Grace & Anor v Thomas Street Cafe Pty Limited &

THIRD RESPONDENT: Primary Court Pty Limited ACN 074 632 992

FOURTH RESPONDENT: North Sydney Council

Existing Use Rights :- zoning - prohibited use - change of use - multiple uses - dominant/ancillary use - independent use - intensification of use - broad and liberal construction - abandonment of use - refreshment room

KEY ISSUES: Injunctions and Declarations: - declaratory orders

Development Consents: - validity - ambit of consent - cannot authorise use which is otherwise prohibited

Environmental Planning and Assessment Act 1979 s 81A(1), Pt 4 Div 10, ss 106, 107(2), 108(2) and 108(3) LEGISLATION CITED: Environmental Planning and Assessment Regulation 1994 cll 38, 39, 40, 41, 42, 43 and 44 Local Government Act 1919 Pt XIIA, Div 7 North Sydney Local Environmental Plan 2001

Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404; Carden v Willoughby City Municipal Council (1985) 56 LGRA 366; Daniel v Manly Municipal Council (1975) 34 LGRA 14; Dorrestijn v South Australian Planning Commission (1984) 59 ALJR 105; Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373; Gameplan Sports and Leisure Pty Ltd v South Sydney City Council, NSWLEC, Pearlman J, 4 October 1996, unreported; Hudak v Waverley Municipal Council (1990) 70 LGRA 130; King v Lewis (1995) 88 LGERA 183; CASES CITED: Lane Cove Municipal Council v Lujeta Pty Ltd (1986) LGRA 157; North Sydney Municipal Council v Boyts Radio & Electrical Pty Ltd (1989) 16 NSWLR 50; Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1; Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305; Shire of Perth v O'Keefe (1964) 110 CLR 529; Turnbull Group North Sydney Council (1998) 101 354; Wade v Burns (1966) 115 CLR 537; Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335; Woollahra Municipal Council v Banool Developments Pty Ltd (1973) 28 LGRA 410

DATES OF HEARING: 14/08/2006; 15/08/2006; 16/08/2006 and 17/08/2006

APPLICANTS: C W McEwen SC and S A Duggan (barrister) SOLICITORS: Staunton Beattie

FIRST, SECOND & THIRD RESPONDENTS: LEGAL REPRESENTATIVES: J L Doyle (barrister) SOLICITORS: Thomson Playford

FOURTH RESPONDENT: P W Larkin (barrister) SOLICITORS: Maddocks

JUDGMENT:

• 30 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

GRACE & ANOR v THOMAS STREET CAFÉ PTY LIMITED & (3) ORS [2006] NSWLEC 547

1 HIS HONOUR: The applicants, Mr Peter Grace and Ms Angela Pearman, live at No. 18 Victoria Street, McMahons Point, a property which fronts both Victoria Street and Thomas Street. On the opposite side of Thomas Street is No. 2 Thomas Street, known as "Thomas Street Café", which also has frontage to Victoria Street. 2 The applicants seek a declaration that the use of No. 2 Thomas Street for the purposes of a refreshment room is contrary to the provisions of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). They also seek orders restraining the use of these premises for the purpose of a refreshment room. And they seek a declaration that three development consents issued by North Sydney Council are invalid to the extent that they purport to authorise the use of the subject land. 3 The first respondent, Thomas Street Café Pty Limited, carries on the business being conducted at No. 2 Thomas Street. The second and third respondents, Mrs Catherine Patricia Kortt and Primary Court Pty Limited, are joint owners of the property as tenants in common and Mrs Kortt is the sole director, secretary and shareholder of the first respondent. The fourth respondent, North Sydney Council, is the local government authority for the area which has granted the three development consents which are impugned. 4 The use of premises for the purpose of a refreshment room or café is prohibited by the relevant zoning under the North Sydney Local Environmental Plan 2001 ("North Sydney LEP"), which is Residential B. The respondents, however, rely upon the combined effect of existing use rights and the development consents to be able to say that the use of No. 2 Thomas Street is lawful.

The relevant planning controls 5 Section 106 of the EP&A Act defines "existing use" as being relevantly 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 have the effect of prohibiting that use. 6 The land was first zoned on the commencement of the County of Cumberland Scheme Ordinance on 27 June 1951 as Industrial Area Class B. Shops and refreshment rooms were permissible uses in that zone. These uses became prohibited upon the commencement of the North Sydney Planning Scheme Ordinance on 19 April 1963. That and subsequent planning instruments have maintained a residential zoning of the land and have maintained the prohibition on shops and refreshment rooms, culminating in the present zoning. 7 It will thus be necessary to define the purpose being served by the use as at 19 April 1963. As Mr C W McEwen SC, appearing for the applicants, points out, this involves three steps:

(i) What, as a matter of primary fact, was happening on the land at that date?

(ii) What was the objective or purpose for which in a general sense these things were being done?

(iii) How is that objective or purpose to be categorised? 8 I should add that although it is necessary to define the use as at 19 April 1963, such use must also be a lawful use to come within the definition of an "existing use". This, in turn, means that the use must have commenced by 12 July 1946, being the date of commencement of Ordinance No. 108 made under the Local Government Act 1919 (The Town and Country Planning General Interim Development Ordinance), after which date interim development consent was required: Pt XIIA, Div 7, Local Government Act 1919. 9 Finally, the use must be one which has not since been abandoned.

The development consents 10 On 12 June 1985, the council granted consent, subject to conditions, authorising a residence to be constructed above the existing single-storey shop. The development application dated 4 April 1985 describes the use of the existing building as "take away food business" and the accompanying plans show the ground floor as "existing shop". Condition D7 of the development consent states: Nothing in this consent should authorise the use of the land in a residential zone for a purpose other than in accordance with a table of permitted uses. 11 On 2 February 1996, the council granted development consent for the strata subdivision of the property. The development application states that the purpose was the "separation of title in respect to the residential and refreshment room component of the existing building". 12 On 29 September 1999, the council granted consent for "replacement of two large market umbrellas with a free-standing demountable open-sided awning to be installed above the outdoor seating area in the courtyard of the restaurant situated on land described as 2 Thomas Street, McMahons Point". The development application, dated 10 June 1999 describes the proposed use of the building as "cover for outside café seating" and describes the current use as "café". The plans accompanying the development application state: "Plans showing proposed freestanding removable awning within courtyard area Thomas Street Restaurant". The plans also show the existing building which is described as "Thomas Street Restaurant". 13 In the present case nothing turns on the first or the second of these development consents. The first consent, for the erection of the residence, is simply a consent for the residence and nothing more. Moreover, nothing more was sought by the development application. Importantly, condition D7 expressly limits the use to that of a residence, which was the only permissible use. 14 The second consent for strata subdivision is again simply that and does not operate as a consent to the use of the strata lots or common property. No use was sought by the development application other than the bare strata subdivision. 15 The third development consent for an awning does, however, raise the following questions identified by senior counsel for the applicants:

(ii) Does the consent authorise the use as a refreshment room?

(iii) And if so, is the validity of the consent open to challenge? 16 As to question (i) and (ii), s 81A(1) of the EP&A Act is relevant: A development consent that enables the erection of a building is sufficient to authorise the use of the building when erected for the purpose for which it was erected if that purpose is specified in the development application, subject to section 109M.

(Section 109M prohibits the occupation or use of a new building unless an occupation certificate has been issued for the building.) 17 I consider the application of these questions to the third development consent in paragraphs [59] to [67] below.

The relevant principles relating to existing uses 18 The correct approach in determining the scope of the protection afforded by existing use provision is settled. The approach to be taken was stated by Kitto J (Owen J concurring) in Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534-535: But at the outset it is necessary to observe that the "existing use" by-laws take two steps which should be kept distinct from one another. First it is required that a purpose be identified as the end for which it can be seen that the premises are being used at the date of gazettal of the by-laws. Then the provision is made that the land may continue to be used for that purpose: not that the precise manner of use for that purpose may alone continue but that use generally for that purpose may continue. The application of the by-law in a particular case has therefore not to be approached through a meticulous examination of the details of processes or activities, or through a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use of the premises at the material date. 19 Kitto J then went on to discuss the degree of particularity required in defining the purpose. In the case of professional offices, no greater degree of particularity is involved in saying that the purpose is that of professional offices: the particular profession of the occupant would not ordinarily be relevant. As to a shop, Kitto J said (at 535): The answer is perhaps not so easy in the case of a shop. As to a butcher's shop, for example, I should be inclined to think that while it would be immaterial to inquire into the details of the user the "purpose" in the relevant sense would be the purpose of a butcher's shop, and not of a shop generally. In the case of a general store, wide variations in the use as regards the nature of the stock carried and the methods of merchandising might occur before one would say, in an ordinary use of language, that the premises were not being used for the same purpose as before. 20 In the same case, Menzies J said (at 537): I agree with the judgment of Kitto J which I have had the advantage of reading but I would prefer to express no opinion upon a question such as whether greater particularity than use for a shop is requisite. As at present advised, it seems to me that it may be, for instance, that premises used as a butcher's shop at the relevant time could subsequently be used as a small goods shop. It is, of course, common for shops in a shopping centre in a residential area to be used from time to time for the sale of different wares and I would not wish to say anything here to cast any doubt upon the lawfulness of such changes. 21 In Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305, McHugh JA (Hope and Samuels JJA concurring) expressed the test applied by the courts as follows (at 310): The courts have done so by refusing 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. Accordingly, a test has been devised which requires the purpose of the use of land to be described only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on at the relevant date. Thus the test is not so narrow that it requires characterisation of purpose in terms of the detailed activities, transactions or processes which have taken place. But it is not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities etc as a class have made of the land. 22 McHugh JA went on to state the following test (at 311): 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. If that conclusion is drawn, then each purpose is to be characterised in accordance with the principles set out earlier in this judgment. 23 In North Sydney Municipal Council v Boyts Radio & Electrical Pty Ltd (1989) 16 NSWLR 50, Kirby P (Samuels and Priestly JJA concurring), after reviewing the above-mentioned cases (and others) said (at 59): From these authorities the following matters of approach emerge: 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 Kirby P went on to say (at 64-65): I approach the task of classification of the existing use rights for this purpose in the way that the High Court has laid down in Perth Shire v Keefe , Parramatta City Council v Brickworks [(1972) 128 CLR 1], Woollahra Municipal Council v Banool [(1973) 129 CLR 138] and as this Court recently elaborated in the Royal Agricultural Society case. They are not to be narrowly defined, restricting such use only to the precise activities shown by the evidence. They are to be broadly and liberally construed, keeping in mind the town planning context in which the classification is ventured. … Equally erroneous is it to confine the use, adopting the definitions used in the NSPSO [North Sydney Planning Scheme Ordinance], years after the existing use rights had first been established. 25 The reference by Kirby P to Parramatta City Council v Brickworks Ltd is a reference to the following principle from the judgment of Gibbs J (1972) 128 CLR 1 at 25: Those clauses are designed to preserve and protect existing rights and ought to be liberally construed and not restricted by dubious implications drawn from words used in other clauses directed to a different subject matter. 26 In Dorrestijn v South Australian Planning Commission (1984) 59 ALJR 105, Mason ACJ, Deane and Dawson JJ adopted the principle of construction that statutory provisions designed to protect and preserve existing right should be as liberally construed as the language in its context allows (at 108). 27 In Royal Agricultural Society case McHugh JA noted (at 311) that the land may be used for more than one purpose. In Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 Meagher JA (Samuels AP and Clarke JA concurring) held that a use which can be said to be ancillary to another use is not automatically precluded from being an independent use of the land (at 409). Meagher JA continued (at 409-410):

But when one use of the land is by reason of its nature and extent capable of being an independent use it is not deprived of that quality because it is "ancillary to", or related to, or interdependent with, another use. If a book publisher opens a sales room at his publishing house to sell his products, the selling of books is an .series of cases dealing with dual uses (of which the decision of this Court in Warringah Shire Council v Caltex Oil (Australia) Pty Limited (1989) 68 LGRA 206 is an example) illustrate the point: they show that a "convenience store" and a petrol station are two independent uses, although the former is clearly ancillary to the latter. This is a fortiori the case where the "ancillary" use has predated the use to which it is said to become ancillary and when it has done so in circumstances where it was initially not "ancillary" to any other use. 28 These principles have been consistently applied in all cases involving disputed existing use rights. With these principles in mind I turn to the evidence of use.

29 Mr Warren William Bury gave evidence by affidavit. He was not cross-examined. He is a retired council worker who now resides at No. 3 Mercator Close, Lake Munmorah. From his birth in 1942 until 1960 he lived at No. 38 Victoria Street, McMahons Point, with his family. He recalls No. 2 Thomas Street ("the premises") well from his childhood. It is notable that he has described the premises as having two distinct uses being "...the local milk bar and corner shop...". Mr W W Bury's further evidence that take-away lunches could be purchased and that lunches were supplied to a number of surrounding businesses indicates that this take-away component was a substantial part of the business at that time. Such a use could not be described as ancillary, indeed it would appear rather that the milk bar/take-away food use was the more substantial objective of the business.

30 Mr Brian Frederick Bury, the brother of Mr W W Bury, also gave evidence by affidavit. He was not cross-examined. He is a retired television presenter who now lives in Queensland. Between 1943 and 1954, and again from 1957 to 1963, he lived at No. 38 Victoria Street, McMahons Point. He remembers warmly the business then operated from the premises and describes it as a "local milk bar". He further deposes to the products sold there being "...small items such as bread, milk, refreshments and sandwiches, and the children in particular visited regularly for ice-cream and milk shakes." In my reading these products clearly fall into two categories, those of groceries (bread and milk) and those of milk bar and take-away food (refreshments, sandwiches, ice-cream and milkshakes). Both seem to have been substantial elements of the trade at the premises but the milk bar/take-away objective of the business seems to be the more substantial of the two. Mr B F Bury's description of the store layout in those days further points to two uses with the prepared food aspect being the principal objective: "...there was a counter, shelves upon the walls upon which were stored goods for sale." He goes on to describe what the counter was used for, namely making and selling sandwiches, either ordered at the counter or pre-ordered, and made up by the proprietor behind the counter. He further indicates that daily lunches were provided to the businesses operating boat building yards and industry at the waterfront. Mr B F Bury has also deposed that during this time the backyard area was used for storage. The evidence of Mr B F Bury would appear to cover the relevant time at which the usage of the premises became unlawful in 1963. At the relevant time his evidence makes it clear that there were two substantial and distinct uses of the property - groceries and milk bar/take-away food and that the milk bar/take-away food aspect was the principal objective of the business.

31 Mrs Carmel LaMaro gave evidence by affidavit. She was not cross-examined. She is a retired shopkeeper who now resides at Naremburn. She stated in her affidavit that she was the owner of the premises from around 1966/67 until 1984. It should be noted that the deed of sale, being an exhibit to the affidavit of Professor Richard Mackay sworn 8 June 2006, shows that Mrs C LaMaro in fact purchased the premises on 12 November 1965. She has deposed that at the time of purchase "...it was a grocery store that also had a milk bar component." Again the two substantial uses of the premises are indicated. It was the milk bar/take-away food aspect of the business that Mrs C LaMaro focussed upon. She developed this so that it soon grew to comprise about three quarters of the business's takings. This consisted of local businesses and residents buying lunches from her shop and she also delivered food to industries and businesses in the area. The food sold included sandwiches, pies, sausage rolls and pasties. Mrs C LaMaro sold toasted sandwiches and ham and egg sandwiches at breakfast time and also traded on Saturday mornings. Mrs C LaMaro deposed to the fact that, while she kept groceries in stock for the local residents, "...this was essentially nickel and dimes business compared to the take-away food profits." Thus, the prepared food side of the business grew to be not merely a substantial use but the most significant use, with the sale of groceries being more aptly described as an ancillary use.

32 The take-away use of the shop between 1974 and 1976 is supported by the affidavit, relied upon by the applicants, of Reginald James Smith, resident at No. 15 Victoria Street, McMahons Point. He deposed that during this time he would have sandwiches made there to take-away and that he observed workers visiting the shop and leaving with their purchases in the morning, at morning tea and at lunch. This is further supported by the affidavit of Mr Peter Rix also relied upon by the Applicants in these proceedings. Mr P Rix owned the business operated at the premises from 1975 until late 1976/ and early 1977. He has deposed that a few groceries were sold as well as take-away food and sandwiches both ordered in store and delivered to local businesses.

33 It is apparent that at some point during Mrs C LaMaro's ownership of the premises the courtyard began to be used for customer seating rather than for storage. Ms Rosa Simon, caterer from Mosman, has sworn an affidavit relied upon by the first, second and third respondents in the proceedings. Between 1990 and 1993 Ms R Simon assisted her brother with the café and catering business run on the premises. She has further deposed that she is familiar with the premises from when she worked in Mitchell Street at Graham Library & Subscription Services for two years around 1981. Ms Simon deposed that at this time she and her workmates would go to the premises for lunch on Fridays and there were benches and tables outside at which they would sit. Mr Josef Liebhardt has sworn an affidavit, relied upon by the first, second and third respondents as evidence in the proceedings. He is a property investor and retired café manager residing at Linley Point. He was the owner of the premises between 1984 and 1996. He has deposed that when he purchased the premises in 1984 the courtyard was already in use as seating for eat-in dining. Countering this, Ms Andrea Taylor, health manager of No. 32 Victoria Street, McMahons Point, has sworn an affidavit, relied upon by the applicants in the proceedings. She has lived in McMahons Point since 1985 and deposed that when a fellow named Joseph first took over the business in 1987/1988 there was no use of the courtyard. I accept Mr J Liebhardt's and Ms R Simon's evidence to be the more reliable as both parties had a commercial interest in the property and I would expect that as a result their recollections of the set up of the premises would be clearer and more detailed. Professor Richard Mackay

34 Professor Richard Mackay has given expert evidence by affidavit, relied upon by the fourth respondent. Professor Mackay is the managing director of Godden Mackay Logan - Heritage Consultants. He has over 20 years experience in cultural resource management, having been actively involved in an extensive range of heritage management projects and issues. Professor Mackay has researched the history of the use of No. 2 Thomas Street up to the year 1990 for the council. In the course of that research he has reviewed a bundle of documents comprising prior approvals and council's resolutions in relation to the property. Additional research was undertaken at the Stanton Library, the North Sydney Heritage Centre, the Mitchell Library, the State Library of NSW and the Department of Lands.

35 Prof Mackay has provided a timeline of the usage of the premises, as recorded in various publications, as follows: 1929 - 1940 · North Sydney Council Building Register from 1929 to 1934 lists the premises as a builder's workshop, approved by council on 2 September 1930. · The owner of the land is listed as Mr Richard Samuel Messent in the North Sydney Rate and Valuation Books. Mr R S Messent purchased the premises from Mr Arthur John Waterhouse in December 1930. · North Sydney Rate and Valuation Books between 1933 and 1936 list the premises as a workshop. · A conveyance recorded in Book 2227 Number 943 at the Department of Lands records that Mr R S Messent died in November 1938 and left the premises to his wife, Mrs Anne Messent in 1939. 1940-1950 · After Mrs A Messent died in July 1941 the property was held by her estate, administered by Mr Charles Ringrose Wilson. · North Sydney Rate and Valuation Books from 1939-1942 list the Premises as being a shop with "workshop" crossed out indicating that the use changed at this time. · Wise's NSW Post Office Commercial Directory of 1941 lists the premises as mixed business. Mrs J Paul is listed as running the business in 1941 and also 1942 · Wise's NSW Post Office Commercial Directory of 1947 again lists the premises as mixed business run by Mrs J Paul. · Wise's NSW Post Office Commercial Directories of 1948 and 1950 list the premises as mixed business operated by J B and V A Crellin. · From 1934-1950 Wises defined mixed business as being "Grocery, Dairy Produce, Confectionary, Pastry, etc."

1950-1960 · The conveyance in Book 2227 Number 943 records that on 25 August 1952 Mr C R Wilson sold the property to Mr Vasilious Eustace Syrmiss. · North Sydney Council's rate records for 1956 list the property as a shop. · Professor Mackay found no other record of the premises during this period. 1960-1970 · A conveyance recorded in Book 2773 Number 767 at the Department of Lands records that the property was transferred from Mr V E Syrmiss to Mrs C LaMaro · North Sydney Council rate records for 1966 list the property as a shop. · Professor Mackay found no other record of the premises during this period. 1970-1980 · A lease signed 13 June 1972 between Mrs C LaMaro (lessor) and Mr Dennis Edward Fuller (lessee) stipulates that the lessees will not at any time during the lease term carry on or permit to be carried on any trade or business at the premises other than the dwelling in terms of the residence or sandwich mixed business in respect of the shop. · A lease signed 7 August 1977 between Mrs C LaMaro (lessor) and William and Norma Cottrell (lessees) with the same agreement as to the restriction on the kind of trade of the 1972 lease. · Exhibited to Professor Mackay's affidavit is a photo of the exterior of the premises from 1977. The premises, sign-posted as a "Family Food Store", is shown to be painted with advertisements for some of the products sold inside including sandwiches, ice-cream and soft-drinks.

1980-1990 · A report by Mr Peter LeBas of February 1984 indicates the premises was being used as a small-goods and take-away food business and that a small goods and take-away food licence had been issued and renewed every year since 1978. The report also indicated that internal works involving a new floor and counter had recently been approved by council. · In March 1984 the council wrote to prospective buyer Mr J Liebhardt advising that although no development consent or building applications could be found, the licences to operate a small goods and take-away food store had been issued in the past and the building appeared to have been originally erected as a shop. · The conveyance in Book 3625 Number 713 records that the premises was sold to Essex 17 Pty Limited (the company owned by Mr J Liebhardt) by Mrs C LaMaro on 15 May 1985. · The council granted development consent 1094/85 for the addition to the premises of an extra storey to be used as a two-bedroom dwelling. The development application described the site as being occupied by a single-storey take-away food shop/refreshment room. · A lease signed 4 November 1985 between Essex 17 Pty Limited (lessor) and one Mary Lennox (lessee) stipulates that the ground floor of the premises is to be used for no other purpose than that of a luncheonette and take-away food shop.

36 Notably, Professor Mackay's affidavit shows that on 25 August 1952 Mr V E Syrmiss purchased No. 2 Thomas Street. He was the owner of the premises until 12 November 1965 when it was transferred to Mrs C LaMaro. There is evidence of the operations carried on at the premises covering the period from 1942 to 1963 from the Burys brothers. Mr V E Syrmiss bought the premises halfway through this period. There is then a small gap in the evidence from 1963 to 1965 and the evidence of Mrs C LaMaro then covers the period from 1965 to1984. That the operations described by the Burys brothers and by Mrs C LaMaro are very similar and as Mr V E Syrmiss owned the property during the period deposed to by the Burys brothers up until Mrs C LaMaro purchased it, it can be assumed that the operations during the 1963-1965 gap were the same as was deposed to by the Burys brothers and Mrs C LaMaro. This confirms that at the relevant time there were two substantial uses of the property - groceries and milk bar/take-away food with the latter being the more substantial of the two. Mr Josef Liebhardt 37 As noted in par [33] above, Mr Josef Liebhardt has sworn an affidavit relied upon by the first, second and third respondents. He is a property investor and retired café manager residing at Linley Point. He was the owner of the premises between 1984 and 1996. He first became involved in the food industry in 1955 and until 1996 he was involved in the management and operation of approximately seven café and milk bar styled premises in addition to No. 2 Thomas Street. He has deposed that during this period Australian approaches to informal eating changed. His experience was that from the 1950s milk bar and cafés grew in popularity. Espresso machines, deep fryers and electric grills became widely available and al fresco dining became increasingly popular. He has deposed that in the 1970s the "local take-away" became increasingly frequented as a place where prepared meals could be taken to work, and from where families could buy a meal to take home in the evening.

38 Mr J Liebhardt has deposed that when he first visited the premises they were in a run down state and the previous owners were selling light meals such as sandwiches and fried food to both seated and take-away guests. When his family first took over operation of the premises there were tables and chairs inside and outside the building and there would be around twenty seated diners on an average day. Before purchasing the business, on 29 February 1984 Mr J Liebhardt wrote to North Sydney Council asking whether consent or existing use rights existed in respect of the usage of the premises as a sandwich shop. The council responded by letter dated 8 March 1984 informing Mr J Liebhardt that, while its records did not show any development consent or building approval, it had for the previous four years issued a small-goods and take-away food licence for the premises and that the building was originally erected for the purposes of a shop. Mr J Liebhardt has deposed that the council's Social Planning Committee at a meeting of 20 March 1984 then considered the issue. At that meeting the committee resolved that it had no objection to the continued use of the premises for the purposes of a small-goods and take-away food shop. Mr J Liebhardt's daughter, Ms Vanessa Liebhardt, was notified of this resolution by letter from the council dated 21 March 1984. This indicates that at the time, as far as the council was concerned, the premises enjoyed existing use rights for two purposes being small-goods and take-away food. 39 Exhibited to Mr J Liebhardt's affidavit is a DVD which became Exhibit 1 in these proceedings. Mr J Liebhardt has deposed that the video (of which the DVD is a copy) was taken by him in the middle of 1985 before the second storey was added to the premises. He states that it shows a typical lunch trading at the time, under his daughter's management. The DVD was shown during the proceedings. It showed the shopfront, the inside of the café and the outdoor courtyard. On the shopfront a painted sign said "Your friendly lunch house, eat here in our garden courtyard or take your eats with you." A smaller sign hanging above the entrance read "Famished lunch house sandwich bar espresso coffee". Inside the café the DVD showed a room full of people ordering and waiting to order food. There appeared to be a counter where sandwiches were made and another where hot food was on display. Behind the counters on the wall was a chalkboard menu listing items for sale under the headings "Sandwiches" and "Hot Filled Sands". Some persons were ordering food on plates to eat on the premises; others were seen to be having food packed into containers and paper bags to take-away. There were some tables inside and people were sitting at them eating. The outdoor courtyard had a lot of tables and chairs all full of patrons eating. This indicates the use of the premises at that time as being a refreshment room and a take-away food shop. 40 Mr J Liebhardt received a letter from council dated 1 February 1996. The letter advised that the council would take legal action if Mr J Liebhardt did not submit a development application for the "intensification of the refreshment room use". Mr J Liebhardt deposed, however, that after the resolution of an "in-house meeting" on 22 April 1996 he was sent a letter dated 6 June 1996 from Mr Matthew Pearce, North Sydney Council's Administrative Support Manager at the time, informing him of the restrictions to be adhered to in relation to the operation of the refreshment room. These restrictions were: 1. The hours of operation shall be restricted to daylight hours, 6 days per week; 2. Garbage pick ups shall not occur before 7:00 am on weekdays and 9:00 am on weekends; 3. The number of customer seating shall not exceed 60 seats; and 4. All customers shall be advised not to park in "No Standing" zones, and of the parking situation.

This then shows that intensification, if any, of the use of the refreshment room was consented to by council in accordance with the above requirements. Mr Stuart Stawman 41 The affidavit of Mr Stuart Stawman was relied upon by the first, second and third respondents. Mr S Stawman, a psychotherapist, was the husband of Ms Kirsten McKay (now deceased). Mr S Stawman has deposed that he was closely involved with the management of the Thomas Street Café together with Ms K McKay from around late 1993 until around the end of 1997 when they sold the business. He states that at all times he was involved with the business they serviced a take-away food market for which there was strong demand, particularly from local workers during the week. Mr S Stawman deposed that they sold a lot of take-away coffee in the morning but also other breakfast items. He states that they had a counter where sandwich fillings could be viewed and ordered for custom-made sandwiches. They also took orders from local businesses which were either collected or delivered. As well as the take-away business they operated a café style restaurant selling gourmet food. Mr Stanley Thomas Higgs 42 Mr Stanley Thomas Higgs furnished an affidavit which was relied upon by the first, second and third respondents in the proceedings. He is a retired accountant and is the father of Mr Gregory Charles Higgs who owned and operated a business at the premises known as Thomas Street Café from July 1997 to December 2002. During this time he worked as the accountant of the business and looked after the management of financial records. He deposes that in the year 2002 there were sales totalling $4,055 to a company named "DDI", he recalls that around 50% of that sum was from sales of platters of sandwiches which were bought over the counter or delivered. Mr S T Higgs has further deposed that a business known as "Mobius" held a monthly account for take-away and delivered lunches, and staff of "Pacific Publications" were regular take-away customers of the café. In addition to these businesses Mr S T Higgs states that a significant part of the takings each day were from over the counter sales of take-away coffees, take-away sandwiches and friands. He deposes that, in his recollection, the take-away component of the business takings was in the order of $15,000 - $20,000 per annum. Mr S T Higgs indicates that this revenue was a proportionately small part of the café's overall takings of between $350,000 - $400,000 per annum but it was regular revenue nonetheless and continued for the whole of the five years of his son's ownership of the business. 43 That the take-away food part of the business was continued during the operation of the premises by Mr G C Higgs is supported by the affidavit of Ms Deborah Anne Light, resident at No. 11 Victoria Street, McMahons Point since around 1995, relied upon by the first, second and third respondents. This is further supported by the affidavit of Mr Gregory Guy Bicknell, the chief executive officer of "Mobius", relied upon by the first, second and third respondents. Mr G G Bicknell further verifies that "Mobius" had a monthly account at the café. Ms Andrea Taylor, resident at No. 32 Victoria Street, McMahons Point, contends in her affidavit, relied upon by the applicants, that she does not believe that take-away food was available once Mr G C Higgs took over operation of the premises. However, in cross-examination by counsel for the fourth respondent on 16 August 2006 Ms A Taylor admitted that she could not in fact see the café when she was in her home. This, combined with the uncontested affidavit evidence of Mr S T Higgs, Ms D A Lights and Mr G G Bicknell, would indicate that the evidence that a take-away business did continue under Mr G C Higgs' operation must be accepted. Mrs Catherine Patricia Kortt 44 Mrs Catherine Patricia Kortt is the second respondent in the proceedings and a director of the first and third respondents. She has sworn two affidavits (on 24 April 2006 and 19 May 2006), both read in these proceedings. She is a housewife and café manager. She has deposed that on 2 October 1996 ownership of No. 2 Thomas Street was transferred to two companies - Primary Court Pty Ltd (the third respondent - of which Mrs C P Kortt is currently the sole director and shareholder) and X'Direct Pty Ltd (a company controlled by Mr Ian Budderym - a friend of Mrs C P Kortt and by her husband). She remembers that at the time the shop/café operated in substantially the same way as it does today except the customer base has moved further towards the white collar workers that now generally occupy the North Sydney business district. 45 Mrs C P Kortt has deposed that at the end of December 2002, shortly before Christmas, Mr G C Higgs ceased to trade. The exact date is indicated in the evidence of Ms A Pearman as being 15 December 2002. Mrs C P Kortt and her husband began to make inquires to find a new tenant at this point. Exhibited to Mrs C P Kortt's first affidavit is a letter from Mr Stephen Beattie, Council's Manager Development Services, dated 27 March 2003, which reiterates the restrictions imposed at the in-house meeting of 22 April 1996, as quoted above in par [40] , and confirms council's acknowledgment that the refreshment room has existing use rights. Mrs C P Kortt has deposed that she and her husband responded by letter dated 19 May 2003 that they intended to re-open but were undertaking the necessary repairs to make this possible. Following this the council gave further consideration to the existence of existing use rights. Exhibited to Mrs C P Kortt's first affidavit is another letter from Mr S Beattie dated 3 October 2003 informing Mr and Mrs Kortt that council had resolved to take no action to restrain the use of the premises, but that if a development application was received for the site the council would seek a court direction as to the extent of any existing use rights applicable to the premises prior to determination of the application. 46 Mrs C P Kortt has deposed that in the fortnight before Christmas 2003 she arranged for the premises to open on a single day to sell a limited range of food. From Ms A Pearman's affidavit this date is shown to be 18 December 2003. As Mrs C P Kortt deposes, two signs were displayed on the day which read: "Finks on Thomas ... Christmas Goods for Sale" and "Finks on Thomas ... Opening Soon". The premises opened for approximately two hours. Copies of two orders made by the council on 18 December 2003 are exhibited to Mrs C P Kortt's affidavit. These were Order No. 20 which required various repairs to be carried out on the premises and Order No. 21 which restricted the seating to 20 patrons. Both were made under s 124 of the Local Government Act 1993. Exhibited to Mrs C P Kortt's affidavit is a copy of the minutes of the resolution of a council meeting 22 August 2005. Relevantly, the meeting resolved that: the existing use rights of the premises were acknowledged by council; the restriction on seating of Order No. 21, 18 December 2003 be revoked; council would monitor the premises once open for business with regard to noise, mechanical ventilation, parking issues, and any non-compliance with the terms of development consent granted on 29 September 1999. Mrs C P Kortt has deposed that around early September 2005, the take-away café re-opened for business under the management of the first respondent. 47 From the affidavit of Ms A Pearman the date of re-opening is clarified as 29 August 2005. The affidavit of Mrs Gaila Merrington, sworn 7 April 2006 and read by the applicants in these proceedings further indicates that from this time the café traded until about January 2006 at which time it closed for a month and opened again in February 2006. The café continues to trade to this day. 48 Whilst not directly relevant to the question of use of the premises it should be noted here that numerous affidavits were read, and some oral evidence was given, in these proceedings both objecting to and supporting the operation of the café. The applicants read affidavits sworn by the following persons, who object to the café's operation on the basis of noise, parking and traffic. Some of these persons also gave oral evidence: Mr Gay Cusack (affidavit of 19 May 2006); Mr Willy Dietrich (affidavit of 11 May 2006, oral evidence on 15 August 2006); Mr Ian Kingsford-Smith (affidavit 12 April 2006); Mrs Gaila Merrington (affidavit of 7 April 2006, oral evidence on 15 August 2006); Mr James Merrington (affidavit of 19 May 2006); Ms Angela Pearman (affidavit of 11 July 2006, oral evidence on 14 and 15 August 2006); Reginald James Smith (affidavits of 18 May 2006 and 10 July 2006); Mrs Sheila Smith (affidavits of 27 February 2006 and 7 July 2006, oral evidence on 14 August 2006); Ms Andrea Taylor (affidavits of 12 May 2006 and 14 August 2006, oral evidence on 16 August 2006). The first, second and third respondents read affidavits in support of the café sworn by the following persons: Ms Kandy Victoria Carpenter (affidavit of 19 May 2006); Ms Nessa Doyle (affidavit of 31 July 2006); Mr James Robert Kell (affidavit of 1 May 2006); Ms Deborah Anne Light (affidavit of 1 May 2006); Ms Wendy Louise Robinson QC (affidavit of 17 May 2006).

49 Nevertheless, some of this evidence confirms the use of the premises as a café. Mr W Dietrich confirmed in cross-examination that in the early 1970s the shop sold take-away food such as sandwiches, meat pies, soft drinks, ice-cream, breakfasts, morning tea and lunches. Mrs S Smith said in her affidavit that the premises operated only as a shop until 1994 when it became a café. I find, however, that Mrs S Smith was an unreliable witness - she only visited the premises on three occasions since 1974, and her evidence is contrary to the uncontradicted evidence in the 1985 video which I have noted in par [39] above. In short, I reject her evidence totally and she cannot be believed.

Application of the relevant principles to the evidence of use 50 As noted above, the question for determination is: for what purpose was No. 2 Thomas Street being used at the relevant date, which in this case is 19 April 1963? 51 Fortunately, there is direct evidence of what, as a matter of primary fact, was happening on the land at that date. This is described in the affidavits of Mr W W Bury and Mr B F Bury. In particular, Mr B F Bury was living in Thomas Street until 1963. I have no hesitation in accepting their evidence, which is undisputed. The Burys brothers described the use of No. 2 Thomas Street as a milk bar. 52 The evidence clearly shows that immediately before 19 April 1963 and at all relevant times thereafter, the major component of the business was that of a milk bar which included the sale of sandwiches and other forms of prepared food and which later developed into a take-away food business and café. The evidence shows that the sale of groceries was generally a minor part of the business or an ancillary use, which was provided mainly for the benefit of local residents.

53 Moreover, the evidence firmly establishes the fact that the take away food component remained a significant part of the business even after it had evolved into a café or refreshment room. This conclusion must be drawn from the evidence of a number of witnesses, not only those of the respondents, but including some called by the applicants (Mrs G Merrington and Mr W Dietrich). As noted in par [49] above, evidence to the contrary by Mrs S Smith proved to be unreliable, particularly in the face of a 1985 DVD which showed a thriving take away food business in addition to the café/refreshment room side of the business.

54 I have noted that McHugh JA in the Royal Agricultural Society case said that the courts have refused to categorise an existing use so narrowly that natural changes in the method of using the land or carrying on a business will render an existing use valueless. Similarly, in Turnbull Group v North Sydney Council (1998) 101 LGERA 354, Sheahan J accepted that shop uses do tend to change and evolve over the time (citing Kitto J in Shire of Perth v O'Keefe at 535, inter alia). 55 The change in emphasis from a milk bar to a café seems to be a natural change in the method of carrying on a business such as that which has been conducted here, consistently with the principles explained by McHugh JA in the Royal Agricultural Society case, so that the existing use right is not lost. This is consistent with the evidence of Mr J Liebhardt, noted in par [37] above, and which I have no reason to reject. That is, the change in the manner in which the use is carried out does not mean that it is a different use, or that the use has been abandoned. In construing the use broadly and liberally (per Kirby P in Boyts) and avoiding a meticulous examination of the details of the activities (per Kitto J in O'Keefe) I have come to the view that the use is one which is covered by the phrase which is well understood in local government, namely a refreshment room. That was the use in 1963 and that is the use today.

56 If I am wrong in so finding and instead there were two uses, one being some kind of corner shop or convenience store and the other a milk bar or café, the fact that the latter use may be ancillary to the former use does not deprive it of also being an independent use, as explained by Meagher J in O'Donnell. I find, however, that the evidence is all the other way. That is, the milk bar/café use was at all relevant times the dominant use and the corner shop/convenience store component was the ancillary use.

57 In applying the principles described by McHugh JA and noted in par [21] above, the natural change in the method of carrying on the business which occurred does not render the existing use right valueless. Adopting a broad and liberal approach to the task of classification (Boyts, at 65), it remains and continues as a refreshment room involving the sale of prepared food to the public. As I have said, that remains the relevant objective or purpose of the business. This is what the business was doing on the relevant date, 19 April 1963. I am satisfied on the evidence that the present use is protected by the existing use provisions of Pt 4, Div 10 of the EP&A Act. Moreover, the evidence clearly shows that by 1985 the use had expanded into the courtyard at the rear of the building. The courtyard appears to have been previously used for storage and as the yard area for the shop. The prohibition in s 107(2)(b) of the EP&A Act against any enlargement or expansion or intensification of an existing use did not commence until 3 February 1986 (Act No. 228 of 1985). That is, the amendment to the Act which commenced on 3 February 1986 and which prohibits any enlargement, expansion or intensification of an existing use, does not operate retrospectively: Lane Cove Municipal Council v Lujeta Pty Ltd (1986) 58 LGRA 157, King v Lewis (1995) 88 LGERA 183.

58 Neither has the existing use been abandoned. Although Mr G C Higgs ceased trading on 15 December 2002 and the business did not re-open until September 2005 under the management of the first respondent, there was never any intention to abandon the use. Mrs C P Kortt's uncontested evidence is that she attempted to find another tenant to run the business after Mr G C Higgs left, she undertook necessary repairs and she sought to confirm the lawfulness of the use with the council. Such rights are not lost by the fact that a tenant leaves and there is a subjective intention by the owner to either find a new tenant or to use the premises herself or himself: Woollahra Municipal Council v Banool Developments Pty Ltd (1973) 28 LGRA 410; Daniel v Manly Municipal Council (1975) 34 LGRA 14, Hudak v Waverley Municipal Council (1990) 70 LGRA 130. Moreover, in the present case Mrs C P Kortt carried out repairs to the premises during this period to enable it to be re-opened.

The effect of the third development consent 59 I have briefly described the third development consent in par [12] above. 60 The applicants rely upon the following submissions, as I understand them:

(i) The consent is void because it purports to grant consent for a use which is prohibited by the relevant environmental planning instrument.

(ii) If the consent is otherwise valid, sub-s 81A(1) of the EP&A Act cannot operate to authorise a use which is otherwise prohibited by the relevant environmental planning instrument: Gameplan Sports and Leisure Pty Ltd v South Sydney City Council , NSWLEC, Pearlman J, 4 October 1996, unreported.

(iii) Subsection 81A(1) of the EP&A Act operates to authorise only the erection of the awning for the purpose of a cover over the courtyard and not the use of the courtyard itself. 61 Section 81A(1) states: 81A Effects of development consents and commencement of development (1) Erection of buildings

A development consent that enables the erection of a building is sufficient to authorise the use of the building when erected for the purpose for which it was erected if that purpose is specified in the development application, subject to section 109M. Note. Section 109M prohibits the occupation or use of a new building unless an occupation certificate has been issued for the building.

… 62 In Gameplan, Pearlman J considered the operation of sub-s 91(4) of the EP&A Act, as it then was, which subsection has since been re-enacted as s 81A(1). As senior counsel for the applicants points out, the subsection does not operate to make permissible a use of land which would otherwise be prohibited by the relevant environmental planning instrument. Pearlman J in Gameplan explained the way in which the provision operates as follows: Section 91(4) does not operate to make permissible a use of land which would otherwise be prohibited by the relevant environmental planning instrument. Rather, it is a provision which streamlines the development application process, so that a person applying for approval for two permissible developments (the construction of a building, and its subsequent use) is not required to submit two applications, but can seek consent for those two developments in the one application (see Parramatta City Council v Australian Posters Pty Ltd (1986) 58 LGRA 213). 63 In Gameplan, the use to which the proposed building was to be put, namely, a restaurant, was prohibited by the relevant environmental planning instrument, and so the section did not authorise its use for that purpose. 64 In the present case, however, the purpose of the structure specified in the development application is permissible under the relevant environmental planning instrument. The effect of sub-ss 108(2) and (3) of the Act is that Pt 5 - "Existing Uses" - of the Environmental Planning and Assessment Regulation 1994 was taken to be incorporated into every environmental planning instrument. In particular, by sub-s 108(3), any provision of any environmental planning instrument that would derogate, or would have the effect of derogating, from the incorporated provisions has no force or effect (Carden v Willoughby City Municipal Council (1985) 56 LGRA 366, Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373 at 376). 65 The incorporated provisions - cll 38 to 44 of the Regulation - allowed an existing use, with development consent, to be (a) enlarged, expanded or intensified; (b) altered or extended; (c) rebuilt; or (d) changed to another use including a use that would be otherwise prohibited under the Act. 66 For the purpose of applying s 81A(1) in the present case, the question is whether the purpose is specified in the development application. The applicants say that the purpose specified is simply "a cover" and not for the use of the covered area as a café or refreshment room. I am unable to agree. The development application form, under the item "Proposed use of the building", states "cover for outside café seating". The plan accompanying the development application states: "Plan showing proposed freestanding removable awning within courtyard area Thomas Street Restaurant". The cover was obviously for a purpose. It was to be used for the purpose of the restaurant. Moreover, the council, in granting the development consent imposed conditions regulating or controlling the use of the restaurant, including specifying the hours of operation, the number of customer seats, and a requirement that "all customers" be advised by way of a sign adjacent to the entry door and on the menus that they are not to park in "No Standing" zones. 67 I have previously described the nature of the existing use. If, contrary to that description it is correct to describe the existing use as a take away food shop, then this development consent amounts to a consent to change the use to a café or restaurant. This follows from the fact that the development consent describes the use as a restaurant and the conditions of consent relate to the use of the whole of the subject premises. Moreover, it was lawful for such a consent to be granted under the incorporated provisions.

Discretionary considerations 68 The conclusion that the use of No. 2 Thomas Street for the purpose of a refreshment room is lawful means that it is not necessary to consider the exercise of the Court's discretion. 69 The applicants nevertheless rely upon the well-known principles described by Kirby P in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339-341. In particular, they rely upon the fact that the use is prohibited under the relevant planning instrument; the adverse effect on the amenity of nearby residents, caused by noise, parking and traffic congestion; and the premises could be put to an alternative use as a residential property. The delay of the applicants in bringing these proceedings is that although they came to No. 18 Victoria Street in 1992, the business was conducted less intensively then, they thought that the council would take the running of the proceedings, and whilst the premises were temporarily closed they did not think any action would be successful. 70 The first, second and third respondents say that they purchased the premises and the business in 1996 when it was operating as a café and after they had investigated the lawfulness of the business. At the time of purchase the council had recently granted the strata title subdivision with a letter of support from the present applicants. The respondents expended a substantial sum to upgrade the premises in reliance upon the development consent and to comply with orders issued by the council. They would suffer severe hardship if they had to close the business having expended monies to upgrade the premises and would have to spend something like a further $100,000 to convert the premises into a residence. A number of local residents have said that they have no complaints about any adverse effect on their amenity and support the retention of the business as having a community benefit. The Court would be less likely to restrain a breach of the Act where the action is brought by a private citizen rather the local council. 71 I have briefly noted above the competing submissions, but do not resolve them because any determination of this issue would be of no consequence: Wade v Burns (1966) 115 CLR 537 at 555, 562-563, 568.

Conclusion and orders 72 The applicants' claim having failed it follows that their application must be dismissed. It must also follow that they should pay the respondents' costs. I make the following orders: (1) The application is dismissed. (2) The applicants must pay the respondents' costs. (3) The exhibits may be returned.

I hereby certify that the preceding 72 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.