Metricon Qld Pty Ltd and Anor v Tweed Shire Council

KEY ISSUES: Appeal :- application for joinder or "Double Bay Marina" orders

LEGISLATION CITED: Land and Environment Court Act 1979

Bongiorno Hawkins Frassetto & Associates Pty Ltd v Griffith City Council [2007] NSLWEC 205 Cartier Holdings Pty Ltd v Newcastle City Council & Another (2001) 115 LGERA 407 City West Housing Pty Ltd v Sydney City Council (1999) 110 LGERA 262 CASES CITED: Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373 Lowy v The Land and Environment Court of NSW & Ors (2002) 123 LGERA 179 Morrison Design Partnership Pty Ltd v North Sydney Council and Another (2007) 159 LGERA 361 Murphy & Anor v Canada Bay City Council [2008] NSWLEC 17 Randall Pty Ltd v Willoughby City Council (2005) 144 LGERA 119

FIRST AND SECOND APPLICANT Mr J Ayling SC with Mr M Staunton SOLICITORS Landerer & Co

RESPONDENT LEGAL REPRESENTATIVES: Mr J Robson SC SOLICITORS HWL Ebsworth

APPLICANT FOR JOINDER Mr D Miller SOLICITORS Mallesons Stephen Jaques

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10214 of 2008 Metricon Qld Pty Ltd & Anor v Tweed Shire Council

JUDGMENT Introduction 1 His Honour : Kings Beach No.2 Pty Ltd has moved the Court for the following orders:

" 1. Kings Beach No.2 Pty Ltd be joined as Second Respondent to these proceedings. 2. In the alternative, that Kings Beach No.2 Pty Ltd be granted leave: (a) to call Will Owen of Conics as an expert witness in the proceedings; (b) that Will Owen of Conics be permitted to participate in the joint conferencing of the economic impact experts and contribute to the joint report; (c) to cross examine the Applicant and the Respondent's expert witnesses in the field of economic impact; and (d) to make submissions with respect to the economic impact of the development application the subject of the appeal. 3. The Applicant and the First Respondent to serve on the Second Respondent all documents filed in the proceedings on behalf of each party within 7 days. 4. Such further or other orders as the Court sees fit." 2 Motions of this type fall for decision under s.39A of the Land and Environment Court Act 1979, which provides: "On an appeal under section 96 (6), 96AA (3), 96A (5), 97 or 98 of the Environmental Planning and Assessment Act 1979, the Court may, at any time, on the application of a person or of its own motion, order the joinder of a person as a party to the appeal if the Court is of the opinion: (a) that the person is able to raise an issue that should be considered in relation to the appeal but would not be likely to be sufficiently addressed if the person were not joined as a party, or (b) that: (i) it is in the interests of justice, or (ii) it is in the public interest, that the person be joined as a party to the appeal." 3 The applicant on the motion relies upon pars (a) and (b)(ii) of s.39A. The alternative suite of orders sought in Order 2 could be described as "Double Bay Marina" orders, which are thought to be made under s.38(2) to assist the Court to inform itself (but see the Court of Appeal discussion in Lowy v The Land and Environment Court of NSW & Ors (2002) 123 LGERA 179). 4 Both parties strenuously oppose the application for joinder, or any Double Bay Marina relief. Background 5 The development application subject to appeal (DA 08/0024) is for the development of a substantial "shopping centre", including a 3200m2 supermarket, 1500m2 of specialty retail shops, a kiosk, petrol/service station, and child care centre, at "Seabreeze Estate" near Pottsville on the "Tweed Coast" in northern NSW. 6 The "Tweed Coast" is defined, and generally understood, to be "… the area from the Tweed River in the north to the [Tweed Shire's] border with Byron Shire in the South and West to the Pacific Highway", approximately 26km west of the ocean. 7 The Applicants commenced this appeal on 6 March, against the deemed refusal of the Applicants' DA and, on 15 August, following extensive case management, and the filing of extensive evidence, it was fixed for hearing in Ballina 27-31 October 2008. The Council did not proceed to refuse the DA, because there were unanswered requests for additional information, but Council is strenuously defending this appeal, and its Statement of Facts and Contentions filed on 15 August (Exhibit T1 before me) runs to 41 pages. 8 Kings Beach is a regional competitor of the Applicants, and will be directly affected by the outcome of the current proceedings. It lodged a detailed submission against the subject development on 20 February 2008, through its planning expert Victor Feros. It has a "shopping centre" development proposal, at Casuarina (including a 2500m2 Coles full-line supermarket), before the Minister for consideration under Part 3A, its period of public exhibition having concluded on 30 September. (A masterplan for Casuarina was approved by the Court on 16 December 1998 in Matter No.10686 of 1997). Mr Feros believes a supermarket should not be considered for Pottsville until Casuarina is operational. 9 There is, relevantly, a third "shopping centre" proposal for the Tweed Coast - at Cabarita Beach (with a 2608m2 full line supermarket) - also before the Minister. Pottsville is the furthest south and Casuarina the furthest north of the three. Council sees the Tweed Coast as a series of self-contained stand-alone coastal towns and villages with distinctive characters. The northern-most "village" is Kingscliff, and the southern-most is Black Rocks. Pottsville is a Coastal Village with an established Town Centre. It is 16km south of Kingscliff and 7km south of Cabarita. 10 The term "shopping centre" is a generic term, and it is difficult to find consistent definitions to classify centres. "High-order Retail" centres (such as exist north of the Tweed Coast, at Tweed Heads and South Tweed) usually include department stores as "anchors". Supermarket-anchored, smaller neighbourhood shopping centres cater for regular household requirements. The term "Chore Retail" would generally indicate a centre based around a major or "full line" supermarket, visited by customers on a weekly or fortnightly basis, and typically occupying more than 2000m2 in floor area in a centre of not more than 10,000m2 in area. The centre would have probably 1000-2500m2 of specialty retailers. An "Impulse Retail" centre is a smaller shopping group, and serves the more immediate needs of the nearby neighbourhood population. Its component supermarket would have a floor area of, say, 500-800m2. There is such a centre (including an IGA supermarket of 498m2) already at Pottsville, in its established Village Centre. Approximately 1.5km further south, at Pottsville Waters, there is another small supermarket - a Foodworks of 350m2. Timing of this application 11 Kings Beach's application comes very late, but its solicitors had sought urgent information regarding Facts and Contentions from solicitors for the Council since 28 May, in order "to assess our client's position in relation to the appeal". No response was received, until, on 21 August, Feros received a letter from Council's solicitor sending a revised site plan and inviting him to attend the hearing to give evidence of his objections. A pre-hearing meeting of objectors was proposed. Kings Beach's solicitors responded to that letter by email on 2 September expressing interest in attending any such meeting. Again no response was received. In response to a follow-up telephone inquiry of Council's solicitors on 16 September, the solicitors for Kings Beach were informed there would now be only an on-site meeting with interested objectors on the morning of the hearing. 12 Further requests for information and copies of evidence were made on 19 September, and Kings Beach's solicitors sent Council's solicitors, by way of a further submission against the subject DA, a copy of a report entitled "Economic and Need Review Three Supermarkets, Tweed Shire Coast" (dated 19 June 2008), prepared by Will Owen and lodged with the Department of Planning in connection with the Casuarina application. Kings Beach sought Mr Owen's involvement in the joint conferencing of economic experts in this appeal, expected to resume on 13 October (see now proposed Order 2(b)). On 23 September the Council's Amended Statement of Facts and Contentions was received by Kings Beach's solicitors, and on 24 September this Notice of Motion was filed. 13 Kings Beach is not able to guarantee that its joinder would not add hearing time, but its counsel assured the Court there should be no need to defer the commencement of that hearing. Council's retail strategy 14 On 26 September, solicitors for Kings Beach wrote to the solicitors for the Applicants and the Council in identical terms regarding the application for joinder. In opposing the current DA, Kings Beach argues: "… that the proposal before the Court is ill-considered and will disrupt the orderly and effective delivery of convenient chore shopping facilities. As we understand it, the Council Strategy for the New Tweed Coast is for small local supermarkets in each 'village'. This pattern of retail development does not recognise the need for appropriately located chore shopping facilities in the form of full line supermarkets to service the needs of the current and future population of Casuarina, Salt, Seaside City and Kings Forest. Our client's economic impact expert, Mr Will Owen, contends that the two logical locations for the establishment of chore shopping facilities are Casuarina and in due course at Pottsville, but that given the approval and progress of development at Salt, Seaside City, Casuarina and Kings Forest, the first logical location for a full line supermarket is in Casuarina. Mr Owen's view is that in the fullness of time, when there is a sufficient population in the Pottsville catchment, there should be a full line supermarket in the Pottsville area, though not necessarily in the location and format proposed by the Applicant in these proceedings. Importantly, our client wishes to raise with the Court that the Council strategy does not recognise the significant current and future investment as Casuarina, Salt, Seaside City and Kings Forest, and the fact that such investment was made in the reasonable expectation that there would be a full line supermarket in close proximity. Further, our client would want the Court to have a full understanding of the impact that any Court support of the Council Strategy would have on the determination of the Casuarina Town Centre application by the Department of Planning and the delivery of appropriate and convenient retail facilities in this area". 15 Both firms responded on 30 September (Exhibit K1). Solicitors for the Applicant indicated they would seek a deferment of the Notice of Motion from 1 to 9 October (a request not pursued before me), and the solicitors for the Council sought to "correct a number of inaccuracies" on Kings Beach's part, saying, inter alia: " Council's current retail strategy is based upon a seven point resolution of Council dated 16 November 2005, which was itself based upon the Core Economics Report of September 2005. We enclose a copy of this resolution for your Information. Your assertion about the Council's retail strategy for 'the new Tweed Coast' (sic) is misconceived. Council's strategy for the Tweed Coast is not simply to have small IGA supermarkets in each village, but to also have chore based, full line supermarkets, in specified locations, once dictated by the demand from the local catchment area. Specifically, the retail strategy does not oppose the development of a full line supermarket in Casuarina when such is dictated by the demand from the local catchment area, subject of course to considerations of appropriate location and other matters. " 16 The copy Council's solicitors attached of the Council's unanimous "seven point resolution" of 16 November 2005 indicates that the "Retail Strategy" of Council is: "1. The character of existing towns and villages and the retail facilities they already have be protected. 2. Where appropriate, Council will support the incremental expansion of existing retail centres in such a way as not to threaten or fracture those existing centres, rather than building new ones. 3. Reinforce Tweed Heads south as the major district retail centre by encouraging the expansion and when Tweed's population demands that increased range and level of shopping. 4. Maintain and wherever possible enhance the special appeal of the retail centre of Murwillumbah and those village centres of similar style. 5. Limit the scale of new large scale retail centres in the coastal region to a level which caters for the majority of chore type shopping needs. This concept to reflect the need to reduce fuel consumption and to support sustainability within each centre through discouraging vehicle use and encouraging walking and cycling. 6. Council does not support the establishment of another district retail shopping centre. 7. The retail concepts in these recommendations form the basis of locality plans in the Shire and any retail development applications which are submitted in the interim of these locality plans being prepared and approved by Council be assessed so that the above retail strategies are supported and not compromised." 17 The Council's contentions on appeal (Exhibit T1) mount a thorough and comprehensive attack on the Applicants' proposal. They bring to the forefront of issues for the Court's consideration on appeal questions of Council's planning and development strategy, and this particular proposal's infringement of many relevant instruments, policies and other documents - Council's strategic planning documents (including its strategies for urban and retail expansion, and its hierarchy for urban and commercial centres), its planning regime for Pottsville as a "Coastal Village" (including consolidation and support of its Town Centre), the principles by which it should assess needs and impacts (including economic and other impacts affecting similar facilities, existing and proposed, elsewhere in the Tweed Coast and the Council's overall area). Economic issues are prominent, and all the relevant contentions (B1.1, 1.2, 3.1, 3.2, 3.3 and 3.4) refer back to Council's resolution of 16 November 2005. 18 Will Owen is National Partner, Economics and Advisory, at "CONICS" (formerly "Core Economics"). Relevantly, he prepared (1) for the Council in 2005, a draft retail strategy document, (2) in February 2008, the "applicant's economic assessment report" for Kings Beach's Casuarina proposal, and (3) in June 2008, the "Three Supermarket Study" which has become part of Kings Beach's submission against the Applicants' Pottsville DA. Before me is a very detailed affidavit from Mr Owen in which he presses on the Court the quality and importance of his draft Retail Strategy, and his trenchant criticisms of Council's decision to depart from it (after public exhibition) to pass its 16 November 2005 resolution and make a new DCP. 19 Mr Owen's 2005 draft strategy embraced a philosophy of consolidating existing "higher order centres" (like Tweed Heads and South Tweed), and establishing new/expanded chore centres (anchored by full line supermarkets) in line with demand. It identified that there needed to be three more "full-line" supermarkets on the Tweed Coast, after Kingscliff, and his consistent position is that the first should be developed now, but at Casuarina (the "central" point and the "best fit for the next supermarket on the Tweed Coast"), rather than at Pottsville. (The third will be justified in about 2012-2014, depending on whose report you read, and two more will be needed by 2024 to service the then expected Shire population of 131,600). 20 If the Court approves the Pottsville DA, Casuarina may not be viable, he says, and he wants to focus the Court's attention on "wider planning considerations" than just the merits of the Pottsville DA, and its impacts on its surrounds. He would give evidence, if either Order 1 or Order 2 is made, against the thrust of both the Council's resolution and its DCP, and would testify that "a network of small impulse supermarkets is not a substitute for a chore full-line supermarket provided in line with demand". 21 He is critical of Council's expert, Mr Haratsis (Exhibit T2), but had not yet seen the report of the Applicant's expert, Mr Leyshon (Exhibit T3). (Mr Miller, for the applicant for joinder, was certainly critical of Mr Leyshon, as well as Mr Haratsis). Mr Haratsis finds Council's strategy "economically efficient" for the Tweed Coast and its centres, and supports Council's contentions regarding the Pottsville proposal, relying upon work done by MacroPlan on retail sustainability. He defends the central role of the Village Centre even though Pottsville has a demonstrated shortage of supermarket space. Mr Leyshon was the author of the economic impact statement which accompanied the DA. He supports the development as consistent with the November 2005 strategy resolution, and says that much-needed additional supermarket space in Pottsville could not be accommodated in its Village Centre. Obviously the two small supermarkets (at Pottsville and Pottsville Waters) will be threatened by the proposal, but Mr Leyshon finds its economic effects "acceptable". 22 It is clear from the evidence before me that Casuarina will be viable (at least in its early days) only because it will draw custom from the Pottsville catchment, which is undersupplied with supermarket space, but Mr Owen does not acknowledge/admit that in this June 2008 report. He does, however, draw attention to Council's letter of 8 April to the Department of Planning regarding the Casuarina proposal, in which Council says its "… retail strategy is based on the principal (sic) of self-containment for supermarkets within the villages and not using other village population catchments for their trade areas". I also note that Mr Owen relies on the Council resolution in his advocacy of the Casuarina proposal, but downplays it to oppose the Pottsville proposal. The principles to apply to joinder 23 In Bongiorno Hawkins Frassetto & Associates Pty Ltd v Griffith City Council [2007] NSLWEC 205 ("Bongiorno"), Jagot J dealt with a joinder application in "shopping centre" circumstances different from those in the present case but, as usual, Her Honour concisely summarised the relevant principles to be applied (at [5], [6] and [9]): "5 Under s 39A of the Land and Environment Court Act, the Court may only exercise the power to join a person as a party to these proceedings if it forms an opinion either that the person is able to raise an issue that should be considered in relation to the appeal but would not be likely to be sufficiently addressed if the person were not joined as a party or that it is in the interests of justice or the public interest that the person be joined as a party to the appeal. While s 38(2) is not similarly constrained, the types of consideration that are set out in s 39A no doubt are also relevant to the exercise of discretion to make any form of Double Bay Marina order. 6 I should also say, consistent with the observation of Lloyd J in Pro-Vision Developments Pty Limited v Ku-Ring-Gai Municipal Council [2003] NSWLEC 226, the mere fact that the Court forms an opinion within the meaning of s 39A is not sufficient. The Court retains a discretion as to whether or not an order for joinder should be made and would take into account such matters as the delay in the application, the likely strength of the issues sought to be raised and any other issue of potential prejudice in the proceedings…. 9 I accept that there are concerns about a multiplicity of parties being involved in proceedings. It is not the case that s 39A or indeed s 38(2) of the Land and Environment Court Act were intended to encourage a multiplicity of parties in circumstances where the Court could be satisfied that the relevant issues would otherwise be appropriately and sufficiently ventilated in proceedings between the applicant for consent and the relevant consent authority. Accordingly, it is necessary to weigh up this consideration about multiple parties, although it seems to me that this concern is more relevant in the second step under s 39A, namely the exercise of discretion (rather than the first step, at least insofar as subs (a) is concerned, about whether the person can raise an issue that should be considered but would not be likely to be sufficiently addressed)." 24 Her Honour formed the opinion envisaged by s.39A(a), and then turned her attention to discretionary considerations, which she listed (in [11]) as: "11 … · the context in which the application is brought by Ritchies Stores to which I have already referred; · the limited nature of the issue on which Ritchies Stores seeks to call evidence and be heard; · the capacity through case management to ensure that there is not inappropriate duplication between Ritchies Stores' evidence and that of the Council insofar as the Council's evidence goes; and · the fact that the application has been brought in a timely manner to enable those case management procedures to be effectively implemented."

Her Honour then made an order for joinder. 25 The principles to apply were also stated by the Chief Judge in Morrison Design Partnership Pty Ltd v North Sydney Council and Another (2007) 159 LGERA 361 ("Morrison") at pars [42]-[43] in these terms: "[42] I note at the outset that s 39A is facultative in the sense of enabling the Court to join a person to proceedings under the Environmental Planning and Assessment Act of the types listed in s 39A of the Land and Environment Court Act who would not otherwise have a right to be a party to such proceedings. Under the Environmental Planning and Assessment Act, persons who object to development proposed in a development application or to a modification of a development consent, have no right to be joined as a party to proceedings unless the development is classified as designated development. Objectors to development applications for designated development do have a right of appeal under s 98(1) of the Environmental Planning and Assessment Act and have a right to be joined to an appeal in respect of such development by the applicant for development consent under s 97(4). [43] This is relevant to note because the legislature has drawn a distinction between the two types of development, designated and other development, and the rights of public participation, including the right to be a party to an appeal to the Court for the different types of development. This needs to be kept in mind when considering exercising the power under s 39A. The power under s 39A is not intended to be a plenary power to allow, in each and every circumstance, objectors to non-designated development to become a party to appeals under ss 96, 96AA, 96A and 97 by dissatisfied applicants for or holders of development consent. Rather, the circumstances in which the Court may order a person to be joined as a party to proceedings of the types listed in s 39A are limited to the circumstances set out in paragraphs (a) and (b) of s 39A. It is to those paragraphs, therefore, that I turn." 26 In deciding Murphy & Anor v Canada Bay City Council [2008] NSWLEC 17), I re-examined many of the notable cases concerning such motions, including Bongiorno, but not Morrison, and I concluded (at [10]):

" The decision in each of those cases turns on its own facts , but one always comes back to the wording of s.39A ". Nothing in Morrison causes me to depart from that conclusion. Will economic impact issues be "sufficiently addressed"?

27 When dealing with the economic impact issues in Bongiorno, Jagot J (at [10]) referred to the Court of Appeal decision in Randall Pty Ltd v Willoughby City Council (2005) 144 LGERA 119, especially the judgment of Basten JA. In argument on Council's behalf on the present motion Mr Robson SC also referred to Basten JA's judgment in Randall, which was not a joinder case, but an attempt to appeal from a decision of Talbot J on a s.56A appeal. Randall makes clear that positive and negative economic impacts, whether "overall", or specific impacts in a "locality", must be considered under s.79C(1)(b) when a DA is being assessed. Basten JA considered in detail the question of allowing appropriate evidence regarding commercial competitors, discussing (at [26]-[33]) three principal cases in this Court: Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373, City West Housing Pty Ltd v Sydney City Council (1999) 110 LGERA 262, and Cartier Holdings Pty Ltd v Newcastle City Council & Another (2001) 115 LGERA 407. His Honour said (at [34]) that while not all economic impacts are mandatory considerations, any limitation on the concept "must be specific and justified". 28 The grounds for Kings Beach's application are well set out in pars 16-17 of the affidavit of Kings Beach's solicitor, Mr David O'Donnell', dated 24 September:

" 16. I am informed by my client and verily believe: (a) All relevant issues in this appeal will not be sufficiently addressed by the Respondent. (b) Kings Beach No. 2 Pty Ltd will be directly affected by the outcome of these proceedings given that the Court's determination in this matter would be a relevant consideration to the Department of Planning and the Minister in the determination of the Casuarina Part 3A application. (c) Mr Owen, being the author of the Council's retail strategy of 2005, has particular knowledge of the likely competitive and economic effects of new supermarket development in this locality. (d) The Court would be deprived of meaningful assistance were the concerns of Kings Beach No. 2 Pty Ltd not able to be fully put by its joinder in the proceedings. (e) Kings Beach No. 2 Pty Ltd is prepared to work within the timetable set by the Court. (f) In terms of public interest, Kings Beach No. 2 Pty Ltd represents a large number of households who have invested in the Casuarina Estate in the expectation that substantial supermarket facilities will be available in the near term. (g) The Council is also opposed to the development of a full line supermarket at Casuarina and may have lodged an objection with the Department of Planning. (h) Kings Beach No. 2 Pty Ltd is able to materially assist the Court with information about the likely future development of the locality. 17. In my opinion, the complex economic issues in this matter will not be sufficiently addressed, and the Court would be deprived of meaningful assistance if Kings Beach No. 2 Pty Ltd were denied the opportunity to participate in these proceedings as a party, as it is clear that there is a strong connection between the proposal at Pottsville and the proposal at Casuarina."

29 Mr Miller, in his submissions on behalf of Kings Beach, argued that the material put on by the parties does not satisfy the need, in the public interest, for the Court to understand the retail strategy at play in the region or appreciate that there is not one. The seven-point resolution of November 2005 contains "points of aspiration" and no strategic content, and the Court must have before it an "objective, logical, rational, and coherent" overarching regional strategy to inform its decision on the appeal. While Mr Miller acknowledged his client has an economic interest in defeating the Pottsville DA, he assured the Court Kings Beach was taking a regional view in the public interest. Only Mr Owen could provide the missing evidence, and indicate the correct strategy which will prioritise the three full line proposals. 30 Mr Robson, for the Council, acknowledges that minds differ on the merits of the Council's retail strategy for the whole district, but the Council will vehemently oppose the Pottsville DA at the hearing of this appeal - it takes no position on any "turf dispute" as to market share between Kings Beach and the Applicant, and it is no function of the Court to rewrite Council's policy/strategy. 31 The Council's position is that "every possible" issue that it could raise against the proposal, including economic impacts, has been raised in the very extensive Statement of Facts and Contentions (Exhibit T1), and will be addressed by the parties' respective economic experts, Mr Haratsis and Mr Leyshon, who have quite different views, but are well aware of Mr Owen's arguments. Mr Feros's objection on Kings Beach's behalf was fed into the Council's contentions and will be put forward by Council at the hearing. The requirements of public policy will be satisfied by the Court hearing from a major objector. 32 Mr Ayling, for the Applicants, adopted all Mr Robson's submissions on the joinder application, and argued strongly that discretionary considerations should rule out any possible success for Kings Beach on the Notice of Motion - apart from delay, the applicant for joinder is relying on the inconsistent attitude of Mr Owen to the Council's strategy resolution, it wants Council to refuse the Pottsville DA in such a way that Casuarina will have to be approved, and it wants the Court to play a role which is not in the public interest, namely to effectively decide on the Pottsville appeal what the Council's retail strategy for the Tweed Coast should be. Mr Ayling saw vacation of the hearing dates as inevitable if the motion succeeds, and that would cause great prejudice to the Applicants. Conclusion 33 I have concluded that the test in s.39A has not been satisfied. I accept Mr Robson's submissions in this regard. Contrary to what is said by Mr Miller and Mr O'Donnell, Mr Owen adds to the economic debate in the appeal nothing necessary and otherwise absent from the evidence already available to the Court. The discretion submissions are cogent, but no issue of discretion requires adjudication. 34 The Notice of Motion should be dismissed. Orders 35 The orders of the Court will, therefore, be:

1. The Notice of Motion by Kings Beach No.2 Pty Ltd is dismissed. 2. Costs are reserved. 3. Exhibits T1, T2, and T3 will be returned to the Court file and Exhibit K1 to the mover.

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