Parramatta Business Freedom Association Inc v Parramatta City Council

THE SMOKING BAN CONDITIONS 9The smoking ban conditions in the approvals under the LG Act s 68 Part E are in the following terms: 3. Development Consent and Footway Restaurant Approval ... (b) You must ensure that no smoking occurs in the Approved Area. You must not do or permit anything to be done in the Approved Area that encourages smoking. For the purpose of this clause "smoking" is the activity described in the Smoking in Public Places Policy (December 2011) adopted by Council. ... 7. Operation of footway restaurant ... (e) The Applicant must ensure that no smoking occurs in the Approved Area. The Applicant must not do or permit anything to be done in the Approved Area that encourages smoking. For the purposes of this clause, 'smoking' is the activity described in the Smoking in Public Places Policy (December 2011) adopted by Council. 10The smoking ban condition in the approvals issued under the Roads Act ss 125 and126 is in the following terms: 15. The Applicant must ensure that no smoking occurs in the Approved Area. The Applicant must not do or permit anything to be done in the Approved Area that encourages smoking. For the purposes of this clause, 'smoking' is the activity described in the Smoking in Public Places Policy (December 2011) adopted by Council. 11Condition 4 of the Roads Act approvals also provides at the end that: 4. ...The Applicant must comply with the guidelines in the Council's Outdoor Dining Policy, annexed hereto marked 'B'.

ROADS ACT 1993 12The Roads Act more specifically and obviously applies to footway restaurants than the LG Act because Division 1 of Part 9 of the Roads Act is entitled "Footway restaurants" whereas no such expression or equivalent is to be found in the LG Act. The Roads Act relevantly provides: 3 Objects of Act The objects of this Act are: ... (h) to regulate the carrying out of various activities on public roads.

5 Right of passage along public road by members of the public (1) A member of the public is entitled, as of right, to pass along a public road (whether on foot, in a vehicle or otherwise) and to drive stock or other animals along the public road.

Part 8 Regulation of traffic by roads authorities Division 1 General Powers

115 Roads authority may regulate traffic in connection with road work etc (1) A roads authority may regulate traffic on a public road by means of barriers or by means of notices conspicuously displayed on or adjacent to the public road.

Part 9 Regulation of works, structures and activities Division 1 Footway restaurants

125 Approval to use footway for restaurant purposes (1) A council may grant an approval that allows a person who conducts a restaurant adjacent to a footway of a public road (being a public road that is vested in fee simple in the council) to use part of the footway for the purposes of the restaurant. (2) An approval may be granted on such conditions (including conditions as to payments in the nature of rent) as the council determines. ... 126 Authority to erect structures (1) A council: (a) may authorise the holder of an approval to erect and maintain structures in, on or over any part of the footway the subject of the approval, or (b) may, at the request and cost of the holder of the approval, erect and maintain any such structure. (2) The council may erect and maintain structures in, on or over any part of the footway the subject of an approval for the protection of public health and safety.

127 Effect of approval While an approval is in force: (a) the use of the footway for the purposes of a restaurant, and (b) the erection and maintenance of structures on the footway in accordance with an authorisation given in respect of the approval, are taken not to constitute a public nuisance and do not give rise to an offence against this or any other Act. 13The reference to "traffic" in s 115 includes pedestrian traffic: see the Dictionary to the Roads Act.

LOCAL GOVERNMENT ACT 1993 14The LG Act provides: 68 What activities, generally, require the approval of the council? (1) A person may carry out an activity specified in the following Table only with the prior approval of the council, except in so far as this Act, the regulations or a local policy adopted under Part 3 allows the activity to be carried out without that approval. ... Note. A person who fails to obtain an approval or who carries out an activity otherwise than in accordance with an approval is guilty of an offence-see secs 626 and 627. Table Approvals ... Part E Public roads ... 2 Expose or allow to be exposed (whether for sale or otherwise) any article in or on or so as to overhang any part of the road or outside a shop window or doorway abutting the road, or hang an article beneath an awning over the road ...

89 Matters for consideration (1) In determining an application, the council: (a) must not approve the application if the activity or the carrying out of the activity for which approval is sought would not comply with the requirements of any relevant regulation, and (b) must take into consideration any criteria in a local policy adopted under Part 3 by the council which are relevant to the subject-matter of the application, and (c) must take into consideration the principles of ecologically sustainable development. (2) If no requirements are prescribed for the purposes of subsection (1) (a), and no criteria are adopted for the purposes of subsection (1) (b), the council in determining an application: (a) is to take into consideration, in addition to the principles of ecologically sustainable development, all matters relevant to the application, and (b) is to seek to give effect to the applicant's objectives to the extent to which they are compatible with the public interest. (3) Without limiting subsection (2), in considering the public interest the matters the council is to consider include: (a) protection of the environment, and (b) protection of public health, safety and convenience, and (c) any items of cultural and heritage significance which might be affected.

94 Determination of application (1) The council may determine an application: (a) by granting approval to the application, either unconditionally or subject to conditions, or (b) by refusing approval. ...

632 Acting contrary to notices erected by councils (1) A person who, in a public place within the area of a council, fails to comply with the terms of a notice erected by the council is guilty of an offence. Maximum penalty: 10 penalty units. (2) The terms of any such notice may relate to any one or more of the following: (a) the payment of a fee for entry to or the use of the place, (b) the taking of a vehicle into the place, (b1) the driving, parking or use of a vehicle in the place, (c) the taking of any animal or thing into the place, (d) the use of any animal or thing in the place, (e) the doing of any thing in the place, (f) the use of the place or any part of the place. (2A) However, a notice: (a) must not prohibit the drinking of alcohol in any public place, including any public road or car park, and accordingly a sign under section 632A or 644C is not a notice under this section, and (b) must not, except as provided by subsection (2B), prohibit or regulate the taking of a vehicle into, or the driving, parking or use of any vehicle in, any public place that is a road or road related area within the meaning of the Road Transport (General) Act 2005. Note. A council may establish alcohol prohibited areas under section 632A (relating to public places such as parks and beaches) and alcohol-free zones under Part 4 of this Chapter (relating to street drinking). (2B) A notice may prohibit the parking of a vehicle, for the purpose of offering the vehicle for sale, in a public place that is: (a) a road or road related area within the meaning of the Road Transport (General) Act 2005, and (b) in the City of Sydney area or other area (or part of an area) prescribed by the regulations. (3) The terms of a notice referred to in this section may: (a) apply generally or be limited in their application by reference to specified exceptions or factors, or (b) apply differently according to different factors of a specified kind, or may do any combination of those things.

BACKGROUND 15Smoking in enclosed public spaces is prohibited under the Smoke-free Environment Act 2000. To date, there is no legislation in New South Wales that directly prohibits smoking in footway restaurants. However, on 12 December 2011 Parramatta City Council became the 32nd council in NSW to adopt a policy banning smoking in outdoor dining areas under its ownership or control. Its adopting resolution also banned smoking in bus and taxi stands, and the policy also banned smoking in other areas in which an earlier policy of the Council had banned smoking: children's playgrounds, aquatic centres, and sports fields and facilities. 16The policy which the Council adopted by resolution on 12 December 2011 was SIPP November 2011. 17There then came into existence SIPP December 2011 prepared by council staff. It differed materially and relevantly from SIPP November 2011. There has been no resolution by the Council adopting it. There is no suggestion that council staff had authority to change SIPP November 2011. 18In April 2012 the Council's "Outdoor Dining Policy" was revised in a way which reflected SIPP December 2011 rather than SIPP November 2011. 19During the latter half of April 2012, council staff visited the footway restaurants in connection with the smoking ban and provided them with a "Resource Pack" containing a letter to the owner, a copy of SIPP December 2011, a copy of the revised Outdoor Dining Policy, a checklist to assist with implementation, a fact sheet, two no smoking posters, and no smoking stickers and table cards. 20Towards the end of April 2012, the Council by its sub-delegate issued the approvals under the LG Act and the Roads Act referred to above at [2].

COUNCIL RESOLUTION 12 DECEMBER 2011 21On 12 December 2011 the Council resolved as follows: (a) That Council adopt the updated Smoking in Public Places Policy November 2011, to implement a ban of smoking in outdoor dining areas on Council owned land through-out the LGA and in bus and taxi stands, as well as the other areas already adopted as smoke free (children's playgrounds, aquatic centres, sports fields and facilities) (Attachment 1). (b) That Council actively support businesses and the community to adjust to and implement the ban by: a. Ensuring a long 6 month lead time for implementation of the ban (to commence on 1st May 2012). b. Developing a thorough implementation support program that includes: i A Communications Plan, including community education strategies, ii Provision of resources for businesses, iii Financial incentives for businesses who implement the ban before the 1st May 2012, and iv Monitoring processes. (c) That Council write to the State Government to lobby for introduction of legislation that uniformly prohibits smoking: ... d.In outdoor dining areas on public land. ... (d) Further, that the proposed 3 month lease holiday, as indicated in paragraph 8.3 [of the Council report], be extended to 6 months for those businesses that implement the ban by 1 May 2012.

SIPP NOVEMBER 2011 22SIPP November 2011 adopted on 12 December 2011(including the reference to bus and taxi stands referred to in the resolution) includes the following provisions: 1.0 Statement of Intent Parramatta City Council (PCC or 'Council') acknowledges its obligation to promote public health outcomes where Council provides assets and services intended to be of benefit to members of the community including children and vulnerable people. This policy recognises Council's commitment to: Protect members of the community from the health and social impacts of second hand cigarette smoke, and Improve the natural environment and the amenity of the local area by reducing the amount of cigarette butt litter in outdoor spaces. The aim of this policy is to ban smoking in designated public places. The purpose of this policy is to provide a rationale and framework for the management of smoking in public places on Council owned land. 2.0 Eligibility This policy applies to all persons who use or are in the vicinity of the identified locations/public places within the Parramatta City Council local government area that are detailed in this policy. 3.0 Definitions Authorised Persons: Council Community Safety Officers. Council Owned Land: Land either owned by Parramatta City Council or Crown land under the care, control and management of Parramatta City Council and land that is being leased by Council. ... Outdoor Dining: Are those areas associated with an existing or approved shop, restaurant, café, take away food or drink premises or tavern/pub located on land owned by Council or under Council's care, control and management where Council has issued a licence for the purpose of outdoor dining. 4.0 Legislation Under the NSW Local Government Act 1993 Councils have the power to legislate in their own jurisdictions to protect their local community from the effects of second hand smoke. Specifically the Local Government Act 1993 gives Council power to: Erect suitably worded and strategically placed notices in "public places" (such places including, but not limited to, public reserves, Crown reserves, public bathing reserves, public baths, public swimming pools, public parks and public roads) within the local government area of Parramatta prohibiting smoking (see, relevantly, s.632 (1) and (2)(e) and S632 (3) of the Act); ... 5.0 Provisions Smoking is prohibited in the following areas on Council owned land: Within ten (10) metres of children's playgrounds and play equipment; Within ten (10) metres of the boundaries of sports fields and sports facilities; Within ten (10) metres of aquatic centres; and In outdoor dining areas on Council owned land. ... 6.0 Implementation of Provisions ... 6.4 Outdoor Dining Agreements to lease outdoor dining spaces will have smoke free clauses inserted into their license agreements for use. The lessee and or licensee will be responsible for enforcing the restrictions on smoking and for any non compliance; and if there are continuous breaches, penalties may apply in accordance with S626(3) of the Local Government Act 1993 and licences may not be renewed. 7.0 Responsibility and Accountability ... Outdoor dining Permit Holders are responsible for enforcing the restrictions on smoking and for any non compliance in the area covered by the Permit/License Agreement. 23Contrary to the applicants' submission, I interpret the references to "lease" or "licence" in paragraph 6.4 to include approvals under s 125(1) of the Roads Act, and the references to "lessee" or "licensee" in paragraph 6.4 to include the holders of those approvals. Payments in the nature of rent were payable under the Roads Act approvals as expressly authorised by s 125(2). In common parlance, a right to use part of a public footway for a specified purpose comes within the rubric of a licence. This interpretation is clear enough from the terms of paragraph 7.0 quoted above. It is reinforced by the context (agreed between the parties) that in the Council's area there were some 75 outdoor dining approvals in force under the Roads Act and the LG Act, and only one lease and one licence (as those terms are understood by lawyers) for outdoor dining areas.

SIPP DECEMBER 2011 24SIPP December 2011 was substantially different from SIPP November 2011. Additional provisions included the following: 3.0 DEFINITIONS ... Outdoor Dining Area: An area located on any land (including, without limitation, a public road or a footway) owned by Council, controlled by Council or under Council's care, control and management within which food or beverages or both are sold or supplied to the public for consumption in conjunction with the sale or supply of food or beverages or both to the public for consumption from adjoining or nearby premises. ... Smoke: Means to smoke, hold or otherwise have control over an ignited smoking product and Smoking has a corresponding meaning. Smoking Product: Means any tobacco or other product that is intended to be smoked. 6.4 Outdoor Dining Any occupancy right granted by Council in respect of an Outdoor Dining Area must include a prohibition on smoking. The person who has been granted the occupancy right in respect of an Outdoor Dining Area is responsible for enforcing the prohibition on smoking. Failure to enforce the prohibition on smoking may result in (amongst other things) termination of the occupancy right, no renewal of the occupancy right or prosecution for offences under the Local Government Act. 7.0 RESPONSIBILITY AND ACCOUNTABILITY ... The person who has been granted the occupancy right in respect of an Outdoor Dining Area is responsible for enforcing the prohibition on smoking in respect of the Outdoor Dining Area to which the relevant occupancy right relates. ... Authorisation: Adopted by Council on 12th December 2011 MINUTE Number 12892 25The endorsement at the end "Adopted by Council on 12th December 2011 MINUTE Number 12892" is wrong. What was adopted on 12 December 2011 was SIPP November 2011. SIPP December 2011 has not been adopted by the Council. SIPP December 2011 is the creation of council staff who had no authority to change SIPP November 2011.

THE ASSOCIATION PROCEEDINGS 26In summary, the grounds of challenge in the Association proceeding are as follows: (1)Council has sought to ban smoking in footway restaurants through the erection of notices under s 632 of the LG Act and it does not have power to do so. (2)Council by its smoking ban conditions in the Armani LG Act approval has sought to amend an existing development consent held by Armani. (3)Conditions banning smoking in the LG Act approvals are beyond power because: (a) SIPP November 2011 does not authorise the imposition of such conditions in such approvals because it is in terms limited to leases and licences; (b) the no smoking conditions adopt a description of smoking in SIPP December 2011 and assert that it was adopted by the Council, when in fact it was not; and (c) the power of the Council's sub-delegate who issued the approvals could only be exercised in accordance with SIPP November 2011 and the said assertion in the condition shows that that limitation was exceeded. (4)Alternatively to ground 3, there is uncertainty as to the commencement or enforcement dates of the smoking ban conditions in the LG Act approvals under the terms of the 12 December 2011 resolution, making the imposition of those conditions ultra vires.

Ground 1: s 632 LG Act notices 27The first ground of challenge is that the Council has sought to ban smoking in footway restaurants through the erection of no smoking notices under s 632 of the LG Act and that it does not have the power to do so. Section 632 is set out above at [14]. 28The definition of "notice" in the LG Act includes a notification, order, direction and demand: Dictionary. The applicants submit that the act of providing no smoking notices to the footway restaurants was a direction or command. 29The relief sought is an injunction in the following terms: An order that the respondent by itself or its servants or agents be restrained from erecting signs or notices pursuant to s.632 Local Government Act on or near and in respect of the premises identified in Schedule A which purport to restrict smoking by persons located on those areas pursuant to "the updated Smoking in Public Places Policy November 2011" adopted by the respondent on 12 December 2011, being Attachment 1 to the Business Papers of the Council meeting on 12 December 2011. 30The first question is whether the Council has erected or sought to erect no smoking notices in a public place - footways of public roads - within the meaning of s 632(1) of the LG Act. If so, the second question is whether the Council has power to erect such notices. 31As to the first question, clearly the Council by its employees or contractors did not erect or intend to erect no smoking signs in the footway restaurants. Rather, the applicants' case is that in distributing the "Resource Pack" referred to above at [19] to the footway restaurants, the Council itself sought to erect no smoking notices in a public place within the meaning of s 632(1) by requesting the footway restaurants to erect them. 32The applicants place reliance on the Council letter in the Resource Pack and to the reference to s 632 in the no smoking posters, stickers and table cards in the Resource Pack. There is no evidence that in fact any of these posters, stickers and table cards have been put up or displayed in a public place. The injunction that the applicants seek is therefore on a quia timet (apprehended or threatened breach) basis. 33The Council letter in the Resource Pack includes the statement that it is "to assist in the implementation of the ban of smoking in outdoor dining areas that comes into effect 1st May 2012". It also states that "Council has powers under the Local Government Act to issue a fine". I think that this should be understood as a reference to s 632. The "NO SMOKING" posters, stickers and table cards in the Resource Pack were endorsed with the words: "Regulated under S632 Local Government Act 1993 PENALTIES MAY APPLY". 34The applicants have seized upon these express or implied references to s 632 as a basis for their first ground of challenge. 35The Council submits that this endorsement was a "clerical error". I agree that it was an error but, in the absence of any direct evidence, I do not accept that the error was "clerical". The probable inference is that council staff responsible for the endorsement intended to represent that if the posters, stickers or table cards were put up or displayed and not obeyed, then s 632 would be breached. 36The checklist and the fact sheet in the Resource Pack indicate that it was a matter for the footway restaurant owners whether or not the posters, stickers and table cards were put up or displayed, although a financial incentive was held out if they were by 1 May 2012. 37The document in the Resource Pack titled "CHECKLIST for Businesses WHO ARE ADOPTING THE OUTDOOR DINING BAN OF SMOKING BEFORE 1st May 2012" states: "make sure you have completed all these steps to ensure you are eligible for a 6 month lease holiday". The first "step" is: "Erect 'No Smoking' poster in window or prominent position at front of restaurant where potential patrons can see". The second "step" is: "Place 'No Smoking' signage on outdoor dining tables". The reference to "6 month lease holiday" was founded on part of the Council resolution of 12 December 2011 to the effect that there would be a 6 month lease holiday for those businesses that implement the ban by 1 May 2012: see [21] above. As noted earlier at [23], fees in the nature of rent were payable under the Roads Act approvals, and I construe these references to a "lease" holiday in the checklist and the resolution as including a holiday for fees in the nature of rent payable under the Roads Act approvals even though "lease" is an inapt description. 38The Resource Pack includes a document titled "FACT SHEET: Tips for talking with your customers about the ban of smoking in outdoor dining on Council owned or managed land". The first paragraph states: This fact sheet is designed to provide general tips to help you in your communication with customers and staff about the introduction of a ban in smoking in outdoor dining. These tips are intended as general information only for your consideration, and do not in any way represent individual advice or recommendations. 39Hence, the "tips" did not even amount to a recommendation. One of the "general tips" is: Have No Smoking signage (posters, stickers, table cards) clearly on display so your customers are aware that your outdoor dining area is now a 'no smoking' area. 40Thus, a financial incentive was held out to the footway restaurants to put up no smoking posters and display no smoking stickers and table cards, and "tips", not amounting to recommendations, were given. 41Having regard to those facts and the fact that it is a criminal offence under s 632(1) of the LG Act not to comply with the terms of a notice "erected by the council" in a public place, in my opinion in this case the Council has not "erected", within the meaning of s 632(1), nor has it attempted to erect no smoking notices. Ground 1 therefore fails. 42Given that conclusion, the question whether the Council has power to erect no smoking notices under s 632 does not arise. The Council suggests that the Court may nevertheless have to decide whether the Council has power to itself erect no smoking signs in or near footway restaurants if the Council decides to do so in the future because the injunction sought seeks to prevent the Council from erecting such notices in or near footway restaurants in the future. I do not accept the suggestion. It is not the function of the Court to give an advisory opinion as to, nor can the injunction sought by the applicants be based on, a purely hypothetical question whether, outside the facts of this case, the Council has power to erect no smoking notices under s 632. However, before passing on I will record, in summary, the competing arguments. 43In summary, the applicants submit that there is no power to erect no smoking notices on footways (of public roads) under s 632 of the LG Act because: (a)such notices constitute regulating pedestrian traffic on a public road in that they prohibit pedestrians from being in, passing through or remaining in that area of the public road; and (b)s 115 within Part 8 of the Roads Act exclusively governs the Council's power to regulate traffic by notices: Manly Council v Malouf [2004] NSWCA 299, 61 NSWLR 394 at [61]. "Traffic" is defined in the Dictionary to the Roads Act to include pedestrian traffic. Under Part 8 of the Roads Act, notices can only be erected if the procedures under Division 1 of Part 8 are first complied with. 44In summary, the Council submits that: (a)Section 632(1) of the LG Act empowers a council to erect a notice in a public place. The definition of "public place" includes a public road: Dictionary, see also s 632(2A) and (2B). A public road includes its footway. Such a notice may relate (among other things) to "the doing of any thing in the place": s 632(2)(e). "Any thing" includes smoking. (b)The applicants' reliance on s 115 of the Roads Act is inapposite since it is in Part 8 which is concerned with the regulation of traffic, including pedestrian traffic. In no way would a sign prohibiting smoking in a footway restaurant be considered a regulation of pedestrian traffic under Part 8. (c)Manly Council v Malouf does not stand for the proposition that the Roads Act exclusively governs all the Council's powers with respect to the footway of a public road for which the Council is the roads authority. That case was concerned with the extent of a council's power to grant a lease, licence or right of private occupation of any part of a public road. (d)The LG Act specifically contemplates that the Council's powers under the LG Act in relation to roads do not affect Council's functions under other Acts, including the Roads Act, unless particular circumstances are met: s 633C(b).

Ground 2: amendment of Armani's development consent 45The applicants' second ground of challenge is that the smoking ban conditions in the LG Act approval granted to Armani operate to amend a development consent granted in relation to Armani Restaurant in October 2009 and that the Council has no power to do this. 46However, the relief sought is not a declaration that the smoking ban conditions are invalid but a declaration that SIPP November 2011 does not operate to amend the development consent, and an order restraining the Council from issuing an approval for outdoor dining under the LG Act restricting the operation of the development consent (prayers 2 and 3 of the Further Amended Summons). The content of this declaration is obviously correct, as the Council readily agrees, but that does not mean the declaration should be made for I consider that it does not flow from Ground 2. 47The condition in the 2009 development consent on which the applicants focus is condition 15, which provides: 15. At all times, the placement of furniture and the operation of the facility are to comply with the Footway Restaurant Approval, and Council's Outdoor Policy. A copy of the Policy is available form Council. Reason: To ensure that the location and fixing of the furniture provides for safe and clear pedestrian movement on the footway. 48The applicants submit that because condition 15 of the consent requires compliance with the "Council's Outdoor Policy" and because, as at the date of the consent, Council had an outdoor dining policy in force which permitted smoking in outdoor areas, then the effect of the imposition of the smoking conditions in the 2012 LG Act approval would be to impermissibly amend the 2009 consent. 49I do not accept the submission. In principle, I am unable to accept that conditions of approvals issued under the LG Act and the Roads Act can "amend" a development consent issued in the different statutory context of Part 4 of the EPA Act. 50Furthermore, the development consent specifically contemplates that footway restaurant approvals had to be obtained and complied with under the Roads Act and the LG Act. In that regard, condition 10 provides: 10. Prior to the placement of tables 1, 4 and 5, associated chairs, and safety barriers on the approved area, approvals under the Roads Act 1993 and the Local Government Act 1993 must be obtained and kept in force. Please contact the Property Asset Management Officer, Parramatta City Council on 9806 5000. This consent does not operate until all approvals have been obtained. Reason: To ensure that the Code's requirements are adhered to, and there is an approval for activities on Council's footways. 51Given that the development consent required approvals under the Roads Act and LG Act to be obtained, it cannot be said that when these approvals were obtained they operated to "amend" the consent. 52It is unnecessary to go further, but I observe that the point underlying this ground is an alleged inconsistency between obligations under the development consent, on the one hand, and under the no smoking conditions of the 2012 LG Act and Roads Act approvals, on the other. However, in my view there is no conflict. Condition 15 of the development consent requires compliance "At all times" with "Council's Outdoor Policy". It does not refer to the Council's Outdoor Policy as at any particular date. In my opinion, condition 15 refers to the Council's Outdoor Policy as revised from time to time. In fact, there appears to have been no Council policy called "Outdoor Policy". However, there was and is a policy called "Outdoor Dining Policy". I consider that that is the policy to which condition 15 refers. The current revised version of that policy is dated April 2012 and paragraph 5.2 refers to a smoking ban in footway restaurants. 53For these reasons, I do not accept Ground 2.

Ground 3: approval under s 68 Part E LG Act 54Ground 3, as pleaded, is that the no smoking conditions are invalid for the following reasons: (a) there is no power under SIPP November 2011 to impose any no smoking conditions on any approvals under s 68 Part E of the LG Act because that SIPP is in its terms limited to leases and licences; and (b) the smoking ban imposed by condition 7(e) of the LG Act approvals (and condition 15 of the Roads Act approvals) provides that "For the purposes of this clause, 'smoking' is the activity described in the Smoking in Public Places Policy (December 2011) adopted by Council", which in fact was not adopted by the Council. The second of these two distinct arguments disappeared from sight in the applicants' written submissions but was resurrected in its oral submissions. 55A third argument, related to the second, emerged in the applicants' oral submissions and was fully argued. It is that, under the instruments of delegation, the power of the Council's sub-delegate who issued the LG Act and Roads Act approvals could only be exercised in accordance with SIPP November 2011 adopted by the Council, and the said statement in the conditions shows that that limitation was exceeded. 56As to the first argument, a council has power under s 94 of the LG Act to determine an application under s 68 Part E subject to conditions. The source of the power is not a policy of a council. The power to impose conditions pursuant to s 94 is not at large. A condition must be "reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised, as ascertained from a consideration of the scheme and of the Act under which it is made": Allen Commercial Constructions Pty Ltd v Council of the Municipality of North Sydney [1970] HCA 42, 123 CLR 490 at 499 per Walsh J. 57The applicants submit that a condition in approvals under the LG Act imposing an obligation on the holder to ensure that no smoking occurs in the area the subject of the approval is not reasonably capable of being regarded as related to the Council's power to grant such approvals. 58Chapter 7 of the LG Act (ss 68 - 184) sets out the major regulatory functions of councils. It lists the activities that are regulated and it sets out the means of their regulation. The introduction to Chapter 7 provides that a council, in relation to a range of activities within its area, exercises regulatory functions of two main kinds, the first being that various activities can only be carried out if the council gives its approval. 59It is convenient to repeat some of the relevant provisions of the LG Act. Under s 68 Part E, approval is required to (emphasis added): 1 Swing or hoist goods across or over any part of a public road by means of a lift, hoist or tackle projecting over the footway 2 Expose or allow to be exposed (whether for sale or otherwise) any article in or on or so as to overhang any part of the road or outside a shop window or doorway abutting the road, or hang an article beneath an awning over the road. 60Section 94 provides: 94 Determination of application (1) The council may determine an application: (a) by granting approval to the application, either unconditionally or subject to conditions, or (b) by refusing approval. 61Section 89 provides (emphasis added): 89 Matters for consideration (1) In determining an application, the council: (a) must not approve the application if the activity or the carrying out of the activity for which approval is sought would not comply with the requirements of any relevant regulation, and (b) must take into consideration any criteria in a local policy adopted under Part 3 by the council which are relevant to the subject-matter of the application, and (c) must take into consideration the principles of ecologically sustainable development. (2) If no requirements are prescribed for the purposes of subsection (1) (a), and no criteria are adopted for the purposes of subsection (1) (b), the council in determining an application: (a) is to take into consideration, in addition to the principles of ecologically sustainable development, all matters relevant to the application, and (b) is to seek to give effect to the applicant's objectives to the extent to which they are compatible with the public interest. (3) Without limiting subsection (2), in considering the public interest the matters the council is to consider include: (a) protection of the environment, and (b) protection of public health, safety and convenience, and (c) any items of cultural and heritage significance which might be affected. 62As indicated by s 89, consideration of the public interest - including the protection of "public health" and "convenience" - is a factor that is to be taken into account in the determination of an application for approval under s 68 Part E of the LG Act. 63SIPP November 2011 is replete with references to the obligation of the Council to promote "public health outcomes" and to the Council's commitment to protect members of the community from the health and social impacts of second-hand cigarette smoke, and improve the natural environment and the amenity of the local area by reducing the amount of cigarette butt litter in outdoor spaces. 64It follows that the determination of an application for approval under s 68 Part E of the LG Act, which includes imposing a condition designed to protect "public health, safety and convenience", is within power under s 94 because it is reasonably capable of being regarded as related to the purpose for which the function of the Council is being exercised. 65I turn to the applicants' second argument: that the no smoking conditions described smoking by reference to the description of smoking in SIPP December 2011 "adopted by Council" when in fact it was not adopted by the Council. This description of smoking did not appear in SIPP November 2011. This is material because the description of smoking in SIPP December 2011 purported to extend the ordinary concept of smoking by the following description: "Smoke: Means to smoke, hold or otherwise have control over an ignited smoking product and Smoking has a corresponding meaning". The ordinary concept of smoking is extended by the words "hold or otherwise have control over an ignited smoking product". In my opinion, on their proper construction, the no smoking conditions were premised on SIPP December 2011 having been adopted by the Council. As they were not in fact adopted by the Council, they are inoperative or alternatively may be characterised as invalid. 66I turn to the applicants' third argument: (a) that if the Council has power, the power could only be exercised by its sub-delegate who issued the approvals under his instrument of sub-delegation in a way that was consistent with the policies and decisions of the Council; (b) the reference to SIPP December 2011 in the no smoking conditions shows that this limitation was not observed; and (c) consequently, those conditions were beyond the sub-delegate's power and invalid. 67The instrument of delegation by the Council to its General Manager of its powers, functions, duties and authorities limited the delegation by requiring the General Manager to exercise his delegated functions in accordance with and subject to "all and every policy adopted by resolution of the Council and current at the time of the exercise of the functions herein delegated". The General Manager sub-delegated relevant functions, including the approval of outdoor dining, to the Manager Strategic Asset Management in an instrument which stated that the sub-delegation "may only be exercised in a way that is consistent with the policies and decisions" of the Council. 68In my opinion, as the conditions adopted the extended concept of smoking in SIPP December 2011 which did not appear in SIPP November 2011, the sub-delegate did not exercise his delegated function in a way that was consistent with a policy of the Council, and therefore exceeded his power under the instrument of sub-delegation. In my opinion, the no smoking conditions are invalid for that reason.

Ground 4: uncertainty as to dates in Council's resolution 69Ground 4 is that there is uncertainty as to the commencement or enforcement dates of the smoking ban conditions in the LG Act approvals under the terms of the 12 December 2011 resolution, making the imposition of those conditions ultra vires. 70The applicants contend that the Council's resolution of 12 December 2011 may be construed as meaning that the smoking bans were to be imposed as from six months after that date, ie 12 June 2012, rather than 1 May 2012, which is the date from which the LG Act approvals operate. Alternatively, the applicants contend that the resolution could be read as introducing a six month lead time from the commencement of the ban on 1 May 2012, meaning that no action would be taken on the smoking ban until 1 November 2012. Declaratory and injunctive relief is sought. 71The Council's resolution of 12 December 2011 spoke at paragraph 10.3(b)(a) of "Ensuring a long 6 month lead time for implementation of the ban (to commence on 1st May 2012)". In my opinion, it is clear enough that 6 months was referred to as an approximation and that the Council's intention was that implementation and enforcement would commence on 1 May 2012. This is reinforced by reference to the 1 May 2012 date in other paragraphs of the resolution: 10.3(b)(b)(iii) and 10.3(d). 72For these reasons, I do not accept Ground 4.

THE ARMANI PROCEEDINGS 73I turn to the Armani proceedings, which primarily involve a challenge to the no smoking condition 15 in the Armani approval under the Roads Act: see above at [10].

Ground 1: no power to impose condition 15 under ss 125 or 126 Roads Act 74Armani required an approval under s 125 of the Roads Act in order to conduct a footway restaurant. An approval under ss 125 -126 may be granted on such conditions as the Council may determine: s 125(2). The power is not at large but is given "to impose conditions which are reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised, as ascertained from a consideration of the scheme and of the Act under which it is made": Allen Commercial Constructions at 499 per Walsh J. 75Armani submits that condition 15 is not reasonably capable of being related to the purpose for which the function of the Council was being exercised. It submits that the objects of the Roads Act do not include any suggestion that an approval can regulate personal behaviour. 76The objects section in the Roads Act relevantly provides in s 3(h) that one of its objects is "to regulate the carrying out of various activities on public roads" (emphasis added). 77Sections 125 -127 of the Roads Act, set out above at [12], are found within Part 9, which is headed "Regulation of works, structures and activities", and form part of Division 1 headed "Footway restaurants". In my view, they involve a broad grant of power to regulate footway restaurants. This is consistent with the fact that the Council is the owner of public roads including their footways. 78The power of councils to impose no smoking conditions in approvals granted under s 125 was recently upheld in a merits appeal in Class 1 of the Court's jurisdiction in Australian Leisure and Hospitality Group Pty Ltd v Manly Council (No 5) [2012] NSWLEC 53 per Preston CJ. His Honour upheld a contested "no smoking" condition contained in an approval issued under s 125 of the Roads Act on the basis that it "regulates use of the footway of a public road": at [96(e)]. Preston CJ granted an approval under s 125 to use part of the footway of a public road in Manly for the purpose of a restaurant in accordance with the conditions of approval in annexure A to his Honour's decision. Condition 3.6 in annexure A provides: Smoking The Proprietor shall not permit any patron or other person to smoke on any part of the Approved Area while it is occupied for restaurant purposes and shall ensure that, at all times, notices advising that smoking is prohibited are prominently displayed on each table. 79Condition 15 of the Armani Roads Act approval is in similar terms. The applicant submits that his Honour's decision was incorrect and should not be followed. I reject the submission. I respectfully agree with the decision. 80For these reasons, I reject ground 1.

Ground 2: approvals under ss 125 and 126 Roads Act 81Ground 2, as argued, relating to condition 15 of the Armani Roads Act approval, is to the same effect as Ground 3 of the challenge in the Association proceedings, which raised three arguments: above at [54] - [68]. For the same reasons that I gave in relation to Ground 3 of the challenge in the Association proceedings, I uphold the second and third arguments. I reject the first argument because the power comes from s 125 of the Roads Act and not from a policy of the Council.

Declarations re SIPPS 82The Armani proceedings also seek declarations to the effect that SIPP November 2011 was adopted by the Council's resolution of 12 December 2011 and that the Council has not adopted SIPP December 2011 which accordingly cannot be utilised by the Council "for any purpose". This is understandable because the Resource Pack included a copy of SIPP December 2011 with an endorsement indicating that the Council had adopted it on 12 December 2011. As I have found, this was wrong. However, this was properly conceded by the Council at the hearing and, as a matter of discretion, I do not think that there is any need for such declaratory relief.

COSTS 83The applicants have been successful. The normal rule in judicial review proceedings is that the unsuccessful party should pay the successful party's costs. That is the order I propose to make, subject to giving the parties the opportunity to apply for a different costs order.

ORDER 84The orders of the Court in the Association proceedings (40385 of 2012) are as follows: (1)Declaration that conditions 3(b) and 7(e) of the Activity Approvals issued under the Local Government Act 1993 s 68 Part E in April 2012 for the period 1 May to 30 June 2012 to the businesses listed in the Amended Schedule A to the Further Amended Summons are invalid. (2)The respondent is to pay the applicants' costs unless within five working days a party applies by notice of motion for a different costs order accompanied by written submissions. (3)The exhibits may be returned. 85The orders of the Court in the Armani proceedings (40536 of 2012) are as follows: (1)Declaration that condition 15 in the Notice of Approval to Use Footway for Restaurant Purposes issued under the Roads Act 1993 ss 125 and 126 in April 2012 for the period 1 May to 30 June 2012 to Armani Restaurant is invalid. (2)The respondent is to pay the applicant's costs unless within five working days a party applies by notice of motion for a different costs order accompanied by written submissions. (3)The exhibits may be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 June 2012