Westfield Management Pty Limited & Anor v Gazcorp Pty Limited & [2004] NSWLEC 7 | Case summary

16 January 2004 WESTFIELD MANAGEMENT PTY LIMITED ACN 001 670 579 First Applicant KENT STREET PTY LIMITED ACN 006 794 654 Second Applicant v GAZCORP PTY LIMITED ACN 001 696 073 First Respondent MOSCA PSERRAS ARCHITECTS PTY LIMITED T/A MOSCA PSERRAS PARTNERSHIP PTY LIMITED ACN 002 586 549 Second Respondent LIVERPOOL CITY COUNCIL Third Respondent JUDGMENT 1 On 15 November 2002 the third respondent, Liverpool City Council ("the council") granted development consent to the second respondent (a firm of architects) for a change of use of a large warehouse building at Warwick Farm, near Liverpool, from bulky goods warehouse to a warehouse clearance outlet. On 14 November 2003 the council, as certifying authority, issued a construction certificate for the internal fit-out of the building for a warehouse clearance outlet. On 24 November 2003 the council issued an interim occupation certificate. 2 The building has been subdivided into approximately 63 tenancies ranging from about 24 square metres to about 1,000 square metres, from which a vast range of merchandise is sold, including clothing, footwear, kitchenware cutlery and china, crystal and glassware, manchester, jewellery, haberdashery, toys, sporting goods, and perfume cosmetics and accessories. The tenants include such well-known names as Fletcher Jones and Staff Pty Ltd, David Jones Ltd, Reuben F Scarf (Retail) Pty Ltd, Oroton Group (Australia) Pty Ltd and Bohemia Crystal Pty Ltd. The building was officially opened as a warehouse clearance outlet by the Minister for Infrastructure and Planning and Minister for Natural Resources, the Hon Craig J Knowles MLA, at a ceremony on 21 November 2003 by the unveiling of a plaque and the cutting of a cake. 3 The applicants are the owner of a large regional shopping centre in Liverpool. They seek a declaration that the development consent is unlawful on the ground that the use is prohibited. They also seek an injunction restraining the first respondent (the owner) from using the property for the sale of items which do not satisfy the definition of a bulky goods salesroom or showroom. The applicants' argument, shortly stated, is that the use for which consent was granted is for the purpose of shops; and shops are a prohibited use of the land under the relevant environmental planning instrument. 4 The parties have tendered four lever arch files of documentary material. The lawfulness of the consent and of the present use may be resolved, however, by reference to only two documents, the relevant environmental planning instrument and the development consent. The relevant environmental planning instrument is the Liverpool Local Environmental Plan 1997 ("the LEP"). It is to that document that I now turn. 5 The land on which the warehouse building stands is in a zone identified as 4(b) Industrial - Special (cl 8). There is a zoning table to cl 9, which sets out in columns the various zonings and which lists the various kinds of development which may be carried out in each zone (either with or without development consent) and those kinds of development which are prohibited. It does this by way of a tick in the relevant column of the table, opposite the particular named use to identify those developments which are permissible with consent, by a tick and an asterisk to identify those which may be carried out without consent, and by the absence of a tick to identify those which are prohibited. Clause 9 of the LEP is as follows: 9 Development which is allowed or prohibited within a zone (1) Unless otherwise provided by this plan, the Table to this clause specifies for each zone: (a) development which may be carried out without consent, where "" is shown corresponding to that development, and (b) development which may be carried out only with consent, where "" is shown corresponding to that development. (2) Development referred to in the Table to this clause is prohibited in a zone if "" or "" is not shown corresponding to that development. (3) Development which is not referred to in the Table to this clause may be carried out only with consent (except within the 6(c) zone, in which any such development is prohibited. (4) The Council may grant consent to development only if the Council has had regard to the following: (a) the general objectives and other objectives of this plan, (b) the objectives of the zone in which it is proposed to be carried out, and (c) the other provisions of this plan. 6 In the column headed "Industrial 4(b)" in the table to cl 9, bulky goods salesrooms or showrooms are ticked (indicating that such development may be carried out with consent). Convenience stores are ticked. Shops are not ticked and are thus prohibited pursuant to cl 9(2). 7 Clause 6 is the definition clause. The relevant definitions are as follows: Bulky goods salesroom or showroom means a building or place used for the sale by retail or auction, or the hire or display, of any of the following: (a) furniture, or (b) electrical goods, or (c) toy and sporting equipment, or (d) office furniture, or (e) hardware, or

(f) outdoor products, or (g) floor coverings, or (h) automotive parts and accessories, or (i) lighting, or (j) antiques and second-hand goods, or (k) kitchen or bathroom showrooms, or (l) tiles (floor, ceiling or wall). … Convenience store means a shop selling a variety of small grocery goods, whether or not goods are available for hire there. … Local shops means a shop that: (a) operates primarily to serve the surrounding residential area, and (b) trades principally in groceries, small goods and associated convenience items, and (c) does not exceed 75 square metres in gross floor area, and includes such a shop that also offers the facilities of a post office or newsagency. … Shop means a building or place used for selling items, whether by retail or auction, or for hiring or displaying items for the purpose of selling or hiring them (whether the items are goods or materials). 8 The opening words of cl 9(1) are: "[u]nless otherwise provided by this plan…". Part 3 of the LEP is headed "Special Provisions" and contains one relevant provision. Clause 10(10), within Pt 3, states: Shops in the 4(a), 4(b), 4(c) and 4(d) zones Development for the purpose of a shop may be carried out only with consent on land within the 4(a), 4(b), 4(c) or 4(d) zone if the shop serves the daily convenience needs of the local workforce. 9 The objectives of the 4(b) zone are set out in cl 50(2). One does not get to consider those objectives, however, unless the development is either shown in the table to cl 9 as being permissible with consent (cl 9(1)(b)), or it is not referred to in the table and is thus permissible with consent (cl 9(3)). That is to say, one does not get to consider cl 9(4) and the objectives of the zone unless one first determines that the development is permissible with consent under either cl 9(1)(b) or cl 9(3). 10 Mr N A Hemmings QC, appearing for the first and second respondents, submits that a warehouse clearance outlet is development which is not referred to in the table and is thus permissible with consent under cl 9(3). This was the basis upon which the development application was made. The statement of environmental effects lodged by the second respondent in support of the development application states, after referring to cl 9(3): Warehouse clearance outlets are not specifically referred to in the subject table, and the site is not within the 6(c) zone, and therefore such outlets can be considered by Council as a use which is permissible with consent in this industrial zone. 11 In Mr Hemmings' submission, a warehouse clearance outlet is an innominate use, being a novel discrete type of development that is not otherwise referred to in the table to cl 9 and which also satisfies the zone objectives. 12 I am unable to agree with the submission. The various warehouse clearance outlets sell and are intended to sell goods by retail, that is, directly to the public. The use is that of shops, within the definition of "shop" in the LEP. Certain kinds of shops, namely those that sell bulky goods, and convenience stores, are permissible with consent (being marked with a tick in the Industrial 4(b) column of the table to cl 9). Similarly, if a shop serves the daily convenience needs of the local workforce then it is permissible with consent pursuant to cl 10(10). 13 The submission of Mr Hemmings could lead to absurdities, as pointed out by Mr M G Craig QC, appearing for the applicants. If the submission be correct, then a supermarket, which is not referred to in the table, would be permissible with consent pursuant to cl 9(3). Similarly, a department store, which is not referred to in the table, would be permissible as a discrete type of development. Even a specialised kind of shop, such as a pharmacy, would be permissible. But all of these uses are kinds of shops. The submission would make nonsense of the definition of a shop. The definition of "shop" is clearly wide enough to include any form of selling of items by retail. It includes the development in the present case. Moreover, the large number of shops and the wide range of goods for sale clearly shows that they are intended to serve far more than the daily convenience needs of the local workforce. 14 Even if it could be said that this is a discrete type of development which is not referred to in the table to cl 9 (and thus permissible under cl 9(3)), that does not assist the respondents. As noted above, the development also answers the definition of a shop, which is prohibited. The fact that the development may be permissible under cl 9(3) would not entitle the council to give its consent if the development were also for a prohibited use under cl 9(2). If a development could fit into more than one category, but one or other of those categories is development for a purpose which is prohibited, then the council cannot give its consent to the application (CB Investments Pty Ltd v Colo Shire Council (1980) 41 LGRA 270 at 271-272, per Hope JA; and at 276, per Reynolds JA). 15 The development of the first respondent's land as a warehouse clearance outlet is a prohibited use. One does not get to consider sub-cl (4) of cl 9. That sub-clause, as noted above, only applies to development which may be carried out with consent. The development consent which the council granted is unlawful. The first respondent's use of the land for the purpose of a warehouse clearance outlet is unlawful. 16 Mr Hemmings QC submits that in any event, the Court would not, in the exercise of its discretion, grant the relief sought by the applicants. A number of grounds are relied upon. First, it is submitted that the breach is purely technical, relating to the interpretation of a contradictory and ambiguous planning instrument which is not drafted in conventional form and open to a contrary interpretation which the council itself adopted. Secondly, the applicants delayed in commencing and prosecuting this action. Thirdly, the applicants are potential trade competitors but claim no hardship to themselves. On the other hand, there would be considerable inconvenience to the first respondent and to the various occupiers of the building and their employees if the relief claimed were to be granted. Fourthly, there is an overall public benefit in allowing the development to continue, particularly its economic benefit, which has the support of the local council. Fifthly, the council adopted a draft local environmental plan on 17 December 2002 by which it is proposed to amend the LEP to insert a new definition of "outlet centre" and to expressly allow the development of an outlet centre on the site of this development. Lastly, it is submitted that an injunction should be either refused or suspended to allow the draft amendment to the LEP to be made and to allow the council to regulate the use. 17 Mr M G Craig QC and Mr R P L Lancaster, appearing for the applicants, rely upon the following submissions. (1) The use is prohibited and thus cannot be regarded as a mere technical breach. (2) There was no delay in commencing the proceedings, which were commenced within the statutory period of three months allowed by s 101 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"), and other delays in not complying with the Court's pre-trial directions totalled only fourteen days. (3) There is no evidence of the extent of any harm to the first respondent if the orders sought were made. (4) Public interest is not confined to the presence or absence of physical or economic harm. There is a broader public interest in securing obedience to the planning laws. (5) The draft amendment to the LEP will be on exhibition until February 2004; it will involve consultation with a number of government authorities; and there is no certainty that it will be made. 18 The considerations which apply in the exercise of the Court's discretion in a case such as this are well known. They are conveniently set out in the judgment of Kirby P in Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335 at 339-341. Shortly stated, those considerations include the fact that the breach may be purely technical; that the applicant may have delayed in bringing its action; that the breach may be shown to have a beneficial interest; that the restraint sought is the enforcement of a public statute by which there is a public interest in the orderly development and use of the environment; that the obvious intention of the EP&A Act is that normally those concerned in the development and use of the environment will comply with the legislation; and that an unjust result may be avoided by postponing the effect of injunctive relief. 19 I accept the submission of the applicants that the breach of the Act in the present case is no mere technicality. Section 76B of the EP&A Act clearly states that where an environmental planning instrument provides that specified development is prohibited on land, a person must not carry out the development on that land. The system of planning control in the State could be set at nought if a use of land which is prohibited by an environmental planning instrument is allowed to continue. The whole system of planning control is dependent upon the orderly enforcement of environmental law. As noted by Kirby P in Warringah Shire Council v Sedevcic (at 340) a sense of inequity would be felt by those who complied with the requirements of the Act if relief were not granted. Moreover, the use in the present case is that of a retail shopping centre. Allowing a retail shopping centre on land on which shops are prohibited cannot be regarded as a mere technical breach. 20 In a similar case, Warehouse Group (Australia) Pty Ltd v Woolworths Ltd [2003] NSWCA 270, Woolworths Ltd had brought proceedings to restrain a trade competitor from using its premises for the purpose of a shop (which was a prohibited use) rather than a bulky goods sales outlet. In the Court of Appeal, Foster AJA (Mason P and Santow JA concurring) referred to a submission that the action was not brought by the council but by a trade competitor and that the applicant for relief had not sought to demonstrate that its commercial interests were in any way affected by the breach of the relevant zoning. His Honour then stated (at [48]): I am not persuaded by this argument. Planning law is of considerable public importance. Obviously, both the zoning and the relevant conditions were intended to achieve a public purpose of considerable significance, being orderly town planning and the implementation of government policy in this regard. The breaches by the appellant, if allowed to continue, would, in effect, nullify the relevant zoning. It would, in my view, have been entirely inappropriate that the infringing use be allowed to continue. 21 Similarly, I am also not persuaded that relief should be refused on the ground that the applicant in the present case is a trade competitor or that there has not been any demonstrated hardship or other impact on the applicants' business. The reasons stated by Foster AJA are not only compelling, but are binding upon me. 22 I am not persuaded that the applicants have delayed in bringing and in prosecuting these proceedings. Section 101 of the EP&A Act provides that the validity of a consent cannot be questioned in any legal proceeding after a period of three months from the date on which public notice of the consent was given. That is to say, the Parliament has fixed an appropriate period within which proceedings must be commenced. It could not be said that the applicants delayed if they commenced proceedings within the period allowed by the Act. In the present case the development consent was publicly notified on 9 April 2003. The proceedings were commenced on 17 June 2003, well within the statutory period. Neither do I regard a total delay of fourteen days in failing to comply with the various pre-trial directions as being so great as to disentitle the applicants to the relief that they seek. 23 Neither do I accept that there is a public benefit in allowing the development to continue. The public benefit is said to arise from the economic benefit it brings to the area, including the employment of persons in the various businesses. If this argument were to be accepted it would mean that business and economic considerations should prevail over planning controls which govern the integrated and orderly use of land. It would elevate the power of the dollar above carefully formulated planning and environmental controls. It would override the considerations described by Foster AJA in the passage cited above. 24 Finally, I refer to the fact that a draft amendment to the LEP has been exhibited and which, if made, would permit the development in the present case. The draft amendment was exhibited as recently as 17 December 2003. However, the council is yet to receive submissions on the proposal. The council has also to consult and to receive responses from a number of government departments. In particular, it is not known what attitude will be taken to the draft amendment by the Department of Infrastructure, Planning and Natural Resources. 25 It is clear, however, that the injunction to be granted should not be effective immediately. The first respondent and the various occupiers of the building will need some time to re-arrange their affairs in an orderly way. The injunction should not prohibit the use of the premises for the permissible use of bulky goods sales, for which there is an earlier extant development consent. The orders will be postponed for a period of twenty eight days. The second and third respondents have submitted to the Court's orders, other then costs. It would normally follow that the first respondents should pay the applicants' costs. Nevertheless I formally reserve the question of costs in order to afford the parties the opportunity to be heard on that question. The matter may be re-listed for this purpose by arrangement with my associate. 26 I make the following declaration and orders: (1) A declaration that Development Consent No. 2919/02 dated 15 November 2002 granted by Liverpool City Council for a change of use from existing bulky goods warehouse to a warehouse clearance outlet at No 12, lot 121 in deposited plan 876962, Orange Grove Road, Warwick Farm is unlawful and void. (2) An order that the first respondent abstain from carrying out, or causing the carrying out of, or permitting, authorising or suffering the use of the property at No. 12, lot 121 in deposited plan 876962, Orange Grove Road, Warwick Farm for the purpose of a shop or shops. (3) An order that the first respondent abstain from carrying out, or causing the carrying out of, permitting, authorising or suffering the use of the property at No. 12, lot 121 in deposited plan 876962, Orange Grove Road, Warwick Farm for the sale, hire or display of anything other than furniture, electrical goods, toy and sporting equipment, office furniture, hardware, outdoor products, floor coverings, automotive parts and accessories, lighting, antiques and second-hand goods, kitchen or bathroom showrooms and tiles (floor, ceiling or wall). (4) Orders 2 and 3 above are postponed for a period of twenty eight (28) days from today. (5) The question of costs is reserved. (6) The exhibits may be returned. I hereby certify that the preceding 26 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

Westfield Management Pty Limited & Anor v Gazcorp Pty Limited &

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