Sherman v Newcastle City Council

Land and Environment Court (NSW)|2019-04-30|Before: Section J

Nature of the Appeal and Outcome

COMMISSIONER: The applicant lodged Development Application No. DA-2017/01339 on 26 October 2017. The Applicant seeks approval for a change of use from a residential dwelling to tourist and visitor accommodation. The development application does not seek consent for any physical works to the property. The development is proposed at Lot 16 Section J in DP 37393, 22 John Parade, Merewether. The Council refused the development application on 26 March 2018 and the applicant is appealing that determination in accordance with the provisions s 8.7(1) of the Environmental Planning and Assessment Act 1979 (the EPA Act).
The Statement of Environmental Effects annexed to the development application notes that the application was made in response to compliance action taken by the Respondent. The use is currently in operation (Ex A).
At the commencement of the hearing, the applicant was granted leave by the Court to amend the Plan of Management (amended POM) for the proposed use of the premises. The relevant changes are:

the inclusion of a section on 'Length of Stay' which restricts rental duration to more than 1 day and less than 90 days;
replacement of the section on 'Cleaning and Servicing of Premises' with the following: "8. Cleaning and Servicing The Owners will ensure that the premises are clean and tidy, both internally and externally when first occupied. Cleaning of both internal and external areas will be undertaken by the guests during their stay. No servicing of laundry will be provided by the Owners during the period of any stay. The cleaning and overall management of the operation will be undertaken under the direction of the Owners, residents at 24 John Parade." (Ex G)

The Site

The site contains an existing single storey residential dwelling. The subject site fronts John Parade which abuts a public reserve and Merewether Beach. The rear yard of the subject site is divided by a secondary fence, restricting the size of the yard utilised by the 'tourist and visitor accommodation' and maintaining a 5m setback of the proposed use from the properties adjoining to the rear. The single storey garage within the rear of the subject site is utilised as a home office for the owners at 24 John Parade.
The site comprises an area of 597m² and has a frontage of approximately 13m to John Parade. Hardstand to accommodate two vehicles is located in the front setback to the dwelling.
The surrounding area is a mixture of residential and recreational purposes with low density single storey development and two storey residential dwellings. To the south west of the site, along John Parade, is a two storey residential flat building.

Relevant Planning Controls:

State Environmental Planning Policy No 71 - Coastal Protection (SEPP 71) was repealed on 3 April 2018. By virtue of cl. 21(1) of State Environmental Planning Policy (Coastal Management) 2018 (Coastal SEPP) the provisions of SEPP 71 apply to the proposed development as the subject site is located in the Coastal Zone and the development application was lodged, but not finally determined, prior to the repeal of SEPP 71.
Clause 7(a) of SEPP 71 requires the consent authority to take into consideration the matters listed under cl 8 of the SEPP in determining a development application. To the extent they are relevant to the development consent sought; those matters listed under cl 8 have been considered in assessing this application.
The subject site is zoned R2 Low Density Residential Development under the Newcastle Local Environmental Plan 2012 (LEP 2012). The objectives of the R2 Low Density Residential Development zone are: • To provide for the housing needs of the community within a low density residential environment. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. • To accommodate a diversity of housing forms that respects the amenity, heritage and character of surrounding development and the quality of the environment.
Pursuant to cl 2.3(1) the land use table for the R2 Low Density Residential Development zone is as follows: 2 Permitted without consent Environmental protection works; Home occupations 3 Permitted with consent Boarding houses; Child care centres; Community facilities; Dwelling houses; Educational establishments; Emergency services facilities; Exhibition homes; Exhibition villages; Flood mitigation works; Group homes; Home-based child care; Hospitals; Neighbourhood shops; Recreation areas; Residential accommodation; Respite day care centres; Roads; Tourist and visitor accommodation 4 Prohibited Backpackers' accommodation; Hostels; Rural workers' dwellings; Serviced apartments; Any other development not specified in item 2 or 3
LEP 2012 contains the following relevant definitions: hotel or motel accommodation means a building or place (whether or not licensed premises under the Liquor Act 2007) that provides temporary or short-term accommodation on a commercial basis and that: (a) comprises rooms or self-contained suites, and (b) may provide meals to guests or the general public and facilities for the parking of guests' vehicles, but does not include backpackers' accommodation, a boarding house, bed and breakfast accommodation or farm stay accommodation. Note. Hotel or motel accommodation is a type of tourist and visitor accommodation - see the definition of that term in this Dictionary. … serviced apartment means a building (or part of a building) providing self-contained accommodation to tourists or visitors on a commercial basis and that is regularly serviced or cleaned by the owner or manager of the building or part of the building or the owner's or manager's agents. Note. Serviced apartments are a type of tourist and visitor accommodation - see the definition of that term in this Dictionary. … tourist and visitor accommodation means a building or place that provides temporary or short-term accommodation on a commercial basis, and includes any of the following: (a) backpackers' accommodation, (b) bed and breakfast accommodation, (c) farm stay accommodation, (d) hotel or motel accommodation, (e) serviced apartments, but does not include: (f) camping grounds, or (g) caravan parks, or (h) eco-tourist facilities.

Public Submissions

The application was notified in accordance with Councils policy and residents/ property owners within the vicinity of the subject site were notified of the proposed development. As a result of this notification 10 submissions were received by the Council. These submissions raise the following concerns:

ongoing noise issues caused by the property being used for short term accommodation;
antisocial behaviour arising from occupiers of the property during its rental;
inadequate parking provision;
intensification of noise and congestion from increased numbers of people and traffic in the area;
potential for a decrease in property value for adjoining and proximate properties;
the noise generated from the subject property during sleeping hours is significant and detrimentally impacting on adjoining owners;
some owners have relocated themselves and their families on weekends in response to the impacts from noise, sleep disturbance and antisocial behaviour;
the ten-person restriction on the occupation of the property is not being effectively managed;
the use of the subject property for a commercial use will 'set a precedent' for similar uses in the area and will change the character of the locality.

At the commencement of the proceedings, on-site evidence was heard from a number of objectors to the application. The issues raised by these objections repeated many of the issues in the proceeding with the following additional concerns:

that the operators of the property, who reside next door to the subject property, are unable to be contacted by neighbours when incidents occur. This leaves adjoining neighbours with the responsibility to contact the police and or manage the disturbance.
that the mitigations proposed in the application are already in place and incidents occur.
the impact of the ongoing operation has been devastating to their amenity, leading them to relocate their family. This relocation on weekends has had financial and emotional impacts on the family.
that people who chose to stay at the subject property do so for an 'event' or as a holiday. This creates an intensity of use that is not the same as would be experienced in a general neighbourhood.

One objector also provided the Court audio-video files of the subject property on occasions where their sleep and amenity was impacted as a means of demonstrating their concerns.
Evidence was also provided to the Court from two parties residing in proximity to the subject site. These residents both submitted that the operation of the subject property has had no impact on them and they have not been disturbed by any noise. Further on the occasion that an incident did occur the owner apologised to neighbours.

Expert Evidence

In line with the issues in dispute in the proceedings, the parties engaged experts in town planning. Ms Amanda Gale provided expert evidence for the Respondent, with Mr Steve O'Connor engaged by the Applicant. I have read and considered the joint report of the planning experts in the assessment of the application.

How is the purpose of the proposed use characterised?

A key area of dispute between the parties is how the use sought by the Applicant's should be categorised. The Respondent argues the purpose of the use is properly categorised as 'serviced apartments' as is therefore, a use prohibited in the R2 Low Density Residential zone.
The Applicant's primary position is that the purpose of the use falls within the group term of 'tourist and visitor accommodation' and does not have the characteristics of any of the prohibited subset terms within the definition, in particular 'serviced apartment'. The Applicant concludes that the development is permissible.
The Applicant's secondary position is that the purpose can be categorised as a 'hotel' which is also a permissible development in the R2 Low Density Residential zone.
The parties accept that the use proposed is neither: backpackers' accommodation', 'bed and breakfast accommodation' or 'farm stay accommodation', each being subset terms of 'tourist and visitor accommodation'.
It is Ms Gale's evidence that the correct characterisation of the proposed development is as a 'serviced apartment'. It is her assessment that the development meets the elements of the 'serviced apartment' definition under LEP 2012. Further, she concludes that the proposed development does not meet the other forms of development that constitute subset terms of the use 'tourist and visitor accommodation'.
Ms Gale's evidence and reasoning in relation to the characterisation of the development as a serviced apartment is as follows: "I believe that when considering the elements of a 'serviced apartment' the proposed development meets all these requirements including the requirement that 'it is regularly serviced or cleaned by the owner or manager of the building', and therefore, is the best or most appropriate definition, and a prohibited form of development in the R2 Low Density Residential zone. The Plan of Management does specify that the cleaning responsibilities during occupant's stay will rest with the occupants, however, the Plan of Management confirms that the owner will be required to service or clean the premises for the continued use of the proposed development. In my opinion, cleaning also by occupants does not remove the requirement for regular cleaning by the owner, and therefore maintains that the proposed development is appropriately characterised as a 'serviced apartment' as defined in NLEP 2012." (Ex 3)
In the alternative, Mr O'Connor's evidence is that the proposed development is characterised as 'tourist and visitor accommodation'. His evidence is that the proposed use "does not 'neatly fit into any of the five examples quoted in the definition of 'tourist and visitor accommodation' found in NLEP 2012" (Ex 3). His reasoning is as follows: "I agree that the correct characterisation of the proposed development is at 'tourist and visitor accommodation'. However, I believe that the proposed 'beach house' does not neatly fit into any of the five examples quoted in the definition of 'tourist and visitor accommodation' found in NLEP 2012. As the definition of 'tourist and visitor accommodation' does not provide an exhaustive list of types of land uses which fall within this definition, there are other land uses which can be added to this list, such as 'cabins' or a 'beach house'. The key criteria contained in the definition of 'tourist and visitor accommodation' which must be met are that the temporary or short-term accommodation must be provided in a building or place and it must be on a commercial basis. This is exactly how the proposed development is intended to operate. It aims to provide short term accommodation in a building on a commercial basis." … (Ex 3)
Mr O'Connor disagrees with the evidence of Ms Gale that the purpose of the use is appropriately characterised as service apartments His reasoning is as follows: "As clearly stated in the Plan of Management dated 16 April 2019, the proposed development is to be cleaned by the guests during their stay not by the owner or manager. It also stipulates that the length of stay must be greater than one day and less than 90 days. Therefore, the premises may not be regularly serviced or cleaned by the owner or manager of the building as some guests may stay for a weekend while others may stay for several weeks or even months. … As the guests will be carrying out their own cleaning during their stay, I believe the proposed development does not comply with the definition of 'serviced apartment'." (Ex 3)
Mr Pickles submits that the proposed use is permissible on either of the following approaches: 1. that the use is characterised as being for 'tourist and visitor accommodation' and is permissible. 2. alternatively, that the use is characterised as 'hotel or motel accommodation' and is therefore permissible.
The first approach is the Applicant's preferred position.
The first submission Mr Pickles makes is that the term 'tourist and visitor accommodation' is a non-exclusionary definition and that the list of uses contained under the definition of tourist and visitor accommodation are not exhaustive. He submits that this approach is consistent with the decision of the Court of Appeal in Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379; [2006] NSWCA 155. In particular, Mr Pickles relies on the following paragraphs of the decision: "42. There is no rule of construction which requires inclusive words to be read as exclusive of any elements which otherwise fall within the meaning of the word or expression being defined: [citations omitted]. … 57 There are textual indications elsewhere in Sch 1 which support the proposition that "includes" is used to enlarge and not exclude. It is apparent that the combination of the words "means" to introduce a definition and either "includes" or "may include" is used in an enlarging sense: see the definitions of "boatshed", "healthcare professional", "hospital", "housing for aged persons" and "parish centres". 58 Conversely, care has been taken to exclude uses which might otherwise fall within the ordinary connotation of a defined expression: see the definitions of "backpackers' accommodation", "bed and breakfast accommodation", "boarding-house", "educational establishment" (the definition of which I note, in passing, does not exclude community facilities), "medical consulting rooms", "place of assembly", "recreation area", "recreation facility", "serviced apartments", "skid" and "utility installations". 59 Finally, a generic approach has been taken in the case of the definitions of "commercial premises", "residential flat building" and "shop" to exclude buildings, places or purposes specifically defined elsewhere in the Schedule. 60 In short, therefore, Sch 1: (a) uses "includes" or "may include" in an enlarging sense; and (b) excludes uses not to be included within an expression into which they might otherwise have fallen either by specifically excluding nominated uses or by generally excluding buildings, places or purposes defined elsewhere in the schedule."
Applying this approach Mr Pickles submits that the list of uses contained within the definition of tourist and visitor accommodation is indicative and other uses may fall within the definition.
Ms Berglund, for the Respondent, accepts that the list of uses contained under the definition of tourist and visitor accommodation is not exhaustive on the basis argued by Mr Pickles.
Applying on the decision of Bignold, J in Friends of Pryor Park Incorporated v Ryde Council [1995] NSWLEC 160 ('Friends of Pryor Park') Mr Pickles submits that the proposed development falls within the permissible use 'tourist and visitor accommodation'. He argues that the approach outlined in Friends of Pryor Park is that once a determination of permissibility is made by categorising a purpose, the fact that it may also fall within another purpose is legally irrelevant. The relevant passage of the decision is extracted below: "The respondent's competing argument is that, where as in the present case, the proposed development falls within the permissible purpose of community facilities, development consent may be legally granted to the proposed development of that purpose and the fact that the development also falls within another purpose, namely childcare centre, is legally irrelevant to the validity of the development consent granted for the permissible purpose. … In my judgement the Respondent's argument is correct and is clearly to be preferred to the Applicant's competing argument."
Mr Pickles argues this approach is supported by the decision of Preston CJ in Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147 ('Pet Carriers'). Mr Pickles submits that par [55] of that judgement is of particular relevance to the current matter. It states: "The decisions fall roughly into two categories. First, there are decisions which involve a purpose which is a genus and one or more species of purposes falling within that genus. If the genus is a nominate prohibited purpose, development for that purpose will be prohibited even if it could also come within one or more species of purposes that are innominate permissible purposes. Conversely, if the genus is a nominate permissible purpose, development for that purpose will be permissible even if it could also come within one or more species of purposes that are innominate prohibited purposes. Decisions in this first category include Egan v Hawkesbury City Council (1993) 79 LGERA 321; Hawkesbury City Council v Sammut [2002] NSWCA 18; (2002) 119 LGERA 171; Abret v Wingecarribee Shire Council [2011] NSWCA 107; (2011) 180 LGERA 343; and Friends of Pryor Park Inc v Ryde City Council."
Mr Pickles submits the current application falls within the second category outlined by the Chief Judge, extracted above, with the exception that the prohibited use in these proceedings is a nominate prohibited use. On this basis, he argues it is relevant to determine, on the facts if the development is for the purpose of a serviced apartment.
Mr Pickles argues the development is not for the purposes of a serviced apartment for the following reasons: 1. Whilst the parties agree that the proposed use meets the first part of the definition under LEP 2012, namely: serviced apartment means a building (or part of a building) providing self-contained accommodation to tourists or visitors on a commercial basis. It is the second part of the definition: that is regularly serviced or cleaned by the owner or manager of the building or part of the building or the owner's or manager's agents that is not met by the development. 2. On the Macquarie dictionary definition of 'regularly' and 'service' he submits that: "… the meaning of regular service is that the terms actually together connote both a degree of regularity and a degree of service provided for tourists and visitors, not generally, but for tourist(s) and visitors themselves because the word 'service' connotes that something is provided for somebody, because they demand it or require it.." (Transcript 30 April pg. 9) 1. That the amended POM for the subject property and its operation clarify that services (such as cleaning, sheet changing, etc.) during the guests stay are not provided. 2. The failure to provide these services means that the proposed use cannot be categorised as a serviced apartment as the provision of such services are fundamental to the definition and on the facts of the case are not provided.
Ms Berglund maintains that the purpose of the use is properly categorised as 'serviced apartments' and is, therefore, a use prohibited in the R2 Low Density Residential zone. She relies on a recent decision of Preston CJ in Tweed Shire Council v Taylor [2019] NSWLEC 45 ('Taylor') in interpreting and applying the definition of a serviced apartment. In particular, she notes at par [5] of the judgement it states: 'Mr Tayor advertised the building for tourist and visitor accommodation including on Airbnb, as Woodstock Koongal Cabin or Crystal Creek Treehouse'. Mr Taylor let it for that commercial purpose. Mr Taylor serviced and cleaned the building before and after each stay by tourists or visitors. The building was, therefore, used for the purpose of a serviced apartment.'
Ms Berglund submits that in this paragraph the Chief Judge references each of the relevant components of the definition of 'serviced apartment' in the Standard Instrument and concludes by stating the development is for that purpose. She notes that the Chief Judge reaches this conclusion notwithstanding that the servicing and cleaning in the Taylor matter occurred only at the beginning and end of each stay. She submits that this approach should be applied to the current case.
Ms Berglund disagrees with Mr Pickles submission that the 'servicing' and 'cleaning' relate to the tourists or visitors, but argues that it is self-evident in the definition that the cleaning and servicing relate to the building itself.
Ms Berglund argues that 'regularly' should be given its ordinary meaning and be considered in the context of the evidence of the residents, the location of the property as being beachside and the details of the previous occupation patterns of the property. It is her submission that given the preceding factors the pattern of stay is at most a week to 10 days. On this basis the property is most likely to be serviced, and cleaned, at least once a week. In her submission this meets the meaning of regularly serviced or cleaned by the owner in the 'serviced apartment' definition.
Ms Berglund makes further submissions in relation to the requirement for the owner to undertake the putting out and collection of the domestic waste bins for the property and argues that this further demonstrates the regular servicing of the property.
Following the completion of the hearing, with the consent of both parties, the applicant provided to the Court a final POM dated 30 April 2019. The amendment inserts the following paragraph under 'Waste Management': "Guests staying overnight on Sunday nights are required to put rubbish bins on the curb for collection, and return them to the back courtyard on Monday morning following collection. The Operators will notify guests of which bins need to be put out (i.e. lid colour)."
In response to Ms Berglund's submissions in relation to the decision of the court in Taylor, Mr Pickles makes the following submissions: 1. in the matter before the Chief Judge the categorisation of the use as a serviced apartment was agreed, and was not the subject of evidence or submissions; 2. the facts of the case are different and the decision is focussed on a different environmental planning instrument.
On the preceding basis, Mr Pickles argues the decision is not binding on the determination of the current proceedings.

Findings

Under s 1.5 of the EPA Act 'development' includes the use of land. The development sought through this development application is a change of the use of the subject site to: 'tourist and visitor accommodation' as defined by LEP 2012.
A development application can only be made to carry out development for which consent is required by an environmental planning instrument. A development application cannot be made for development that is prohibited. In this case, LEP 2012 is the relevant environmental planning instrument.
The task of correctly categorising the purpose, or purposes, of a particular use or development application is a threshold question in determining whether a particular development application is capable of lawful determination. If the Court accepts the submission of the Respondent, that the proposed use is prohibited, the current development application is an ineffective application and the Court would have no power to approve the change of use sought (s 4.13 of the EPA Act).
In Chamwell Pty Ltd v Strathfield Council (2007) 151 LGERA 400 ('Chamwell') at [407] Preston CJ held, applying Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 at [310], that the characterisation of the purpose of a use of land should be undertaken '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'. He notes also that the task of characterisation of a proposed development must also be done in a 'common sense and practical way' ('Chamwell' at [408]).
Characterisation of development to determine permissibility focusses on whether the proposed development falls within a nominate or innominate purpose of development that is permissible with consent in the relevant zoning table. In this matter the relevant zoning table for the R2 Low Density Residential zone, extracted at par [15].
The Standard Instrument template on which LEP 2012 is based includes a mandatory dictionary of standard definitions relating to land uses. Some 'group terms' in LEP 2012 also contain one or more 'subset terms' that themselves cover other defined land use terms in LEP 2012. For example, the definition of 'tourist and visitor accommodation' includes a reference to the subset terms of 'serviced apartment', 'bed and breakfast' etc. The definition of these terms is included in par [1].
Relevantly, cl 2.3(3)(b) of the LEP 2012 provides as follows: (3) In the Land Use Table at the end of this Part: … (b) a reference to a type of building or other thing does not include (despite any definition in this Plan) a reference to a type of building or other thing referred to separately in the Land Use Table in relation to the same zone.
The land use table for the R2 Low Density Residential zone identifies that innominate uses are prohibited by stating that any development not identified as either 'Permitted without Consent' or 'Permitted with consent' is prohibited.
I accept the submission of Mr Pickles that the approach of the Court in both 'Friends of Pryor Park' and 'Pet Carriers' are relevant to the current proceedings.
In his decision in 'Pet Carriers', Preston CJ states that the ultimate focus of an inquiry as to the characterisation of land should be whether a development is within a nominate or innominate purpose under the relevant instrument.
Applying the preceding framework, I am satisfied that the development sought falls within the broad definition of 'tourist and visitor accommodation', a nominate permissible use.
Having made this determination, I have turned my mind to whether the purpose of the use sought in the development application is appropriately characterised as a serviced apartment and therefore falls within the nominated prohibited use. I am satisfied it does not. My reasoning is as follows: 1. I accept the arguments of Mr Pickles (refer par [38]) that the use 'serviced apartment' denotes a regularity of servicing (of which cleaning is one such service) that is not present in the current application. 2. Notwithstanding if the draft POM, or the final POM, is considered I am not persuaded that the placing of waste bins out for collection by the owner is reasonably regarded as regular servicing. 3. Cleaning and servicing of the premises at the beginning and end of a hire period are a feature, or characteristic, of each of the remaining subset terms under the definition of tourist and visitor accommodation. Therefore in my view this is not a characteristic that distinguishes serviced apartments. 4. I am satisfied that giving the ordinary meaning to the term, 'serviced apartment' denotes the provision of some services to the occupant, beyond the provision of accommodation. I am not persuaded that the application proposes such additional services (such as changing sheets, towels and provision of daily or on request cleaning). This position is reinforced by the Macquarie Dictionary definition of 'serviced apartment' which states: serviced apartment /sɜvəst əˈpatmənt/ (say servuhst 'uhpahtmuhnt) noun an apartment which is rented for short or long stays, in which basic housekeeping services are provided. https://www.macquariedictionary.com.au 1. I am satisfied that the use sought provides facilities and services more akin to self-contained accommodation.
I accept the agreed position of the parties that the nominated forms of 'tourist and visitor accommodation' found in the definition are not exhaustive. I find that the use proposed is encompassed by the group term and does not fall within any of the listed subset terms.

Is the development inconsistent with the objectives of the zone?

The Council argues that the development warrants refusal as it is inconsistent with the objectives of the R2 Low Density Residential zone.
In particular, Council argues that the development is inconsistent with the third objective of the zone: 'to accommodate a diversity of housing forms that respects the amenity, heritage and character of surrounding development and the quality of the environment'.
In their joint report the planning experts provide the following in relation to the proposed developments consistency with the third objective: "Ms Gale: … I do not believe that the proposed development clearly meets the third objective, which I consider is the most relevant objective in this matter being to 'accommodate a diversity of housing forms that respects the amenity, heritage and character of surrounding development and the quality of the environment'. Without permanent residents on site the proposed use for tourist and visitor accommodation as a 'serviced apartment' is not conducive to protecting the amenity, heritage and character of the surrounding development and the quality of the environment. (Ex 3) Mr O'Connor: … I consider that the third objective is met as tourist and visitor accommodation is one of a diverse form of housing needs along with more permanent accommodation. The proposed development will operate in accordance with the Plan of Management which provides strict rules which must be adhered to. These rules cover topics such as noise management, waste management and anti-social behaviour. The Plan of Management will be enforced by the Manager who resides in the adjacent property being 24 John Parade, Merewether. Therefore, the manager will be readily available if required. Given these special circumstances, in my opinion it is appropriate to conclude that the proposed development will respect the amenity, heritage and character of the surrounding development and the character of the environment." (Ex 3)
Mr Pickles submits that the reference in the third objective to 'housing forms' is a reference to the physical form of the development, not the manner of their usage. Applying this approach he argues that the 'amenity impacts' referenced by the objective are therefore directed to impacts that arise from the built form, not its use. In other words amenity impacts such as view loss, overshadowing or on heritage significance that arise from the building. Given the application is for a proposed use, he argues that the development generates no such impacts and therefore can't be inconsistent with the third objective.
Secondly, Mr Pickles argues that the proposed use is not a 'housing form', but rather a form of tourist and visitor accommodation which is a distinct and separate form of development. On this basis, he argues that the third objective does not apply.
Finally, Mr Pickles submits that pursuant to cl 2.3(2) of LEP 2012 the consent authority is required only to 'have regard to the objectives of the zone', not to be satisfied that the development is consistent with them.
Following these submissions, Ms Gale, in her oral evidence, accepted that the reference in the third objective to 'housing forms' is a reference to the physical form of the development, not the manner of their usage. Further, she accepted that the existing building form respects the amenity, heritage and character. She notes that her assessment focusses on the impacts arising from the use of the building. In concluding her oral evidence Ms Gale accepts that the proposed development does not infringe any of the objectives of the R2 Low Density Residential zone.
In his oral evidence, Mr O'Connor also agreed that the impacts identified in the third zone objective relate to the building form, rather than the use. He maintains that the proposed development is consistent with the zone objectives.
In the alternative, Ms Berglund submits that 'housing forms' is not a defined term in LEP 2012. As such, she argues that there is ambiguity as to whether the reference in the third zone objective is to the physical form or use of a development. She concludes that objective is equally open to being interpreted in either approach, as demonstrated by the evidence of the planning experts both in the joint report and orally.
Ms Berglund accepts that the objectives of the zone are a matter for consideration for the Court, and the development is not required to be consistent with them.

Findings

Clause 2.3(2) of LEP 2012 states that 'the consent authority must have regard to the objectives for development in a zone when determining a development application in respect of land within the zone'.
There is no requirement, in this case, for the proposed development to be consistent, or compatible, or the like, with the zone objectives.
At cl 2.3(1) LEP 2012 states that the Land Use Table provides 'objectives for development'.
At s 1.5 of the EPA Act 'development' is defined as any of the following: (a) the use of land, (b) the subdivision of land, (c) the erection of a building, (d) the carrying out of a work, (e) the demolition of a building or work, (f) any other act, matter or thing that may be controlled by an environmental planning instrument.
The objectives of the zone, dependant on their terms, may be relevant to any of the above forms of development.
I accept the agreed evidence of the planners, as detailed at pars [66]-[67] that the proposed development is not inconsistent with the zone objectives.
In the preceding, I found that the use proposed by the application is best characterised as 'tourist and visitor accommodation'. I am not persuaded that, in having regard to this use and the objectives of the zone, there are no grounds in having regard to the zone objectives that would warrant the refusal of the application.

Are the impacts of the proposed development on the adjoining and proximate residents unreasonable?

The Respondent contends that, as demonstrated by the submissions received in objection to the application, the use of the dwelling as visitor and tourist accommodation is generating unreasonable detrimental impacts on the amenity of adjoining or proximate neighbours. Those amenity impacts are particularised in the joint report of the planning experts as excessive noise, potential and actual antisocial behaviour and parking.
The Applicant proposes a series of means of managing or mitigating the risk of amenity impacts on adjoining properties arising from the use of the property for tourist and visitor accommodation. These means include:

vetting of potential hires,
provision of documentation outlining the house rules at the commencement of the stay,
the inclusion of a volume limiter on onsite speakers and an automatic cut off at 10 pm,
the use of closed circuit television (CCTV) footage within the property,
the provision of the owners mobile number to adjoining residents, and
the proximity of the operators in the adjoining property.

These measures are discussed in the following paragraphs.
As part of the hire of the property guests are provided with a welcome letter that includes a section titled: 'House Rules'. Relevant to the current proceedings these state: "House Rules We would appreciate your adherence to the following House Rules: … - No parties or events of any kind … - No overnight visitors that exceed the maximum occupancy of nine people - Please respect our neighbours and keep noise to a minimum, especially after 10 pm … - Maximum of 2 cars to be parked in the driveway and they must not block the pedestrian footpath" (Ex E)
Further, the Applicant proposes that the following conditions of consent should be included in any approval to provide additional surety to the acceptable management of the use: "2. Development consent is granted to the use of the existing dwelling house at 22 John Parade Merewether as 'tourist and visitor accommodation' operated by the occupier of the adjoining land at 24 John Parade, Merewether. 3. In the event that the occupier of the adjoining land at 24 John Parade, Merewether ceases to be the operator of tourist and visitor accommodation at 22 John Parade, this consent will cease to operate, unless otherwise modified to permit independent operation. 4. The tourist and visitor accommodation is approved for a total of three (3) bedrooms accommodating a maximum of nine (9) guests at any one time as per the existing dwelling plans lodged with the application. … 6. The Plan of Management must be amended to incorporate a contact telephone number for the operator of the tourist accommodation available 24 hours per day and seven days per week. The contact number must also be provided to the adjoining neighbours to enable any neighbours to contact the operator should any of the conditions not be complied with. …." (Ex H)
During the course of the hearing, the Applicant agreed to the following additional measures, included in the final POM. These were agreed following the conclusion of the expert evidence and were not considered by the planning experts.

lighting on the rear deck to be cut off by an electrical timer on weeknights and Sunday nights between 10 pm and 6 am and Saturday night between 12 am and 6 am.
a request that the guests do not utilise the rear deck after 10 pm on weeknights and Sunday night and after 12 am on Friday and Saturday night.

Ms Gale's evidence is that the submissions received from residents in proximity to the site demonstrate that the use of the dwelling for tourist and visitor accommodation results in unreasonable impacts on the amenity of adjoining residents.
In her evidence, Ms Gale places emphasis on the need for the owner to be 'on site' to ensure the protection of the amenity of adjoining neighbours. She distinguishes the presence of the owner on site, from the proposal which locates them in the adjoining property as follows: "In my opinion, no on-site managers for example as required with a 'bed and breakfast establish[ment] which is a permissible use, is not resolved with the owners residing next door at 24 John Parade. I believe there is no certainty that this off-site overseeing of the proposed development will continue, as the property could be sold at any time and does not form part of the proposed development." (Ex 3)
Further, Ms Gale raises concern in relation to the uncertainty of the owners and operators of the tourist and visitor accommodation continuing to reside next door at 24 John Parade as 'the development could be sold at any time and does not form part of the proposed development' (Ex 3).
Ms Gale concludes that the amended POM 'does in part contribute or assist in the management and mitigation of residential amenity impacts.' However, her conclusion is qualified by the assessment that in her view the amended POM is insufficient to rely on to provide certainty that unreasonable adverse impacts will not occur to the residential amenity of the surrounding residents. She notes that the owners were in residence next door, and a similar POM was in place when the incidents documented in the submissions occurred (Ex 3).
In the alternative Mr O'Connor argues that the amended POM 'has been prepared to provide strict rules for guests in terms of behaviour while staying at the proposed development', further he argues that the proximity of the operator next door effectively means that the behaviour of guests can be 'managed' (Ex 3).
Mr O'Connor identifies the following relevant attributes of the amended POM: 1. the upper limit of 9 guests, 2. a strict prohibition on parties or events being hosted at the site, 3. the requirement for noise to be kept to a minimum after 10 pm, 4. the ability to remove guests who do not comply with the house rules. 5. (Ex 3)
Further, Mr O'Connor argues that, unique to the subject property ,the owners are located next door. This means that they have an interest in maintaining the residential amenity of their own property.
Mr O'Connor concludes that: 'Given these strict management procedures and the fact that the Manager will reside next door, there is every reason to believe that the proposed development will not cause an unreasonable amenity impact on the neighbours. If issues do arise there is a clear process to ensure that they are appropriately addressed' (Ex 3).

Submissions

Mr Pickles acknowledges that there is a potential for 'greater adverse amenity impacts by reason of an anticipated occupation of nine people in a tourist and visitor accommodation development than there may be for a single dwelling'. However, he argues this potential is balanced by the following factors:

tourist and visitor accommodation is unlikely to be occupied 24/7 and will remain empty.
that standard residential dwellings are occupied by people who like to have parties, like to entertain and generate noise.
That the final POM and draft conditions of consent provide reasonable and effective controls to mitigate the risk of unreasonable impacts.
that in the future the subject property could be utilised for tourist and visitor accommodation without consent. [Transcript 30/4/19 pg 16 at 25]

Mr Pickles submits that the document: Explanation of Intended Effect: Short -term Rental Accommodation Planning Framework' (STRA planning framework), produced by the NSW Department of Planning and Environment is in effect a draft instrument and should be taken into account, and given significant weight, in the determination of the development application.
Mr Pickles notes that the effect of the STRA planning framework will be that the use of a residential property as short term rental accommodation, as defined in the document, for a minimum of 180 days per year will be exempt development. He argues that this is relevant to the consideration of the acceptability of the impacts on the residential amenity of the adjoining properties as follows: "The consequence of that is that that's essentially the threshold of acceptability. 180 days is therefore regarded as an acceptable balancing of interest in a residential zone outside of Greater Sydney in which it could be expected that it could be exempt development and in particular, contemplating beachside locations such as Merewether and all up and down the New South Wales coast." (Transcript 30/4/19, pg.14 at 45)
It is Mr Pickles submission that when the imminent implementation of this framework, and the mitigation measures proposed are considered, the amenity impacts of the proposed use on the adjoining neighbours are reasonable.
Ms Berglund argues that the STRA planning framework produced by the NSW Government can't be said to be certain or imminent to the extent that it should be taken into account in the assessment of the application in the manner of a draft instrument under s 4.15(1)(a)(ii) of the EPA Act. She argues that the fact that the document seeks public feedback on the draft provisions necessarily implies that the framework may be amended following the receipt of feedback. Further, she argues there is no date for its implementation.
Ms Berglund submits that the STRA planning framework is irrelevant as it does not influence the position of the Council that the purpose of the development is 'serviced apartment' and is prohibited. The STRA planning framework does not affect this determination.
In relation to the assessment of the reasonableness of the amenity impacts arising from the development Ms Berglund makes the following key submissions: 1. the development consent is not tied to the current operators and their learned experience in screening and managing the guests who occupy the subject property. It could be run in the future by operators who are less diligent and less experienced. Therefore the impacts that may arise are uncertain. 2. that the nature of the use of the subject property as tourist and visitor accommodation generates a pattern of occupation that is distinct from that generally experienced from ongoing residential use. People occupying the property are more likely to be gathering for an event or celebration and being on vacation are likely to stay up later. She argues: 'It has a greater impact and yes, neighbours might have a party, but it would be rare for someone to have a party every Saturday night or every few Saturday nights.' (Transcript 30/4/19, pg.31 at 30) 3. that the neighbours continue to be impacted despite the imposition of a POM, and the controls detailed by Ms Rose in Exhibit C. 4. there is no certainty that the operators (at 25 John Parade) being in residence at all times that the subject property is occupied by guests. This reduces the certainty of the proposed 'House rules' and the provisions of a POM being complied with.
Finally, in relation to the amenity impacts arising from the development Ms Berglund argues that the question is whether the particular site is appropriate for the intensity of use proposed, given the number of neighbours, their proximity, the type of events which tend to take place in such forms of tourist accommodation and whether on merit the likely impacts are acceptable.

Findings

In assessing amenity impacts arising from a new development the Court has often utilised the framework of the planning principle set out in Davies v Penrith City Council [2013] NSWLEC 1141 at [121] to assist. This principle provides a series of structured questions to assist in assessing the impact of the development on neighbouring properties. The principle in full is: "The following questions are relevant to the assessment of impacts on neighbouring properties: How does the impact change the amenity of the affected property? How much sunlight, view or privacy is lost as well as how much is retained? How reasonable is the proposal causing the impact? How vulnerable to the impact is the property receiving the impact? Would it require the loss of reasonable development potential to avoid the impact? Does the impact arise out of poor design? Could the same amount of floor space and amenity be achieved for the proponent while reducing the impact on neighbours? Does the proposal comply with the planning controls? If not, how much of the impact is due to the non-complying elements of the proposal?"
The preceding planning principle is less applicable to the current circumstances where the development application seeks a change of use for an existing building, and proposes no physical works to the property. Commissioner Tuor, in Randall Pty Ltd v Leichhardt Council [2004] NSWLEC 277 ('Randall'), dealt with the intensification of an existing use where the adjoining properties raised objections in part on the basis of the impact of the current operations.
At par [25] of Randall, Tuor C details the following principles for the assessment of an extension or intensification of a use which may have an adverse impact on residential amenity, such as a hotel, are: "First, is the impact of the operation of the existing use on residential amenity acceptable? If the answer is no, then an extension or intensification, would be unacceptable unless there is no overall increase in impact or there are measures proposed which would mitigate the existing impact. · Second, if the answer is yes, is the impact of the proposed extension or intensification still acceptable?"
The principle in Randall has applicability for the current application. Any approval for the continuation of the proposed use will be predicated on the implementation of the measures proposed by the applicant to mitigate any adverse amenity impacts. The assessment is therefore focussed on: what is an acceptable level of impact and whether, with the measures proposed, the continued operation of the tourist and visitor accommodation meet that level of acceptability.
It is clear from the evidence of the residents (refer pars [17]-[20]) that the existing operation of the tourist and visitor accommodation has from their view had an unacceptable impact on their amenity.
As the development application was notified in late 2017, many of the incidents referred to as generating the amenity impacts listed at pars [17]-[20] relate to that time period. These incidents generally accord with the list of incidents nominated by the Applicant in their evidence.
The resident of 8 Coane Street, Merewether (at the rear of the subject property) provided the Court with audio-visual material that depicted events at the rear of the subject property on 4 November 2017, at 12.18am and 2.28am; 24 March 2018 at 12.22am; May 18 2018 at 10.30pm and 31 August 2018 at 10.48pm.
I accept the submission of Ms Berglund that the nature of the use of the subject property as tourist and visitor accommodation generates a pattern of occupation that is distinct from that generally experienced from ongoing residential use. I accept her submission, and the lay evidence of the neighbours, that often the tourist and visitor accommodation is utilised for a party, to celebrate a specific occasion or a vacation. I accept that equally these may result in the occupants staying up later, being more vocal and may result in the dwelling being occupied by a greater number of adults.
However it is appropriate to consider these factors in the context of the locality, the final POM, and the conditions of consent which seek to manage, control and mitigate the potential impacts that would arise.
Ms Rose, and her husband Adam are the owners of the subject property and reside next door at 24 John Parade. Ms Rose manages the operation of the tourist and visitor accommodation (the 'Beach House') and provided a statement to the Court, tendered as Exhibit C. Her evidence includes the following key details:

The Beach House was first listed on online advertising platforms in December 2016;
Ms Rose has declined a number of bookings that she deemed 'as high risk of disturbing the neighbourhood';
that the screening process for guests 'has become more strict over time as we started asking more detailed questions about the purpose of the stay and have gotten better at determining which groups are at high risk';
Ms Rose notes a series of incidents that generated neighbourhood complaints in March 2017, June 2017, July 2017, September 2017, November 2017, and two incidents in December 2017.
that the 'Beach House' has been rented for 377 nights over the period of 28 months. The occupancy rate is approximately 44%.
During the 28 months, three breaches of the 'House Rules' have resulted in guests being evicted before the end of their stay.
During the last 16 months, there has been one incident which occurred during the daytime. (Ex C)

Ms Rose also details other proximate sources of noise in the local area: "There are wedding and functions at the Merewether Surfhouse (400m away) and the Beach Hotel (450m away) most Friday and Saturday nights, with up to 490 guests attending those functions (Surfhouse function capacity is 350 people, Beach Hotel function capacity is 140 people), as well as additional people visiting the bars and restaurants in those venues. We regularly hear groups of people that have been at those venues walking along Bathers Way (the footpath across the road from the Beach House) or partying on the beach late at night." (Ex C)
I am satisfied on the evidence that the Applicant has demonstrated an improvement in the management of the subject site. These improvements have been captured and included in the final POM and the consent conditions. I am satisfied this addresses the submission of the Respondent that the consent is not personal (i.e. attached to the current operators) and runs with the land as these controls (POM, consent conditions) will apply to any operator of the tourist and visitor accommodation.
I am satisfied that the benefit of the agreed condition, reproduced below, that requires the accommodation to be operated by the adjoining landowner is their proximity and the ability for them to be responsive and attuned to any impacts arising from the operation of the tourist and visitor accommodation. "Development Consent is granted for the use of the existing dwelling house at 22 John Parade Merewether as 'tourist and visitor accommodation' operated by the occupier of the adjoining land at 24 John Parade, Merewether. In the event that the occupier of the adjoining land at 24 John Parade, Merewether ceases to be the operator of tourist and visitor accommodation at 22 John Parade, this consent will cease to operate, unless otherwise modified to permit independent operation." (Annexure B)
Consent has been provided by the owner of 24 John Parade for the imposition of this condition.
Tourist and visitor accommodation, or holiday letting, is a use which is synonymous with coastal areas both historically and at present. This is recognised by the 2016 Legislative Assembly Committee on Environment and Planning report titled: 'Adequacy of the Regulation of Short-Term Holiday Letting in New South Wales' (the Legislative Assessment Committee report). However, that report also acknowledged the change that has occurred since the advent of online advertising platforms. The report summarises this change as follows: "With the advent of online advertising platforms, however, it is now much easier for property owners to let their properties, whether their principal place of residence, an empty beach house, or an investment property, for short-term occupation. The numbers we heard about, not just in holiday areas, but across the state, attest to a rapid growth in letting and an expansion of the tourist and visitor accommodation market. (https://www.parliament.nsw.gov.au/committees/inquiries/Pages/inquiry-details.aspx?pk=1956#tab-reportsandgovernmentresponses)"

the extent and duration of the development of the proposed changes;
the ongoing engagement with the community, both in the formulation of the recommendations, and the development of the appropriate regulatory response;
the level of detail included in the STRA planning framework (Ex D).
The fact that the planning framework has been the subject of recent public exhibition. At Part 5 of the document: Have your say, it states: "The Department of Planning and Environment welcomes feedback, but notes that the state-wide permissibility of STRA and number of days in which it can take place are a policy position which has been endorsed by Government." (Ex D)

The STRA planning framework proposes amendments to introduce a state-wide planning framework for short term rental accommodation. The amendments include: "- introduction of a land use definition and permissibility for 'short- term rental accommodation' (STRA) - introduction of exempt and complying development criteria for STRA which will include a maximum number of days that STRA can operate in a calendar year - allowing councils outside Greater Sydney to set the number of days that a dwelling can be used for STRA without development consent or with a complying development certificate, to no lower than 180 days per year, to meet the need of their communities, and - the introduction of minimum fire safety and evacuation requirements for premises used for STRA." (Ex D)
The approval pathways proposed by the STRA planning framework are extracted below: (Ex D)
The most comparable category to the present development application is: "• When the host is not present and the property is not on 'bushfire prone land': The state-wide provisions will stipulate the number of days per calendar year that a property can host STRA as exempt development, as follows: - If the property is in Greater Sydney, a property may be used for STRA for no more than 180 days per year. - If the property is not in Greater Sydney, a property may be used for STRA up to 365 days per year. However, Councils in these areas will be able to reduce the number of days STRA is permissible to no less than 180 days."
At the commencement of the proposed amendments, intended to be implemented through changes to the Standard Instrument LEP, any property owner in the Merewether area will be able to utilise their dwelling for STRA without development consent for a no lower than 180 days per year.
I am satisfied that it is appropriate to give weight to this fact in determining what an acceptable level of impact is arising from the proposed use of the subject property as tourist and visitor accommodation. Appropriately this consideration needs to be balanced against the evidence of the actual impacts of the operation of the subject property.
I accept Ms Gale's position that, notwithstanding the POM and the additional conditions of consent, there is no certainty that adverse impacts will not occur to the residential amenity of the surrounding residents. But importantly this risk needs to be balanced by the fact that the use sought is permissible: BGP Properties Pty Ltd v Lake Macquarie City Council (2004) 138 LGERA 237; [2004] NSWLEC 399 at [117], the additional controls in the final POM and the regulation of the use through the proposed consent conditions.
I am satisfied that the final POM is consistent with the principles outlined in Renaldo Plus 3 Pty Limited v Hurstville City Council [2005] NSWLEC 315 at [53]-[55]. Importantly in this matter, I find that requirements in the final POM do not require people to act in a manner that is unreasonable or unlikely and the provisions of the plan do not require absolute compliance to achieve an acceptable outcome.

Conditions

Following the completion of the hearing, the parties were required to file an updated set of consent conditions detailing the agreed and contested conditions. These conditions were filed on May 1 2019. As noted at par [44] the Applicant included a final POM with these documents. The Respondent's solicitor provided consent to the provision of this document.
The Applicant seeks to reference this final POM in the consent conditions. I am satisfied it is appropriate to grant leave to this updated POM on the basis that it incorporates additional controls agreed to by the Applicant during the hearing (refer par [79] ) which provide additional mitigation measures.

Orders

The Court orders that: 1. The Applicant is granted leave to amend the Plan of Management for the proposed development to the version dated 1 May 2019 and included as Annexure 'A'; 2. The appeal is upheld; 3. Development Application for a change of use from a residential dwelling to tourist and visitor accommodation at Lot 16 Section J in DP 37393, 22 John Parade, Merewether is approved subject to the conditions in Annexure 'B'; 4. The exhibits are returned with the exception of Exhibits A, B and 2. ……………. D M Dickson Commissioner of the Court Annexure A: Final Plan of Management Annexure B: Conditions of Consent 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: 31 May 2019

(2004) 138 LGERA 237

(2013) 201 LGERA 116

(2007) 151 LGERA 400

(2002) 119 LGERA 171

(2011) 180 LGERA 343

At a glance

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Judgment (14 paragraphs)

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Cases Cited (17)

Cited By (1)