Randall Pty Ltd v Willoughby City Council

Asserted error of law 12 To understand the relevant error of law, as identified by the Claimant, it is necessary to have regard to the language of the statutory provision, namely s 79C(1)(b) of the EP&A Act. That provision reads: " 79C Evaluation (1) Matters for consideration - general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application: … (b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality."

As noted above, s 96(3) made that provision relevant to the determination of an application for modification of a consent. It is also convenient to note that the EP&A Act contains a definition of "development" which includes "the use of land". 13 Most of the argument in the case turned on the indirect impact which the imposition of a fee during the first two hours of parking might have on retail and commercial businesses within the Regency. The relevant "impacts" were treated as extending to the possible consequential changes in behaviour of potential customers of those businesses. There was no suggestion that indirect impacts were not properly covered by the provision, nor was it suggested that speculation as to the possible behaviour of future customers was too remote. Nevertheless, the direct, and perhaps tacitly assumed, impact would be on the persons who would in the future use the car parking facility and be required to pay a fee. 14 The argument put both clearly and succinctly on behalf of the Claimant was that the Commissioner's findings of fact could be summarised as follows:

(1) People who presently use the parking facility in the Regency in order to visit relevant businesses there may park somewhere else in the locality if a fee were imposed for the first two hour parking period.

(2) Those persons who are induced by the imposition of the fee to park elsewhere may take their business elsewhere in the locality.

(3) As a result, businesses in the Regency may be adversely affected.

The error in this reasoning was encapsulated in the following two propositions: (a) the effects or impacts so identified were purely economic and had no affect on the amenity of the locality; (b) because business might be taken elsewhere in the locality, this was a 'zero sum game' with no overall adverse economic impact on the locality.

Each of these considerations was said to fall outside that which could properly be addressed as a mandatory factor identified by par (b) of s 79C(1). 15 The Claimant, for the purposes of this argument, did not need to suggest that the matters taken into account by the Commissioner were irrelevant, in the sense of impermissible, considerations. The submission was rather that the Commissioner had, at least implicitly, identified the economic impacts of the proposal as a matter of relevance to the variation of the consent and had thereby accepted that they fell within s 79C(1). However, the Commissioner did not expressly state that they fell within s 79C(1), nor, in particular, par (b) thereof. Although this point was not expressly addressed by the parties, when so identified, the Claimant's argument meets a significant legal hurdle. If, properly understood, the factors which the Commissioner addressed did not fall within the scope of the mandatory considerations, but were not impermissible considerations, there was no error of law in addressing them. The Claimant's case was a negative one: it did not seek to establish that there was in fact a mandatory consideration which had not been taken into account. Its argument was limited to the proposition that the matter which was taken into account did not fall within the mandatory considerations, properly identified. This does not establish that the Commissioner made a material error in deciding a question of law. 16 In some cases it is arguable that treating a discretionary factor as a mandatory consideration may constitute an invalidating error. No such argument was mounted in this case. Thus the only basis on which the Claimant could succeed would be if the matters considered by the Commissioner were irrelevant considerations. It is possible that the Claimant's argument could be so understood, but it would require radical reconstruction, which the Court should not undertake, for four reasons. First, there is no express statutory constraint of the kind suggested. That need not be fatal, but the argument must then rely on an implication derived from the subject matter, scope and purpose of the EP&A Act and, arguably, subsidiary legislative instruments, in accordance with well established principle: see Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505 and Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-86) 162 CLR 24 at 40 (Mason J). The Claimant eschewed that approach and focused solely on s 79C(1)(b). 17 Secondly, even if the Claimant did not wish to put its case comprehensively, by reference to the statutory scheme as a whole, the Respondent was entitled to notice of such an argument, so that it could respond to it. 18 Thirdly, the conclusion which must follow from such an argument is that the Commissioner constructively failed to exercise his jurisdiction on the basis of a point not articulated before him. The Court can be satisfied that it was not so raised below, because the parties joined in presenting evidence before the Commissioner of precisely the economic impacts which were taken into account by him in a way which is now challenged. At least implicitly, the parties must have invited him to take that material into account and it is at least a powerful discretionary consideration on a leave application, that the Claimant should not be allowed now to complain that the Commissioner did just that. 19 Fourthly, if the Commissioner was not asked to, and did not, decide the question of law now raised, it is doubtful whether the statutory appeal jurisdiction, under ss 56A and 57 of the Land and Environment Court Act, could properly be invoked. The appropriate relief should be found in the judicial review jurisdiction of the Court. The nature of the argument presented was not directed to the appropriate issues relevant to such relief and the Commissioner was not joined as a party to the proceedings: see SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 at [42] and [43] (McHugh J); [90] and [91] (Gummow J); [153] (Kirby J); [180] Hayne J. The radical reconstruction required to mount such a case should not now be undertaken. 20 It follows, in my view, that leave to appeal should be refused. However, because the contentions raised on the appeal, did not go to these matters, it is appropriate to deal with the case as argued. In my view, the legal error identified by the Claimant is in any event misconceived for the reasons noted below.

Economic impact as a planning matter 21 The first concerns the complaint that the matters considered had no effect on "the amenity of the locality". The precise meaning of this phrase was not explored, and it was adopted by way of contrast to the correlative proposition that the economic impacts considered merely affected the viability of businesses within the Regency vis-à-vis their business competitors in the locality. Such an impact on competition was said not to be a relevant impact in "an environmental and planning respect". 22 Evaluation of this argument commences with the proposition, accepted by the Claimant, that no such limitation is imposed expressly on the terms of s 79C(1). Rather, the limitation is said to derive from the statutory context, broadly understood, together with a line of case law derived from dicta in judgments of the High Court in Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675. In particular, the Claimant took the Court to a passage in the judgment of the Chief Justice and a passage in the judgment of Justice Stephen, noting that Gibbs J, Mason J and Aickin J agreed with Stephen J. The comment by Barwick CJ was expressed in the following terms at 681, his Honour having determined that the appeal should be allowed for other reasons: "However, because a misapprehension as to the permissible scope of a planning authority's consideration in deciding whether or not to grant a planning permit ought not to be allowed to persist, I desire to say that it is my opinion that economic competition feared or expected from a proposed use is not a planning consideration within the terms of the planning ordinance governing this matter. … Restraint or prevention of economic competition is not, in my opinion, part of the orderly and proper planning of the zone to which cl 7(2) refers. The expression in ground 5(c) of the order nisi, 'the economic viability of the adjoining area', is at best ambiguous. If it means simply the effect of competition by the proposed use with existing uses of property in the area, it does not express a relevant ground. If it means the proposed use will be destructive of the amenity of the neighbourhood, giving amenity a wide connotation, it may afford particulars of a general ground relating to the maintenance of the amenity of the neighbourhood. However, so far as appears, the former is the meaning attached by the parties to this particular ground. They were in agreement that the proposed use did not threaten the amenity of the neighbourhood." 23 The passage in the judgment of Stephen J appears at 687, in the following terms: "If the shopping facilities presently enjoyed by a community or planned for it in the future are put in jeopardy by some proposed development, whether that jeopardy be due to physical or financial causes, and if the resultant community detriment will not be made good by the proposed development itself, that appears to me to be a consideration proper to be taken into account as a matter of town planning. It does not cease to be so because the profitability of individual existing businesses are at one and the same time also threatened by the new competition afforded by that new development. However, the mere threat of competition to existing businesses, if not accompanied by a prospect by a resultant overall adverse effect upon the extent and adequacy of facilities available to the local community if the development be proceeded with, will not be a relevant town planning consideration." 24 These two extracts form the source of the Claimant's argument that one must have an overall adverse effect upon the amenity of an area and that increased competition as such will not satisfy that test. The second limb of the Claimant's attack, referring to a "zero sum game", picked up the other side of the same idea, namely that if a financial detriment to businesses in the Regency was, as the Commissioner appears to have assumed, likely to be picked up as a benefit by other businesses in the locality, no adverse economic impact had been established. 25 As the Claimant noted, the reasoning in Kentucky Fried Chicken has been adopted in later cases dealing with different statutory planning provisions. It is therefore necessary to consider the intended operation of these dicta, in their own statutory context. Such a limitation is made express in the comments of Barwick CJ, but there is no reason to suppose that other members of the Court were seeking to impose some general constraint on planning laws, as adopted by different legislative instruments, from time to time. The statutory context was identified in the judgment of the Chief Justice in the following terms (at 679): "The statutory provision relevant to the appellant's application for a permit is cl.7 of the Planning Scheme Ordinance of the Melbourne Metropolitan Planning Scheme. It is as follows: (1) Subject to the provisions of this Ordinance, land within the zone described in a Section of the Table to this Clause - … (c) may subject to the permission of the responsible authority be used for any of the purposes specified or included in Column 4 of such Section. (2) The responsible authority having regard to the primary purpose for which the land is zoned, the orderly and proper planning of the zone, and the preservation of the amenity of the neighbourhood may refuse its permission for the use of land … ."

It may thus be seen that two of the considerations to be taken into account by the authority were "the orderly and proper planning of the zone" and "the preservation of the amenity of the neighbourhood". This language is significantly different from the terminology employed in s 79C(1) of the EP&A Act. 26 The later New South Wales authority relied on included a number of decisions of the Land and Environment Court. This line of authority commenced with the scope of former s 90(1)(d) of the EP&A Act, which was the predecessor to s 79C(1)(b). The chapeau to the earlier subsection did not differ in any presently relevant sense from the opening words of s 79C(1) set out above. However, paragraph (d) was worded differently to the present provision: "(d) the social effect and the economic effect of that development in the locality."

Paragraph (o) referred to "the existing and likely future amenity of the neighbourhood", whilst par (q) referred to "the circumstances of the case". Section 90 contained no reference to the "environmental impacts" now referred to in the first limb of s 79C(1)(d). 27 In Fabcot v Hawkesbury City Council (1997) 93 LGERA 373, Lloyd J considered an appeal against the refusal to grant consent to a development application for a Woolworths supermarket. One of the grounds of refusal, known as issue (5) was as follows: "(5) The proposed supermarket is considered to have an adverse economic impact on existing and planned retail supermarkets within the Hawkesbury city local government area."

That factor was considered in relation to s 90(1)(d) of the EP&A Act and was said to be "of no relevance": at 379. That conclusion was reached after reference to the passage from the judgment of Stephen J in Kentucky Fried Chicken set out above. 28 This case was, as counsel for the Opponent Council before this Court noted, one of a number of cases in which the question of competition with existing businesses was considered with respect to a development application to set up a new business. That was not the situation presently in issue. 29 Nevertheless, a series of dicta of Lloyd J in Fabcot bear a resemblance to the argument presented in the present case by counsel for the Claimant. His Honour stated at 378: "Section 90(1) is limited to environmental and planning considerations ( Liu v Fairfield City Council …). For example, s 90(1)(d) relating to the social effect of a proposal does not relate to moral considerations, for which the criminal law is the appropriate regulatory vehicle: it is not for local government councils for this court to assume the mantel of moral arbiter ( Liu v Fairfield City Council )."

Pausing at that point, it should be noted that Murrell AJ in Liu v Fairfield City Council (1996) 130 LGERA 230, in a series of applications dealing with proposed brothels and an "adult swingers club", did give consideration to the relevance of "community moral standards" in relation to determination of the development applications. However, the two passages in her Honour's judgment which may have led to the summary set out in Fabcot , were as follows (at 233): "Morality is concerned with abstract matters of right and wrong, good and evil. Generally, s 90 is concerned with concrete planning matters. The capacity of councillors to inquire into and determine a predominant public standard on a matter of morality must be doubted. It would be surprising if a council acting as consent authority under s 90(1) was required to consider matters ranging as far from concrete planning matters as might issues of morality."

Her Honour also stated at 235: "Section 90(1)(d) extends the scope of what were traditionally regarded as planning considerations … . However, this head of consideration is not open-ended. Rarely, if ever, could material establishing personal upset and offence, or the fears some individuals may hold about a potential for moral corruption, demonstrate that a particular development in a particular locality would have a detrimental social effect." 30 In Fabcot, Lloyd J continued at 378: "Similarly, economic competition between individual trade competitors is not an environmental or planning consideration to which the economic effect described in s 90(1)(d) is directed. The Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) are the appropriate vehicles for regulating economic competition. Neither the Council nor this Court is concerned with the mere threat of economic competition between competing businesses. In an economy such as ours that is a matter to be resolved by market forces, subject to the Trade Practices Act and the Fair Trading Act . It is not part of the assessment of a proposal under the Environmental Planning and Assessment Act for a consent authority to examine and determine the economic viability of a particular proposal or the effect of any such proposal on the economic viability of a trade competitor. Moreover, it is at least arguable from the fact that the Trade Practices Act now applies to local government councils, that if a local council were to refuse or to limit a proposal for development on the ground of competition with a trade competitor, it could be guilty of anti-competitive conduct contrary to Part IV of that Act." 31 Putting aside any possible Constitutional constraint arising from the operation of Part IV of the Trade Practices Act, which would require careful consideration and was not relied upon by the Claimant in the present case, there is a danger in seeking to identify a pattern of exclusive characterisation which would place economic competition within one statutory framework and planning considerations within another. Constitutional requirements aside, there is nothing which requires the State Parliament to adopt such a legislative dichotomy. Whilst his Honour did not propose any such strict dichotomy, the legal construction adopted by the Claimant in the present case came close to such an approach. That approach gains no support from the more restrained articulation of principle in Liu. 32 The primary authority in the Land and Environment Court on which the Claimant relied was Cartier Holdings Pty Ltd v Newcastle City Council (2001) 115 LGERA 407: the discussion of the current provision, at [20]-[34] thereof, placed extensive reliance on the reasoning in Fabcot set out above. In Cartier, Pearlman J sought to steer a course between the relatively restrictive construction adopted by Lloyd J in Fabcot and a broader approach derived from the judgment of Bignold J in City West Housing Pty Ltd v Sydney City Council (1999) 110 LGERA 262. With reliance on the objects set out in s 5 of the EP&A Act, her Honour concluded at [34]: "That indicates, in my opinion, that the phrase 'economic impacts in the locality' is to be understood in an environmental and planning sense. Hence I would agree with Lloyd J in [ Fabcot ] that the economic impact of a proposed development upon private individual traders is not per se a proper environmental or planning consideration, and I do not think that the decision of Bignold J in City West Housing Pty Ltd v Sydney City Council is, properly understood, authority to the contrary. It is simply not competition as such which is encompassed by s 79C(1)(b). It would be unwise to attempt to categorise the type of economic impact which would properly fall to be considered under s 79C(1)(b), for, of course, each case depends upon its own facts, but it is clear, in my opinion, that the section does not require the consideration of economic impact on individual competitors, except to the extent that any impact upon individual competitors, or competition generally, demonstrates economic impact in the locality as an environmental or planning matter." 33 Three points need to be made in relation to this passage and the general line of authority. First, in considering the historical development of planning law, it is useful to refer to the consideration by Bignold J in City West which extended not only to Kentucky Fried Chicken, but to authorities in this State dealing with the relevance of economic matters. After reference to several decisions of Else-Mitchell J in relation to the earlier planning legislation found in the Local Government Act 1919 (NSW), Bignold J concluded at [137]: "However, whatever be the position under the previous law, the enactment in 1979 of the EP&A Act materially and radically changed the scope of planning law in this State. No longer could it be said, in the face of s 90(1)(d), that economic or social considerations were irrelevant to the determination of a development application."

That conclusion is reflected in the qualification accepted by Pearlman J in the last sentence of the passage in Cartier set out above. 34 Secondly, reliance upon the objects of the legislation, set out in s 5, which "are very wide in their ambit" (to adopt the words of Pearlman J), provides little assistance in construing specific statutory provisions. The objects are of greater use in seeking to ascertain the limits of a consideration such as "the public interest", set out in s 79C(1)(e). 35 Thirdly, the suggested limitation of s 79C(1)(b) to only those economic impacts which can be described as "an environmental or planning matter" is unclear both as to the extent and the justification for the limitation. Leaving aside the question of "environmental", which is not relied upon by the Claimant in the present circumstances, the concept of a "planning matter" is largely meaningless as an implied constraint. The EP&A Act may reasonably be described as "planning legislation": those factors which it prescribes as mandatory or discretionary considerations may therefore be described as "planning matters". There is no independent point of reference to avoid circularity. In my view, it is neither necessary nor appropriate to impose such a gloss on the language of par (b) of s 79C(1). That is not to say that all economic impacts are mandatory considerations, but rather that any limitation must be specific and justified. 36 It remains, of course, to consider whether there is some inviolable constraint on the statutory concept, which has been contravened in the present case. At the point of greatest limitation, it may be argued that the economic impact of a proposal on the application for development consent may not be the kind of impact which should be considered. Nevertheless, as is illustrated by the judgment of Kerr LJ in R v Westminster City Council; Ex parte Monahan [1989] 3 WLR 408 at 425, quoted by Bignold J in City West at [139], the imposition of a condition may involve financial constraints on the economic viability of a particular development, which may be of significance in particular circumstances. At the very least, such a consideration will not necessarily fall outside the boundary of "planning" considerations sought to be identified by the Claimant. 37 Another example of economic impact may be found in the judgment of Kitto J in Royal Sydney Golf Club v Federal Commissioner of Taxation (1956-57) 97 CLR 337, where his Honour discussed factors which might be taken into account in relation to an hypothetical application to subdivide the lands of the golf club in Rose Bay. His Honour noted at 391: "In an area which is populous but large parts of which are occupied by high-class residences, it is a matter of real importance to a body concerned at once with preserving the amenities of the locality and with maintaining values for rating purposes, that if a tract of land such as the appellant's is kept under an embargo against use otherwise than as a golf course, the consequential detriment to the owner of that land must be considered in the light of the consequential advantage accruing to the owners of the lands in a large surrounding area. Reduce the one and you reduce the other. The resulting increase in the value of the appellant's land might easily be much less than the resulting decrease in the combined values of other lands."

In this example the loss of open space might affect the amenity of the locality, but the economic impact is the consequence of the diminution of the amenity. However, the discussion in the judgment does not suggest that a diminution in rateable values is only relevant to a planning authority when it is the consequence of a loss of amenity. 38 This was not a case in which either the purpose or the effect of the decision was or would be to interfere with market forces. No question arose as to the establishment of a new business which might compete with existing businesses. Rather, the question was whether the Claimant should be entitled to charge for an aspect of its services for which it cannot now charge, because of the existence of a condition which the Claimant assumed to have been validly imposed. In this situation it would not have been surprising if the Claimant had sought to call evidence of the economic impact of the condition on its operations. But its present argument would appear to entail the conclusion that such evidence should not be considered. If a planning authority can impose a condition regulating the circumstances in which charges can be levied, it would be absurd to suggest it cannot consider the economic impact of imposing or varying such a condition. 39 It is therefore implausible to suggest that economic impacts on others must fall outside the statutory concept. This point is illustrated by returning to the concept of direct economic impact, noted above. The imposition of a parking fee must have a direct economic impact on each person who thereafter uses the parking lot for a period of less than two hours, that being the period of free parking under the existing consent conditions. No doubt the impact on one individual would be dismissed as insignificant. However, the direct impact must properly be understood as applying to many individuals over an extended period of time. This impact cannot be so readily dismissed and the Claimant expressly resiled from the proposition that any such impact could be ignored as "de minimis". No doubt that concession was impelled by the consideration that the Claimant's strenuous pursuit of the proposed condition variation demonstrated that the power to charge fees was a matter having significant economic consequences for it. It would then be hard pressed to deny that there was any economic impact on users, on the basis that they were a disparate group of individuals. Indeed, arguably the consent authority would be entitled to identify the economic impact as including both the adverse effect on the car parking community and the equivalent beneficial economic impact on the Claimant. The Claimant has failed to demonstrate legal error in this respect on the part of the Commissioner.

Identifying "the locality" 40 A final element of the Claimant's case turned on the meaning of the phrase "in the locality". The Claimant sought to define the locality as at least encompassing the Chatswood retail centre in which the Regency was located and in which the potential business competitors were also located. The purpose of this approach was to justify the conclusion that, on the evidence, there would be no overall adverse economic impact in the locality. There are a number of objections to this line of reasoning. 41 First, it is, to say the least, doubtful that the factual findings of the Commissioner set out above would support the assumption underlying this approach. The Commissioner also referred to, and appears to have accepted, evidence that the proposal would "adversely impact on the availability of parking spaces in the retail precinct carparks in Chatswood": at [15] and the last sentence of [22]. 42 Secondly, this approach appears to read the word "in" as "on": in other words, what must be determined is the overall impact on the locality not specific and identifiable impacts within the locality. There is no justification for this construction. Thirdly, there is a serious question as to whether the word "locality" is legally constrained in the manner suggested. There was no discussion in the present case as to whether the term "locality" should properly be seen as a word carrying its ordinary meaning, the identification of which involved no question of law. Since the decision in Collector of Customs v Agfa-Gevaert Ltd (1995-96) 186 CLR 389, it is commonly accepted that even a word having a non-technical meaning may well give rise to a question of law where its proper meaning must be identified as part of a "composite phrase": at 397. However, in a particular case, the question is often better understood as involving not the abstract construction of a term, whether a single word or a phrase, but its application in a particular context. In the language of Dixon J in Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391 it is open to the legislature to make the power or jurisdiction of a body contingent upon its opinion as to a state of facts, rather than the actual existence of the state of facts. In this context, the concepts of 'economic impact' and 'locality' will interact. Subject to identifiable outer limits of connotation, the provision should be construed as leaving to the consent authority, or the Commissioner on appeal, the identification of what constitutes a relevant impact in a particular case and what constitutes the appropriate locality within which to consider the impact. 43 At the next stage, there is a question as to whether the Commissioner erred in law in treating the locality as the Regency, within which the Claimant operates its business, but which includes other strata title lot holders operating their separate businesses. There is little sense, in planning terms, in denying a power to consider economic impacts on this collection of businesses, simply because they happen to be under one roof. Such a result is not required as a matter of statutory interpretation. Accordingly, the Regency itself could be seen as a relevant "locality". Other possibilities might be considered; however, these conclusions are sufficient to dispose of the Claimant's case, which requires the exclusion of these possibilities in order to establish its "zero sum game" argument.

Conclusion 44 In these circumstances, it may be seen that no error of law has been established in relation to the decision of the Commissioner, or any part thereof. Accordingly, Talbot J was correct in rejecting the appeal before him. 45 However, the reasoning set out above differs from that of Talbot J in that it does not rely on the dicta in Kentucky Fried Chicken as setting the relevant legal limits to the proper construction of s 79C(1)(b). Further, without seeking to identify precisely the limit sought to be imposed in Fabcot and Cartier Holdings, it is at least arguable from the analysis set out above that a broader construction of s 79C(1)(b) should be adopted than those cases in the Land and Environment Court would indicate. 46 Pursuant to s 57(4)(c) of the Land and Environment Court Act, the Claimant requires leave to appeal to this Court from the judgment of Talbot J. I would refuse leave to appeal. The Claimant must pay the costs of the proceedings in this Court. **********

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.