Sevenex Pty Limited v Blue Mountains City Council

Judgment 1McCOLL JA: I agree with Young JA's reasons and the order his Honour proposes. 2YOUNG JA: This is the concurrent hearing of an application for leave to appeal against a decision of the Land and Environment Court, and if it is appropriate that leave be given, it is also the hearing of the appeal itself. 3The applicant operates a tourist caf at Echo Point near Katoomba in the Blue Mountains. It wishes to expand its activities by reorganising the lower ground floor of its premises to incorporate a large room which will contain what has been described as a mixed media exhibition which will include: (1) an aboriginal cultural exhibit; (2) a live koala exhibit; and (3) a vivarium, in which there will be living snakes and lizards. A "secure, comfortable and aesthetically pleasing living environment" is to be provided for the inhabitants of (2) and (3). 4The applicant approached the respondent for development consent. That initially was the subject of a deemed refusal and subsequently an actual refusal. It applied to the Land and Environment Court, but was unsuccessful, both before Senior Commissioner Moore and Justice Sheahan. 5The decision of Sheahan J, the subject of the present application, was made in an appeal under s 56A of the Land and Environment Court Act 1979 ("LEC Act") against an order or decision of that Court made by a Commissioner. Appeals lie to the Court of Appeal from Sheahan J's decision dismissing that s 56A appeal under s 57(1) of the LEC Act insofar as the appeal is on a question of law. However, leave to appeal is required by s 57(4)(c) for any appeal against "an order or decision made on appeal under section 56A." 6The applicant says that there are two questions of law involved: "(1) Whether on the proper construction of the development consent granted by the respondent on 4 March 1993 to development application number 940/92, as subsequently modified ("the 1993 Consent"), the carrying out of the proposed use on the land referred to in the 2008 application was authorised by the 1993 consent and did not amount to a change of use; and (2) Whether on the proper construction of clause 41(1) and (3) of the Environment Planning and Assessment Regulation 2000 ("the Regulations") and the definition of "business premises" and "retail premises" in the Standard Instrument (Local Environmental Plans) Order 2006 ("the Standard Instrument"), the carrying out of the proposed use on the land, referred to in the 2008 application was a commercial use within the meaning of clause 41(3)." 7By way of background, the primary judge noted in [8]-[10] of his reasons as follows: "8 The subject property, 30-35 Echo Point Road, Katoomba (Lot 1 DP 300226), is situated in a ' residential bushland conservation ' zone under the LEP. Under this zoning, the proposed development and the present use of the premises are prohibited, but the present use benefits from the development consent granted in 1993 and is an existing use within the definition in s 106 of the EP&A Act. 9 The site was granted consent on 4 March 1993 pursuant to a development application (DA No 940/92) submitted on 9 September 1992. The first paragraph of the notice of determination reads: 'Pursuant to Section 92 of the Environmental Planning and Assessment Act, 1979, notice is hereby given of the determination by Council of Development Application No. 940/92 of 9 th September, 1992 for the establishment of a commercial development on the abovementioned land. The Development Application as shown on the plans DRS No. 92016 SK/1 to SK/15 Statement of Environmental Effects prepared by Planning Workshop has been determined by the granting of consent subject to the following conditions:' (emphasis added) 10 The various plans approved with DA No 940/92 identify the proposed uses throughout the development, as 'retail', 'crafts' , 'food service' , 'coffee shop' , and 'games room' . The lower ground floor, the area where the current proposal would be located, is detailed in plan no SK/4, which shows an area for 'crafts' in the north-western corner and 'retail' in the south-western corner. SK/4 depicts a dividing wall that separates those two uses, but the modification approved in November 1993 deleted the dividing wall and designated the relevant area on plan No B04 simply as 'retail and crafts' (both plans in Exhibit G)." 8The zoning has changed so that the land is now zoned a "residential bushland conservation" zone and the applicant's existing activities on its land, as well as its proposed changed activities, would now not be permitted. However, the applicant is entitled to continue its existing activities under existing use rights. It says that the additional activities it proposes are also within its existing use rights. 9The concurrent application for leave to appeal and the appeal were heard on 24 May 2011. Mr T S Hale SC and Mr J B Maston appeared for the applicant and Mr J Robson SC and Mr C Ireland appeared for the respondent. 10The only way in which the applicant could succeed on the appeal is to show that it has existing use rights and those rights include what it proposes to do with respect to its aboriginal cultural exhibit, koala exhibit and vivarium. 11The applicant relies on s 91(4) of the Environmental Planning and Assessment Act 1979 (the "EP&A Act") as in force at the relevant time. The section has since been relocated in the EP&A Act with a minor amendment as s 81A(1). Section 91(4) reads as follows: "91(4) A consent to a development application for the carrying out of development, being the erection of a building, shall be sufficient to authorise the use of the building when erected for the purpose for which it was erected where that purpose is specified in the development application." 12The submission is that the development consent in the instant case was for the "establishment of a commercial development on the abovementioned land". It then refers to the development application as shown in certain nominated plans. Mr Hale says that the purpose of the development consent was for the establishment of a commercial development on the land, and, accordingly, s 91(4) operates as a consent to the use of the land for that purpose. The aboriginal cultural exhibit, koala exhibit and vivarium are a commercial development and, accordingly, all that is needed is consent to the alteration of the partitioning, etc of the lower ground floor, but not to its use. 13The first problem with that submission is that s 91(4) provides that the purpose is the purpose specified in the development application. The development application was never tendered before the Commissioner. Mr Hale says that his client was not the owner at the time and the respondent did not see fit to tender it, but, with respect, that does not overcome the difficulty, given that it is the applicant which bears the onus of satisfying s 91(4). 14Mr Hale points to numerous authorities which say that, as the development consent is a public document, it should be self contained and one need not look further than the development consent (see eg Ryde MC v Royal Ryde Homes (1970) 19 LGRA 321). I am not too sure whether that argument applies when someone is relying on s 91(4) to give it a positive right, but on the assumption that it does, one would then have to construe the development consent. Mr Hale says that the purpose is for the establishment of a commercial development. Mr Robson says that the "establishment of a commercial development" is not a purpose, and in any event those words are too vague to show what the purpose is. The plans which are referred to in the development consent show clearly that what is to be operated on the site is a tourist caf together with retail sales of goods such as souvenirs which would be expected to be purchased by tourists. 15The learned Senior Commissioner concluded that the consent was not for a "broad and unconstrained commercial purpose" but rather "to use the various spaces in the building for the various uses designated on the March 1993 consent plans." Sheahan J upheld that finding at [23]. 16The question as to what is meant by "purpose" in this sort of scenario has been the subject of authority. 17In Bonus Pty Ltd v Leichhardt MC (1954) 19 LGR (NSW) 375, a Residential District Proclamation of 1944 prohibited the use of a building for the purposes of any trade. However, the subject shop had been used as a retail butcher's shop since 1915. Sugerman J said (at p 376), "their continued use for that 'purpose' is, therefore, within the exception" allowing the existing use. He then said: "What 'purpose' means in these provisions is a question of some difficulty. I mentioned the difficulty in Forrester v Marrickville MC (1953) 19 LGR 232 at 236 and suggested there that the matter must be viewed as one of substance, that such fluctuations in the method of using premises as might result from fluctuations in the way in which some trade or industry is carried on, or from new improvements, might not effect an alteration of 'purpose' of the use, and that, indeed, changes might go beyond that while the 'purpose' of the use remained substantially the same." 18At 378, his Honour said: "It is the 'purpose' of the use which must remain unchanged ... and it seems to me that the continuity and identity of the purpose will not be affected by changes merely in those incidental and subordinate activities." 19The matter was recently considered by Preston CJ in Chamwell Pty Ltd v Strathfield Council [2007] NSWLEC 114; 151 LGERA 400. His Honour said at 406 [27] and following: "In planning law, use must be for a purpose ... . The purpose is the end to which land is seen to serve. It describes the character which is imparted to the land at which the use is pursued ..... . However, the nature of the use needs to be distinguished from the purpose of the use. Uses of different natures can still be seen to serve the same purpose ... . The characterisation of the purpose of a use of land should be done at a level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on, not in terms of the detailed activities, transactions or processes .... ." 20Granted that the purpose should be described in liberal language, it still seems to me that describing the purpose as commercial development is far too vague and nebulous. What the plans showed were the sale of souvenirs and food, principally for tourists; what is now sought is to include some tourist entertainment including a mini zoo. 21Mr Hale referred to the decision of Pain J in the Land and Environment Court in Brinara Pty Ltd v Gosford City Council [2010] NSWLEC 25. In that case, the subject land was at Erina Heights. The council had granted development consent, the approved purpose being described as "Commercial Premises". That involved the construction of a modern commercial retail building which was used for various shops. The proposed development was to add several hundred storage lockers of varying sizes in the basement. Pain J held that the development was for a commercial use and there was no change from the present commercial use. Mr Hale says that this is just an example of how one reads these consents liberally and makes proper inferences from the words used. It is appropriate that development consents be read consistently in the same way as they are close to incidents of title and subsequent parties need to make decisions based on what is contained in the development consent; see eg Ryde Municipal Council v Royal Ryde Homes (1970) 19 LGRA 321, 324. 22Mr Hale then referred to the Bonus case. I cannot, with great respect, see how this assists Mr Hale's argument. Whilst it may be that a change in the food being sold from cucumber sandwiches to pizzas might not affect premises being used for the purpose of a caf, what is here proposed would appear to me to be more than an incidental change in the way that a trade is carried out. 23Despite Mr Hale saying everything possible that could be said for the point (and with respect a good deal more beside), the problems in the way of his submissions are insurmountable. The first is that the statute refers to the purpose stated in the development application and the applicant did not tender the development application. No reason was given for this. However, if someone is going to win a case on a point, that person needs to take the steps available to obtain the necessary evidence. 24Even if one assumes that the purpose stated in the development application (and we know that there would have had to be a purpose specified as that is part of the standard form) is the same as in the development consent, it is not a proper construction of the development consent to say that it was for unspecified commercial development. The development consent refers to the plans which were attached to the application and these show that the area in question was to be used for a caf and the sale of souvenirs. That was the purpose and that is quite foreign from the present situation. 25As far as the Brinara case is concerned, I do not read it as being a case which is otherwise than on its own facts and I do not obtain any general propositions from reading it. 26Accordingly, in my view, Sheahan J was correct on the first question. 27I now pass to the second ground. It is necessary to set out some statutory provisions. 28Section 108(1) of the EP&A Act is as follows: " 108 Regulations respecting existing use (1) The regulations may make provision for or with respect to existing use and, in particular, for or with respect to: (a) the carrying out of alterations or extensions to or the rebuilding of a building or work being used for an existing use, and (b) the change of an existing use to another use, and (c) the enlargement or expansion or intensification of an existing use." 29Regulation 41 of the Environmental Planning and Assessment Regulation 2000, so far as is relevant is as follows: "41(1) An existing use may, subject to this Division: ... (e) if it is a commercial use-be changed to another commercial use (including a commercial use that would otherwise be prohibited under the Act), ... (3) In this clause: 'commercial use' means the use of a building, work or land for the purpose of office premises, business premises or retail premises (as those terms are defined in the Standard Instrument (Local Environmental Plans) Order 2006 ) . " 30It is necessary to consider the definitions of "business premises" and "retail premises" in the Standard Instrument as it existed at the relevant date. It is clear that "office premises" are not relevant to the present case: "'business premises' means a building or place at or on which: (a) an occupation, profession or trade (other than an industry) is carried on for the provision of services directly to members of the public on a regular basis, or (b) a service is provided directly to members of the public on a regular basis, and may include, without limitation, premises such as banks, post offices, hairdressers, dry cleaners, travel agencies, internet access facilities, medical centres, betting agencies and the like, but does not include sex services premises. ... 'retail premises' means a building or place used for the purpose of selling items by retail, or for hiring or displaying items for the purpose of selling them by retail or hiring them out, whether the items are goods or materials (or whether also sold by wholesale)." 31The real question here is whether the proposed change of use is another commercial use in that the building is being used: (a) for retail premises; or (b) for business premises, noting that (b) involves a service provided directly to the public on a regular basis. So far as a retail business is concerned, the applicant's submission is that what is actually proposed to be sold on the lower ground floor are tickets from the ticketing office and photos of patrons with the exhibits and that the sale of tickets brings the activity within the concept of a retail business. The distinction between "retail premises" and "business premises" is that the former directs attention to the sale and hire of items - tangibles, whereas "business premises" directs attention to the provision of services - intangibles. It is put that the proposed use qualifies under both or either of the headings. 32The Commissioner and the primary judge could not accept that selling tickets to the koala exhibit constituted a retail business. As Sackville AJA said during argument, one can sell tickets to anything. I am quite sure that a bus driver taking a couple of dollars and selling a ticket from Ryde to Circular Quay would be surprised to think that he or she was involved in a retail business, as would the passenger. The decisions below distinguish between what is purchased in a shop on the one hand, and the purchase of entertainment on the other, and to my mind, that is perfectly correct. Turning then to whether these are business premises, there is no occupation, profession or trade seemingly carried on, but even if there was, the proposed activity would not be a service provided directly to members of the public on a regular basis. The primary judge accepted Mr Robson's submission that the ordinary definition of "service" is "an act of helpful activity". The primary judge continued at [47]: "The proposed development, which provides 'an experience', cannot be identified as providing a service in a planning sense." 33I respectfully agree. Mr Hale accepted that the specific examples given in the definition of "business premises" can be taken into account in determining the scope of the expression: "a building or place at or on which ... (b) a service is provided directly to members of the public on a regular basis." The proposed development does not involve the provision of services to individual customers in accordance with their particular requirements, as is the case with each of the examples given in the definition. The only doubt one has about the list is the reference to "sex services" being specifically excluded from which one might conclude that if they were not specifically excluded they would come within the definition of "services", but I do not think that that is sufficiently strong to displace the ordinary meaning of the word. 34I realise, of course, that in some contexts the word "services" can have a very wide connotation: see IW v City of Perth [1997] HCA 30; 191 CLR 1, 12-14. However, one must read the word in its context and the illustrations given direct the mind to the type of service that the rule-making body had in mind. 35I can see no error made by the primary judge when dealing with this second question. 36The only remaining question for me is whether this case was so likely to fail that it is one where leave to appeal should not be granted. It probably does raise sufficient matters of public importance for the Court to grant leave to appeal. However, the appeal should be dismissed with costs. 37Accordingly, I would propose the following orders: (1) Grant leave to appeal. (2) Order that the appellant file notice of appeal in accordance with draft notice of appeal on pp 51 and following of the White Appeal Book within seven days. (3) Order that the appeal be dismissed. (4) Order that the appellant pay the respondent's costs. 38SACKVILLE AJA: I agree with Young JA.