Metro Transport Sydney Pty Ltd v City of Sydney Council

Metro Transport Sydney Pty Ltd v City of Sydney Council - [2009] NSWLEC 37 - NSWLEC 2009 case summary — Zoe

[26]

19 The applicant submits that the exemption from Part 4 of the EPA Act for "development for the purposes of a light rail system" in s 104P(2) of the TA Act should be construed broadly. The purpose of the submission is to gain a better foothold for the proposition that such development includes third party advertising. The applicant's first argument for a broad construction is that a breach of an order under s 121B of the EPA Act carries penal consequences under s126 of the EPA Act (as well as civil consequence under s 123). I do not accept the argument for two reasons. First, if an exemption from the EPA Act is to be read up because otherwise it subjects the applicant to planning law penalties, the remarkable consequence, on the other side of the coin, must be that every matter of planning law which may ultimately lead to a s 121B notice is to be read down - because, ultimately, there may be a penal consequence if the notice is disobeyed. There is no authority for the radical proposition that this fundamental piece of state legislation should be read down in this way. It is inconsistent with the important and beneficial objects in s 5 of the EPA Act. Secondly, in any case, there is no problem with penal provisions if there is compliance with any need to obtain development consent, which is the central issue in the case. 20 The applicant's second argument for a broad construction of "development for the purposes of a light rail system" in s 104P(2) is by reference to existing use cases in which appear statements that a dominant purpose may characterise the "purpose" around which cluster incidental activities: Bonus Pty Ltd v Leichhardt Municipal Council (1954) 19 LGR 375 at 378; and to the effect that there is a need to find an appropriate level of characterisation for the activities carried on: Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 (CA) at 310. Existing use principles were recently analysed by me in Warlam Pty Ltd v Marrickville Council [2009] NSWLEC 23 at [18]. As the City submits, the classic test of categorisation of an existing use in Royal Agricultural Society of New South Wales v Sydney City Council is a "Goldilocks" test: not too wide, not too narrow, just right. That, in my opinion, is how s 104P should be construed. Meaning of "incidental"

[29]

25 In the constitutional case of Grannall v Marrickville Margarine Pty Ltd (1954-1955) 93 CLR 55 at 77 Dixon CJ, McTiernan, Webb and Kitto JJ said: "…every legislative power carries with it authority to legislate in relation to acts, matters and things the control of which is found necessary to effectuate its main purpose, and thus carries with it power to make laws governing or affecting many matters that are incidental or ancillary to the subject matter." 26 Brennan J said in the constitutional context in Cunliffe v Commonwealth (1993-1994) 182 CLR 272 at 320: "The connexion with power is a matter of degree and, so understood, the terms sufficient' and reasonable' are interchangeable". 27 Two propositions emerge from these statements. First, the notion of an incidental power is purposive. Such things are incidental as are necessary to effectuate the main purpose of the power. Secondly, whilst the word "necessary" does not mean strictly necessary, an issue of degree arises such that the matter claimed to be incidental can reasonably or sufficiently be characterised as tied to achieving the purpose. 28 In the constitutional sphere the High Court has held, for example, that the incorporation of industrial organisations is incidental to the permissible regulation of interstate industrial disputes pursuant to the power in s 41(xxxv) of the Constitution: Jumbunna Coal Mine NL v Victorian Coal Miners' Association (1908) 6 CLR 309; provisions for the forfeiture of imported goods are incidental to the regulation of interstate/overseas trade pursuant to the power in s 51(i) of the Constitution: Burton v Honan (1952) 86 CLR 169; a provision prohibiting taxpayers from paying State taxes until they had satisfied their federal tax obligations is not incidental to the power to make laws with respect to taxation under s 51(ii) of the Constitution: Victoria v Commonwealth (Second Uniform Tax Case) (1957) 99 CLR 575 at 614; and restrictions on usage of certain words relating to the Bicentenary were not incidental to the Executive power to execute and maintain the Constitution in s 61 of the Constitution (even though celebration of the Bicentenary itself fell within that power): Davis v Commonwealth (1988) 166 CLR 79. 29 The notion of incidental powers had earlier developed with respect to the ultra vires doctrine in relation to corporations. In the frequently cited cases of Attorney-General v Great Eastern Railway Co (1880) 5 App Cas 473 (HL) Lord Selborne LC said at 478: "whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorised, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires ."

[32]

35 To the extent that Foodbarn is relied upon to suggest that matters, which ordinarily go together with other matters, may be taken to be ancillary, then analysis of the judgment does not make the proposition good. The issue in Foodbarn related to a prohibition on development in a local government ordinance. The case turned on the purposive definition of "shop" in the ordinance. The Court of Appeal did not talk about activities "ordinarily ancillary to development" in the manner suggested by the applicant. It was accepted at 161 that if use of premises for one purpose was merely ancillary to another dominant purpose, then the former purpose might be disregarded. However, Glass JA stated at 160 -161: "An ordinance which sets out to provide a catalogue of activities some of which are permitted and others prohibited could hardly intend that the prohibited activity would be acceptable if it were allied to some other permitted activity…If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be over-shadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged." 36 The applicant's second proposition, in essence, is that because express provision is made for incidental development, where such would likely be implied in any event, then this must be doubly significant. I cannot accept the proposition. It is commonplace for statutes to provide expressly for incidental matters in order to make the issue clear. For example, s 50(1)(e) of the Interpretation Act 1987 (NSW) provides that statutory corporations "may do and suffer all other things that bodies corporate may, by law, do and suffer and that are necessary for, or incidental to, the exercise of its functions". Such provisions are merely to put the issue beyond doubt. Another example is the express incidental power in s 51(xxxix) of the Constitution, of which Barton J said in GG Crespin & Son v Colac Co-operative Farmers Ltd (1916) 21 CLR 205 at 214: "Though the incidental power would have been exercisable without this express grant, the sub-section makes assurance doubly sure". Part 5 EPA Act: s 104P(3) 37 The applicant submits that the effect and purpose of s 104P is that development is to be dealt with under Part 5 of the EPA Act and not under Part 4. This submission is based on subsection (3) of s 104P which provides that: "Development for the purposes of a light rail system is an activity within the meaning of Part 5 of the EPA Act and the Director-General is the proponent and a determining authority in relation to that activity for the purposes of that Part.

[42]

44 Thirdly, in any event, as a matter of fact, it has not been established that it is economically necessary for this kind of advertising to be undertaken. The advertising in question appears to account for less than 0.5 percent of total revenue for the Monorail: see [13] above. This is a minor amount on any view. Moreover, what is at issue is whether or not the applicant is required to obtain development consent from the City for the advertising in question. It has not applied for any such consent, and it has not established that the City would refuse all such applications. The implication that it will lose all of the revenue in question if it cannot obtain the exemption in s l04P is without evidentiary foundation. 45 Fourthly, even if that were established, an economic necessity justification fails the test of being incidental to the purposes of the light rail system. This gains support from the decision of the Court of Appeal in an analogous context in Woollahra Municipal Council v Minister for the Environment (1991) 23 NSWLR 710. The case concerned whether or not licensing powers conferred on a Minister by the National Parks and Wildlife Act 1974 extended to the grant of a lease of a building within a national park to a private university. The question was seen to turn upon whether or not the grant of the lease was for the purpose of promoting, or was ancillary to promoting, the enjoyment of the national park by the public. The justification offered for the grant of the lease was that whilst it would not directly benefit the public, it would indirectly affect such benefit by financing the restoration of particular buildings within the national park for the long-term benefit of the public. 46 The Court of Appeal held that this was insufficient justification for the grant of the lease, which was thus beyond power. Gleeson CJ emphasised that one had to focus upon the use of the land which was at issue. He said at 717D: "It is the use of the land that is to be judged by reference to the objects of the Act, not the motives which lie behind the decision to permit that use". Similarly, Kirby P stated at 728F that: "…there was a separate use of public buildings and land for a private university whose activities would not, as such, promote or be ancillary to the use and enjoyment of the national park as a park". Kirby P at 729B posed these questions: "Is it possible that the 'purpose' of the development might be characterised in a way which would bring it within the 'purpose authorised by' the Act, because it is one permitting the infusion of funds which could then be used for the park's purposes? Does this mean that a solicitor could establish a quiet office in a corner of a national park, upon a promise to contribute substantially funds which would undoubtedly be useful to develop the park or particular facilities in the park? Does it mean that such entitlements to pursue private activities in the park to the derogation of its public purposes can be purchased for a certain sum? At what point would the contribution of a private business enterprise convert its self-interested 'purposes' into a 'purpose authorised by' the Act? Can planning law, which envisages the orderly division of land into zones for different specified uses be so readily undermined by the power of the purse? Can the objective of zones set aside for national parks (being for conservation and recreation purposes) be changed for purposes having nothing to do with conservation and recreation simply because of a promise, incidentally, to provide funds and do certain things of benefit to the park? May such an approach to the designation of the 'purposes' of encroachments upon national parks, if they became a general rule, not undermine such places as environments open to the public generally and set aside from the busy world for recreation, enjoyment and reflection?"

[43]

47 The following statement by Samuels JA at 733D is apposite: "It was submitted, however, that the revenue to be gained from this development provided a means, otherwise unavailable, of financing the refurbishment and renovation of the old Officers' Mess, said to be a building of architectural significance, and of providing other structures without which the area could not be used to its maximum potential as a national park. In my opinion such a consideration is irrelevant. The fact that an activity which does not satisfy the criteria which I have adumbrated will produce money capable of constructive use to improve the amenities and facilities in the park, cannot validate a grant which would otherwise be beyond power. If it were otherwise, a host of disreputable examples could readily be conjured up. As it was put, it must be the planning use that is within power, and not the management use which might be represented by the wise application of funds which an improper exercise of power (or a grant made without power at all) would generate". 48 The decision of the High Court in Thompson v Council of the Municipality of Randwick (1950) 81 CLR 87 is also pertinent. The case concerned a series of land acquisitions proposed by the council in order to construct a new road and path in the area. The council had sought to resume more land than was required for that purpose in order to enable subdivision and sale of that land for profit. The High Court considered a series of statutory powers said to authorise the acquisition, holding that none of them sufficed. One of the powers, in s 535 of the relevant Act, authorised a council which proposed to acquire land for any purpose also to acquire other land adjoining to or in the vicinity. The High Court held (at 104) that this power was "not an independent but an incidental power and this indicates that some limits must be placed on its meaning", namely that it only authorised acquisition of adjoining or proximate land where such "is reasonably incidental to the carrying out of the purpose for which the land is authorised to be acquired" under that section. The Court then said, at 104: "In the present case it is clear that the lands proposed to be resumed exceed what is required to construct the new road, and there is no evidence that it is reasonably incidental to any purpose under s.235 of the Act that this excess should be acquired under s.535."

[45]

Service: ss 104N and 104M 51 The applicant submits that third party advertising is a form of service to Monorail passengers to inform them of "local, tourism-related businesses sited near Monorail stations". The applicant relies on s 104N which defines a light rail system as a system for the provision of "light rail services" which, in turn, is defined in s 104M as "railway passenger services provided by light rail vehicles": see [17] - [18] above. Section 104N lists items of infrastructure but s 104M is concerned with railway passenger services provided by light rail vehicles. The latter would, for example, encompass employing drivers, conductors, ticket sellers, ticket machines and such like. It does not, however, encompass third party advertising, in my opinion, because that is not "railway passenger services provided by light rail vehicles". It is not a service to railway passengers. It is insufficient that a relatively small proportion of the vast numbers of people who pass by the third party advertisements on the pylons happen to be people who have been Monorail passengers. The third party advertisements are directed to everyone. In no meaningful way are the third party advertisements connected to the fact that some of the people catch the Monorail. Moreover, the contention that the advertising relates to tourism-related businesses is inconsistent with the facts. The advertising in question includes the following businesses: Active Kids Child Care Centre, the Telstra Shop, Hilton Car Parks, and Complete City Health. 52 In my opinion, the advertising in question cannot be characterised as reasonably necessary to achieve the purpose of developing a light rail system, as that notion is defined in s l04N. That Parliament did not intend that this distinct usage should be immune from the necessity for development consent under Part 4 of the EPA Act is supported by consideration of the statutory context. Section 104P provides that "development" has the same meaning in the section as in Part 4 of the EPA Act. The word "development" is defined in s 4(f) of the EPA Act to include "any other act, matter or thing referred to in s 26 that is controlled by an environmental planning instrument". Section 26(1)(g) of the EPA Act provides that an environmental planning instrument may make provision for or with respect to "controlling advertising". Thus, the EPA Act treats advertising as a particular and distinct use of land. Section s l21B, relating to orders that may be given by a consent authority, itself specifically addresses orders relating to altering, obliterating, demolishing or removing an advertisement or associated advertising structure. These points support the conclusion that the use of land involved in such advertising would not be regarded as merely incidental to the carrying out of the building or operation of a light rail system, as encompassed within s l04P. Rather, it is a distinct form of development.

[46]

Advertising commonly associated with public transport 53 The applicant submits that third party advertising is incidental because it is commonly associated with public transport. In my opinion, this does not, of itself, satisfy the incidental test. The notion of being incidental is that the activity in question can be characterised as reasonably necessary to achieve the relevant purpose: see [21] - [36] above. Common practice does not establish any such connection. Advertising is commonly associated with numerous activities, including placement on city buildings and street furniture such as bus stop shelters, kiosks, public toilets, seats and rubbish bins. The fact that such advertising is commonplace does not mean that it is reasonably necessary for the purpose of a city building or street furniture. A categorical point 54 The applicant makes a categorical submission that because some forms of advertising, in particular advertising of the Monorail itself, are incidental, then all advertising, including third party advertising, is incidental because it is illogical to distinguish between different types of advertising. I do not accept the submission. Advertising of the Monorail itself and third party advertising are relevantly distinguishable. An analogy may be drawn with development consent for the use of a building as a hotel. That consent would not be construed as including consent for the display of third party advertisements on the walls of the hotel building on the reasoning that it was ancillary to its use as a hotel. Third party advertising is an independent use. 55 The City has not issued s 121B orders relating to directional signs indicating the location of Monorail stations. It may well be that such directional signs are incidental to the operation of a light rail system, although it is not necessary to determine that point in this proceeding. The advertising at issue in this proceeding is for third parties unconnected to the operation of the Monorail or the services provided by the Monorail. Similarly, it is not necessary to consider whether or not s 104P of the TA Act applies to other types of advertising connected with the Monorail. Whether City had to obtain declaratory relief 56 The applicant submits that it was incumbent upon the City to establish that Part 4 of the EPA Act does not apply in Court proceedings in which it sought declarations to that effect. I reject the submission. When the applicant displayed the third party advertisements, there was no public law exercise of power that would support judicial review: see Neat Domestic Trading Pty Ltd v AWB Ltd [2003] HCA 35, (2003) 216 CLR 277 at [52] - [56]. The display of third party advertisements was just part of the applicant's general operation of its business. In any case, I can see no reason why the City was obliged to seek judicial review.

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