does argue that the attendance in the basement by members of the public who have no connection with those enjoying the accommodation facility provided in the premises, and the encouragement of same by the respondents, constitutes a new and separate use, distinct from the approved use. It was suggested that this new and separate use, according to the Council's argument, is that of a public bar and "nightclub". Further, the Council's argument is that this additional use is without development authorisation under the Development Act and therefore is contrary to the Act, with the result that the respondents are in breach of the Act.

On the part of the respondents, it was submitted that even if members of the public who are related to, or are invited by, those persons enjoying the benefit of accommodation provided in the premises, attend to enjoy the activities, entertainment, drinks or general ambience provided in the basement, that is merely an incident of the use of the premises as a short term accommodation facility. In the same way, it was submitted, members of the public resort to a restaurant which forms part of a motel premises.

Is the public bar and nightclub use of part of the basement of the premises ancillary or subservient to the backpacker accommodation use, or are they plainly two uses which are independent of each other? This was the question posited in Southern Cross Homes Inc v Enfield City Corporation (1992) 76 LGRA 94, to determine whether two uses of one parcel of land were separate and independent uses or whether one use was plainly part of, ancillary to, or subservient to the other use. As a matter of fact and degree, I am satisfied that the public bar and nightclub use of the basement part of the premises is ancillary to, or part of the backpacker accommodation use of the whole premises, in this case. They are not two independent uses. In coming to this conclusion I have taken into account the following:

The whole of the three floors of the premises are managed by the same persons.

The basement premises are not leased independently of the balance of the premises, nor is the basement subject to a sub-lease.

The various facilities provided in the basement are all for the enjoyment of those persons benefiting from accommodation provided in the premises and are directed at the age group of persons likely to fall within the category of backpackers.

There was no evidence that the bar and/or nightclub are operated as a business separate from the backpackers' accommodation business.

In so deciding, I am not to be seen as concluding that a public bar and a nightclub are inevitably or ordinarily part of the backpacker accommodation or hostel facility. It will always be a question of fact and degree.

Another means of approaching the question of the relationship between the accommodation provided in the premises and the activities in the basement, particularly the public bar and nightclub, is to consider whether one purpose is dominant and the other servient. If such a relationship exists, then it can be said that the use of the premises is for the dominant purpose: Foodbarn Pty Ltd & Ors v Solicitor-General (1975) 32 LGRA 157 and Minister of Environment & Planning v District Council of Stirling & Rockleigh Engineering Pty Ltd (1990) 53 SASR 505. In this case, I find on the evidence available to me, that the public bar and nightclub and the other activities taking place in the basement of the premises are subservient to the purpose for which the balance of the premises are used, namely that of backpackers' accommodation, in the same way that the Supreme Court considered that the elements of the proposal before it in the Rockleigh (above) case, were subsumed in the dominant purpose of the development which was a "health retreat".

In Ronecast Caterers Pty Ltd v Davis (1981) 26 SASR 545, the principle issue for the Full Court, was whether the use of the lower ground floor of premises as a discotheque was a use ancillary to the use of the balance of the premises as a restaurant. In his reasons, the Chief Justice considered that the critical question, once one concluded that certain activities were accepted concomitants of a restaurant, was whether those activities were "of such magnitude and importance in the operation of the establishment that they cannot be said to be mere concomitants of the service" provided and "must, on the contrary, be regarded as an end in themselves and therefore an activity distinct from the (principal) activity", in other words, a new, additional use.

Can it be said that the provision of bar facilities, entertainment by way of bands, karaoke, comedians, and competitions, for the benefit of the backpackers and members of the public, are accepted concomitants of a backpackers' accommodation facility? If so, in this case are they of such magnitude and importance that they can be said to be an end in themselves and therefore an activity separate from the backpacker accommodation use of the premises? Whether they do constitute a new activity and therefore a change of use of part of the premises is a question of fact and degree: Adelaide City Council v Frankham Judgment No. [2002] SASC 162.

The very nature of the facilities provided, shows them to be aimed at the comfort and convenience of the backpackers using the accommodation, in the same way as a 5-star hotel is likely to have a bar, restaurant, nightclub, lounge, travel desk, and business centre. Therefore, while the provision of the entire range of facilities offered in the first respondent's premises might be unusual in the run-of-the-mill backpackers' accommodation facility, in the same way that the range of facilities in a 5-star hotel would not be found in a 2-star or 3-star country hotel, the facilities can be accepted as concomitants of the accommodation facility operated by the first respondent.

Next, as a matter of fact and degree, the conclusion that I have come to is that these activities in the basement are not of such magnitude and importance in the operation of the backpackers accommodation facility that they should be properly regarded as an end in themselves and therefore, constitute an additional use of the premises. My reasons for so concluding are as follows:

The space devoted to these activities and facilities is small, having regard to the layout of the basement and the other facilities provided in the basement part of the premises, and having regard to the fact that two entire floors of the premises are devoted to accommodation.

The nature of the activities and facilities on offer, is consistent with the provision of a comfortable and accommodating environment for that class of travellers described as "backpackers".

"Backpackers" generally includes older teenagers and young adults who travel lightly and cheaply, and who generally seek the company of other like-minded young people, enjoy listening to particular categories of music and participating in karaoke sessions, among other past-times.

Again, my decision should not be taken as suggesting that in every case, the provision of a bar and lounge with entertainment facilities would not constitute an activity separate from the main activity carried on in, or the use of, the premises. In each case, it will be a matter of fact and degree. I was referred to the decision of the Victorian Civil and Administrative Tribunal in Starera v Melbourne City Council [2000] VCAT 569. That was a case where it was found, inter alia, as a matter of fact and degree, that the use of the premises had been changed from that of a hotel to that of a nightclub. The case illustrated the importance of the factual matters.

The Ronecast Caterers (above) case was decided before the Development Act 1993, and indeed, before the Planning Act 1982. In light of the provisions of the Development Regulations 1993, that test may no longer be apposite. Schedule 3 to the Development Regulations sets out acts and activities which are excluded from the definition of development. Clause 5(1) of that Schedule is as follows:

"The use of land and the use of any lawfully-erected building which is ordinarily regarded as (and is in fact) reasonably incidental to any particular use of the land and the building, or the land or the building, and which is for the substantial benefit of the person or persons who, in any capacity, are making use of the land and the building, or the land and the building."

Thus, there is a threefold test, which I divine to be as follows:

Is the bar and nightclub use of the basement a use which is ordinarily regarded as reasonably incidental to the use of the premises for the purpose of backpackers' accommodation?

Is that use of the basement in fact reasonably incidental to the use of the premises as backpackers' accommodation?

Is that use of the basement for the substantial benefit of the persons who are making use of the premises?

With respect to the question numbered 3, I conclude that those persons are the backpackers or those who use the premises for short-term accommodation. For the reasons set out above, I conclude, as a matter of fact and degree, that the facilities provided in the basement are for the substantial benefit of those persons.

With respect to question number 2, I have already concluded, above, that the facilities provided in the basement are in fact, in this case, concomitants of the use of the premises for backpackers' accommodation and do not, by their magnitude and scale, constitute a separate use. It must follow that the bar and nightclub (and other facilities there) are reasonably incidental, in fact, to the use of the premises for short-term backpackers' accommodation.

I am unable to say that it is common knowledge that such uses of the basement as are undertaken in the subject premises are ordinarily regarded as reasonably incidental to the use of the premises for backpackers' accommodation, and no evidence was provided to me to assist me with this conclusion. It may be that this kind of backpackers' accommodation facility is a first, or is at the top of the range with respect to backpackers' accommodation facilities, in the same way as a 5-star hotel with all its facilities is at the top of the range of hotels which provide accommodation. While such facilities might not ordinarily be regarded as reasonably incidental to the use of premises for backpackers' accommodation, there is no reason why they should not be so regarded; hence I have already found that they are (but not necessarily so) concomitants of a backpackers' accommodation facility. As there is a wide range (with associated grading) of hotels providing accommodation, so there is a range of motels, guest houses and other forms of accommodation. I see no reason why what is provided here is not to be ordinarily regarded as reasonably incidental to the use of the premises for short-term accommodation for backpacker travellers.

There is an issue as to whether "ordinarily regarded" is fixed in time. This was explored by Wells J in City of Noarlunga v Usher (1981) 29 SASR 109. At page 116, His Honour said:

"The relevant words are "ordinarily regarded as ... reasonably incidental", which, to my mind, emphasises the character of the res, rather than its incidence within the community."

Having regard to the character of the res, I am satisfied that the first question should be answered "yes".

Thus, I have concluded that the fact that the general public attend at and frequent the basement part of the premises, in addition to those persons who are staying in the backpackers' accommodation provided in the premises, is a use of the premises which falls directly within Clause 5(1) of the Third Schedule to the Development Regulations. Accordingly the use of the premises for purposes of a public bar and nightclub, to the extent to which they are presently and have been used, does not constitute development within the meaning of the Development Act. It does not matter that this public bar and nightclub use, as described herein, was not part of what was proposed when the original or the amended development approvals were granted for use of the premises for the purposes of backpacker accommodation. This is because the scheme of the legislation does not require, once a particular kind of development has been approved on land or in premises, that any additional act or activity which is reasonably incidental to the use approved (in terms of Clause 5(1) of Schedule 3 of the Development Regulations) be the subject of a separate approval. This is a commonsense approach.

Finally, it must be stressed that my conclusions and decision relate expressly to the factual situation as it is presently, and has been, in the basement of the premises. Without being specific, I can say that any one of a number of possible changes to the layout and facilities available in the basement, or perhaps a change in the number of the members of the public attending the basement compared with the number of resident backpackers, could result in the use ceasing to be reasonably incidental to the use of the premises for backpacker accommodation, in which case an unlawful change of use would have occurred, unless development authorisation had first been obtained.

It follows, from my findings in my conclusions above, that I am not satisfied that a breach of the Development Act has occurred, as alleged. Therefore, it is not open to me to make the orders as sought in the summons by the applicant. The application is dismissed.