Moore Development Group Pty Limited v Pittwater City Council

APPLICANT: Mr G B Newport (barrister) SOLICITORS: N/A LEGAL REPRESENTATIVES: RESPONDENT: Ms J M Jagot (barrister) SOLICITORS: Mallesons Stephen Jaques

JUDGMENT:

• 10 - IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 10710 of 2002

29 May 2003 MOORE DEVELOPMENT GROUP PTY LIMITED ACN 003 395 471 Applicant v PITTWATER CITY COUNCIL Respondent JUDGMENT Introduction 1 This is the separate determination of a question raised in an appeal against the deemed refusal of a development application, as permitted by Pt 31 r 2(a) of the Supreme Court Rules 1970 (and which applies in this Court by Pt 6 r 1 of the Land and Environment Court Rules 1996). The question for determination is the extent of existing use rights which apply to the development site. The question was re-phrased during submissions as: what is "the land on which the existing use was carried out", for the purposes of cl 42(2)(b) of the Environmental Planning and Assessment Regulation 2000 ("the EP&A Regulation") in the facts and circumstances of the present case? The legislation 2 The existing use provisions of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") are found in Pt 4 Div 10 (ss 106-109B). Section 106 defines an existing use as follows: 106. In this Division , existing use means: (a) the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would, but for Division 4A of Part 3 or Division 4 of this Part, have the effect of prohibiting that use, and …. 3 The protections and advantages afforded by existing use rights are set out in the following two sections: 107 Continuance of and limitations on existing use (1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use. (2) Nothing in subsection (1) authorises: (a) any alteration or extension to or rebuilding of a building or work, or (b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned, or (c) without affecting paragraph (a) or (b), any enlargement or expansion or intensification of an existing use, or (d) the continuance of the use therein mentioned in breach of any consent in force under this Act in relation to that use or any condition imposed or applicable to that consent or in breach of any condition referred to in section 80A(1)(b), or (e) the continuance of the use therein mentioned where that use is abandoned. (3) Without limiting the generality of subsection (2)(e), a use is to be presumed, unless the contrary is established, to be abandoned if it ceases to be actually so used for a continuous period of 12 months. 108 Regulations respecting existing use (1) The regulations may make provision for or with respect to existing use and, in particular, for or with respect to: (a) the carrying out of alterations or extensions to or the rebuilding of a building or work being used for an existing use, and (b) the change of an existing use to another use, and (c) the enlargement or expansion or intensification of an existing use. … 4 Regulations have been made pursuant to s 108(1). Clause 41 of the EP&A Regulation enables an existing use to be (a) enlarged, expanded or intensified; (b) altered or extended; (c) rebuilt; or (d) changed to another use, including a use that would otherwise be prohibited under the Act. 5 Clause 42 of the EP&A Regulation states: 42 Development consent required for enlargement, expansion and intensification of existing uses (1) Development consent is required for any enlargement, expansion or intensification of an existing use. (2) The enlargement, expansion or intensification: (a) must be for the existing use, or for a changed existing use, but for no other use, and (b) must be carried out only on the land on which the existing use was carried out immediately before the relevant date. 6 The applicant seeks by its development application to demolish and rebuild a building used for an existing use and to change the existing use to another use which would otherwise be prohibited under the Act. As noted above, the question now raised is: what is "the land on which the existing use was carried out" for the purposes of cl 42(2)(b) of the EP&A Regulation? This is a question of fact rather than a question of law. The relevant facts 7 The facts relevant to the question posed are derived from an agreed statement of facts, supplemented by affidavits filed on behalf of the applicant. The subject premises is known as No. 1858 Pittwater Road, Church Point, being lot 142 in deposited plan 752046 ("the property") and an adjacent outdoor eating area (permissive occupancy No. 1965/326). The site area of the property is approximately 632.3 square metres, and is situated within the zone 3(c) Neighbourhood Business under the Pittwater Local Environmental Plan 1993 ("the LEP"). 8 On 21 November 1961, under the County of Cumberland Scheme, Warringah Shire Council (the relevant consent authority at the time) granted development consent subject to conditions ("the 1961 consent") to a development application which proposed a development comprising a three-storey building and consisting of three shops (with small storerooms attached), an estate agent's office, restaurant and kitchen and toilets on the ground floor; a caretaker's flat (consisting of two bedrooms) and 13 bedrooms each containing a bathroom on the first floor; and a common laundry, private laundry storeroom and plant room on the second floor. The building was then altered in accordance with the consent. 9 Subsequently to approval of the development, Warringah Planning Scheme Ordinance 1963 prohibited the development of motels in the relevant zone. Restaurants and shops remained permissible with development consent. Part IV of that instrument, however, authorised the continued use of the first floor for the purpose of a motel. Likewise, since 1 September 1980, Pt 4 Div 10 of the EP&A Act 1979 has authorised the continued use of the first floor for the purpose of a motel, notwithstanding that the Warringah Local Environmental Plan 1985 prohibited, and the current LEP prohibits, that use in the relevant zone. Presently, the council is unaware as to the nature of the use of the second floor or its relationship to the uses on the ground and first floors. 10 The building modified pursuant to the 1961 consent effectively occupies the whole of lot 142 in deposited plan 752046. A plan of the building as it is presently configured shows that it is almost identical with the plan of the building as originally approved. The approved plan shows the following: Ground floor : entry vestibule, booking office, restaurant, kitchen, toilets, three shops each with a storeroom and an estate agency. First floor : 13 bedrooms, each with a bathroom, and a caretaker's flat. Second floor : common laundry, private laundry, plant room and storeroom. 11 As I have said, there is no difference of significance between the present layout and use of the building and that which was approved in 1961. 12 Ms A M Romeo, who describes herself as a restaurateur/ motel operator, purchased the building in conjunction with her husband, Mr G Romeo, in December 1989. She describes in an affidavit the operation of the business carried on within the building. She and her husband operate all the businesses except one of the shops, namely a real estate agency operated by a tenant. Prior to the purchase Ms Romeo enquired of the previous owners as to the use of the restaurant and motel business and established that they were operated and managed as a single business (including the laundry on the second floor). Ms Romeo also deposes as follows: [7] The ingress/ egress to the ground floor are used for both the restaurant and motel activities. There is a common use of the ground floor areas, including stairs, reception, entrance and the like. [8] The reception area on the ground floor serves the restaurant and motel activities. Motel reservation and restaurant bookings are all made on the one phone number and dealt with by the same reception staff. Motel bookings are only dealt with within the hours of the restaurant. [9] The restaurant and motel activities operate together. The motel patrons may only obtain room service within the business operating hours of the restaurant. The motel patrons are to use table service at the restaurant to order food, coffee and drinks or to use the rest room facilities within the business operating hours of the restaurant. The restaurant is not available to motel guests outside the restaurant hours. [10] The staff employed to work on the subject premises fulfil roles for both the restaurant and motel. Managerial staff is required to oversee the restaurant and motel functions together with the bottle shop [one of the three shops] . [11] All accounts, revenues and all business decisions are made on the basis that the restaurant and motel activities are the one operation. The electricity, rates, water, insurance accounts for the motel and restaurant activities are amalgamated into the one account. … 13 Ms Romeo further states that the restaurant facility helped sell the motel rooms and motel rooms helped sell the restaurant; and that the restaurant and motel activities need to operate together to remain financially viable. For these reasons they have always, during their ownership, been used in conjunction with each other. Finally, the second floor has been used for laundry and ancillary facilities to service the restaurant and motel. The only access to the second floor is by the common vestibule and the motel corridors and stairs. Submissions 14 Mr G B Newport, appearing for the applicant, relies, inter alia, upon the following relevant submissions. (1) "Land" is defined in s 4 of the EP&A Act as including "a building erected on the land." Further, in the context of cl 42 of the EP&A Regulation, "an existing use of land refers to land which from a practical point of view should be regarded as one piece of land or a unit" (Starray Pty Ltd v Sydney City Council [2002] NSWLEC 48 at [23], Lemworth Pty Ltd v Liverpool City Council (2001) 53 NSWLR 371). (2) The existing use of the building is to be liberally interpreted (Council of the City of Parramatta v Brickworks Ltd (1972-3) 128 CLR 1 at 25), as is the extant consent (House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498 at 503, 106 LGERA 440 at 449). In determining the genus which best describes the activities (North Sydney Council v Boyts Radio and Electrical Pty Ltd (1989) 67 LGERA 344 at 353), the nature and extent of the particular existing use is to be examined (Scully v Leichhardt Council (1994) 85 LGRA 109 at 111). In the present case, the genus would reveal one use with three species of the integrated refreshment room/motel activities and the ancillary shop uses. Therefore the three floors of the building are to be regarded as the same single unit for the purposes of existing use rights (Armstrong v Ashfield Council [2002] NSWLEC 237 at [15]). However, if the shops are found to possess a separate purpose and do not attract existing use rights, the remainder of the land nonetheless attracts such rights as one unit of land. (3) The present case may be distinguished from Lemworth because "the land" in that case had a separate consent and a distinct purpose differing from the rest of the building. Further, in Lemworth, there was a distinct portion of the building used solely for the brothel. In the present case, however, the restaurant is part of the use as a motel with shared and indispensable common areas (Lemworth at 378 [44]). (4) Similarly, Armstrong may be distinguished because the uses of the restaurant and motel are not entirely different and inconsistent with each other (Armstrong at [16] and [19]). The two activities comprise individually indispensable elements (Lemworth at 377 [39]), inextricably linked, which cannot be severed (Salvation Army v Newcastle City Council (2000) 107 LGERA 40 at 43 [16]). 15 Ms J M Jagot, appearing for the respondent council, relies upon the following relevant submissions. (1) The proper construction of the 1961 consent is that approval was granted to separate and independent uses: a restaurant, shops, estate agency and a "tourist establishment". (2) Interdependence of the restaurant and motel uses does not render one of the uses subordinate to the other, necessitating the preclusion of one independent use of the land (Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 161): it is a question of fact and degree in all the circumstances of the case (Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 at 408-410). In the present matter, relevant facts include that the 1961 consent shows there are separate uses on separate levels and that the restaurant can accommodate many more persons than the motel. These circumstances support the conclusion that the restaurant and motel are (and have always been) separate uses. (3) Similarly, the presence of ancillary aspects of the motel use on the ground and second floors "does not mean that such areas become, for the purpose of the existing use provisions in the Act, part of the land the subject of the use within the regulation" (Lemworth, per Stein JA at 313). (4) The current definition of "motel" use does not affect this determination. Further, the relevant definition at the time consent was sought was "tourist establishment". Complementary "refreshment rooms" were a separate permissible use. (5) Rather than aiding the applicant's cause, the decision in Armstrong is wholly explicable on its own facts. The single relevant question was clearly addressed in Salvation Army v Newcastle City Council. Therefore the existing use was carried out immediately before the relevant date only on the first floor of the building. Conclusions 16 In determination of the question posed, two fundamental processes are to be undertaken (Armstrong at [12]). The first involves a practical assessment of the circumstances of the case. The terms of the 1961 consent provide the genesis of this sequence. The relevant passage from the report to the Town Planning Committee dated 15 November 1961 in relation to the 1961 consent is as follows: Application for permission to convert existing premises … into a guesthouse or boarding house. The application provides for three shops with small storerooms attached and an estate agent's office, also a restaurant and kitchen and toilets on the ground floor. The first floor contains a caretaker's flat of two bedrooms, and thirteen bedrooms each containing a bathroom and W.C. On the roof- two laundries and small storeroom… Resolved to recommend - that the application be approved… 17 A liberal interpretation of the extant consent (House of Peace Pty Ltd v Bankstown City Council) suggests that the council granted consent for what is now identified as a motel. Further it may be inferred from the wording of the council's resolution that the motel comprised the restaurant and the kitchen on the ground floor and the laundries and storerooms on the second floor. It is irrelevant that the restaurant also provides for the general public. That is not an uncommon feature of restaurants attached to motels. This is recognised by the definition of a "motel" under the Warringah Planning Scheme Ordinance 1963, which includes the provision of meals for travellers or "the general public". 18 A similar construction of the "existing use" (Council of the City of Parramatta v Brickworks Ltd at 25) arising from the consent involves the determination of the appropriate genus which best describes the activities in question. Analysis of the nature and extent of the particular existing use of the subject premises (Scully v Leichhardt Council at 111) focuses upon the evidence of Ms A M Romeo, the restaurateur/ motel operator. Her evidence shows that the three floors of the building are operated together as one entity. There is common use of the ground floor areas, including the stairs, reception and the entrance. The ground floor reception area receives bookings for both the restaurant and motel on the one phone number, and by the same staff members. Further, motel patrons are able to access room and table service only during restaurant hours. It is also evident that the two activities are financially interdependent. The undisputed evidence is that both activities need to operate together, each activity encouraging patronage of the other, in order to remain financially viable. To this end, all motel and restaurant accounts and revenues are amalgamated and business decisions are made on the basis that the operations are the one entity. 19 These circumstances lead to the conclusion that the existing use in question is that of a motel. That is to say that the motel genus encompasses the restaurant and laundry species of use. Necessarily, Ms Jagot's submission that interdependence of uses does not render one of the uses subordinate to the other necessitating the preclusion of one independent use of the land (Foodbarn Pty Ltd v Solicitor-General), must fail in light of the facts and circumstances of this particular case. Notwithstanding that the restaurant can accommodate many more persons than the motel and that the 1961 consent shows the activities are principally located on separate levels, they are physically interconnected and are operated as the one entity, utilising attributes of both species for the one genus (North Sydney Municipal Council v Boyts Radio and Electrical Pty Ltd). 20 This construction is consistent with the statement of Gibbs J in Brickworks at 25, in relation to legislation analogous to cl 42 of the EP&A Regulation: Those clauses are designed to preserve and protect existing rights and ought to be liberally construed and not restricted by dubious implications drawn from words used in other clauses directed to a different subject matter. 21 This construction is also consistent with the statement of Pearlman J in relation to cl 42 of the EP&A Regulation specifically: "[a]n existing use of land refers to land which from a practical point of view should be regarded as one piece of land or a 'unit'" (Starray at [23]; see also Steedman v Baulkham Hills Shire Council [No.1] (1991) 87 LGERA 26 at 27, Lemworth at 377 [37] and [41], and Mona Vale Pty Ltd v Pittwater Council [2003] NSWLEC 74). 22 The second step necessary in determining the physical extent of an existing use right calls for an inquiry as to whether the proposed use can be properly regarded as part of the same unit applicable to the existing use (Armstrong at [15]). Meagher JA in Steedman stated (at 27) the rule to be applied as follows: "that if the land is rightly regarded as a unit and it is found that part of its area was physically used for the purpose in question it follows that the land was used for that purpose". (See also Mona Vale Pty Ltd v Pittwater Council.) 23 In the present case, I conclude that the entire ground floor (other than the three shops and the estate agency), and the first floor and the second floor are employed in the provision of services jointly offered by the motel and the restaurant. All three areas, however, may rightly be described as a single unit. Further, the physical use of all these areas shows that the "land" is used for the purpose of the motel. Therefore, applying the test set down in Steedman (see also Boyts), the "land" on which the existing use was carried out may be considered, for the purposes of cl 42(2)(b), to be the same unit as that of the existing motel use. 24 It follows, then, that Lemworth and Salvation Army may be distinguished because in those cases only a small portion of the subject site was utilised for the existing use, the remainder employed for an entirely different purpose. Similarly, Armstrong may be distinguished due to the fact that in the present case the restaurant and motel cannot be regarded as separate uses, their physical, operational and financial co-dependency rendering them inextricably linked. 25 In light of the conclusions to which I have come it is now possible to return to the question for determination raised in the principal proceeding. As I have already observed an existing use of land refers to land which from a practical point of view should be regarded as one piece of land or a unit (Steedman at 27, Lemworth at 377 [37] and [41], and Starray at [23]). I have concluded that the existing use is lawfully carried out on that part of the ground floor not occupied by the shops; on the whole of the first floor; and on the whole of the second floor (other than the private laundry, which no longer seems to exist). It follows that the existing use of the motel is carried out on each floor. From a practical point of view the answer to the question posed is that the "land" for the purposes of cl 42(2)(b) of the EP&A Regulation in the facts and circumstances of the present case is the ground floor, the first floor and the second floor. It also follows that the building accommodating such existing use and the land upon which the building stands may also for practical purposes, be considered as the same unit or "land" as that of the existing use. 26 The answer to the question posed (see par [1] above) is that the "land" for the purposes of clause 42(2)(b) of the EP&A Regulation, in the facts and circumstances of the present case, is the entire building in question together with the land on which it stands. 27 It follows that the proceeding should proceed to a hearing on merits upon the basis of my answer to this preliminary question. The matter should be listed for a call-over before the Registrar for its further disposition. The exhibits may be returned. I hereby certify that the preceding 27 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

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