Knox City Council v Tulcany Pty Ltd [2004] VSC 375

5. By determinations made on 7 November 2003 the Tribunal granted permits for the use and development of boarding houses (subject to detailed conditions) at two different sites, 10 Milton Street, Ferntree Gully and 54 The Avenue, Ferntree Gully ("the permit proceedings"). On 18 November 2003 the Tribunal determined to grant enforcement orders with respect to both premises requiring the use of both premises to comply with such permits ("the enforcement proceedings").

8. The Council contends that because the orders made in the enforcement proceedings were premised upon the orders made in the permit appeals, it is necessary for the Court to consider the orders made in the enforcement proceedings if the Court is persuaded to set aside the Tribunal's decision in the permit appeals.

12. Both appeal sites are located in the foothills of the Dandenong Ranges in a Residential 1 Zone within which:

(a) A permit is required for the use of the land for the purpose of a boarding house (being a form of "accommodation" as defined by the planning scheme other than Dependent Persons Unit and Dwelling) unless such use fell within the terms of the exemption contained in cl.52.23 of the planning scheme, which provides:

"A permit is not required to use a building, including outbuildings normal to a dwelling, to house a person, people and any dependents or 2 or more people (including people with intellectual disabilities) if the building meets all of the following requirements: * Is in an area or zone which is used mainly for housing. * Provides self-contained accommodation. * Does not have more than 10 habitable rooms."

(b) A permit was required to construct a residential building (being in this case a boarding house).

22. Further, both appeal sites were the subject of the Dandenongs Foothills Local Planning Policy set out in cl.22 of the planning scheme.

25. The first defendant ("the permit applicant") constructed and commenced use of the boarding houses at each of the two sites without planning permission.

28. Thereafter the Council commenced enforcement proceedings with respect to the uses and developments in issue, and in response the permit applicant sought planning permits to legitimise (so far as necessary) the uses and developments in issue.

31. The Tribunal determined to grant permits (subject to conditions) for both the developments and use and as I have said made orders in the enforcement proceedings that the use of the subject sites for the purpose of a residential building cease other than in accordance with the permits granted by it.

35. The Council contends that the Tribunal erred in law in three respects:

(a) in the manner in which it had regard to the pre-existing built form of the developments, which built form had been created without planning approval;

(b) in the manner in which it had regard to the question of need for the proposed use; and

(c) in its construction of the permit exemption.

Pre-existing Development

41. The Tribunal concluded its reasons in the following terms:

"17. An interesting, and ultimately decisive factor in these applications is that both the expert town planners called as witnesses in these review applications, Mr Cook for the Responsible Authority and Mr Bowden for the Permit Applicant, reached broadly similar conclusions. Ultimately it was their expert opinion that the proposed uses were an appropriate use of the subject sites, and that it was appropriate for a permit to be granted, provided that there were conditions requiring: * Measures to significantly improve the landscaping of both sites; * Measures to reduce overlooking; * The provision of on site car parking at the rate of 0.5 car spaces per bedroom. 18. It was argued on behalf of the Responsible Authority, that the existing buildings as they have been redeveloped are inappropriate from a neighbourhood character perspective, and that on this basis no permit should be granted, or if a permit is granted it should be subject to conditions requiring a substantial modification of the existing buildings. While it is true that the buildings are larger than most neighbouring buildings, they are large but not inordinately large in a suburban context, having floor areas in the order of 300 square metres (or 32 squares). 19. In relation to 54 The Avenue in particular, the topography of the land is such that the new parts of the building are not unduly intrusive, and subject to some additional landscaping and privacy screening are entirely acceptable from an amenity and neighbourhood character perspective. 20. In relation to No. 10 Milton Street, the extended building is prominent when viewed from Milton Street itself, and this is in part to do with the design of the new building, but primarily a consequence of the topography of the land. Our view is that in accordance with Van Egmont [sic] v City of Knox, Bassett and Ors [P84/1570] the permit applicant should neither be punished nor rewarded for undertaking work before a permit was obtained. Our view is that while the present outcome might not be ideal, the outcome that was achieved is not so unacceptable, that one would require anything other than cosmetic alteration of the existing building. In particular we find that the Responsible Authority's proposal to delete one of the larger bedrooms, and a shared bathroom, to be particularly inappropriate when one has regard to the need for accommodation of this type. 21. It is our conclusion that these residential buildings are well run land uses which satisfy an important need evident in this local community. The use of these sites for the purpose of residential buildings will not have an unacceptable impact on the amenity of nearby properties or the area, and the buildings developed to house these proposed land uses are reasonably respectful of neighbourhood character, in both cases subject to some modifications in relation to landscaping, privacy, and car parking."

45. The conclusion of the Tribunal with respect to the built form of 54 The Avenue is not challenged. The decision with respect to 54 The Avenue was simply that it is as a matter of fact "entirely acceptable from an amenity and neighbouring character perspective."

48. The conclusion with respect to 10 Milton Street is challenged firstly, on the basis that the Tribunal misdirected itself as to the manner in which it should have regard to the existing development. It is submitted that the Tribunal was required to address the respective properties "in terms of the planning applications afresh, that is to say, as if they had been applied for at the outset." It is submitted that the Tribunal adopted "a pragmatic approach on an a priori basis advocated by (the permit applicant)"; such an approach involved an acceptance of the existing built form condition of each premises as currently constructed, and then an assessment of any "pragmatic change" that might be required for the built form as constructed rather than the proposed plans.

(a) Insofar as both properties are concerned the Tribunal expressly referred to and adopted the correct principle namely "the permit applicant should neither be punished nor rewarded for undertaking work before a permit was obtained."

That principle was stated by Mr Morris, Chairman of the Planning Appeals Board (as he then was) in Van Egmond v City of Knox, Bassett & Ors[1]:

"The Board proposes to consider the application on its merits and not place the Applicant at any disadvantage because he has commenced the use illegally. Ironically the fact that the Applicant has illegally commenced the use enables a better assessment of the use as possible problems have already been revealed. Be this as it may the Board wishes to make it clear that it does not condone the illegal commencement of a use. Any permit issued at the direction of the Board can only operate prospectively and does not retrospectively authorise the use from its commencement. Consequently, even if a permit is granted at the direction of the Board, the Applicant can still be prosecuted for illegally conducting the use prior to the issue of a permit. Moreover, if such a prosecution is successful, the Board cannot see how any subsequent decision to direct the issue of a permit can be regarded as a mitigating factor. The fact that the Board proposes to deal with this matter on its merits and not penalise the Applicant for his illegal commencement makes it more important that any prosecution considered on its merits (that is upon the culpability of the Applicant at the time the offence was committed) rather than on the basis that this was a mere technical omission which has now been corrected. If those who breach the law are not prosecuted, the law will quickly fall into disrepute and the whole system of town planning will be undermined."

(b) The statement of principle contained in Van Egmond does not suggest the Tribunal should look only at the application plans. To the contrary, it expressly identifies the paradox that unlawful commencement of a use (or construction of a development) may enable a better appreciation of its impact on its context than plans or other descriptions of a proposal ever could. This is self-evidently correct.

(c) The Tribunal's decision with respect to 10 Milton Street in the present case does not warrant the conclusion that it has "rewarded" the permit applicant for undertaking work before a permit was obtained.

(d) The statement that the present outcome "might not be ideal" does not demonstrate an error in law. The planning scheme does not require an ideal outcome as a pre-requisite to a permit. If it did, very few, if any, permits for development would ever be granted and there would be difficult differences of opinion as to whether the outcomes were in fact ideal. The Tribunal is entitled to grant a permit where it is satisfied that the permit will result in a reasonably acceptable outcome having regard to the matters relevant to its decision under the planning scheme. Clause 31 of the planning scheme introduces the zone controls pursuant to which the relevant permits were granted. It makes the following statement with respect to s.2 (permissible) uses:

"Because a use is in Section 2 does not imply that a permit should or will be granted. The responsible authority must decide whether the proposal will produce acceptable outcomes in terms of the State Planning Policy Framework, the Local Planning Policy Framework, the purpose and decision guidelines of the zone and any of the other decision guidelines in clause 65." (My emphasis)

"Because a permit can be granted does not imply that a permit should or will be granted. The responsible authority must decide whether the proposal will produce acceptable outcomes in terms of the decision guidelines of this clause. ... Before deciding on an application or approval of a plan, the responsible authority must consider, as appropriate: * The matters set out in Section 60 of the Act. * The State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies. * The purpose of the zone, overlay or other provision. * Any matter required to be considered in the zone, overlay or other provision. * The orderly planning of the area. * The effect on the amenity of the area. * The proximity of the land to any public land. ..." (My emphasis)

(e) Reference to the State and Local Planning Policy Frameworks demonstrates that a proposal may potentially be favoured by some policy considerations but opposed by others. In the present case the proposal is favoured by policies relating to housing diversity and social needs to which I shall shortly return. The goal of the State Planning Policy Framework is expressly stated in terms that recognised decision makers must address the question of whether outcomes are acceptable in terms of "net community benefit". Clause 11.02 provides:

"The State Planning Policy Framework seeks to ensure that the objectives of planning in Victoria (as set out in Section 4 of the Planning and Environment Act 1987) are fostered through appropriate land use and development planning policies and practices which integrate relevant environmental, social and economic factors in the interests of net community benefit and sustainable development." (My emphasis)

The concept of net community benefit is not one of ideal outcomes, but of outcomes which result in a net benefit to the community assessed within a policy framework by reference to both their benefits and disbenefits.

(f) The statement that "the outcome is not so unacceptable, that one would require anything other than cosmetic alteration of the existing building" is in substance a finding that the built form of the proposal is reasonably acceptable.

(g) The finding that "... the buildings developed to house these proposed land uses are reasonably respectful of neighbourhood character, in both cases subject to modifications in relation to landscaping, privacy, and car parking" is conclusive of the matter. This finding was made in the context of the significant preliminary findings that the buildings "are larger than most neighbouring buildings, they are large but not inordinately large in a suburban context, having floor areas in the order of 300 square metres (or 32 squares)," and that in the case of 10 Milton Street prominence in the streetscape derived primarily from the topography of the land and not the design of the new building.

(h) Further reference to the transcript demonstrates that the Tribunal's findings were reasonably open to it and supported not only by the evidence for the permit applicant but also as the Tribunal's reasons indicate by the evidence given in cross-examination by the town planner called to give expert evidence on behalf of the Council.

72. Accordingly, the first basis of challenge to the Tribunals' decision argued before me fails.

76. At the hearing before the Tribunal the Council accepted that the proposed land uses would accommodate community needs. Thus, in its outline submission it stated:

"In its assessment of the two planning permit applications, the Responsible Authority generally supports the proposed use of the land for Residential Buildings which accords with the planning scheme objectives to provide a range of Housing to accommodate the various needs of the community, particularly in relation to the provision of low cost rooming house accommodation in residential areas."

"The Responsible Authority has indicated that it supports, in principle, the proposed use of the subject lands for Residential Accommodation, and acknowledges that such use is consistent with the policies and objectives in the Knox Planning Scheme, to provide a range of housing to accommodate the various needs of the community, particularly in relation to the provision of low cost rooming house accommodation in residential areas. To this extent, the Responsible Authority accepts that the proposal may serve a community 'need' ..."

82. The Council nevertheless contended to the Tribunal that this was not a case of "overwhelming need" and now submits to this Court that the Tribunal reached the conclusions it did only on the basis that the permit applicant had established a case of overwhelming need when the Tribunal was not entitled to so conclude.

85. A careful reading of the Tribunal's reasons demonstrates that it did not reach its conclusions on the basis that this is a case of overwhelming need.

(a) The Tribunal makes clear that it does not regard this as a case of overwhelming need but rather as one in the ?middle ground in which need may not be a decisive factor in the case of an individual development application, but will be a factor which influences the balance to be struck between competing planning considerations".

(b) The Tribunal applied this consideration directly to its conclusions as to the appropriateness of the use (a conclusion with which the Council does not take issue). The Tribunal took need for the use into account in considering questions of risk of anti-social behaviour.

(c) The Tribunal further commented in the course of expressing its conclusions as to built form by reference to the need for the proposal.

"In particular we find that the Responsible Authority's proposal to delete one of the larger bedrooms and a shared bathroom, to be particularly inappropriate when one has regard for the need for accommodation of this type."

In my view, the better view is that this comment did not form the basis of the Tribunal's decision as to the reasonable acceptability of the built form proposed. The Tribunal's decision in this regard was based on the evidence that measures including in particular landscaping rendered the proposal acceptable in terms of respect for neighbourhood character. The Tribunal simply did not find that the built form was unacceptable in terms of impact on neighbourhood character but that it should be allowed by reason of need for the use proposed (as the Council submits it did).

93. Having reached this conclusion it is strictly unnecessary to further consider the question of need. Nevertheless I observe firstly, that the question of need must be a potential component of acceptable outcomes in terms of the provisions of cl.31 and secondly, that the concept of social need is expressly recognised as a component of the State Planning Policy Framework. The degree to which need is relevant will be a matter of fact in each case. Because the inquiry is essentially one of fact it is undesirable for this Court to attempt to categorise the potential circumstances of such relevance. It might be thought, however, that the resolution of need issues will ordinarily involve first, the identification and characterisation of the need in issue and second, an assessment of its proportionality to any matters it might be said to counterbalance. The Tribunal undertook both these tasks in the present case. Further, as I have indicated, the Council expressly conceded that there was a need for the proposed use and that this was a relevant consideration.

96. For the sake of completeness I should record that the notice of appeal contains grounds which were formulated prior to the availability of a full transcript and which allege that the Tribunal's conclusions as to the fact of need:

(a) were not open to it on the evidence; and

(b) were vitiated by a want of natural justice in the procedures adopted by it with respect to the need issue.

102. These matters were ultimately not urged in argument before me and having regard to the transcript together with the terms of the written submissions made on behalf of the Council to the Tribunal (to which I have referred) I am satisfied that they are in any event without foundation.

106. It is strictly unnecessary to address this clause. The Tribunal held that the exception did not apply because the developments in issue each comprised more than 10 habitable rooms. Moreover, the uses in issue are now tied to the permit plans by the orders made in the enforcement proceedings. Nevertheless, in deference to the detailed submissions made to me I shall summarise my conclusions with respect to the relevant provisions. As I have already stated cl.52.23 provides:

"A permit is not required to use a building, including outbuildings normal to a dwelling, to house a person, people and any dependents or 2 or more people (including people with intellectual disabilities) if the building meets all of the following requirements: * Is in an area or zone which is used mainly for housing. * Provides self-contained accommodation. * Does not have more than 10 habitable rooms."

110. The Council contends that the use of a building for the purposes of shared housing in accordance with this exemption requires that each person within the shared housing be provided with self-contained accommodation.

"It is submitted that whilst the buildings in question are in an area used mainly for housing they otherwise fail to satisfy the criteria of clause 52.23 in that they do not provide self-contained accommodation; rather, the purpose of the use is to sell or rent accommodation which is not self-contained, and which requires the individual tenants to share various facilities."

114. The permit applicant contends that the building as a whole must itself provide self-contained accommodation for those who share it by way of housing. In my view this is the preferable construction.

(a) The provision should be construed in accordance with the following statement of the High Court. In CIC Insurance Ltd v Bankstown Football Club Ltd[2] Brennan CJ, Dawson, Toohey and Gummow JJ said:

"Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. ... if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent."

Likewise, in K & S Lake City Freighters Mason J stated that:

"The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise." [3]

(b) There are four contextual considerations which support the construction which I prefer:

* the purpose reflected in the policy provisions of the planning scheme;

* the sense of parallel provisions relating to crisis accommodation and community care unit;

* the history of the predecessors to the provision; and

* the consequences of the alternative construction.

(c) Clause 52.23 gives effect to the general implementation provisions set out in cl.16.04 of the State Planning Policy Framework:

"Planning schemes must not require a planning permit for or prohibit the use of a dwelling of up to 10 habitable rooms in a residential area as shared housing or crisis accommodation."

The reference to shared housing is deliberate despite the lack of reference to shared housing in the heading or objectives of the relevant policy.

"A building used as a self-contained residence which must include: (a) a kitchen sink; (b) food preparation facilities; (c) a bath or shower; and (d) a closet pan and wash basin. It includes outbuildings and works normal to a dwelling."

The policy thus envisages an exemption for shared housing provided within a self-contained residence having the above attributes and being of up to 10 habitable rooms.

(e) The exemption with respect to shared housing sits between that relating to crisis accommodation (cl.52.22) and community care unit (cl.52.24). The requirement that the building provides self-contained accommodation is expressed in the same terms in cls.52.22 and 52.23. In turn cl.52.24 stipulates a requirement for services "which provide self-contained accommodation". These provisions must be interpreted consistently. They are each supported by the policy contained in cl.16.04 and expressed in parallel terms.

(f) It is highly unlikely the makers of the planning scheme intended each resident or client of crisis accommodation or a community care unit be provided with individually self-contained accommodation. The policy implementation provisions of cl.16.04 which I have quoted relating to crisis accommodation support this view. Reasonable expectations as to what might be contemplated by way of a community care unit are further addressed in some detail in the decision of Mr Byard, Acting Deputy President, in Cobden v Greater Bendigo City Council[4].

(g) The history of the provisions supports the view that it is the building which is required to provide self-contained accommodation rather than each occupancy within the building. This history was the subject of comprehensive submissions by Mr Pitt SC set out in the decision of Intervarsity Developments Pty Ltd v Frankston City Council[5].

(h) The heading "shared housing" itself tends to support the view that the provision is directed to the sharing rather than the co-location of self-contained residential accommodation.

(i) The phrase "to house a person, people and any dependents or two or more people ..." is problematic if the alternative construction is adopted. Is it self-contained accommodation that is required for each person or is it contemplated that two or more persons may occupy separate "occupancies" which provide self-contained accommodation? If the latter, the notion of "occupancies" is not to be found expressed in the exemption provisions. Nor is any limitation on the extent of each such occupancy expressed by reference to limits on numbers of people. Conversely, if self-contained accommodation is to be provided for each occupant what remains to be shared? In my view the definition contemplates as one alternative that two or more people may share a building which itself provides self-contained accommodation.

131. For the above reasons the appeal is dismissed.

[1] (1985) 3 PABR 249 at 250

[3] [1985] HCA 48; (1985) 157 CLR 309 at 315 recently applied in Winslow Constructors Pty Ltd v Mt. Holden Estates [2004] VSCA 159.

[4] [2003] VCAT 1395.

[5] [2001] VCAT 833