Icon Hospitality Management Pty Ltd v City of Sydney Council

CASES CITED: ABC Planning Pty Ltd - ats South Sydney Council [2002] NSWLEC 255

APPLICANT Mr C. McEwen, senior counsel Gaden Lawyers LEGAL REPRESENTATIVES:

RESPONDENT Mr S. Kondilios, solicitor of Maddocks

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10987 of 2006 Icon Hospitality Management Pty Ltd v City of Sydney Council

JUDGMENT Background. 1 This appeal was lodged against council's refusal of a development application proposing the extension of trading hours for the Dolphin Hotel at No. 412-416 Crown Street, Surry Hills.

2 This 3-storey corner hotel was refurbished in 2005/2006 and the conditions of consent allowed the following trading hours: o Monday to Saturday; 10 a.m. to 12 midnight, and o Sundays; 10 a.m. to 10 p.m.

3 The application seeks consent for an extension of the trading hours to allow: o Friday and Saturday; from midnight to 1a.m., and o Sundays; from 10 p.m. to 12 midnight.

4 A number of issues were identified for the appeal, which can be summarised as: o whether the extension of trading hours to 1 a.m. on Friday and Saturday and 12 midnight on Sunday is consistent with the objectives of the Mixed Use Zone, o whether the extension of trading hours is consistent with the planning intent for the Mixed Transitional Precinct, o whether the extension of trading hours is consistent with the established character of licensed premises trading in the mixed use area, o precedent and cumulative impact, o amenity impacts and noise, o security, o public interest.

The site. 5 The Dolphin Hotel is situated at the junction of Crown and Fitzroy Streets in Surry Hills and Sheas Lane is located at the rear of the property. The approved refurbishment included: o the extension of the licensed premises into the adjoining two terraces to the south; and o removal of the roof to create an open terrace at the first floor level.

6 The hotel contains a gaming room, bottle shop, pool room, restaurant, bar and storage areas at ground level. A dining area, kitchen and staff offices are located at mezzanine level. A bar, lounge and terrace are located on the first floor. The terrace fronts Crown Street and a void is located in the centre of the first floor. A function room and toilets are located at the second level. There are four public entrances to the hotel, three on Crown Street and one via Fitzroy Street.

7 The surrounding area is characterised by a mixed uses to the north and south and residential to the east. The adjoining terraces to the south are occupied by retail, medical and commercial uses at ground level. Some of these properties have residential uses on the upper floors.

8 A 3-storey commercial warehouse is located directly across Fitzroy Street to the north. The building is currently vacant. The Medina hotel/serviced apartments is located diagonally across Crown Street and commercial offices occupied by St Vincents, are located to the west across Crown Street. Residential terraces are located to the east along Fitzroy Street and directly to rear along Sheas Lane.

9 There are four other hotels located in close proximity to the Dolphin, namely the Clock, the White Horse, the Hopetoun and Forresters.

10 South Sydney Local Environmental Plan 1998 (SSLEP). This site is in a Zone No 10 - Mixed Use Zone and adjacent to a residential zone. It is also located in a Mixed Use Transitional Precinct.

11 The property is listed as a Schedule 2 heritage item and is in the Bourke Street North Conservation Area.

12 Clause 10 of SSLEP provides that the Council must not grant consent to the carrying out of development on land to which the plan applies unless the Consent Authority is of the opinion that the proposal is consistent with the objectives of the zone within which the land is located.

13 Clause 21 sets out the following relevant objectives: (a) the allow, in appropriate circumstances, a mixture of compatible land uses such as residential, retail, commercial, light industrial and industrial development, and (b) to promote mixed use planning by locating mutually supportive and compatible uses such as residential uses, places of employment and retail uses in close proximity to each other so as to minimise vehicular travel, and (c) to permit appropriate forms of residential development within the zone to mutually support the vitality of nearby commercial and urban village centres, and in doing so, assist successful urban consolidation, and (d) to incorporate contemporary urban design principles in the design of new buildings and the interpretation of their relationship with the public domain, and (e) to implement the principles of energy efficiency, travel demand management and other sustainable development practices as part of the development assessment process, and (f) to encourage integration of suitable employment and resident intensive activities into accessible locations so as to maximise public transport patronage and encourage travel by foot and bicycle from surrounding areas, and (g) to minimise any adverse impact on residential amenity by devising appropriate design assessment criteria and applying specified impact mitigation requirements by the use of development control plans, and (h) to ensure that the nuisance generated by non-residential developments, such as that related to operating hours, noise, loss of privacy, equal and pedestrian traffic or other factors, is controlled so as to preserve the quality of life for residents in the area.

14 South Sydney Development Control Plan 1997: Urban Design (DCP 1997). Part B of DCP 1997 at Section 3 sets out the objectives and performance criteria for ensuring that development respects, improves and enhances urban village character.

15 The subject site is within Precinct 2 - Mixed-use transitional. This category of precinct is usually located along major roads that act has transitional areas or buffer to surrounding residential areas. The stated planning intent includes: o To protect the amenity of adjoining residential areas by providing a buffer.

The evidence. 16 Planning evidence on behalf council was presented by Ms P Oxby, councils senior planner, in Exhibit 4 and Mr J Lidis (consulting town planner) for the applicant, in Exhibit A. They prepared a joint planning report, which is Exhibit 6.

17 The acoustic issue was addressed by Mr S. Cooper (on behalf of council) and Dr R Tonin (on behalf of the applicant), resulting in a joint experts report, which is Exhibit 7.

18 Sergeant P. Mort (Licensing Supervisor at Surry Hills) also provided a detailed statement, which is Exhibit 9.

19 A considerable number of objections were lodged against the proposal, both written objections as contained within councils bundle of documents (Exhibit 1) and oral objections heard at the site inspection. Ms Oxby summarised the objections as follows: o continued, unacceptable background noise from the rear of the premises, where the door (between the outside courtyard and in side areas) is often opened making it uncomfortable in habitable rooms on a busy night; o noise from smoking patrons outside the premises on the Crown Street frontage of the site; o noise from base and thudding beat of the premises' stereo system; o noise from clanging of bottles within the premises, and when bottles are collected by garbage contractors; o patrons from the Dolphin fighting in the street - in recent months fights have been observed on more than two occasions adjacent to the premises; o drunk people loitering and engaging in loud conversations, or singing and shouting outside bedroom windows until 12.30 a.m. and later; o patron noise in street when locating vehicles or hailing taxis; o mobile phone calls from patrons leaving the hotel; o beer bottles and cigarette butts discarded in the public domain; and o significant increases in noise from all of the above sources since the premises reopened after the last renovations. 20 It is apparent from the evidence that the main concern relates to the likelihood of increased disamenity for the residents of this Precinct 2 neighbourhood, where there are a variety of residential, commercial and light industrial uses, due to the extension of trading hours.

21 Insofar as no late-night trading hours are specified in the DCP, Ms Oxby notes that the controls refer to a number of different urban villages, whereby the site is within the urban village of Surry Hills. This includes virtually the entire suburb of Surry Hills, which spans from Oxford Street to Cleveland Street and broadly comprises three late-night trading areas, mixed use and residential areas.

22 Consequently, Ms Oxby identified a 'study area' (Attach A) for the purposes of analysing the premises and its environs. This study area was selected on the basis of consistency of built form and character, pedestrian 'walkability', and pattern of street grid. For this study area, she surveyed the existing hotel and restaurant uses finding that typically licensed premises trade to midnight, although one licensed restaurant (the Bentley Restaurant and Bar) and 2 hotels (the Waterhouse and Beresford Hotels) trade until 1 a.m. on some nights of the week.

23 Apart from this, she identified the following two late-night trading areas adjoining the study area, which trade beyond midnight, up to 24 hours a day, 7 days a week: 1. Taylor Square/Oxford Street, which is located approximately 575 m to the north of the premises. The Oxford Hotel at the corner of Bourke and Oxford Street is an example of a licensed premises permitted to trade 24 hours a day, seven days a week. 2. The area to the west of Riley Street along Foveaux Street, which is approximately 200 m away.

24 For the purposes of comparison, Ms Oxby said that it is useful to consider this study area in contrast to the King's Cross Entertainment Precinct, which is defined as follows: "The entertainment precinct encompasses the area of Kings Cross which runs along a short section of Darlinghurst Road/Macleay Street and is marked in the Mixed Land Use Map. This precinct is part of the Kings Cross Urban Village, however in contains a strong component of entertainment oriented activities which sets it apart from other urban villages."

25 Ms Oxby says that unlike Kings Cross, the Surry Hills study area does not have an entertainment status and the incremental alteration of trading hours towards late-night trading is considered to erode those qualities, which contribute to the existing village character, and shift the balance away from residential amenity and more towards commercial entertainment interests.

26 Accordingly, Ms Oxby says that even though there are many hotels and licensed restaurants in Surry Hills within close proximity of residential uses, she supports council's consistent practice of restricting hours of trading to cease at midnight on Friday and Saturday's and 10 p.m. on Sunday as this represents a reasonable balance between commercial operations and associated residential amenity.

27 Against this, Mr Lidis supports the application because he considers that any nuisance generated by non-residential development, such as operating hours, noise, loss of privacy, vehicular and pedestrian traffic or other factors can be reasonably covered by conditions of consent as follows: o following the noise impact assessment and conferencing between the acoustic experts, satisfactory conditions can be imposed to control internal noise from the extension of trading hours; o the proposal would allow for the staggering of patrons leaving the premises to assist in mitigating the impact of all patrons leaving simultaneously at midnight; o the hotel would be effectively locked down in accordance with the draft plan of management to ensure egress only from Crown Street and therefore allow security to move patrons away from Fitzroy Street; o car parking in surrounding streets is limited and the majority of patrons are not likely to drive given the fact there are viable alternative forms of transport and based on the cultural shift in the community with respect to drink driving laws; o the outdoor courtyard at the rear of the hotel, next to Sheas Lane, will not be used at all during extended hours. It will be locked after 10 p.m. Music will not be played in that area and any time; o all external doors and windows will remain closed during the extended hours, other than four ingress and egress - which shall be limited to the main entrance on Crown Street; o the upper terrace on Crown Street will not be accessible after midnight (ie during extended hours on Friday and Saturday nights after midnight); o the premises has a very low number of complaints on record, under the current operators, for a licensed premises; o a plan of management will be introduced and complied with; o a condition requiring that no new patrons will be permitted entry from midnight on Friday and Saturday; and o a condition requiring a 12 month trial period to monitor the impact of the proposal to allow an opportunity for the operators to demonstrate that the premises can operate satisfactorily.

28 In further support of the application, Mr Lidis referred to the following licensed premises, which he says trade satisfactorily after midnight within Surry Hills: o The basement bar of the Clock Hotel at 470-474 Crown Street, o The Porterhouse Hotel at 233 Riley Street, o The Excelsior Hotel at 64 Foveaux Street, o The Beresford Hotel at 354 Bourke Street, and o The KB Hotel at 26 Foveaux Street.

29 The matter of existing late-night trading premises was included in Ms Oxbys report, wherein she identified the following premises within the study area; 9 hotels, 18 restaurants, 1 'on-site licensed motel', 1 bottleshop.

30 With respect to the 9 hotels, 6 trade in accordance with the Dolphins current trading hours with the exception of: o The Clock; which has consent to trade until midnight, 7 days a week, o The Porterhouse; which has consent to trade until 1 a.m. on Friday and Saturday and midnight on Sundays, o The Beresford; which has consent to trade until 1 a.m., 7 days a week. 31 However, Ms Oxby distinguishes these premises from the subject premises in terms of their location on the periphery of the subject area, their general closer proximity to the designated late trading areas and separation to residences.

32 Sergeant Morts evidence is that he has conducted numerous business inspections at the Dolphin Hotel since its renovations were completed. He does not support the application and identified a number of incidents and expressed the following concerns if the extension of hours are granted: "I believe other hotels within the vicinity such as, The Clock, White Horse, Forresters, Hopetoun and Trinity Hotel will most probably apply to have their hours extended. Should this be the case then it potentially will have a cumulative effect on local residents. It would be likely that hundreds of intoxicated people would be on the streets in the vicinity at closing times. In my opinion, the longer a hotel opens the more likely patrons will remain inside the premises and consume more alcohol and therefore become more intoxicated. Patrons leave the hotel when the supply of alcohol inside the hotel is stopped. There is a likelihood that these patrons could become victims or offenders of alcohol related crimes. Crime figures within Surry Hills Police station indicate that certain types of crimes of violence ie. Assaults occur within close proximity of licensed premises. Extra trading hours can impact upon the resources of amongst others, police and other emergency services. Given the hotels are situated in a unique location surrounded by Terrace homes within a village type environment it may impact upon the good order of the local neighbourhood. This may very likely cause a disturbance to the good order of the neighbourhood pursuant to Section 104 of the Liquor Act 1982. I am concerned that the hotel will attract more patrons if the hours of trading are extended. The hotel currently has no limits in terms of the maximum numbers of patrons permitted in the hotel. There is no Place of Public Entertainment Authority and furthermore and no condition on the liquor licence that states the maximum number of patrons permitted in the hotel. Therefore, if the hotel continues to build its patronage than it's very likely that overcrowding will occur. It is unclear if this situation is occurring. If so, this will present real safety concerns to patrons as Crown Street has the potential to continue being a highly sought after area for party goers". 33 The other significant issue concerns noise impacts. This was initially addressed by Mr Cooper by way of site inspections, review of the applicant's noise assessment prepared by Dr Tonin and noise monitoring. From this, Mr Cooper found that Dr Tonin's noise assessment did not correlate with his observations and the objections raised and therefore additional noise control measures were required.

34 This resulted in a conference between Mr Cooper and Dr Tonin, wherein they agreed to a number of noise control measures to be incorporated into the conditions of any consent. These measures are aimed at decreasing noise emissions from the hotel, so that no noise is inaudible after midnight. The measures include the upgrading of laminated glass in the building adjacent to Sheas Lane and also upgrading of the toilet windows near Sheas Lane to minimise noise leakage.

35 With regard to patron noise in Crown Street, the acoustic experts agree to the incorporation of conditions in the hotels ' Plan of Management', which provides for a progressive close down of the hotel and security patrols to minimise antisocial behaviour in the hotels environs.

36 From this evidence, I am satisfied that reasonable conditions of consent can be imposed to control the internal noise sources, but the security patrols will only have a limited effect on any external anti-social behaviour.

Conclusions. 37 Having considered the evidence, the submissions and undertaken a view, it is apparent that the planning controls identify a hierarchy of late-night trading areas. At one end of the spectrum is the late-night trading entertainment precinct at Darlinghurst Road, Kings Cross where a considerable number of licensed premises trade until 3 a.m., or on a 24 hour basis. Then there are the other late-night trading areas of Oxford Street and Cleveland streets, where a considerable number of premises trade until 3 a.m., some later.

38 The next type of area is the mixed use transitional zone, which I understand and accept is to provide a buffer from the late night trading areas to the other predominantly residential areas. This hierarchy recognises that a different level of residential amenity is likely within the various precincts. Presumably there is more late-night activity and associated noise anticipated in entertainment precinct than in the predominantly residential precincts and the controls seek to maintain this distinction by the incorporation of 'buffers' to prevent the deterioration of amenity.

39 On this basis, I find Ms Oxbys detailed assessment particularly relevant and helpful. This assessment is based on the identification of the 'study area' for the designated Precinct 2 - Mixed-Use Transitional, where the planning intent is to encourage medium density housing and a range of compatible non-residential uses, which "protect the amenity of adjoining residential areas by providing a buffer".

40 The assessment indicates to me that the vast majority of licensed premises in this zone do not trade after midnight. This is consistent with the evidence of the objectors who acknowledge the presence of commercial premises in relatively close proximity to residences and generally accept the resultant level of amenity. This amenity is influenced by the operation of the commercial premises, the behaviour of patrons leaving the area after the close of the premises, either as pedestrian or returning to access private vehicles where there are limited parking spaces, in the precinct.

41 I accept the residents submissions that on the weekend trading periods, the shut- down period for the patrons to arrange their exits often extends past the designated midnight closing time, which consequently contributes to a reduction in residential amenity. Therefore any extended trading hours until 1 a.m. will prolong this shut down period and likely further reduce residential amenity, particularly if patrons decide to move on to the nearby late-night trading precincts, as indicated by the residents experience. For these reasons then, I do not consider the extension of trading hours until 1 a.m. is consistent with the SSLEP objective to ensure that nuisance created by non-residential developments is controlled in such a way as "to preserve the quality of life for residents of the area".

42 The other significant factor concerns the proximity of other residential premises to the subject premises. The section of Fitzroy Street east of Crown Street, terminates in a cul-de-sac and contains a significant number of medium density dwellings on both sides of the street. I accept the resident's submissions that there is limited parking available and competition for on-street parking is keen and readily sought by the Dolphin patrons. Therefore if patrons leave later via Fitzroy Street, either as pedestrians or to collect vehicles or to arrange pickup, then residents are likely to experience more noise and disamenity.

43 On the western side of Crown Street, opposite the site is part of the Matthew Talbot hostel where currently some 40 - 60 men reside. According to Mr Allen (Matthew Talbot spokesman), the hostel is not air-conditioned and relies on open windows for air circulation. Accordingly Mr Allen says that extended late-night trading hours will result in a prolongation of night-time noise and reduce the amenity for occupants of the hotel. Also the hostel is planning in the foreseeable future to allow women and children to reside in the hostel, and any extended hours would be detrimental, due to the noise from departing patrons.

44 Diagonally opposite the site, on the northeast corner of Crown and Fitzroy Streets are the Medina Apartments, which contain a considerable number of residential apartments in relatively close proximity to the Dolphin Hotel. In my assessment, it is likely some of the residents will more likely experience adverse impacts from the proposed extended late-night trading. There is no compelling evidence to show there will be enhancement of residential amenity. 45 According to my understanding of the controls, the proposed extended trading hours would not result in an effective buffer to these surrounding residential uses. Instead, the longer trading hours are more likely to extend patrons activity in this buffer zone, and result in a reduction in residential amenity, as stated by Sergeant Mort, whose evidence I consider should be given positive weight.

46 In assessing the impact on the residential amenity, I have carefully considered the applicants proposal, which includes a 12 month trial period and the conditions supported by Mr Lidis. However, I do not consider there is any likely residential amenity enhancement in the staggering of departure times after midnight as this only provides a later time and opportunities for antisocial behaviour, in the nearby residential environs.

47 Likewise, I do not accept that the extended hours will minimise the existing amenity problems created by patrons accessing and leaving this Precinct 2. No compelling evidence was presented on the availability of a reasonable level of integrated parking for hotel patrons, or access to convenient public transport, which would minimise disamenity to the residents of this area, after the common closing time of midnight for the commercial premises. 48 Insofar as the premises has a very low number of complaints on record, I do not consider this is justification for an extension of trading hours, in this 'buffer' zone. Instead, it seems to me that under the existing hours of consent, the hotel should have in place management controls, which enable it to operate as a 'good neighbour' with the nearby residences, without complaint. Nevertheless, there have been complaints about noise and antisocial behaviour, some of which can reasonably be attributed to the Dolphin hotel.

49 I also note the reference made to other appeals, particularly ABC Planning Pty Ltd - ats South Sydney Council [2002] NSWLEC 255 where Commissioner Brown said: " In my view the council's planning approach of providing a buffer or mixed-use transition or precinct between the high activity levels of Darlinghurst Road and residential areas to the south is sound and should be supported."

50 In the ultimate, I rely on Ms Oxbys assessment of the subject area, which confirms that a significant feature of the prevailing character of this area is that night trading of licensed premises ceases at midnight on Friday and Saturday and 10 p.m. on Sundays. Notwithstanding a few exceptions on the periphery of the subject area, which are not in such close proximity to residential units, I accept the evidence that Council has consistently maintained these hours, and accordingly I give weight this determining weight, in refusing the proposal for extended trading hours in this ' buffer zone'. In my opinion this maintains a reasonable balance between the commercial activities and the residential amenity in the buffer zone.

Court Orders 1 The appeal is dismissed.

2 Development consent for Development Application D/2006/1072 for the extension of trading hours at the Dolphin hotel at 412-416 Crown Street, Surry Hills is refused.

3 The exhibits may returned except for 4, 6, 7 and A.

      R Hussey
      Commissioner of the Court
      ljr

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.