Exceland Property Group Pty Limited v Marrickville Council

(a) minor internal alterations to the Building (i.e. including installation of partitions as shown in the plans the subject of development application); (b) landscaping to the property; (c) business identification signage for the Building; (d) use of the Building as an office by a construction company, property development company and a firm of solicitors.

28. The applicant seeks to rely on the provisions of Division 10 of Part 4 of the Environmental Planning and Assessment Act 1979 and Part 5 of the Environmental Planning and Regulation 2000 [sic] to obtain consent to the development proposed by the DA.
29. The DA has not been determined and a Class 1 application has been filed by the Applicant pursuant to section 97(1)(b) of the Environmental Planning and Assessment Act 1979.

4. Section 106 of the EP&A Act provides: In this Division , existing use means (a) the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would, but for Division 4A of Part 3 or Division 4 of this Part, have the effect of prohibiting that use, and (b) the use of a building, work or land: (i) for which development consent was granted before the commencement of a provision of an environmental planning instrument having the effect of prohibiting the use, and (ii) that has been carried out, within one year after the date on which that provision commenced, in accordance with the terms of the consent and to such an extent as to ensure (apart from that provision) that the development consent would not lapse.

5. Section 107(1), (2)(e) and (3) of the EP&A Act provide: (1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use. (2) Nothing in subsection (1) authorises: … (e) the continuance of the use therein mentioned where that use is abandoned. (3) Without limiting the generality of subsection (2) (e), a use is to be presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months.

6. Section 108(1) of the EP&A Act provides: The regulations may make provision for or with respect to existing use and, in particular, for or with respect to:

(a) the carrying out of alterations or extensions to or the rebuilding of a building or work being used for an existing use, and (b) the change of an existing use to another use, and (c) the enlargement or expansion or intensification of an existing use.

7. Clause 45 of the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation 2000) is as follows: Development consent is required:

(a) for any change of an existing use to another use, and (b) in the case of a building, work or land that is used for different existing uses, for any change in the proportions in which the various parts of the building, work or land are used for those purposes. 8. The key initial issue to determine, before answering the preliminary questions of law, is what is the nature of the existing use relied on by the Applicant? There are contrary submissions from the parties on this issue. The nature of any existing use is crucial to the determination of whether that use has been abandoned, as is raised in question one, or whether there is a change of use resulting from the current development application, as is raised in question two.

9. I note that in addition to the statement of agreed facts the Council relied on various affidavits of Mr Duigan, Mr Wotton, Mr DeJobson Anderson and Mr Christmas and the Applicant relied on various affidavits of Mr Baird, Mr Zancanaro, Mr Danias, Mr Nelson and Mr Carrick.

Council's arguments 10. The Council argued that no consent or approval issued under the County of Cumberland Planning Scheme Ordinance could be found on its files in relation to the building on the land in question. Accordingly it is not possible to determine on what terms or in what manner the Council may have expressed any consent or approval in 1963. It was submitted by the Council's solicitor that on the basis of Hubertus Schuetzenverein Liverpool Rifle Club Ltd v Commonwealth of Australia (1994) 85 LGERA 37 the plans submitted to the Council are relevant in determining the use which was consented to. These plans show a showroom and boardroom as well as partitioned offices. In the Industrial 4A zone under the County of Cumberland Planning Scheme Ordinance the use of the land for the purpose of showroom, boardroom and office was permissible with consent at the time the consent was granted. The layout of the building in the plans also suggests it was to be used by one entity, presumably Malco Industries, at that time. Council submits the appropriate categorisation of the existing use is the use of the whole building by one entity for administrative offices and showroom for a metal casting business. Categorisation of the use of the land as commercial premises or offices is too broad a categorisation and nor can Malco's use of the building be characterised as just an office.

The Council submitted the use of the building by Malco in fact evolved over time having regard to the overall business operations of Malco on the land and adjoining properties owned and operated by Malco. The use of the building when it commenced was ancillary to the overall business operations of Malco, in that sense it was ancillary to the dominant industrial use by Malco of that site and adjoining properties. It was not prohibited in 1972 therefore when the Marrickville Planning Scheme Ordinance was introduced. It is not clear, on the Council's case, at what point the use of the building evolved from a subordinate use to the dominant industrial use by Malco to a separate and independent use. It is however at that point at which the use of the building became prohibited under the existing environmental planning instrument and the existing use continued. That point in time would have occurred some time in the period during the currency of the Marrickville Planning Scheme Ordinance being 27 December 1972 until 17 May 1999, when Malco sold the land.

The next issue to arise in argument was, was there a change of use in 1997? The Council argued that the building was used by more than one business entity from at least 1997 which was an intensification of use, a change of use and an alteration of use, all of which needed consent from the Council to enable the lawful existing use to continue and that consent was not obtained in 1997.

It was also submitted that the covenant in the lease by the lessee Anderson in 1997 to seek consent for change of use to an actual use other than the existing use implies an intention by the then owner Malco not to preserve the existing use. Accordingly, the Applicant's evidence after 1997 is said to be irrelevant, there being no lawful existing use to continue after that point.

Without the required consent to the change in use in 1997 the existing use is terminated and there is no existing use which can be changed from one use to another applying s 108(b) of the EP&A Act and cl 45 of the EP&A Regulation 2000.

There was also reference by the Council to the unauthorised building of internal partitions in the building in or about 1997. This was also relied on by the Council to demonstrate that there had been a change of use without consent. There was no evidence presented as to who erected the partitions in question.

The Council's argument on the change of use in 1997 is also relevant to its argument concerning abandonment of the existing use. The Council argued the Applicant had abandoned the existing use of the building because, if there was an existing use of the ground floor of the building, that use was abandoned by, firstly, the granting of the lease to the Anderson Group in 1997 and, secondly, Anderson taking up the lease and using the ground floor of the building for a use that was not the existing use, that is, a printing and brokerage business and failing to apply to the Council for a consent to the change of use as was provided for in the lease.

In relation to the first floor it was argued that existing use had also been abandoned because Malco vacated the first floor, the first floor was vacant for a period of more than 12 months and the Applicant used the first floor of the building for a use which was also not the existing use. The abandonment of the first floor by Malco was said to be in March 1999 on the respondent's evidence or May 2000 on the Applicant's evidence. I note there is conflicting evidence on the issue of precisely when Malco vacated but that it appears to be uncontested rent was paid by Malco until June 2000 to the then owners, the Danias family.

Applicant's arguments 18. The Applicant argued that the consent granted by the Council on 25 June 1963 to the then owner, Malco, was for a two storey office block and this is clear from resolution 33 passed by the Council on that date. The application was granted subject to three conditions identified in resolution 33. There is no legal basis to adopt the Council's submission that the consent by the Council as shown in resolution 33 should be defined or narrowed in any way by the plans simply because the Council cannot find a consent. The conditions of consent as referred to in Council's resolution do not limit the use of the building as the Council has argued. The provisions of the building application to Council together with the Council's Resolution 33 and the letter from Malco confirming the building was to be occupied all show a clear record of the consent given by the Council.

19. The Applicant further argued the evidence disclosed that Malco occupied the office building and used the whole building for office purposes until 1 April 1997. It is not the case that the existing use, which operated from 22 December 1972 when the Marrickville Planning Scheme Ordinance was gazetted and had the effect of prohibiting that use of the building, requires that the whole building must be occupied by one entity. Accordingly when Malco leased the ground floor of the building to the Anderson Group on 1 April 1997 this was not a change of the existing use.

20. Furthermore, in relation to abandonment, Malco continued to use the first floor for office purposes from April 1997 to May 2000. The extent of that use reduced over time, nevertheless Malco had the right of quiet enjoyment under its lease until it vacated the premises in June 2000 at which time Exceland, the current Applicant, moved in.

21. On 1 April 1997 Malco leased the ground floor to the Anderson Group with car-parking for three years with a three year option. The Anderson Group vacated the ground floor in March 1999. From that time Mr Danias and family, who were the owners of the building, instructed real estate agents to lease the ground floor for office purposes. These were leased to Mr McInnes in February 2001 for a computer and graphics office. On or about 7 August 2002 Mr McInnes vacated the ground floor of the building. It is clear from the evidence that it was always the intention of the owners of the building to continue to use the building for office purposes, as stated in the affidavits of Mr Danias.

22. It is not correct to categorise the existing use of the building by linking it only with the one owner. Council's argument that the ground floor had been converted to another use which was arguably not offices when leased by the Anderson Group is not maintainable because firstly, that there is no evidence that Anderson did not use the premises as offices during the period of the lease. Secondly, there is the evidence of the current owner Mr Danias that he always had the intention to preserve the building for commercial office use as this was the highest and best use of the land. The non commercial office activity undertaken by one tenant, Mr McInnes, was discouraged by the owners as soon as they became aware of it. Thirdly, the existing use rights apply to the whole of the land. Even if the Council was correct and there was an abandonment of that use for a portion of the land, the regulations would enable alteration to cover the intent of the application. Fourthly, there is alleged to be unauthorised partitioning relied on by the Council, which occurred in or around 1997, which Council says requires development consent. This was argued to be irrelevant to the question of whether existing use rights continue.

Applicable law 23. I will refer briefly to the applicable law which I particularly rely on and which I was referred to by the parties. Both parties referred me to the decision of Kirby P in North Sydney Municipal Council v Boyts Radio and Electrical Pty Ltd (1989) 67 LGRA 345 where his Honour sets out three principles which are pertinent in defining the existing use. His Honour stated at 353:

1. Defining the "existing use" depends upon a detailed examination of the facts of each case. Inevitably there will be borderline cases where the characterisation of the use which is protected will be controversial and upon which minds may differ.
2. Nevertheless, the general approach to be taken is one of construing the "use" broadly. It is to be construed liberally such that confining the user to precise activity is not required. What is required is the determination of the appropriate genus which best describes the activities in question.
3. In determining that genus, attention should be focused on the purpose for which the determination is being made. This is a town planning purpose. It therefore considers the use from the perspective of the impact of the use on the neighbourhood. This is because the regulation of the use within the neighbourhood is the general purpose for which planning law is provided.

24. This, his Honour said, was supported by various authorities including that of McHugh JA in Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 where McHugh JA stated at 311 that: …If the activities, processes or transactions are capable of being treated as all or the majority of the species of a genus, then that genus may properly be regarded as describing the purpose of the use of the land. If they are not, then it may be that the only conclusion is that the land has been used for more than one purpose.
25. The Council relied particularly on Royal Agricultural Society to argue that "commercial premises" would be too broad and general a characterisation. It referred to the judgment of McHugh JA, quoted by Kirby P, in Boyts at 353, to the effect that: The courts have done so by refusing [sic - to] categorise an "existing use" so narrowly that natural changes in the method of using the land or carrying on a business or industry will render an existing use right valueless. At the same time, the courts have been concerned not to categorise the purpose of an existing use so widely that the land or premises could be used for a prohibited purpose which was not part of its use at the commencement of the legislation.

26. A further case that I have had regard to and which I was referred to by the Applicant is House of Peace Pty Limited v Bankstown City Council (2000) 106 LGERA 440 in particular the judgment of Mason P particularly at 446 and 450.

27. In relation to the case law referred to on abandonment, the Council relies particularly on the matter of Hudak v Waverley Municipal Council (1990) 70 LGRA 131 where Hope AJA stated at 137: It is difficult to imagine that an existing use will continue indefinitely despite absence of actual use merely because an owner has an intention to carry on the existing use or to resume it at some time in the future.

28. Both parties also referred to Earle Cameron Constructions Pty Ltd v Parramatta City Council (1983) 46 LGRA 130 where McLelland J stated at 137: There is no alternative to an actual intention on the part of those in control of the land for the time being to carry on the physical activities which comprise the use which is sought to be preserved and once that intention has been given up in conjunction with the physical vacation of the land for purposes of the use then that is the end of the use.

Findings 29. These are class 1 proceedings. The Applicant bears the onus of demonstrating that it has existing use rights and the nature of these on the balance of probabilities. The Council has the onus of establishing that the existing use rights have been abandoned on the balance of probabilities.

What is the existing use? 30. Firstly, I will with the question of what is the relevant existing use. I accept the Applicant's submission that the existing use is that of a two storey office block which is not limited to its occupation by one particular entity. This is in conformity with the evidence of the consent issued by the Council in 1963, which use continued up to and became prohibited in 1972 when the Marrickville Planning Scheme Ordinance was passed. I consider this is an appropriate application of the case law I referred to above, particularly the comments of Mason J in House of Peace at page 446 and 450, in the circumstances of this case as these appear to have been in 1963 and thereafter. While such a characterisation of the existing use is broad, it reflects the circumstances of the consent in 1963 and the subsequent use of the building.

I note that the Council has sought to rely on the absence of a separate consent to the building application lodged by Malco apart from resolution 33 passed by the Council on 25 June 1963 to argue the scope of the use consented to is unclear. What is unclear is that such a document would in fact issue on the evidence presented to the Court. No evidence was presented or submissions made by the Council as to whether the law in force at that time required a separate consent to issue. The original building application held on the Council's file has on it a handwritten notation of a Council officer which refers only to the approval by Council in accordance with the resolution 33 and the conditions contained in it, which conditions are clear in the resolution.

I do not think the Council can rely on the absence of such a separate document demonstrating consent to argue, in the absence of any evidence that such a document was likely to have issued, that there is any uncertainty in what the Council approved in resolution 33 and hence that the plans submitted with the building application should be applied to limit the scope of the consent. I do not think it is appropriate to apply the decision of Liverpool Rifle Club by analogy, as the Council's solicitor submitted, as this would enable the scope of what was consented to by the Council to be narrowed to reflect the plans submitted with the building application. The situation which applied in Liverpool Rifle Club was addressing a situation that is different to the matter before me.

It therefore follows that I reject the Council's submission that the leasing of the ground floor to Anderson Pty Limited in 1997 was a change of use which required consent under the EP&A Act and the Regulations. The lease to Anderson shows the intended use of the premises was as an office, a use in keeping with the existing use for the whole premises. The existence of the provision in the lease to Anderson requiring the lessee to apply for consent for a change of use of itself does not prove that there was a change of use, simply that the lease provided for such a circumstance if it arose.

It also follows from my finding above that the fact that another entity occupied the ground floor different to the occupier of the first floor is not automatically an alteration or intensification of the existing use, given the same floor area is being used for the same overall use of office.

The erection of unauthorised partitioning in or about 1997 relied on by the Council is not relevant to the issue of determining the existing use and this is confirmed by the decision in Ashfield Municipal Council v Armstrong (2002) 122 LGERA 105. The Applicant relied on this case to argue there is a distinction to be made between the use of premises and the physical attributes of the premises.

The onus of demonstrating on the balance of probabilities the nature and existence of existing use pertaining to the building falls on the Applicant as I have said and I consider that onus has been discharged.

Abandonment 37. I now need to consider the issue of abandonment. It follows from my finding on the nature of the existing use and that there was no relevant change of use in 1997 when the ground floor was leased to the Anderson Group, that the evidence presented by the Applicant in relation to the use of the building after 1997 is relevant, contrary to the Council's submissions. The onus of establishing the abandonment of the existing use on the balance of probabilities falls on the Council. I do not think that onus has been discharged given my findings above as to the nature of the existing use and the evidence presented by the Applicant that the owner from March 1999, Mr Danias and family, intended that the use continue as commercial office use; the tenant McInnes was removed as soon as the activities conducted by him which were incompatible with that use were identified; that Malco paid rent for the first floor until the day before Exceland moved in in June 2000, so that while there is conflicting evidence about whether Malco vacated the floor earlier it continued to have the right to occupy those premises until June 2000; and that at all times since 1997 either or both of the ground and first floor have been occupied for office purposes, which has preserved the existing use for the whole building.

38. The circumstances in this case are different to those in Hudak and Earle Cameron where it was held that the existing use had been abandoned. There was clearly an intention to continue the existing use on the part of the owner Danias after March 1999 when the building was acquired from Malco, so that while the premises have been occupied in part temporarily since then that does not amount to abandonment in the circumstances and s 107(3) of the EP&A Act does not apply in my view.

39. It is evident from my findings above that I do not accept there is a change of use such that consent is required under clause 45(a) of the EP&A Regulation 2000 for the current development application in these class 1 proceedings, the details of which are set out at par 27 of the statement of agreed facts. It is clear that it is intended to continue the use of the whole building as offices.

40. Accordingly the answer to the preliminary points of law are:
41. There has been no abandonment of the existing use.
42. There is no change of use proposed as a result of the current development application requiring development consent under clause 45(a) of the EP&A Regulation 2000.

1. Exhibits B and 1 may be returned, exhibit A to remain on file.
2. The Notice of Motion dated 20 June 2003 is stood over until to 4 July 2003 at 11.30 am.

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