Medium Neutral Citation [2002] VCAT 470

The decision of the responsible authority in relation to planning permit application No TP01/205 is affirmed.

It is directed that a permit under clause 52.27 of the Melbourne Planning must not be granted for the land at 171-175 Elgin Street, Carlton.

For the applicant for review: Mr J F Larkin of Counsel, instructed by Swindon Town Planning. He called the following persons to give evidence;

* Mr Robert Steane, Licensed Enquiry Agent and former Sergeant of Police,

For the responsible authority: Mr Roger Harvey, Town Planning Consultant

For the respondent objectors: The following respondent objectors appeared in person; Mr Bill Pickford, Mr Pete Steedman, Mr Andrew Jennings, Mr Andrew McIntyre, Mr Roy Brandi, Mr Graeme Evans, Mr Alan Frost, Ms Anne Evans, Mr Tony Davis, Ms Jaquie Watts and Mr Peter Demertzidis,

1. This was an application under Section 77 the Planning and Environment Act 1987 (P&E Act) to review a decision by Melbourne City Council to refuse to grant a permit (in Permit Application No. TP01/205) to extend the hours of trading in which liquor may be consumed in an existing hotel, trading under the name Pugg Mahones, at 171-175 Elgin Street, Carlton.

2. The central issue in this proceeding is whether the additional late night on street activity resulting from an extension of trading hours, would unreasonably affect the amenity of persons occupying residential properties near to the hotel.

3. The application for permit was lodged with the Responsible Authority in February 2001. The application as originally made was for an extension of hours to 5 am on Thursday to Saturday nights. Consideration of the application was deferred for some months pending the implementation of works to address acoustic concerns over the emanation of noise from the first floor of the building, which is used for live and amplified music entertainment. These works were carried out in October 2001 and were the subject of a follow up report by Mr Crawford.

4. Following the giving of notice of the application for permit 23 objections were received. The grounds for objection were summarised in Mr Harvey's written submissions as follows: -

"* Since Pugg Malone has occupied the premises there has been a great increase in disturbance to amenity and anti social behaviour.

* Concern re sleep disturbances. People leaving hotel are noisy.

* Anti social behaviour of people leaving hotel.

* CBD is more appropriate location for proposed trading hours.

* Noise from current hotel operation is unacceptable.

* Will adversely affect abutting residential properties.

* Reasonable closing hours where businesses adjoin residential zone are:

Sunday, 10 AM to 11 PM and 7 AM to 12 midnight on other days,

These are the times which were permitted for Lemon Tree Hotel.

* Security at hotel does not extend to surrounding streets.

* Concern re tables and chairs on footpath outside hotel."

5. In correspondence dated 3 September 2001, Senior Constable Jarrod Fox of the Melbourne FIST (that is the police section dealing with the liquor complaints and issues) made the following recommendation to the Station Commander Files and Enquiries, Melbourne City Police, Sergeant Frank Holzer. Senior Constable Fox's correspondence, a copy of which was appended to Mr Harvey's submission, reads as follows:

"On the 30th of November 2001 the Melbourne F.I.S.T office received an application for a variation at Pugg Mahones which is situated at 171-175 Elgin Street, Carlton.

The objection to the application is as a result of the following:

i) F.I.S.T currently has an outstanding complaint file on Puggs that is being investigated. The complaint relates to excessive noise emanating from the premises and poor patron behaviour upon leaving the premises.

ii) Carlton Police have noticed a significant increase in the number of incidents occurring at the premises since it has been opened. These incidents include an increase in the number of drunks removed from the premises and the amount of times security attend at the Carlton Police station requesting assistance. Carlton police are of the opinion that an extension of hours would only exacerbate the current problems associated with the premises.

As a result of the above information, I recommend an objection be lodged by the Licensing Inspector in relation to the application.

Report forwarded for your information and consideration."

6. A memo dated the following day to the licensing inspector, a copy of which was also appended to Mr Harvey's submission, stated as follows:

"I concur with the comments made by Senior Constable Fox. I believe the grant of such a variation could be detrimental to the amenity of the area."

7. It is apparent that at the time of this correspondence the application for variation referred to was for 5 am.

8. In a decision dated 19 September 2001, the Responsible Authority's delegate determined to refuse to grant a permit on the following ground:

"The proposal will detract from the amenity of the nearby properties by reason of noise, disturbance and poor patron behaviour upon leaving the premises.

9. The subject application for review was lodged with the Tribunal on 14 February 2002. The sole ground of review was in effect to refute the Responsible Authority's ground for refusal.

10. At the commencement of the hearing and pursuant to Clause 64 of Schedule 1 of the Victorian Civil and Administrative Act 1998 (VCAT Act) Mr Larkin requested the Tribunal to amend the application for permit by altering the hours of extended trading to no more than 3 am on Thursday, Friday and Saturday night. The hotel is presently licensed to trade to 1 am from Monday to Friday nights, to 3 am on Saturday night and to 11.30 pm on Sunday night. As submitted by Mr Larkin this amendment would enable an extra 2 hours trading on a Thursday and Friday night.

11. Notice of this proposed amendment had been given to some of the parties by facsimile transmission dated 20 June 2002.

12. There were was no objection to this amendment. Being also of the opinion that it would be appropriate to so amend the application, I made the amendment in the manner requested.

13. At the hearing the Respondent Objectors, except for Messrs Pickford, McIntyre, Evans and Davis, presented oral submissions based on their statements of grounds. The gentlemen just mentioned, as well as the representatives for the Responsible Authority and the Applicant for Review, tabled and spoke to written submissions. These, together with the witness statements of Messrs Steane, Campbell and McGurn and the plans, photographs and other material tabled in the course of the hearing, have been attached to the Tribunal's file. The licensee Mr McCumber, who was called on short notice, gave his evidence orally.

14. Following the hearing I inspected the subject land and surrounding neighbourhood in order to obtain a clearer understanding of the submissions and evidence given.

15. The subject land which is on the south west corner of Elgin and Drummond Streets, is occupied by a two storey Victorian hotel building known until recently as Stewarts Hotel. The site has frontages of approximately 20 metres to both Elgin Street at the front and Court House Place to the rear. It has a side boundary of approximately 18 metres to Drummond Street.

16. I was advised that in early 2001 the permit applicants spent approximately 1 million dollars on refurbishment of the building and it was subsequently opened as Pugg Mahones. The ground floor of the hotel is set up with various bars and lounge areas having an Irish theme. Much of the first floor is occupied by a sound stage and entertainment or dance area. It was this area that was acoustically treated in an endeavour to meet the noise limits of State Environment Protection Policy N2 (Control of Music Noise) from public premises. I was advised that these works cost approximately $70,000. It was Mr McCumber's evidence also that he is now the owner of one apartment and the lessor of another in a development comprising six apartments located above and to the rear of Mr Pickford's chemist shop which abuts the hotel to its west. These apartments are accessed via Court House Lane. The apartment purchased by Mr McCumber is Unit 1 which immediately abuts the music stage area.

17. The following description of the surrounding neighbourhood is taken from Mr Harvey's written submission, the words in square brackets are my own:

"The land west of the site and extending to a petrol station on the corner of Elgin and Lyon Street is occupied by a commercial strip occupied by (west from Pugg Mahones), a chemist, solicitors office, restaurant, tobacconist/gift shop, furniture shop and phone shop. The area above the chemist is occupied by six (6) residential apartments that have their pedestrian and vehicle access from Drummond Street along Court House Place which also defines the southern boundary of the Hotel (Permit TP96/890 issued 21 November 1996).

Land on the north side of Elgin Street is occupied by a variety of commercial uses, mostly of a service and office nature. A number of the premises are currently vacant.

Land south of Court House Place is occupied by an historic former court building, now used as a commercial theatre. Further south is the rear of Lygon Court, a major commercial development with supermarket, shops and underground car park with access from Drummond Street.

The south east corner of Elgin and Drummond Street is occupied by a lofty three storey Victorian building used as a coffee shop and catering premises at ground level and what appears to be residential use at upper levels [as advised Mr Steedman, the upper floors of this building are indeed used for residential purposes. Mr Jennings is an occupant of one of the dwellings]. Further south (along Drummond Street) are two vacant building previously used as a printing works and bookshop before the historic Carlton Police Station, South of the Police Station, at 328-330, Permit TP00/1402 has recently been granted (13 March 2002) to allow the construction of two, three storey buildings for use as 12 dwellings.

While the northern corners of Elgin and Drummond Streets are occupied by commercial buildings, immediately north of this is the commencement of a consistent residential area comprised of a mix of flats, infill and original Victorian dwellings.

Drummond Street has a wide and treed median both north and south of Elgin Street.

The intersection of Elgin and Drummond Street is not signalised, but a signalised pedestrian crossing is located immediately opposite the Hotel on Elgin Street. Pugg Mahones has kerbside tables and chairs at this part of Elgin Street."

18. The subject application for permit is made under Clause 52.27 of the Melbourne Planning Scheme. This clause is titled "Licensed Premises". The clause applies to premises licensed or to be licensed under the Liquor Control Reform Act 1998. This clause provides, inter alia, that a permit is required "to use land to sell or consume liquor if any of the following apply:

* the hours of trading allowed under any license are to be extended."

19. A schedule to the clause may specify that a permit is not required under this control and I was advised that the central city area is exempted from the control but not other parts of the City of Melbourne.

20. The subject land is zoned Business 1 under the Melbourne Planning Scheme, as is all of the land fronting Lygon Street south of Elgin Street as well as most of Elgin Street, east of Lygon Street. Beyond these Business 1 Zone strips, land in Carlton, north of Grattan Street, is zoned Residential 1.

21. It is important to understand that when considering applications for permit under the controls established by the Melbourne Planning Scheme, or any other VPP format planning scheme, that the planning scheme is the "implementation tool" for the State and Local Planning Policy Framework articulated within the planning scheme. Relevantly, at clause 20, referring to the operation of the Local Planning Policy Framework, it is stated that the Municipal Strategic Statement "provides the strategic basis for the application of the zones, overlays and particular provisions of the planning scheme and decision making by the Responsible Authority." Relevantly also Clause 20 goes on to refer to the operation of local planning policies - namely those set out at Clause 22 of the scheme. The following is an extract from this part of the clause:

"Local planning polices are tools used to implement the objectives and strategies of the Municipal Strategic Statement_._

A Local Planning Policy (LPPF) is a policy statement of intent or expectation. It states what the Responsible Authority will do in specified circumstances or the Responsible Authority's expectation of what should happen. The LPPF gives the Responsible Authority an opportunity to state its view of a planning issue and its intentions for an area. An LPPF provides guidance to decision making on a day to day basis. It can help the community to understand how the Responsible Authority will consider a proposal. The consistent application of policy overtime should achieve a desired outcome." (emphasis added)

22. Before deciding on any application for permit under this scheme the Responsible Authority (and therefore this Tribunal on review) must consider, as appropriate, the decision guidelines set out at Clause 65.01 of the scheme. This clause opens with the following statement:

"Because a permit can be granted does not imply that a permit should or will be granted. The Responsible Authority must decide whether the proposal will produce acceptable outcomes in terms of the decision guidelines of this clause."

23. The decision guidelines at clause 65 that are relevant to this application are as follows:

"* The State ... and Local Planning Policy Framework ....

* The purpose of the zone ... or other provision

24. The stated purpose of the Business 1 Zone, apart from implementing the State and Local Planning Policy Framework, is:

"To encourage the intensive development of business centres for retailing and other complementary commercial, entertainment and community uses."

25. Within this zone a hotel is a section 2 use in the table of uses at clause 34.01-2. Establishment of a hotel therefore requires a permit pursuant to Clause 31.01-2 of the scheme. The subject land has been used as a hotel for very many years prior to the advent of the Victoria Planning Provisions Melbourne Planning Scheme. As such the provisions at Clause 63, referring to existing uses, apply.

26. An existing use right obviates the need for lawfully established uses to obtain a planning permit upon the advent of a new planning scheme. At clause 63.05, a use for which an existing use right is established may continue provided that no building or works are carried out without a permit, that any condition or restriction to which the use was subject continues to apply and provided the amenity is not damaged or further damaged by a change in the activities beyond the limited purpose of the use preserved by the existing use right.

27. In recognition of the difficulty in controlling changes to hotel trading hours, where such uses are invariably protected by the existing use provisions of the Scheme and the Act, the State Planning Provisions at Clause 52.27 make specific provision in relation to the use of land for the sale and consumption of liquor. Under this clause, notwithstanding that a hotel has existing use rights, a planning permit is specifically required, among other things, when it is proposed to extend the hours of operation within which alcohol may be sold or consumed. I think it open to find that the inclusion of this provision in the scheme is in response to a recognition that changes to licensing hours and classes of licenses can and do have off site impacts depending on the location of the premises in question and that the regulation of such impacts is properly the province of town planning control.

28. The provisions of the State and Local Planning Policy Framework most applicable to this application were referred to in some detail by Messrs McGurn and Harvey.

29. Of greatest relevance to this particular application is the Local Planning Policy at Clause 22.15 titled "Lygon and Elgin Street Shopping Centre". This policy is stated to apply to the Lygon and Elgin Street Shopping Centre and surrounding area as depicted on a map set out within the clause. The area encompassed by the map extends from Queensberry Street to the south to Palmerston Street to the north and from Swanston Street to the west to Rathdowne Street to the east. Accordingly it encompasses not only the Business 1 zoned land of Elgin and Lygon Streets, but the Residential 1 and Mixed Use zoned land forming what might be said to be a "hinterland" to this commercial precinct.

30. Because the policy is not unduly long I find it useful to set out in full below:

The Lygon/Elgin Street shopping centre has a dual role of providing for the convenience shopping needs of the local residential and working community and the needs of the metropolitan population in terms of entertainment and eating establishments. The Municipal Strategic Statement identifies Lygon Street as a major retail area where a diversity of retail and local convenience premises are encouraged. The success of the street in fulfilling this dual role is dependent on a broad mix of shops, and food and drink premises. In accordance with the Lygon Street Action Plan 1984, Lygon Street north (north of Grattan Street) and Elgin Street are the local retailing and community focus of the areas, and Lygon Street south (south of Grattan Street) is the regional restaurant and entertainment focus_._

* To ensure the Lygon/Elgin Street shopping centre retains its dual local shopping centre and regional restaurant/entertainment role.

* To encourage a range of eating and entertainment facilities to develop in areas where these uses will cause the least detriment on the shopping centre and residential areas_._

* To maintain a local shopping centre role to help promote residential development in the surrounding area_._

* To discourage the extension of retail, entertainment and restaurant uses from Lygon Street into surrounding streets.

In Lygon Street north (north of Grattan Street) and Elgin Street:

* A wide variety of shops to serve the needs of the local community should be maintained and enhanced.

* The continuity of the street-level shop frontages and tenancy mix should be maintained and enhanced.

* Conversion of shop fronts to non-shop uses should be discouraged.

* Restaurants, convenience restaurants, hotels, motels and takeaway food premises should be discouraged in adjacent residential and mixed-use areas.

In Lygon Street south (between Grattan and Queensberry Streets):

* New uses and development should complement the tourist/ entertainment role of the area.

* Entertainment and restaurant uses should be promoted_._

Before deciding on an application the Responsible Authority, must consider:

* Whether the continuity of shop frontages in Lygon Street north and Elgin Street is maintained.

* The existing and future amenity of the land and the surrounding area including abutting residential uses_._

* The type of liquor licence, if any_."_ (emphasis added)

31. The policy very clearly distinguishes between that part of the shopping centre to the north of Grattan Street, which has an interface with Residential zoned land and that part south of Grattan Street which interfaces with the broad swathe of mix use zoned land that separates Carlton from the CBD. South of Grattan Street is where entertainment and restaurant uses are to be promoted and very relevantly for this application, the objective is for entertainment facilities to be encouraged where they will cause "the least detriment" to residential areas. Relevantly also, an objective is to ensure that the local shopping role of the centre is maintained in order to "help promote residential development in the surrounding area".

32. Mr McGurn, when questioned about the distinction drawn in the policy between land to the south and north of Grattan Street, expressed the view that had this been an application for the establishment of a new hotel it should not be supported at this location. It was his view however that as these premises have the benefit of an existing use right - and a long established one at that - the distinction made in the policy was less relevant. I am not persuaded that this is so.

33. The requirement for a planning permit to trade later provides an opportunity to consider the consequences of extended trading hours at this rather than any other location within the shopping centre. The locational characteristics or qualities of this particular site must therefore be considered. The local planning policy distinguishes between the various parts of the Lygon Street precinct, preferring some areas over others. Having regard also to the different interface between the commercial strip and the mixed use area south of Grattan Street, I think it understandable why specific mention is made for the more southerly area to be actively promoted for entertainment and restaurant uses. In Lygon Street north and in Elgin Street, a more local community focus is to be maintained and enhanced.

34. None of the parties to this proceeding disagreed that persons living at the interface of, or indeed within, a vibrant commercial/tourist/eating and entertainment hub such as the Lygon Street precinct, should expect the sort of residential amenity that might be anticipated in a more suburban location. Neither indeed did they suggest that for persons at the interface there was any real prospect of enjoying the sort of amenity experienced by residents of the more "homogenous" residential parts of Melbourne referred to at Clause 21 - Aim 4.5 of City Plan (the Municipal Strategic Statement). Under Aim 4.5, which is to make Melbourne even more liveable by improving amenity, safety and access, the following very realistic statement is set out:

"In some areas there has been conflict between the amenity expectations of new residents and the operating requirements of late night entertainment venues and industry. The lifestyle offered in different parts of the city will vary. While living in the CBD and mixed use areas provides excellent access to shops, restaurants and views and entertainment, there is often noise and activity in these locations that will not be acceptable in a residential neighbourhood.

Homogenous residential zones are quieter and should be protected from encroachment of incompatible uses, including late night and other uses such as gaming or sexually explicit entertainment."

35. Clearly also the Local Planning Policy Framework and indeed the Council's recently adopted Integrated Local Area Plan for Carlton "Carlton a Vision to 2010", recognise the important role - both socially and economically - which is performed by the Lygon Street precinct. At page 13 of the Integrated Local Area Plan - a similarly relevant observation is made:

"Amenity requirements of residents should not threaten the purpose of the mixed use and business zones. Residents living in or adjacent to these zones cannot expect the same level of amenity in regard to noise and activity as residents in more isolated residential zones."

36. This integrated local area plan does not of course form part of the planning scheme and therefore the gazetted planning policy framework underpinning that scheme. Nevertheless I do not consider that the statement quoted above and referred to so specifically by Mr McGuran, was denied to any significant degree by the respondent parties to this proceeding. Most of respondent objectors, when making their submissions, recognised that some level of disruption must be expected so close to such a vibrant centre.

37. The question to be decided here however is at what point can the level of disamenity be found to be no longer reasonable. It was submitted on behalf of the permit applicant that with careful management this Hotel could be operated to 3 am on Thursday to Saturday nights in a manner that did not unreasonably affect the amenity of residents at the interface of this commercial precinct. Careful management, applying some of Mr Steane's suggestions would include:

* not allowing entry into the premises during the last hour of operation,

* concluding entertainment thirty minutes before closing time,

* engaging staff members armed with buckets to patrol the vicinity of Elgin and Drummond Street to wash away evidence of urine and vomit and if need be, to collect disposed of bottles or cans,

* engaging crowd controllers that are more proactive than those presently engaged, who would encourage patrons to reduce the volume of their voices whilst they remained outside the premises and to move on instead of remaining outside the premises.

38. Mr Steane's other principle recommendation was for the introduction of a taxi rank in Elgin Street. In his opinion these measures would result in smaller groups of persons congregating outside of the hotel in the period leading up to closing time. It was his view that smaller groups were less likely to generate a life of their own, thereby providing a reason to remain out on the street.

39. Mr Steane observed the premises on five nights, only one of which was a Saturday night when trading is already authorised to 3 am. Whilst on no occasion was any violence or significantly anti social behaviour observed, invariably a number of the patrons were loud and exuberant. Notably also, yelling was consistently recognised. Under cross examination he stated that from within his parked car, outside the dwellings on Drummond Street, north of Elgin Street, he "couldn't hear much".

40. On none of these five nights did Mr Steane state how many patrons had been accommodated. He did however suggest that fifty different people located on a footpath in five different groups will invariably speak loudly. In another very recent hotel case (application for review P294/2002 Gammar v Stonnington City Council) acoustic evidence given by Mr Graeme Harding, a principal of Mr Campbell's firm, confirmed that persons exiting a noisy venue, where there is a need to raise one's voice, are likely to maintain a raised voice outside the venue until such time as they adjust to the different acoustic environment. It is hardly surprising therefore that patrons leaving a late night entertainment venue, where live bands are playing, will be noisy upon exiting the premises.

41. Mr Steane's observations of over 5 nights with only one being a Saturday night, must be weighed against the testimony of the resident objectors. I have to say that I found the consistency of their statements in relation to yelling on the street and to fighting, vomiting and urinating in front of dwelling, to be persuasive and not entirely at odds, in any case, with Mr Steane's evidence. I find also that the fact that Mr Evans is a company executive with BHP Billeton and Mr Brandi is a Senior Constable of Police at Melbourne City Police assists me in accepting the credibility of their observations. In the case of Mr Evans, this included a fight at his doorstep in January this year when he was told to "get back inside or you're next". In the case of Mr Brandi, a diary kept by him in recent weeks makes frequent references to yelling and screaming after 11.00 pm. He had also observed yelling from the hotel itself. It was his submission also that in summer, when bedroom windows are open, the noise from such on-street activity is even more audible.

42. Mr Steane advised that on the morning of his giving evidence, he had rung a Senior Sergeant Ashlar, Officer In Charge of Carlton Police Station. Senior Sergeant Ashlar had told him, contrary to the correspondence referred to above between Senior Constable Fox and Sergeant Holzer, that he has "no problems with Pugg Malones. It's a good pub". Without calling Senior Sergeant Ashlar I can give little weight to this different view.

43. Under re-examination Mr Steane acknowledged that there is an increasing phenomena within the hotel and entertainment industry for persons to not start their entertainment activities until at least midnight. Accordingly, where a venue closes at 1.00 am patrons may still be in a party mood because, as he put it, they are not ready to go home. In his opinion by extending the hours to 3.00 am, patrons were more likely to leave the premises as it suited them meaning that large congregations with a life of their own were less likely at closing time. He omitted to give an opinion, however on the effect of the premises accommodating more people at a later hour. If more are attracted then even if they leave gradually, the resultant numbers on street at any one time may be little different to the numbers now, except that the hour will be even later.

44. Whilst I accept the sense of Mr Steane's observations about letting people leave at the time it suits them, I found his evidence pointed also to the very different nature of a premises that can trade until 3.00 am. When closure must take place at 1.00 am such premises are less likely to be attractive to persons whose evening entertainment commences at midnight.

45. Should this premises be granted a permit to operate till 3.00 am on Thursday and Friday nights it can be reasonably anticipated that more persons will arrive later because they can stay longer. This premises is licensed to accommodate up to 500 persons at the one time and may well do so; if it adopts a late night entertainment role.

46. With the best will in the world on the part of the management and even with proactive security, a taxi rank, graduated music and entry times and staff assigned to mopping up duties, I cannot be persuaded that there would be other than a significant reduction in the amenity of persons residing within say 100 metres of this site. For this activity to be occurring at and beyond 3.00 am is, I find, an unacceptable outcome having regard to the objectives of the Local Planning Policy for entertainment facilities to develop in areas where they will

cause least detriment to the residential area. Put simply, its position at the outer edge, or residential interface of this commercial precinct is not a suitable location for such a late night venue.