1 Pursuant to section 149A of the Planning and Environment Act 1987, I declare that:

1. The land at 31 Albert Street, Preston has existing use rights for the purpose of a hotel; and
2. By reason of the existing use rights, a planning permit is not required under clause 52.27 of the Darebin Planning Scheme to modify or extend the hours within which liquor may be sold or consumed at the hotel.

Daniel Robinson of Counsel instructed by Sarah Kovatch BSP Lawyers.

1 Kevak Hotels Pty Ltd (applicant) owns and operates the Olympic Hotel at 31 Albert Street, Preston (subject land).

2 The applicant wishes to extend its trading hours and applied for a planning permit under clause 52.27 of the Darebin Planning Scheme (planning scheme). Darebin City Council (Council) refused the application and the applicant sought review of the decision.[1]

3 The applicant now seeks to rely instead on existing use rights and is seeking a declaration under section 149A(1)(b) of the Planning and Environment Act 1987 that the subject land has existing use rights as a hotel and is entitled to extend its operating hours without the need for a planning permit under clause 52.27 of the planning scheme.

4 The Council does not dispute that the subject land has existing use rights as a hotel but submits a permit is required under clause 52.27 to modify the hotel's trading hours.

5 The application to establish existing use rights was supported by the affidavit and sworn evidence of Mr Kevin Shelton and Mr Adam Sebastiano, who are both directors of the applicant company.[2]

6 I accept and rely on the applicant's evidence, which was unchallenged by the Council.

7 This decision only relates to the application under section 149A of the Planning and Environment Act 1987 for a declaration.

DOES THE SUBJECT LAND HAVE EXISTING USE RIGHTS AS A HOTEL?

8 I am satisfied that the subject land has existing use rights as a hotel.

9 It was common ground that the Olympic Hotel was established on the subject land in or around 1955 to cater for athletes staying in the nearby Olympic Village for the 1956 Olympic Games in Melbourne.

10 The exact date that the use commenced is not established by the material. The Council officer report[3] refers to a letter from the City of Preston dated 20 May 1992 that states the building was constructed on the subject land on 9 February 1953, prior to the introduction of planning controls in 1955. I was not provided with a copy of this letter.[4]

11 The applicant was able to obtain copies of numerous letters from the City of Darebin to the Liquor Licensing Commission from 1995 and 1996 concerning the liquor licence for the Olympic Hotel, which all contained the following statement:

A search of Council records indicates that the building was constructed in February 1953 and that the use of the land for the purpose of an hotel commenced thereafter.

It appears that the use of the land for an Hotel commenced prior to the introduction of planning controls, i.e. 1 March 1955. On this basis, the premises would enjoy existing use rights and the land may continue to be used for this purpose without a planning permit, provided the use does not cease for a period of more than two (2) years.[5]

12 I was not provided with copies of the Council's records.

13 Clause 63.01 states that existing use rights may be established, relevantly in the following circumstances:

• The use was lawfully carried out immediately before the approval date.
• Proof of continuous use for 15 years is established under Clause 63.11.

14 Although there is a strong likelihood that subject land was being used as a hotel before the new format planning scheme came into operation on 2 December 1999[6], the application was made on the basis that pursuant to clause 63.11 of the planning scheme, the use has been carried out continuously for 15 years prior to the date of the application to the Tribunal.

15 Clause 63.11 states that it is sufficient proof for the establishment of an existing use right "if the use has been carried out continuously for 15 years" prior to the date of the application or proceeding. The relevant period has been held to be the 15 years immediately before proceeding was commenced.[7]

16 In this case, the declaration application was made to the Tribunal on 1 June 2021, so the 15 year period commenced on 31 May 2006.

17 Having regard to the evidence before me, I am satisfied that the subject land has been continuously used as a hotel for the 15 years prior to the date of the Tribunal application. My finding is supported by the following evidence and material, which was unchallenged by the Council:

• Mr Sebastiano, who has been a director of the applicant company since September 2010, attended the Olympic Hotel as a patron when he was a student from 1997 onwards and was later employed as a duty manager in August 2006. His sworn evidence was that the facilities of the Hotel included a public bar that served liquor, a gaming room, a dining bistro, a TAB and sports bar, a function room and drive through bottle shop. When he commenced working at the Olympic Hotel, the hotel was permitted to trade from 8.00 am to 4.00 am and the trading hours have varied throughout his involvement with the Hotel. The Hotel also been refurbished and modernised over this time.
• Mr Shelton, who has been a director of the applicant company since 3 April 1995, gave sworn evidence that the subject land has been used continuously as a hotel since at least 1995 when the applicant purchased the Olympic Hotel. When the applicant took over operations, the Hotel was run down, and the first floor bedrooms were hotel rooms. It was common knowledge the Hotel was built for the Olympics. The facilities of the Hotel have been substantially renovated and now include a function room and gaming room.
• Mr Berry deposed in his affidavit that he commenced his employment at the Olympic Hotel in 1997. Since that time, he has witnessed the Olympic Hotel operate continuously as a hotel.
• Records from the Victorian Commission for Gambling and Liquor Regulation confirming that the applicant has been authorised to supply liquor for consumption on and off the subject land since at least 9 May 1995, pursuant to Liquor Licence Number 31909980.[8]
• Between the years 1995 to 2014, the Council granted numerous planning permits authorising works to be carried to the hotel building,[9] including alterations to the facade of the existing building,[10] alterations and extensions to the existing hotel[11] and construction of a new building entrance.[12] The Council has also issued various permits for the display of business identification signs.[13]

18 It was common ground that since the 15 year period commenced, the use of the subject land as a hotel has not been held to be unlawful and the Council has not given a written direction for the use to cease. I am therefore satisfied that existing use rights are established pursuant to clause 63 of the planning scheme.

IS A PERMIT REQUIRED UNDER CLAUSE 52.27 TO EXTEND TRADING HOURS?

19 The Council contends that, despite the establishment of existing use rights as a hotel, a permit is still required under clause 52.27 to extend the trading hours allowed by the liquor licence. Clause 52.27 states:

Permit required

A permit is required to use land to sell or consume liquor if any of the following apply:

• A licence is required under the Liquor Control Reform Act 1998.
• A different licence or category of licence is required from that which is in force.
• The hours of trading allowed under a licence are to be extended.
• The number of patrons allowed under a licence is to be increased.
• The area that liquor is allowed to be consumed or supplied under a licence is to be increased. [14]

20 The Council argued that clause 52.27 does not prevent the continuation of an existing land use, but instead regulates the sale and consumption of liquor when changes are contemplated to a liquor licence. In the Council's view, clause 52.27 is not a land use control because it regulates the activity of selling and consuming liquor and is applicable even when an existing use right is established. The Council relies on Kazer Pty Ltd v Port Phillip CC[15], Barjen v Port Phillip CC[16] and Bomvic Pty Ltd v Yarra CC.[17]

21 I am not persuaded by the Council's submission, and I do not agree that a planning permit is required to vary the trading hours of the Olympic Hotel. The establishment of existing use rights not only protects the use of the subject land for the purpose of a hotel but also allows the uses and activities that comprise that use to intensify over time. The Supreme Court in in the City of Nunawading v Harrington[18] said the use and the activities on the land -

... may change, increase or decrease, so long as the same purpose is served.[19]

22 I consider the changes to the hotel's operating hours to be an intensification of the existing hotel use, and not a use for a new or different purpose. In Wellington v Surf Coast Shire Council & Ors,[20] Deputy President Dwyer stated:

Moreover, cases such as Norman v Gosford Shire Council make it clear that a use may be intensified over time, even with a change in activities within the use, without changing the purpose of use. The use to which land may be put and the activity on it may change, increase or decrease, so long as the same purpose is served. There may even be greater amenity impacts created through the intensification of the use, without the purpose of the use changing.[21]

23 The approach advanced by the Council and the cases it relied upon reflect an outdated and potentially erroneous view that clause 52.27 does not prevent the continuation of an existing use right, provided the uses and activities remain "unchanged".[22] If this approach were adopted, the scope of existing use rights would be materially constrained. It is also contrary to the established principle that existing use rights may be intensified provided the underlying purpose of the use does not change.

24 Applying these principles, I consider that the proposed change to the Hotel's ground floor trading hours, from 7.00am − 3.00am to 9.00am − 5.00am on weekdays and Saturdays,[23] will not change the activities conducted on the subject land or the use for the purpose of a hotel. I am satisfied that despite any changes to the trading hours permitted by the liquor licence, the subject land will continue to be used for the purpose of a hotel.

25 I also consider clause 52.27 to be a use control, as it imposes a permit requirement on the use of land to sell and consume liquor in circumstances where those activities are components of a protected existing use. I agree with Deputy President Dwyer's comments in McKinnon Hotels Pty Ltd v Glen Eira CC [24] that a permit could conceivably be refused and the permit requirement in clause 52.27 would impose a fetter on the Olympic Hotel's existing use rights.

26 Clause 63 of the planning schemes requires existing uses to continue to meet any condition or restriction to which the use was subject at the relevant date. [25] It was apparent from the material that the use of the subject land as a hotel was not subject to any condition or restriction imposed by a planning control. The evidence demonstrated that the Olympic Hotel's hours of operation have varied over the years as a result of liquor licencing requirements. In Stonnington CC v Southern Property Corp Pty Ltd and Abgol Pty Ltd[26], the Supreme Court expressed the view that liquor licensing requirements could not define the extent of existing use rights.[27]

27 For these reasons, I find that a permit is not required under clause 52.27 of the planning scheme to modify the trading hours of the hotel in the liquor licence. However, the extension of hours may still require regulatory approval under other legislation such as the Liquor Control Reform Act 1998.

28 For the reasons set out above, I find the subject land has existing use rights as a hotel and does not require a planning permit under clause 52.27 of the Darebin Planning Scheme to modify its trading hours. The applicant is entitled to a declaration under section 149A of the Planning and Environment Act 1987.

[1] VCAT Ref P135/2021is an application under section 79 of the Planning and Environment Act 1987 and is not the subject of this proceeding.

[2] The application was also supported by the affidavits of Mr Rod Berry, Administration Manager and Account Executive, Kevak Pty Ltd, Ms Amelia Fradley, Solicitor, BSP Lawyers and Ms Sarah Kovatch, Solicitor, BSP Lawyers.

[3] Presented to the City of Darebin Planning Committee Meeting on 9 March 2021.

[4] The applicant was unable to obtain a copy of this letter despite making numerous requests to the responsible authority.

[5] Letters from City of Darebin dated 3 May 1995, 10 May 1995, 8 August 1995 and 22 November 1996 and being Exhibits SK-5, SK-6, SK-8 and SK-9 to Affidavit of Sarah Jade Kovatch dated 16 September 2021.

[6] Although I was not addressed on what the legal status of the use was at that time.

[7] Octopus Media Pty Ltd v Melbourne City Council [2017] VSC 429.

[8] Copies of some of the annual licences that were available are set out at Exhibit AF-1 to the Affidavit of Ameilia Breen Fradley dated 12 August 2021.

[9] Copies of these permits are set out at Exhibit SK-11 to the Affidavit of Sarah Jade Kovatch dated 16 September 2021. I was not provided with copies of any of the endorsed plans relating to these permits.

[10] Planning Permit D/270/95 issued on 4 July 1995.

[11] Planning Permit D350/96 issued on 28 November 1996 and Permit D/943/2011 issued on 21 April 2012.

[12] Planning Permit D482/3007 issued on 29 November 2007.

[13] Planning permit D463/95 issued on 29 September 1995, Planning permit D/214/98 issued on 21 April 1998, Planning permit D/238/07 issued on 21 February 2012 and Planning permit D/748/2012 issued on 21 February 2014.

[15] [1999] VCAT 2151 (31 December 1999)

[16] [2000] VCAT 1306 (30 June 2000).

[17] [2004] VCAT 1961.

[18] [1985] VicRp 64; [1985] VR 641.

[20] (Red Dot) [2011] VCAT 2317.

[22] For instance, in Kazer Pty Ltd v Port Phillip CC [1999] VCAT 2151at p 12 the Tribunal expressed the view that the existing use rights for a restaurant could continue to operate unchanged without a planning permit. However, because the restaurant operator did not wish to continue his existing use "in an unchanged fashion", the changes would require planning permission.

[23] No changes are proposed in respect of the trading hours for Sundays, public holidays or the basement and first floor.

[24] (includes Summary) (Red Dot) [2011] VCAT 41 at [21].

[26] [2006] VSC 435.