Drayton Manor Pty Ltd v Greater Bendigo CC [2011] VCAT 628

Drayton Manor Pty Ltd v Greater Bendigo CC [2011] VCAT 628 - VCAT 2011 case summary — Zoe

[22]

The Foundry Hotel in Golden Square is a landmark heritage building in Bendigo. A Hotel has operated from the land since the late 19th century. It is a well established premise with a range of facilities including its bar, bistro, function room and conference facilities. It is common ground between the parties in both proceedings that it is a quality, well-managed, venue.
The two proceedings before us relate to a proposal to introduce 25 electronic gaming machines ["EGMs"] at the Foundry Hotel. This is part of an expansion of the Hotel on its site. One proceeding is brought by the City of Greater Bendigo seeking review of a decision by the Victorian Commission for Gambling Regulation ["VCGR"] to allow 30 EGMs. Another proceeding is brought by Drayton Manor seeking review of the Council's decision to refuse a planning permit for the proposal including 30 EGMs.
In summary:
- The Council challenges the determination made by the VCGR because (among a range of matters) it considers the proposal will have a detrimental net social and economic impact, does not meet the Council's gaming policy, is opposed by some 74% of respondents to a survey of residents within five kilometres of the Hotel, and new data provided through Mr Gill's evidence shows the transfer of expenditure will be lower than estimates provided in evidence to the VCGR. Drayton Manor disagrees based on evidence it relied upon.
- In relation to the second proceeding, the Council has determined to refuse the planning permit on grounds relating to the failure of the proposal to comply with the gaming policy in the Greater Bendigo Planning Scheme, the failure to produce a net community benefit, expressed community opposition, and contended detrimental social and economic impacts. The decision is challenged by the permit applicant on grounds that the proposal will produce an acceptable planning outcome. That position is based on evidence it relied upon. Ms Grygierczyk supports the Council's decision.
The proposal in both proceedings before the Tribunal has been amended to reduce the number of EGMs to 25 and to limit hours of operation to 11am to 1am the following morning. During the hearing revisions to the plans were also proposed primarily to respond to heritage evidence brought by the Council and permit applicant but also dealing with some other matters relating to the proposed gaming room and car parking.
The Tribunal must decide if the decisions made by the respective decision-makers should be affirmed, varied or set aside.

[23]

We are required to consider and weigh different matters in each proceeding.
Section 3.3.7 GRAct sets out the matters to be considered in determining applications for gaming machines. Section 1(c) is central to the proceeding brought by the Council against the VCGR's decision.[3] The Commission must not grant an application for approval of premises as suitable for gaming unless satisfied that "the net economic and social impact of approval will not be detrimental to the well-being of the community of the municipal district in which the premises are located". There are no decision criteria to define this test or assist in deciding if the test is met.
Section 60 PEAct sets out the relevant matters in determining a planning permit application. The test set by the Greater Bendigo Planning Scheme is whether the proposal will achieve acceptable outcomes based on the relevant provisions including the purpose of the Residential 1 Zone; Overlays; particular provisions Clauses 52.06, 52.07, 52.28; Clause 65; and relevant policies such as Clauses 21.07 and 22.28. Clause 10.04 states responsible authorities should endeavour to "integrate the range of policies relevant to the issues to be determined and balance conflicting objectives in favour of net community benefit and sustainable development for the benefit of present and future generations".
Unlike the GRAct where an application must be found to not be detrimental to the well-being of the community of the municipality[4], Clause 10.04 of the Scheme does not mandate proof of net community benefit. Rather, Clause 10.04 sets policy considerations to guide the decision-maker[5]. In the case of the Greater Bendigo Planning Scheme, Clause 22.28 includes a decision guideline requiring consideration of whether there is "a net community benefit" to be derived from an application for gaming machines. This is part of the policy assessment and balance we must undertake.
Tribunal decisions have sought to distinguish other differences between relevant matters in each type of proceeding as summarised in Bright Newbay[6]:

[40]

The Council's case with respect to social disadvantage focus on the existing level of social disadvantage and the extent to which that will be increased mindful of the prospect of transferred expenditure and the density of EGMs.
Reliance was placed on the evidence of Mr Gill and Ms Wallace including the results of a community survey where significant opposition to the proposal for 30 EGMs was expressed by people living within five kilometres of the Foundry Hotel who replied to the survey.
The original application was premised on the basis that there would be no new EGMs as the proposed machines would be transferred from an existing location. This was not required in the VCGR approval[10] and, based on Ms Peterson's evidence, can not be assumed having regard to the auction process that has occurred.
It is very difficult to predict with any certainty as to whether, and to what extent, the proposal would increase social disadvantage. The evidence of Ms Wallace, Ms Peterson, Mr Quick, Mr Clyne and Mr Gill is all based on a range of variables and assumptions that have varying degrees of certainty in themselves. For example, there are varying approaches to the geographic areas used as a basis for assessment including ABS collector districts, postcodes and suburbs (these having varying relevance in the two proceedings before us). There is also the proposal for additional EGMs at the Kangaroo Flat Sports Club which have not been approved but which, we understand, will not be opposed by the Council. This has been factored into some evidence but not consistently across the witnesses given there is no approval.
However, the following can be discerned from the evidence with certainty as relevant to our consideration of the permit application:
- The EGM cap for the City of Greater Bendigo is 756. There are currently 547 EGMs. The auction process has resulted in 615 entitlements being purchased. No entitlements have been purchased for the 25 EGMs proposed at the Foundry Hotel meaning, if approved, the 25 EGMs would be new (total of 640 EGMs) or could be transferred. We have assumed the "worst case" that all 25 EGMs would be new to the municipality in assessing impacts.
- The City of Greater Bendigo has 10 gaming venues. Nine are within approximately five kilometres of the Foundry Hotel. Two postcode areas comprise the primary catchment area.
- The catchment for the Foundry Hotel is primarily within a 20 kilometre radius (75%) with 51% being from within five kilometres.[11]
- The SEIFA Index for the City of Greater Bendigo is 984; below the Victorian LGA median of 993 based on Ms Peterson's and Mr Quick's evidence. The two postcode areas that comprise the primary catchment area show similar signs of some disadvantage at 957 for postcode 3555 and 978 for postcode 3550.
- These postcode areas also provide the primary catchment for most of the other existing gaming venues.
- Postcode 3551 also falls within the Foundry's catchment of five kilometres but it has a SEIFA Index of 1,058.
- At collector district level, the area immediately around the site is generally between 970 and 1,025 on the SEIFA Index other than the area to the immediate south. The more disadvantaged areas within postcode 3555 include Kangaroo Flat where there are existing gaming options.
- The density of EGMs for the City of Greater Bendigo is 6.91 EGM per 1,000 adults (at June 2010). This is higher than the Victorian country average of 6.65 EGMs per adult. The proposal would increase that density to 7.23 (assuming all new EGMs) or 4.57%. The increase may be counterbalanced by population growth particularly given the EGMs would not be operational until 2012. The calculations will further fluctuate with any other changes in EGM numbers and population.
- The density of EGMs in adjacent suburbs to the Foundry Hotel is above the Victorian country average.
- The proposed 25EGMs would be the smallest venue in Bendigo compared with the existing premises with EGMs such as Rising Sun and Windermere Hotels.
- As expressed through a mail survey of residents within 5 kilometres of the review site conducted by the Council, significant community opposition to 30 EGMs at the Foundry Hotel and perceived negative impacts on respondents' well-being, happiness, contentment and the area's social character.
- There will be some transfer of expenditure from existing gaming venues and, on the evidence of Messrs Gill and Clyne, that might be less than 50% or up to 80%. [We discuss this again below].
- The Applicant is proposing to introduce responsible gaming measures as set out in the evidence of Mr Barrett.
The local policy prefers EGMs where the total density of gaming machines in the suburb and its adjoining suburbs is less than the regional Victorian average.
The proposal would comply with that policy insofar as the proposed EGMs would be in the suburb of Golden Square where the density of EGMs is below the regional average. However, it would not meet the second part of that policy with respect to adjoining suburbs that have higher than the regional average density of EGMs.
This part of the policy was criticised in evidence[12] as being impossible to comply with and commented upon by the VCGR[13] as being too restrictive. It is not our role to review the policy but we regard it as one of a number of parts of the policy requiring consideration and, consequently, failure to comply with it is not a "knock-out" point.[14]
The Applicant emphasised the nature of the venue and the new initiatives proposed by the operator with respect to responsible gaming. The accessibility of EGMs is affected by considerations such as density, location, the size of a venue and nature of the venue.[15] These are factors we have considered in our decision. The package of responsible gaming initiatives endeavours to manage the venue in a way that minimises problem gambling and equips the venue to deal with problem gambling. They are a positive part of the proposal and can contribute to a culture of more responsible gaming albeit the potential for problem gambling cannot be prevented entirely.
The addition of a new venue is at the core of the Council's concern. By adding a new venue at the location proposed:
- The distribution of EGMs in the locality would change.
- The gaming machines would be introduced into an area that is already well exposed to, and has ready access to, EGMs.
- A sizeable proportion of custom would be drawn from beyond five kilometres (around 49% based on the patron survey referred to in Ms Peterson's evidence). This proportion could be expected when taking into account the location of the site in a major regional centre and the fact that the venue operates conferences and functions that could reasonably include a wider catchment than, for example, a local pub.
We consider these factors would lessen the risk and negative impact upon the community resident within five kilometres of the Foundry Hotel.
While not expressly referred to as a consideration in the local policy, we have taken into account the views expressed in the community survey. This was influential to the Council's decision to refuse a planning permit. [16] We have not sought to critique the survey methodology or "drill down" into views or perceptions it contains. We are aware of the reasonable response rate and strength of view expressed (around 75% opposition) including responses to open-ended questions. We do not consider it proves increased social disadvantage. However, we accept it as an indicator of concern and impacts on the image of the locality that are relevant to a decision.
We also observe Ms Peterson's evidence that research shows 85% of Victorians see gaming as a problem and therefore opposition amongst this community to gaming is consistent with the Victorian perception generally.
We have not yet identified and acknowledged the positive elements of the proposal referred to in submissions and evidence. They are relevant to our consideration of whether the proposal would derive "a net community benefit" as specified in one of the decision guidelines of Clause 22.28. Examples include increased opportunities for responsible gaming in the locality as a legitimate past time, returns through flow-on purchases to businesses, some additional employment, and an annual community donation of $50,000.
To conclude, the proposal does not fully comply with the local policy as it relates to social disadvantage and the density of EGMs in adjacent suburbs but the specific circumstances of the site, venue and locality are relevant to how this non-compliance is weighed in balancing all relevant considerations as we discuss below. It is significant that the site is not within the area expressly discouraged for gaming by the local policy.

[42]

The Council's submission referred to the review site being highly visible, in a gateway to Bendigo, metres from a bus stop, and opposite a supermarket. It submitted the entry to the gaming room would be convenient and accessible from Shamrock Street opposite the supermarket car park. It recognised the low pedestrian volumes identified in Ms Peterson's pedestrian survey but said the supermarket attracts significant numbers of people and the location has the potential to result in more impulsive convenience gaming. The Council remained critical of the entry arrangements from Shamrock Street, however, submitting the entry would not result in patrons passing through the bistro before becoming aware of the gaming room. These submissions were challenged by Drayton Manor primarily through the evidence of Mr Twite and Ms Peterson.
Policy seeks to minimise the potential for spontaneous decisions to game and convenience gaming within the broader context of reducing the incidence of problem gambling. Sites with large numbers of pedestrians passing in the course of their daily activities or where there are high concentrations of people undertaking daily activities are discouraged for these reasons.
We find:
- The site is within walking distance of, and proximate to, the "higher order" activity centre of Golden Square but is not within that centre. The site is closer to the Business 1 Zone containing a supermarket but not physically linked with that stand-alone supermarket and petrol station. It is physically separated from the police station and bulky goods precinct that are on the opposite side of the Calder Highway east/north-east of the site.
- The existing volume of pedestrian traffic past the Hotel is relatively low based on the evidence of Ms Peterson[17] and observations made by others in submissions and evidence[18]. Evenings and weekends appear busier than weekdays. Our inspections have been consistent with this material. That contrasts with the area of much higher pedestrian activity within the supermarket itself and car park.
- There is no significant people-attractor abutting the review site on the same side of the Calder Highway. The supermarket is separated by a road and angled car parking spaces. Supermarket customers from the nearby residential area may walk past the Foundry Hotel but the numbers are not large or concentrated. The same appears to be the case with respect to the use of the bus stop. Pedestrian signals to access the supermarket are at Thistle Street.
- The new development would be visible from the supermarket and its car park but the Hotel is already apparent and the new works, particularly the ground level form of the addition, would not change the appearance so as to specifically draw attention to the presence of gaming machines in the premises. Importantly, that is assisted by the fact that signage drawing attention to the presence and availability of gaming machines will be restricted under the gaming regulations.[19] While local people will be likely to know about the presence of gaming machines, the visual cues would not be readily apparent. [We note that the relationship is of a much lesser order than, for example, the physical relationship between the Windermere Hotel and an Aldi supermarket].
- There is access to the facility by two bus services and the Calder Highway but it is offset from the main road. The Foundry is more of a destination venue than a convenience venue.
The Council placed some reliance on the findings of the VCGR about the proximity of the review site to the supermarket that was said to be a "problematic aspect of this application" [20]. We note, however, that the Commission's concerns were substantially allayed as it explained in the same paragraph:

[44]

Based on the application plans, the entry to the gaming room would be available from[21]:
- The bistro entry which comprises a main door and then a second door leading directly into the northern side of the bistro with a feature screen wall marking one side of the gaming room.
- The rear car park from which two entries would be available - one direct to the gaming lounge and the other into a corridor leading to the western end of the bistro.
- Entries that lead into the public bar.
The site has a relatively high profile even though it is off-set from the Calder Highway and is no doubt well-known in the area and region. We agree with the Council that the relationship with the supermarket is particularly sensitive even though there appears to be limited pedestrian flow between the Hotel and the supermarket and its car park. Most specifically, the proposed layout in the original plans caused some concern with respect to the bistro entry that is prominent in Shamrock Street. This was because the gaming room was proposed immediately to the right of the entry with machines visible from only a few metres inside the second door.
We considered this aspect of the proposal could be further improved and has been in the revised plans. The layout has been modified to provide a lounge close to the bistro before then entering the main gaming room/s. This ensures a much reduced level of visibility. The plans also show 25 EGMs rather than 30.
We have also considered the potential visibility of, or apparent presence of, EGMs given the courtyard with window panel that abuts Shamrock Street. The visibility of EGMs should be masked. Noise associated with the gaming room may be presented to the courtyard and emitted beyond the site. This was not, however, a concern raised by the Commission with respect to the earlier design (which had a similar layout but smaller courtyard). We consider the detailed design can be addressed in the endorsement of plans so that the potential for any noise emissions can be resolved in association with the Council including any covering over all or part of the courtyard mindful of the requirements for external smoking areas under the Tobacco Act 1987. The suggestion for a pergola is referred to in the later material but that is something that can be resolved with the Council. We note the provision of an operable screen gate in the courtyard that would separate gaming patrons in the courtyard from other patrons.
For the above reasons, we find the location of the proposed gaming machines would (with some revisions) be sufficiently separated from areas of high pedestrian activity and that the location, design and layout would sufficiently minimise opportunities for convenience gaming.

[52]

The VCGR found the proposal would meet the "no net detriment" test in referring to the advantages as[22]:
- Provision of gaming for locals and visitors in addition to the range of other options already provided.
- A small number of jobs that would be created (six).
- The presence of two other hotels in the immediate vicinity which do not have EGMs so non-gaming options are available to those who do not wish to gamble.
- A contribution of $50,000 per annum to community groups (although it observed that this was "not a large amount"[23]).
The Commission also referred to the high regarded and well run venue and the management's intention to adopt a Responsible Gaming Policy.
It considered the views of the community and evidence of Ms Wallace.
The major negative effect identified by the Commission was the relative social disadvantage of Golden Square and the two postcode areas that are within the Foundry Hotel's primary catchment. However, the impact was found to be "less than might at first appear" because of the existing exposure to EGMs and the fact that the major of venues within the municipality are located in areas of equal or greater disadvantage when compared at collector district level.[24] The Commission also gave weight to Bendigo's role as a tourist and regional centre, and the Foundry Hotel itself, meaning that high density of EGMs and EGM expenditure per adult is "diluted" by the fact that a high proportion of patrons are likely to come from outside the primary catchment.
The Council seeks a review of this approval on the basis that the Commission failed to give weight, sufficient weight, or proper regard to a range of matters including the conditional nature of Ms Peterson's support for the proposal, the Council's gaming policy, the community survey, the concentration of existing gaming machines within a five kilometre radius of the Foundry Hotel, the average distribution of gaming losses and distribution of EGMs per head of population in the municipality when compared with the regional average, the level of socio-economic disadvantage and social stress.

[59]

Changes in EGM density and EGM expenditure are indicators of EGM accessibility and potential harm from gambling.
We have indicated that the density of EGMs for the City of Greater Bendigo is higher than the Victorian country average and, assuming no transfer of EGMs, the proposal would increase that density by 4.57%. The municipal ranking would be changed from 32nd to 31st of the 39 country LGAs (ascending order). We have also stated that the increase in density may be counterbalanced by population growth particularly given the EGMs would not be operational until 2012. These calculations will further fluctuate with any other changes in EGM numbers and population.
Above, we have acknowledged the range of variables and assumptions that underlie the evidence about the amount of EGM expenditure that would be transferred from existing gaming machines to the new machines. The impact of the 2009 economic stimulus package, changes in population numbers, the base number of EGMs referred to in an analysis are just a few examples. Each expert analysis has a purpose that is of relevance and we are not prepared to conclude either is fatally flawed.
A transfer of expenditure will occur to some degree but there can be no certainty as to actual amount. The data presented by Mr Gill seeks to demonstrate the actual transfer of expenditure in three cases compared with projections. This is of interest insofar as the projections appear to over-estimate transferred EGM expenditure. There are, however, circumstantial differences in those three examples compared with the situation of the Foundry Hotel and Bendigo. Even so, we are persuaded to accept that an estimate of 80% transferred expenditure adopted by Mr Clyne is too high and that a lower figure is more likely. We consider it unlikely that the Foundry would under-perform other venues to the extent an 80% figure suggests or that the offer of 25 new EGMs will cause a significant transfer from other venues in the primary catchment. There are also the tourism and regional roles of the venue and Bendigo that further suggest that 80% is too high. Further, Mr Clyne's analysis includes an amount for new responsible gaming initiatives and while we accept that there can be expected to be new responsible gaming regulations we find those impossible to quantify as their nature, extent and timing are uncertain.
Whether we adopt 50% or another figure such as 70%, we consider the increase in expenditure is such as to be a potential concern when also considered with the fact that gaming expenditure in the municipality is above the regional average, the existing level of social disadvantage (as reflected through the SEIFA Indices at postcode, suburb and collector district) and the proposal would introduce a new venue. The lower the transfer rate the greater the likely negative impact. But, in overall terms, the degree of impact will still be low regardless of which figure or range of figures might be adopted and must be seen in the context that although there is some level of disadvantage at the municipal and sub-municipal levels that disadvantage is not, in relative terms, high.
There is also a negative impact on the way some members of the community will perceive the venue and their local area. We have referred to the survey previously as one indicator of an impact on well-being. The individual survey responses listed through Ms Wallace's evidence demonstrate general concerns with gambling and gaming, concerns about gaming in Bendigo, and concerns about gaming at the Foundry. Because there are amply non-gaming venues in the area, it is relevant that people will have a choice not to dine or drink at the Foundry Hotel because they oppose gaming machines in this location.
We also are mindful of the higher level of concern compared with, for example, a similar survey for the Kangaroo Flat Sports Club proposal.[28] We have also taken into account the Council's different positions in each application which demonstrates to us that it is seeking to balance all relevant considerations and not saying "no" to any proposal[29].
However, there are counter-balancing factors to these negative outcomes. They include the small size of the proposed gaming facility, the small component of the Foundry's facilities that the gaming component would represent, the existing level of accessibility of EGMs nearby, the tourism and regional roles of the venue and Bendigo that will bring patrons from locations well outside the primary catchment and the ongoing growth of Bendigo (albeit the Foundry is not within a specified growth area). There are several other positive social impacts. The proposed facilities will benefit responsible gamblers through choice and accessibility although we accept that gambling and gaming are not desired by many but are legitimate and lawful pursuits. In addition, the financial contributions that will be to groups in the local community including a provider of responsible gambling counselling.

[93]

Before the development & use commences, amended plans to the satisfaction of the Responsible Authority must be submitted to and approved by the Responsible Authority. When approved, the plans will be endorsed and will then form part of the permit. The plans must be drawn to scale with dimensions and three copies must be provided. The plans must show:
- (a) Changes generally in accordance with the plans as provided to the Tribunal under cover of letter of 15 March 2011 - Leave is given to the Applicant to substitute for the application plans the plans marked as TP01_A (07/02/2011), TP02_A (07/02/2011), TP03_A (26/10/20091), TP03_B (26/10/2009), TP04_A (11/02/2011), TP05_B (07/02/2011), TP06_A (26/10/2009), TP07_A (26/10/2009) and TP07_B (26/10/2009);
- (b) Complete and correct dimensions;
- (c) A notation that the existing sandstone section of the in-filled façade must be retained;
- (d) Modifications to show correct window shapes and proportions on the parts of the building to be retained and the parts of the new building;
- (e) If the brick wall extending from the existing north-west corner of the building on Shamrock Street, to No. 33 Shamrock Street is to be removed, then it must be replaced with a brick wall of no greater than 2 metres in height of similar style to that currently existing;
- (f) A full schedule (including samples) of construction materials, external finishes and colours;
- (g) A landscape plan in accordance with Condition 2;
- (h) A Construction Management Plan in accordance with Condition 8;
- (i) Any treatment required to ensure that there is no potential for noise escape of gaming machines off the site notably along the Shamrock Street frontage adjacent to the courtyard;
- (j) Any treatment associated with the courtyard to enable non-gaming patrons to access the courtyard without entering the gaming room;
- (k) The courtyard to comply with the requirements of the Tobacco Act 1987;
- (l) All signage to comply with the requirements and restrictions of the Gambling Regulation Act 2003;
- (m) A demolition plan including appropriate protective measures for, in particular, the north-west corner of the building and its abuttals;
- (n) Bicycle parking to comply with Clause 52.34.
Before the development starts, a landscape plan to the satisfaction of the Responsible Authority must be submitted to and approved by the Responsible Authority. When approved, the plan will be endorsed and will then form part of the permit. The plan must be drawn to scale with dimensions and three copies must be provided. The landscaping plan must show:
- (a) A survey (including botanical names) of all existing vegetation to be retained and/or removed;
- (b) Details of surface finishes of pathways and driveways; and
- (c) Planting schedule of all proposed trees, shrubs and ground covers, including botanical names, common names, pot sizes, sizes at maturity, and quantities of each plant.

At a glance

Court

Decision date

Before

Source

Judgment (131 paragraphs)

Drayton Manor Pty Ltd v Greater Bendigo CC [2011] VCAT 628 (12 April 2011)

Parties

Legislation Cited (1)