George Thomas Hotels v Council of the City of Sydney

CASES CITED: Zhang v Canterbury City Council [2001] 115 LGERA 373

APPLICANT Mr P Clay, barrister SOLICITORS Bruce Stewart Dimarco Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr S Kondilios, solicitor SOLICITORS Maddocks Lawyers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11024 and 11079 of 2008 George Thomas Hotels (Madison) Pty Limited v Council of the City of Sydney

JUDGMENT 1 COMMISSIONER: These are two separate but related appeals in relation to conditions imposed on two separate approvals granted by the Council of the City of Sydney (the council) for alterations to the Madison Hotel located at 52-54 Devonshire Street, Surry Hills (the site).

2 Appeal 11024 of 2008 relates to conditions imposed on the approval of Application No. D/2008/1271. The proposed works include the fit-out and use of an existing light shaft/air well to provide patrons with a smoking area that complies with the Smoke Free Environment Act 2000. It has dimensions of approximately 5 metres x 1.7 metres.

3 Appeal 11079 of 2008 relates to the conditions imposed on the approval of Application No. D/2008/244. The proposal seeks to convert one of the rooms at the first floor of the hotel, on the Devonshire Street frontage, as an open-air terrace and a smoking area for patrons by removing the roof from this part of the building. The existing floor area is unchanged and all external walls are to be retained.

4 The number of conditions in dispute was significantly reduced through discussions between the parties prior to the hearing. The principal, but not only issue in dispute, is the hours of operation for the two areas. The council's conditions 5 For Appeal 11024 of 2008 the council seeks the following condition: (2) HOURS OF OPERATION _ SENSITIVE USES. The hours of operation are regulated as follows. (a) The hours of operation must be restricted to between 10 am and 10 pm Mondays to Sundays inclusive. (b) Notwithstanding (a) above, the use may operate between 10 am and 12 midnight for a trial period of 12 months from the date of the Occupation Certificate. (c) A further application may be lodged to continue the trading hours outlined in (b) above before the end of the trial period. Council's consideration of a proposed continuation and/or extension of the hours permitted by the trial will be based on, amongst other things, the performance of the operator in relation to the compliance with the development consent conditions, any substantiated complaints received and any views expressed by the police. 6 For Appeal 11079 of 2008 the council seeks the following condition: (4) HOURS OF OPERATION _ SENSITIVE USES. The hours of operation are regulated as follows. (a) The hours of operation for the Hotel shall continue to be 24 hours a day, 7 days per week (b) The hours of operation for the outdoor terrace must be restricted to between 10a m and 10 pm, seven days per week. No approval is given for the use of the outdoor terrace for the purposes of entertainment. (c) Notwithstanding (b) above, the outdoor terrace may operate until 12 midnight for a trial period of 12 months from the date of issue of the Occupation Certificate. (d) The use of the outdoor terrace area shall be restricted to a maximum of 50 patrons from 10 pm to 12 midnight. (e) A further application may be lodged to continue the trading hours outlined in (c) above before the end of the trial period. Council's consideration of a proposed continuation and/or extension of the hours permitted by the trial will be based on, amongst other things, the performance of the operator in relation to the compliance with the development consent conditions, any substantiated complaints received and any views expressed by the Police." The applicant's conditions 7 For Appeal 11024 of 2008 the applicant seeks the following condition: The hours of operation are regulated as follows. (a) The hours of operation for the hotel shall continue to be 24 hours a day, 7 days per week. (b) The hours of operation for the ground floor outdoor terrace must be restricted to between 10 am and midnight, 7 days per week. No approval is given for use of the outdoor terrace for the purposes of entertainment. (c) Notwithstanding (b) above, the outdoor terrace may operate 24 hours for a trial period of 12 months from the date of issue of the occupation certificate. (d) The use of the outdoor terrace area shall be restricted to a maximum of ten patrons after 12 midnight. (e) A further application may be lodged to continue the trading hours outlined in (c) above before the end of the trial period. Council's consideration of a proposed continuation and/or extension of the hours permitted by the trial will be based on, among other things, the performance of the operator in relation to the compliance with development with development consent conditions, any substantiated complaints received and any views expressed by the police. If an application is made then the trading hours as outlined in (b) above shall continue until the Court or the council determines the application. 8 For Appeal 11079 of 2008 the applicant seeks the following condition: The hours of operation are regulated as follows. (a) The hours of operation for the hotel shall continue to be 24 hours a day, 7 days a week. (b) The hours of operation for the first floor terrace must be restricted to between 10 am and midnight, 7 days per week. No approval is granted for the use of the outdoor terrace for the purposes of entertainment. (c) Notwithstanding (b) above, the outdoor terrace may operate 24 hours for a trial period of 12 months from the date of issue of the occupation certificate. (d) The use of the outdoor terrace area shall be restricted to a maximum of 60 patrons after 12 midnight, being 55 in the main terrace area, no more than 5 in the terrace on the Candletree façade. (e) A further application may be lodged to continue the trading hours outlined in (c) above before the end of the trial period. Council's consideration of a proposed continuation and/or extension of the hours permitted by the trial will be based on, among other things, the performance of the operator in relation to the compliance with development consent conditions, any substantiated complaints received and any views expressed by the police. If an application is made then the trading hours as outlined in (b) above shall continue until the council or the Court determines the application. (f) All external windows to the outdoor terrace shall be closed at 8pm each night and remain closed until 7am the following day. (g) The doors of the first floor terrace shall be fitted with a self-closing mechanism. (h) The door from the terrace to the Randle Street terrace shall be fitted with a self-closing mechanism. (I) Background music is only permitted on the outdoor terrace and it shall be restricted to no louder than 60dBA (spatial average). Relevant planning controls 9 The site is within the City Edge zone under Sydney Local Environmental Plan 2005 (LEP 2005). The use of the premises for a hotel is a permissible use, although the hotel operates under an existing consent. Relevantly, the consent was granted in 2006 allowing for 24 hour trading, seven days a week. Part 6 of LEP 2005 provide special provisions for certain uses. Clauses 28 and 29 relate to late opening pubs. Clause 38 provides objectives for the City Edge zone.

10 Having granted consent to the alterations, I have assumed that the council raises no issue with any requirements in LEP 2005. I also note that the council's contentions in reply do not identify any issue with any requirements in LEP 2005.

11 The Central Sydney Development Control Plan (the DCP) also applies. Part 9 provides special controls for certain uses including late opening pubs. Objectives are provided at cl 9.1.

12 The City of Sydney Late Night Trading Premises Development Control Plan 2007 (DCP 2007) applies. DCP 2007 indicates that the site is located within a Category A Late Night Management Area, as identified in s 3.2. Table 1 of s 3.1 provides that the base outdoor trading hours for this category of development is 10 am to 10 pm. Section 3.1 provides that a renewal or extension of trading hours may only be permitted if council is satisfied that the premises have demonstrated good management performance and compliance with a Plan of Management following the completion of a satisfactory trial period. Trial periods may be permitted for the following times. 1. First trial, one year. 2. Second trial, two years. 3. Third and subsequent trial, five years. 13 The maximum extended operating hours are 10am to 1am. The evidence 14 Mr Chris Corradi, a town planner with the council, states that both of the areas sought in the amendments are appropriately categorised as Outdoor Trading for the purposes of s 3.1 of DCP 2007 and as such should be subject to the trading hours and trial periods in this clause. DCP 2007 applies because the alterations are "an intensification of an existing use" (s 2.3(b)) and "seek approval for outdoor trading beyond 8 pm" (s 2.3(d)).

15 Mr James Lidis, a town planner, provided evidence for the applicant. He states that neither application seeks to amend the existing approved 24 hour and 7 day operation. The applications are to provide venues for smokers. The conditions imposed by the council for the two areas would effectively force smokers onto the public domain as the remainder of the hotel can still operate 24 hours and 7 days per week. Mr Lidis states that the applicant would accept a 12-month trial period for the proposed smoking areas but only at the hours that are consistent with the rest of the hotel. 16 Acoustic evidence was provided for the applicant by Mr Nick Kodiaks. He proposed additional conditions for both areas to address any likely noise impacts. With the conditions, he states: The noise generated by all noise sources on the first and ground floor areas will not exceed the nominated noise criteria for all hours of the day and night. Whether there is a roof or not in place, the noise impact will be no different. Findings 17 In balancing the evidence of Mr Corradi and Mr Lidis, I prefer the conclusions of Mr Liddis for a number of reasons. First, the emphasis to be given to a DCP is addressed in Zhang v Canterbury City Council [2001] 115 LGERA 373. Spigelman CJ at par 75 raises three important propositions. First, and although the Court has a wide-ranging discretion, the discretion is not unfettered. Secondly, the provisions of a DCP are to be considered as a fundamental element in or a focal point to the decision making process, particularly if there are no issues relating to compliance with a Local Environmental Plan. Thirdly, and of some relevance in this case, a provision of the DCP directly pertinent to the application is entitled to significant weight in the decision making process but it is not in itself determinative. The third proposition provides for some flexibility in the enforcement of the provision of a DCP.

18 Second, cl 2.3 of DCP 2007 asks the specific question of what type of development does DCP 2007 apply to. As I understand Mr Corradi's evidence, he maintains that the applications are captured by this clause because the applications are "an intensification of an existing use" and "seek approval for outdoor trading beyond 8 pm".

19 I am not satisfied that the proposed alterations could be seen as an intensification of the existing use. The Macquarie Dictionary defines intensification as to become intense or more intense. The proposed alterations do not seek to change the fundamental operating conditions of the hotel, that is, there is no change to the overall hours of operation, the floor area of the hotel or the number of patrons. I do not accept that even though additional conditions are to be imposed on the approval for the alterations that this somehow could be seen as making the hotel operation more intense. 20 Also, s 3.1 of DCP 2007 requires a decision to be made on whether the application falls into one of two categories; indoor trading or outdoor trading although DCP 2007 provides no definition for either classification. Each has different requirements. I agree that the proposed alterations could not be defined as indoor trading with the removal of the roof and consequently must fall within the other classification of outdoor trading. However, in the absence of any definitions and taking into account the likely wide range of outdoor trading areas associated with a hotel, some consideration must be given to the particular characteristics of the outdoor trading area.

21 I would readily accept that in circumstances where consent was being sought for an outdoor trading area that was located on the footpath or at ground level near an adjoining sensitive land use, that the provisions of s 3.1 for trading hours and trial periods may be applicable. In my view, the circumstances relating to the subject applications support the applicant's position for the following reasons: 1. the areas of the hotel, the subject of the alterations, currently have approval for 24 hour and 7 days per week operation, 2. there were no objections received when the development application was advertised, 3. the police did not object to the proposed alterations, 4. strict compliance with DCP 2007 would likely see patrons using public areas for smoking, 5. there are no amenity impacts associated with the alterations, 6. there was agreement between Mr Corradi and Mr Lidis that the relevant objectives in cl 2.2 of DCP 2007 are satisfied, 7. a trial period is to be undertaken, 8. there was agreement between Mr Corradi and Mr Lidis that that the Plan of Management was acceptable, and 9. there was agreement between Mr Corradi and Mr Lidis that that the current operation of the hotel has demonstrated good management performance. 22 While Mr Corradi expressed some concern with the conclusions of Mr Koikas, the council provided no expert acoustic evidence to refute his conclusions, so the evidence of Mr Koikas remained unchallenged.

23 For these reasons the applicant's conditions for the hours of operation are appropriate. Conditions 24 For Appeal 11024 of 2008, the council's condition 20 is in dispute. This condition deals with noise complaint handling and provides that if a noise complaint is substantiated by a council officer, the area concerned shall cease operation until attenuation works are carried out. The applicant offers as an alternative condition that on substantiation of a noise complaint (not necessarily by a council officer) then further acoustical testing is to be undertaken and any recommendations implemented. The applicant's condition is the same as condition 15 in the conditions for Appeal 11079 of 2008.

25 On condition 20, I prefer the applicant's condition because it provides a more scientific basis for overcoming any potential non-compliance with noise conditions and appropriately allows the applicant to be involved in determining whether the complaint is valid and, if so, how it can be rectified.

26 Condition 37E was also in dispute. This condition requires that when a security officer is deployed, all patrons entering the premises will be subject to a hand-held metal detector. The applicant opposes this condition and seeks its deletion.

27 I agree with the applicant that it should be deleted. It must be remembered that the subject application seeks alterations only. It would be impractical to enforce this condition as it technically only applies to patrons using the proposed first floor terrace. As I understand, the overall consent for the hotel does not contain such a condition and the police did not specifically require such a condition for this application. The source of the condition, according to Mr Corradi, is a general request from the police for all late night hotels in the Sydney area. As no evidence was provided for the need for this condition in this particular instance, it may be deleted. Orders 28 For Appeal 11024 of 2008, the Orders of the Court are: 1. The appeal is upheld. 2. Application No. D/2008/1271 for alterations to the Madison Hotel located at 52-54 Devonshire Street, Surry Hills is approved subject to the conditions in Annexure A. 3. The exhibits are returned.

29 For Appeal 11079 of 2008, the Orders of the Court are: 1. The appeal is upheld. 2. Application No. D/2008/244 for alterations to the Madison Hotel located at 52-54 Devonshire Street, Surry Hills is approved subject to the conditions in Annexure A. 3. The exhibits are returned.

      G T Brown
      Commissioner of the Court
      ljr

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