Woolworths Limited v Randwick City Council

Court of Appeal (NSW)|2017-06-23|Before: Leeming JA, Payne JA, Preston CJ

Greenwood v Warringah Council [2014] NSWCA 205 House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44 Hoy v Coffs Harbour City Council (2016) 218 LGERA 411; [2016] NSWCA 257 ISPT Pty Ltd v Valuer General (2009) 165 LGERA 25; [2009] NSWCA 31 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 Sevenex Pty Ltd v Blue Mountains City Council (2011) 183 LGERA 1; [2011] NSWCA 223 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 Woolworths Ltd v Randwick City Council [2016] NSWLEC 82 Category: Principal judgment Parties: Woolworths Limited (Appellant) Randwick City Council (Respondent) Representation: Counsel: Mr A Galasso SC (Appellant) Mr I Hemmings SC and Mr D Beaufils (Respondent)

Solicitors: Mills Oakley (Appellant) Marsdens Law Group (Respondent) File Number(s): 2016/227354 Publication restriction: Nil Decision under appeal Court or tribunal: Land and Environment Court of New South Wales Jurisdiction: Civil Citation: [2016] NSWLEC 82 Date of Decision: 7 July 2016 Before: Moore J File Number(s): 2016/154399

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

LEEMING JA: I have had the considerable advantage of reading the reasons of Preston CJ of LEC in draft. I agree that the appeal should be allowed, the separate questions should be answered favourably to Woolworths, and the proceedings remitted to the Land and Environmental Court so that the balance of the proceeding may be heard and determined. Contrary to the decision of the primary judge, and to Council's submissions on the appeal, cl 6.13(3)(a) of the Randwick Local Environmental Plan 2012 (RLEP) does not prevent consent being granted to Woolworths' development application for approval to convert premises formerly occupied by Randwick Rugby Club into a retail liquor outlet trading under the name "Dan Murphy's".
Clause 6.13 of the RLEP is as follows: "6.13 Business premises, office premises, restaurants or cafes and shops in residential zones (1) The objectives of this clause are as follows: (a) to provide for the establishment and continued operation of small-scale business development in residential zones, used in conjunction with dwellings or otherwise, (b) to enable the use of existing commercial buildings for office premises, business premises, restaurants or cafes and shops in residential zones, (c) to provide neighbourhood-scale commercial development to encourage walking and cycling as preferred modes of access. (2) This clause applies to the following: (a) in Zone R2 Low Density Residential and Zone R3 Medium Density Residential-development for the purposes of business premises, office premises, restaurants or cafes or shops, (b) in Zone R1 General Residential-development for the purposes of business premises, office premises or shops. (3) Development consent must not be granted to development to which this clause applies unless: (a) the development relates to a building that existed when this Plan commenced and was designed or constructed for the purpose of commercial premises, and (b) the consent authority is satisfied that: (i) the development will not adversely affect the amenity of any residential component of the development and the surrounding locality, and (ii) the intensity of development is suitable for the building, and (iii) the degree of modification of the footprint and facade of the building is consistent with the scale and desired attributes of surrounding development."
The land is zoned R3 Medium Density Residential under the RLEP, and there is no dispute that Woolworths' application is for the purpose of a "shop", satisfying the criteria in cl 6.13(2)(a). The conditional prohibition in cl 6.13(3) accordingly applies. That prohibition has two limbs which are cumulative. There is a per se prohibition unless paragraph (a) is satisfied, which turns on the character of a building which existed in 2012. Even if paragraph (a) is satisfied, the application must not be granted unless the consent authority is satisfied of each of the matters stated in paragraph (b). By reason of the way in which the litigation has proceeded to date, the only question which has arisen is that posed by paragraph (a). That has not prevented a relatively large number of issues of construction being argued on appeal (and, if I may say so, argued capably and concisely).
As Preston CJ of LEC has explained in more detail, Council conceded that the primary judge was wrong to hold that "retail premises" had an additional requirement of service to the public, as opposed to service to members or members' guests. That concession was properly made. Conspicuous by its absence is any requirement of services to the public in the definition of "retail premises", in contradistinction with the definition of "business premises". On the approach taken by the primary judge, that error was dispositive and, but for Council's notice of contention, the appeal would need to be allowed on that basis.
The first ground of Council's notice of contention was that "the relevant date for the inquiry required by [cl 6.13(3)(a)] was 15 February 2013, being the date on which LEP 2012 commenced". I would not accept this contention. The primary judge was correct to consider the design and construction of the building in 2003.
There are two limbs to paragraph (a) of cl 6.13(3), each of which specifies a different time. The first time is specified explicitly, the second implicitly. 1. The first limb relates to a building that "existed". The words "when this Plan commenced" qualify the point in time at which the building must have existed. Buildings typically exist for decades, and the ordinary meaning of the words is to select a moment in time at which the building must have existed, namely, 15 February 2013. 2. The second limb relates to the separate requirement that the building "was designed or constructed" for a particular purpose. This is quite different from the first limb. Most buildings are designed once, and constructed once. Typically, the design precedes the construction, and both are completed prior to the decades during which the building is in existence. (Of course, an existing building may be redesigned, and there may be further construction to implement the altered design. But that does not detract from the proposition that the design and construction happen at a particular time, after which the building will be in existence, it is hoped, for many years.) The purpose to which the second limb of cl 13(3)(a) is to be identified at the time the building was designed or constructed. That is the ordinary meaning of the language of the clause.
It is true that there is only one express temporal reference in the paragraph: "when this Plan commenced". It does not follow that that point of time governs both limbs of the paragraph. As a matter of word order, it would be unnatural for the temporal clause "when this Plan commenced" to follow the first limb but to precede the second limb if in fact that clause were to qualify both limbs. Moreover, the fact that there are no words in the second limb of the paragraph pointing to any particular time is a consequence of the fact that a temporal element is implicit in the words "was designed or constructed". In contrast, buildings "exist" for many years and so in the first limb of the paragraph it is necessary to identify a point of time within the life of the building.
The second ground of Council's notice of contention was to the effect that because the premises were designed and constructed for the purposes of a registered club, they were not designed or constructed for the purposes of commercial premises. This was not addressed by the primary judge.
On its face, the plans as approved by the Council in 2001 describe premises which fall within the definition of "commercial premises" in the RLEP. "Commercial premises" means "any of the following: (a) business premises, (b) office premises, (c) retail premises." The primary meaning of retail premises is "a building or place used for the purpose of selling items by retail". The term is also defined to include "food and drink premises" and "shops". The floorplan discloses premises used for the purpose of selling food and drink by retail. The administration and storage and toilets are ancillary to that purpose. The internal gaming room is in a different position, but its presence does not deny the character of the premises as being retail premises.
The premise of Council's submission is that the RLEP evinces an intention that the categories of "registered club" and "commercial premises" are mutually exclusive. That is not a matter for which express provision is made in the RLEP. The Council sought to imply as much from the cascading definitions in the RLEP and, especially, from the use of defined terms in the Land Use Table. Thus, in Zone B2, both "Commercial premises" and "Registered clubs" are permitted with consent; in Zone IN2, all of "Business premises", "Office premises", "Shops" and "Registered clubs" are prohibited, and in Zone RE2, all of "Restaurants or cafes", "Take away food and drink premises" and "Registered clubs" are permitted with consent. Of these three zones, the latter two (which treat "Registered clubs" in the same fashion as some but not all of the class of "Commercial premises") are at best neutral on the issue. It is true that the fact that in Zone B2 the entirety of "Commercial premises" and the entirety of "Registered clubs" are both expressly permitted with consent, which is consistent with the two being mutually exclusive. But it is also consistent with the RLEP treating those two terms as overlapping - that is to say, that while some registered clubs are not commercial premises, other registered clubs are.
Thus, I am doubtful that the premise of the Council's submission is made out. But in any event there is no reason to insist that an implication discerned from the definitions and the Land Use Table should be translated into the binary question posed by cl 6.13(3)(a), which focusses upon "existing commercial buildings" - that is to say, the built structures as opposed to their use.
Clause 6.13 distinguishes between "the purpose of commercial premises", which is the element of its operation on the one hand (cl 6.13(3)(a)), and "for the purposes of business premises, office premises, restaurants or cafes or shops" (being a subclass of "commercial premises"), in respect of which consent may be available under the clause. That is to say, the clause itself distinguishes between a narrower sub-class of "commercial premises" (which engages the application provision in cl 6.13(2)) and the entire class of "commercial premises" (for which purpose the existing building must have been designed or constructed).
The prohibition in cl 6.13(3)(a) turns on an historical purpose. It does not turn on an historical use, still less a current use of those premises. Because "use" plays no part in determining the operation of the prohibition in cl 6.13(3)(a), there is no sound reason why the Land Use Table ought be used to construe - and in particular, to narrow - the class of "commercial premises" to which the clause applies.
Further, cl 13(3)(a) is merely the first limb of the prohibition upon the power to grant consent. Because a proposed development is required to be refused under cl 13(3)(b) unless the consent authority is satisfied of each of the three matters specified (such as no adverse effect on nearby residential amenity), there is no good reason to give a narrow meaning to "commercial premises" which would serve to expand the scope of the per se prohibition in cl 13(3)(a).
For those reasons, it does not avail the Council to submit that the building was designed or constructed for the purpose of a registered club. That is true, and, in substance, was admitted on the statement of agreed facts ("Building 'A' fronting Brook Street comprises club premises on one level ..."'). But that does not prevent the application of cl 6.13(3)(a).
Subject to the foregoing, which is principally by way of emphasis and elaboration, I agree with the reasons of Preston CJ of LEC.
PAYNE JA: I have read the comprehensive reasons of Preston CJ of the LEC in draft. I gratefully adopt his Honour's summary of the facts and the relevant provisions of the legislation and the Randwick Local Environmental Plan 2012 ('RLEP'). I agree with the orders his Honour proposes for substantially the reasons his Honour gives. My reasons for making the orders proposed can be expressed shortly.

The correct question under RLEP - Grounds 2, 4 and 7 (a) and (b); Notice of Contention - Ground 2

The correct enquiry required by cl 6.13(3)(a) is to determine the purpose for which the building was designed or constructed. For the reasons given by Preston CJ of the LEC, the primary judge erred in focussing upon the Club's use as a registered club rather than the purpose for which the building was designed or constructed.
On this issue, I was troubled in the course of argument about the Council's second contention in its Notice of Contention. It is true that cl 6.13(3)(a) of RLEP does not require or permit a characterisation of the use of the building. What cl 6.13(3)(a) requires is examination of whether the building was designed or constructed for the specified purpose of "commercial premises."
The Council's second contention in its Notice of Contention accepted so much as correct. Mr Hemmings SC, in the course of his able and helpful address, submitted that within the meaning of the RLEP design or construction for the purpose of "commercial premises" necessarily excluded design or construction for the purpose of a "registered club". Why this is relevant is that when examining the correct question, whether the purpose for which the building was designed or constructed was "commercial premises" within the meaning of the RLEP, I would conclude, based on the plan contained in the Development Application 1165/02 which was much relied upon by Woolworths in this appeal, that the design and construction of the premises, by including the games room, was for the purpose of a "registered club". If the design or construction for the purpose of "commercial premises" within the meaning of the RLEP necessarily excluded the design or construction for the purpose of a "registered club" within the meaning of the same RLEP, the answer to the correct question may still not have availed Woolworth's here.
I have concluded, however, that the Council's second contention in its Notice of Contention should be rejected. First, as Preston CJ of the LEC points out, there is no express exclusion in the RLEP from the definition of "commercial premises" for "registered clubs". Secondly, I agree with Preston CJ of the LEC that there is no implication in the definitions of "commercial premises", "business premises" or "retail premises" that a "registered club" is excluded, at least at the level of generality at which these terms are defined in the RLEP. Thirdly, the fact that in the RLEP the development control tables for various zones use the terms "commercial premises" and "registered club" in ways which mark out important differences in the uses of those terms for some purposes under the RLEP does not in this case lead to a conclusion that for the purposes of the RLEP design or construction for the purpose of "commercial premises" necessarily excludes design or construction for the purpose of a "registered club".

The building was designed for the purpose of commercial premises - Grounds 3, 5, 6 and 7 (c) and (d)

I agree with Preston CJ of the LEC that the primary judge should have concluded that the Club's building was designed and constructed for "retail premises" and thus "commercial premises" as defined. Having rejected the Council's second contention in its Notice of Contention, I have concluded that characterisation as a "registered club" does not necessarily exclude characterisation as "retail premises" within the meaning of the RLEP. I agree, for the reasons Preston CJ of the LEC gives that the Council's remaining arguments about the characterisation of the Club as other than "retail premises" within the meaning of the RLEP should be rejected.

Existing use rights - Ground 1

I agree with Preston CJ of the LEC that it is not appropriate to determine ground 1.

Conclusion and orders

I agree with the orders proposed by Preston CJ of the LEC.
PRESTON CJ of LEC:

Nature of appeal and outcome

Randwick Rugby Club ('the Club') has operated a club on the ground floor of a building at 102-104 Brook Street, Coogee since the 1950s. The Club proposes to relocate its operations. Woolworths Limited proposes to convert the Club premises into a retail liquor outlet operated under the Dan Murphy's banner.
Woolworths lodged a development application for the proposed retail liquor outlet with Randwick City Council ('the Council'). The Council refused consent to the development application. Woolworths appealed to the Land and Environment Court under s 97 of the Environmental Planning and Assessment Act 1979 ('EPA Act').
The Council raised a contention that development consent could not be granted to Woolworths' proposed development because that development did not relate to a building that was designed or constructed for the purpose of commercial premises, pursuant to cl 6.13(3)(a) of Randwick Local Environmental Plan 2012 ('RLEP').
The Council applied for this contention to be heard and decided separately from other questions in the appeal. Pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005, the Court ordered two separate questions: "(a) Does the development application seek consent for development which does not relate to a building that was designed or constructed for the purpose of commercial premises pursuant to cl 6.13(3)(a) of Randwick Local Environmental Plan 2012? (b) Having regard to the answer to question A, is it open to the consent authority to grant approval to the development application?"
The separate questions were decided by Moore J on 7 July 2016: Woolworths Ltd v Randwick City Council [2016] NSWLEC 82. The primary judge upheld the Council's contention, answering the first question "yes" and the second question "no". That is to say, the primary judge decided that, pursuant to cl 6.13(3)(a) of RLEP, development consent could not be granted to the proposed development because the Club's building, although existing when RLRP commenced, was not designed or constructed for the purpose of commercial premises. The primary judge considered that this determination of the separate questions was dispositive of the appeal. He therefore proceeded to order that the appeal be dismissed.
Woolworths appealed against the decision of the separate questions and the order dismissing the appeal under s 57(1) of the Land and Environment Court Act 1979 ('the Court Act'). An appeal under s 57(1) of the Court Act is limited to "an order or decision…on a question of law".
Woolworths raised seven grounds of appeal, grouping them into three categories: 1. The correct question under RLEP (Grounds 2, 4 and 7 a and b): the primary judge misapplied cl 6.13(3)(a) of RLEP by asking the wrong question, both in terms of the subject matter of the analysis and the other legislative provisions referred to; 2. The building was designed for the purpose of commercial premises (Grounds 3, 5, 6 and 7 c and d): the primary judge erred in failing to find that the development application was not barred by cl 6.13(3)(a) of RLEP; 3. Existing use rights (Ground 1): having found that the Club's building had the benefit of existing use rights, and that the building was not designed or constructed for the purposes of commercial premises, the primary judge erred in failing to hold that, by operation of s 108(3) of the EPA Act, cl 6.13(3)(a) of RLEP had no effect while the incorporated provisions of s 108 of the EPA Act and Pt 5 of the Environmental Planning and Assessment Regulation 2000 ('the EPA Regulation') remain in force.
The Council raised two contentions in its Notice of Contention on which the Council contended the decision of the primary judge should be affirmed. The first concerned the time at which the inquiry required by cl 6.13(3)(a) of RLEP, of whether the building was designed or constructed for the purpose of commercial premises, needed to be answered. The first contention was: "1. Contrary to the conclusion of the trial Judge at Judgment [11], the relevant date for the inquiry required by clause 6.13(3)(a) of the Randwick Local Environmental Plan 2012 (LEP 2012) was 15 February 2013, being the date on which LEP 2012 commenced."
The second contention was that: "2. As the premises were designed and constructed for the purposes of a 'registered club', those premises were not designed or constructed for the purposes of 'commercial premises' (and that was the correct finding at either the date in contention 1 or at the date used by the trial Judge)."
The second contention assumed that the purposes of "registered club" and "commercial premises" were mutually exclusive, so that if the building was designed or constructed for the purpose of registered club, it could not be designed or constructed for the purpose of commercial premises.
I would uphold Woolworths' first two categories of grounds of appeal. First, the primary asked the wrong question and misdirected himself as to cl 6.13(3)(a) of RLEP. Second, on the facts properly found, the proposed development related to a building that was designed or constructed for the purpose of commercial premises. Commercial premises means business premises, office premises or retail premises. The primary judge erred in finding that the building was not designed or constructed for the purpose of retail premises, although he did not err in finding that the building was not designed or constructed for the purpose of business premises.
I would not uphold the Council's two contentions. As to the first contention, the primary judge did not err, in the circumstances of this case, in answering the inquiry required by cl 6.13(3)(a) of RLEP by considering the design and construction of the Club's building when it was approved and first built in 2003. The second contention itself involves misdirection. The correct question required by cl 6.13(3)(a) of RLEP is only whether the building was designed or constructed for the purpose of commercial premises; it is legally irrelevant to inquire whether the building was designed or constructed for any other purpose, including registered club. The answer to the correct question cannot depend on the answer to the wrong question.
As a consequence, the primary judge erred, on a question of law, in deciding that cl 6.13(3)(a) of RLEP precluded the grant of consent to the proposed development. The primary judge should have found that cl 6.13(3)(a) of RLEP did not preclude the grant of development consent to the proposed development. The primary judge found on the facts that the proposed development related to a building that existed when RLEP commenced and that the building was designed or constructed for the purposes of food and drink premises, being one of the specified types of retail premises (at [46]). But for the primary judge's error in adding a requirement, not found in cl 6.13(3)(a) of RLEP, that the retail at the food and drink premises had to be "to the public", the primary judge would have found that the building was designed or constructed for food and drink premises, and hence retail premises, and hence commercial premises.
The primary judge's answers to the separate questions should therefore be set aside and the separate questions answered differently, namely "no" to the first question and "yes" to the second question.
This conclusion on the first and second categories of the grounds of appeal means that the third category of grounds of appeal does not arise. If cl 6.13(3)(a) of RLEP does not have the effect of preventing the grant of development consent to the proposed development, the clause does not derogate from, or have the effect of derogating from, the incorporated provisions of s 108 of the EPA Act and Pt 5 of the EPA Regulation. Section 108(3) of the EPA Act therefore does not operate to cause cl 6.13(3)(a) to have no force or effect. There is no need to, and good reason not to, determine this ground of appeal.

First category of grounds of appeal: misconstruction of cl 6.13(3)(a)

Woolworths submitted that the primary judge misdirected himself in two respects. First, the primary judge improperly focused on the Club's operations in order to determine the purpose of the Club's use of the building, rather than on the historical fact of the purpose for which the building was designed or constructed (Grounds 2 and 4). Second, the primary judge erred in his application of cl 6.13(3)(a) by improperly referring to the irrelevant term "registered club" as defined in RLEP (which in turn referred to the Liquor Act 2007) but, if such definition was relevant (which Woolworths resisted), the applicable term would be "club" as defined in Randwick Local Environmental Plan 1998 ('Randwick LEP 1998'), the instrument in force at the time the building was designed or constructed (Grounds 7 a and b).
The first misdirection, Woolworths submitted, was that the primary judge approached the inquiry required by cl 6.13(3)(a) of RLEP, by considering whether the Club's current use of the building for the purpose of a registered club can fit within the definition of "commercial premises" so as to satisfy cl 6.13(3)(a) of RLEP. This approach is evidenced by the following statements of the primary judge: "27. Although a deal of the submissions related to general characterisation questions in the context of a Chamwell-style analysis (see Chamwell Pty Ltd v Strathfield Municipal Council [2007] NSWLEC 114; 151 LGERA 400), I am satisfied that the appropriate consideration is more confined and requires analysis in the context of the relevant statutory provisions for 'registered clubs' which impose boundaries or limits on the nature of the activities of such bodies. … 29. As the premises are currently used for the purposes of a registered club, it is necessary to consider whether or not, in the confined definitional and statutory framework for a registered club, such an enterprise can fit within the definition of either 'business premises' or 'retail premises' and thus 'commercial premises' for the purposes of satisfying cl 6.13(3)(a) of the LEP. 30. This involves consideration of not only the provisions of the LEP but also how, linking from the definition of 'registered club' in the LEP, the relevant provisions of both the Liquor Act and the Clubs Act define and/or confine the nature of the permitted operations of the club at the premises in this definitional context. … 34. The element of the building involved in these proceedings is operating as a registered club. The term 'registered club' is one defined in the LEP as earlier set out."
Woolworths submitted that, in so doing, the primary judge asked himself the wrong question. The question required to be asked by cl 6.13(3)(a) was what was the purpose for which the building was designed or constructed. The actual use of the building and the purpose that such use might be seen to serve were irrelevant. Hence, it was irrelevant that the building was "currently used for the purposes of a registered club" (at [29]). Whatever be the current use of the building or the purpose of the current use, it cannot assist in determining the purpose for which the building was designed or constructed. It was therefore erroneous for the primary judge to approach the inquiry required by cl 6.13(3)(a) by considering whether the Club's current use of the building for the purpose of a registered club, "in the confined definitional and statutory framework for a registered club", could fit within the definition of either "business premises" or "retail premises" and thus "commercial premises" for the purposes of satisfying cl 6.13(3)(a) (at [29]).
The second misdirection, Woolworths submitted, was to apply cl 6.13(3)(a) of RLEP by reference to the definitional and statutory framework of "registered club" in RLEP and in the Liquor Act and the Registered Clubs Act 1976. The primary judge's approach in this respect is evidenced by the passages in [27], [29], [30] and [34] quoted earlier, as well as the primary judge quoting in [16] the definition of "registered club" in RLEP ("a club that holds a club licence under the Liquor Act 2007") and considering whether use for the purpose of a registered club can fall within the definition of business premises or retail premises.
In relation to business premises, the primary judge said: "33. For the purposes of my consideration in these proceedings, it is appropriate to start with the definition of 'business premises' and, in particular, the concept of providing services to 'the public'. 34. The element of the building involved in these proceedings is operating as a registered club. The term 'registered club' is one defined in the LEP as earlier set out. 35. From its terms, this definition takes one to consideration of the relevant provision in the Liquor Act, s 10(1)(c). This provision is in the following terms: 10 Types of licences and authorisation conferred by licence (1) The following types of licences may be granted and held under this Act: (a) …, (b) club licence, …, (f) ... (2) A licence authorises the licensee to sell or supply liquor in accordance with this Act and the conditions of the licence. (3) The authorisation conferred by a licence is subject to this Act and the regulations. 36. This then leads to two further provisions of the Liquor Act. The first is s 18(1), a provision in the following terms: 18 Authorisation conferred by club licence (1) A club licence authorises the licensee to sell liquor by retail on the licensed premises to a member of the club (or a guest of a member of the club) for consumption on or away from the licensed premises. 37. The second is s 19(1), a provision in the following terms: 19 Club licence - general provisions (1) A club licence may only be granted to a club that: (a) meets the requirements specified in section 10 (1) of the Registered Clubs Act 1976, and (b) otherwise complies with the requirements of that Act. 38. Thus, in turn, s 19(1) of the Liquor Act engages the provisions of s 10(1) of the Clubs Act. That provision is lengthy and it is not necessary to reproduce it. 39. A proper analysis of these provisions, in my view, however leads to a prima facie conclusion that such services as are provided by a 'registered club' are not ones that are provided to the public but are only ones provided to members of the registered club or their guests."
The primary judge then dealt with the argument of Woolworths that, under s 23 of the Registered Clubs Act, the relevant authority could grant a club function authorisation permitting persons who are not members of the club to attend functions at the Club's premises (at [40]-[45]). The primary judge held that: "it is not able to be said that access to such club premises pursuant to a s 23 authorisation is available to the public for the public to utilise such services as provided on the premises of a registered club" (at [44]).
The primary judge therefore held that, as the general public do not have the ability to access and to use the Club's premises, the premises cannot constitute business premises (at [45]).
Woolworths submitted that cl 6.13(3)(a) of RLEP has nothing to do with "registered clubs" or "the nature of the activities of such bodies" (at [27] of the judgment). The clause does not refer, either expressly or impliedly, to "registered clubs". It was erroneous for the primary judge to import the concept of a "registered club", and the definitional and statutory constraints on the activities of a registered club, into the analysis required under cl 6.13(3)(a) of RLEP.
Clause 6.13(3)(a) of RLEP directs attention only to the purpose for which the building was designed or constructed. The primary judge's elevation of the regulation of the Club's activities in the building under the Liquor Act and the Registered Clubs Act over the historical matter of fact of the purpose for which the building was designed or constructed directed attention to the wrong activity. The Registered Clubs Act and the Liquor Act cover the conduct of the occupant of a building in the operation of a registered club, whereas cl 6.13(3)(a) of RLEP addresses the anterior issue of the design and construction of that building.
Woolworths submitted that this conclusion can be drawn from an interpretation of the text of cl 6.13(3)(a) of RLEP (as to the relevance of the text in interpretation, see Alcan (NT) Alumina v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47]). But it is also consistent with a purposive approach (referring to Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28; Cranbrook School v Woollahra Municipal Council (2006) 66 NSWLR 379; [2006] NSWCA 155 at [36]; Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 at [54]).
The objectives of cl 6.13 of RLEP include enabling "the use of existing commercial buildings for office premises, business premises, restaurants or cafés and shops in residential zones" (cl 6.13(1)(b)). Woolworths submitted that the obvious reason for this policy is that buildings regularly outlive their original occupants, and the ability to continue commercial activity on a particular site protects, and encourages, investment by a landowner. To ascribe particular significance to the operation of a building's first occupant, and limit further development based thereon, prevents the clause from operating as intended. Indeed the practical effect of the primary judge's reasoning is that the use of the premises cannot be altered from accommodating a registered club, and the site would otherwise become dormant. The primary judge's construction of cl 6.13(3)(a) would defeat the objectives of cl 6.13 of RLEP, as well as the object of the EPA Act in s 5(a)(ii) which seeks "to encourage…the promotion and co-ordination of the orderly and economic use and development of land".
Woolworths put its argument on the second misdirection concerning registered clubs in an alternative way. If it was not legally irrelevant to refer to the Club's use of the building as a registered club in applying cl 6.13(3)(a) of RLEP (contrary to Woolworths' primary argument), then the primary judge also erred in referring to the definition of "registered club" in RLEP (and the provisions of the Liquor Act incorporated by reference in that definition), rather than the definition of "club" in Randwick LEP 1998. RLEP was not in force at the time that the purpose relevant to the inquiry under cl 6.13(3)(a) of RLEP needed to be determined. That time was when the building was designed or constructed. In this case, that time was in 2003. The applicable instrument in force in 2003 was Randwick LEP 1998. RLEP did not come into force until 15 February 2013.
Woolworths submitted, in contrast to RLEP, Randwick LEP 1998 did not contain any definition of a "registered club" but rather included a definition of "club" in the following terms: "club means a building or place which is used for social, literary, political, sporting or any other lawful use which is, or intended to be, registered under the Registered Clubs Act 1976, whether or not the building or place is licensed to sell liquor under the Liquor Act 1982."
Woolworths submitted that there are a number of relevant differences between the meanings of the respective defined terms, the most obvious of which is that whereas a "registered club" for the purposes of RLEP requires a liquor licence, a "club" under Randwick LEP 1998 expressly does not. The earlier definition is in that, and other respects, more inclusive and of broader application.
The Council submitted that the primary judge did not err in referring to the definition and statutory requirements of a registered club in applying cl 6.13(3)(a) of RLEP. The Council submitted that the primary judge did not misdirect himself in the first way contended for by Woolworths, namely by focusing on the Club's operations rather than the historical fact of the purpose for which the building was designed or constructed.
The Council submitted that the primary judge was not focused upon the operations of the Club at all. As can be seen from [41] and [42] of the judgment, because of the generalised way the primary judge dealt with the matter, the specifics of the actual operations were irrelevant. Rather, the primary judge proceeded upon the basis of the single floor plan (at [24] of the judgment). By reference to that plan (and town planning limitations imposed by reference to the Liquor Act and Registered Clubs Act), the primary judge focused upon whether the building was designed or constructed for the purpose of commercial premises. What the primary judge did not perform was a separate - impermissible - task of determining whether premises, that were designed and constructed for the purpose of registered club, were nevertheless able to be adapted so as to be used for commercial premises.
The Council submitted that the fact that the premises had high ceilings, a loading dock or car park or a café which led itself to adaptation for use as a commercial premises (even easy adaptation) is beside the point.
As to the second misdirection contended for by Woolworths, the Council submitted that it was appropriate for the primary judge to refer to the purpose of a "registered club" and the definitional and statutory framework for a registered club.
First, and this was the Council's second contention in its Notice of Contention, a characterisation of the purpose for which the building was designed or constructed as a "registered club" necessarily excludes a characterisation of the purpose as being for commercial premises. The Council contended that the purpose of registered club and the purpose of commercial premises are mutually exclusive. If the building is found to have been designed or constructed for the purpose of a registered club, it cannot be characterised as being designed or constructed for the purpose of commercial premises.
The Council submitted that, in approaching the question raised by cl 6.13(3)(a) of RLEP, it was necessary to characterise the purpose of the use that would be made of the building. The clause looks to the design and construction for a specific purpose of a use. The Council therefore referred to the principles governing the characterisation of the purpose of a use: "As the authorities make clear any use must be for a purpose. That purpose is the end to which the use of the land can be seen to be put. It describes the character which is imparted to the land at which the use is pursued. Further, in planning law, 'purpose' is not concerned with the nature of the buildings that will be used to serve that purpose. Uses of a different nature can still be seen to serve the same purpose. Finally, the characterisation process is not carried out by reference to the detailed activities, transactions or processes carried out on the land" (citing Abret Pty Ltd v Wingecarribee Shire Council (2011) 180 LGERA 343; [2011] NSWCA 107; Chamwell Pty Ltd v Strathfield Council (2007) 151 LGERA 400; [2007] NSWLEC 114; Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305)."
With this understanding of the approach to be taken to the characterisation of the purpose of the use, the Council considered the structure of RLEP to determine whether a registered club is simply a form of "commercial premises" for the purpose of RLEP or whether, as the Council submitted it was, a separate and independent purpose for which the building may be used.
The Council firstly referred to the definitions of the relevant purposes in RLEP. Both "commercial premises" and "registered club" are separately defined. Neither of those definitions refer to the other purpose. The purpose of "commercial premises" is a genus. By its definition the species of that genus are business premises, office premises and retail premises. Each of those species is separately defined. Each of those separately defined terms concludes with a note. The note assists with the use and understanding of RLEP by cross referencing. The note for each term relevantly identifies that they are a type of commercial premises. Pursuant to cl 1.5 of RLEP, notes in the Plan are provided for guidance and do not form part of the Plan. Having regard to the potential guidance, the definition of "registered club" does not conclude with a note.
Some of the definitions of the species of the genus "commercial premises" are further defined. "Retail premises" contains an inclusive list. When regard is then had to those subspecies, RLEP again includes a note for guidance to identify that, for example, use for the purpose of a "restaurant or café" is a type of "food and drink premises". "Food and drink premises" form paragraph (c) of the definition of "retail premises", which is a type of "commercial premises".
The Council noted that the definitions have no operative effect. They are to be used in the body of RLEP itself. RLEP is a standard instrument. It adopts a land use table in Pt 2. In the normal way, that table identifies development for a purpose permissible without consent, with consent or that is prohibited. Further, it adopts the format whereby use for a purpose may be a nominate prohibited use, or it may be a nominate permissible use, or it may be an innominate prohibited or permissible use. The Council referred to the discussion of the threefold classification of development in Botany Bay City Council v Pet Carriers International Pty Ltd (2013) 201 LGERA 116; [2013] NSWLEC 147.
Next, the Council referred to how the defined terms are used in the land use table. Use for the purpose of "registered club" is dealt with in RLEP as an innominate use in three different zones: B2 Local Centre, IN2 Light Industrial and RE2 Private Recreation. Consideration of the way in which both commercial premises and registered clubs are dealt with further supports the conclusion that they are uses for independent separate purposes.
In the B2 Local Centre zone, use for the purpose of "commercial premises" is a nominate permissible use. As a result, there is no need for reference, and there is no reference, to use for the purposes of "business premises", "office premises" or "retail premises". That is because they are each species of the genus "commercial premises" and so permissible. Use for the purpose of "registered club" is a separately identified nominate permissible use. If a registered club was merely a species of the genus commercial premises, its nomination would simply be superfluous.
In the IN2 Light Industrial zone, any development not specified as prohibited is permissible with consent. Both business premises and office premises are prohibited. Retail premises are not prohibited, however some subspecies are prohibited: bulky goods premises, food and drink premises, markets, roadside stalls, shops and vehicle sales or hire premises. It is because some of the subspecies of retail premises remain permissible that the prohibited purpose is not simply "commercial premises". Registered clubs are separately defined as a nominate prohibited use.
In the RE2 Private Recreation zone, any development not nominated as permitted without consent or with consent is prohibited. As a result, "commercial premises", "business premises", "office premises" and "retail premises" are prohibited as innominate prohibited uses. Relevantly, "restaurants or cafés" and "takeaway food and drink premises", both being subspecies of the species "retail premises", both containing the guiding note, are nominate permissible uses. "Registered clubs" are a nominate permissible use.
The Council submitted that the textual indicators available from (1) the definitions themselves, (2) the structure of the Dictionary (including the guidance provided by the "notes") and (3) the structure of the land use table show that, properly characterised, use for the purpose of registered club is not a use for the purpose of "commercial premises".
The Council noted that the primary judge did find that the building was currently used for the purpose of a registered club (see [29] and [34] of the judgment, for example). The Council submitted, however, that the primary judge should also have found that the building was designed or constructed for the purpose of a registered club. If the primary judge had so found, the building necessarily could not have been designed or constructed for the purposes of "commercial premises". The primary judge's actual finding that the building was not designed or constructed for the purpose of commercial premises can, therefore, be affirmed on this ground.
Second, the Council supported the primary judge's approach that, as the building was currently used for the purpose of a registered club, it was relevant to consider whether a registered club could fit within the definition of either "business premises" or "retail premises" and thus "commercial premises" so as to satisfy cl 6.13(3)(a) of RLEP. The Council submitted that the process of characterisation of the purpose of a use serves a town planning purpose (citing House of Peace Pty Ltd v Bankstown City Council (2000) 48 NSWLR 498; [2000] NSWCA 44). Different purposes give rise to different town planning considerations. For example, different town planning considerations arise in relation to a commercial "pub" (a defined purpose in RLEP) compared to a "registered club" (another defined purpose in RLEP). The purely commercial focus of a "pub", compared to the generally more community based focus (or societal function) of a "registered club", identifies the starting point for different potential impacts upon amenity. The Council submitted that it is for that reason that it can be understood, for example, that in the RE2 Private Recreation zone, "registered clubs" are permissible whereas "pubs" are prohibited.
The Council submitted that part of the reason for the different impacts was because of the limitations imposed upon the operation of a registered club because of its registration and licensing regime. Far from being irrelevant, in order to properly understand the purpose of the use, limitations that may be imposed upon the use, which have the potential to generate different town planning impacts, are clearly relevant.
The Council noted that the definitions in RLEP (which is a standard instrument) import those town planning restrictions by reference to other legislation. The simple fact that those restrictions are not themselves cited in the definition of RLEP does not detract from their town planning purpose. As a result, the primary judge's consideration of the regime under the Liquor Act and the Registered Clubs Act was not in error.
Third, the Council disputed Woolworths' alternative submission that, if it be relevant to refer to the purpose of a registered club, the proper reference should have been to the definition of "club" in Randwick LEP 1998, and not to the definition of "registered club" in RLEP. The Council's first contention in its Notice of Contention was that the relevant date for the inquiry required by cl 6.13(3)(a) of RLEP is when RLEP commenced, which was 15 February 2013. Clause 6.13(3)(a) refers to a building that, firstly, existed when RLEP commenced and, secondly, was designed or constructed for the purpose of commercial premises. The Council contended that the date for both limbs is the same, namely the date when RLEP commenced. The inquiry required by cl 6.13(3)(a) is whether the building, in the form that the building existed on the date when RLEP commenced, was designed or constructed for the purpose of commercial premises. The Council contended that the primary judge erred in using as the date for the second limb, the date when the building was designed or constructed (as evidenced in the approved plan in the 2003 development consent).
The relevance of this contention, the Council submitted, was that it avoided the uncertainty inherent in Woolworths' alternative argument that the relevant definition was that of "club" in Randwick LEP 1998 and not of "registered club" in RLEP. If, as the Council contended was correct, the date for both limbs of the inquiry in cl 6.13(3)(a) is the same, namely the date when RLEP commenced, then the relevant definition will be that of "registered club" in RLEP and not of "club" in Randwick LEP 1998. The Council noted that it was common ground that the purpose of "commercial premises" is to be interpreted by reference to the definition of "commercial premises", and the definitions of terms nesting within that purpose (such as of "business premises" and "retail premises") within RLEP, and not by reference to the definitions in Randwick LEP 1998. Consistent with this approach, the purpose of "registered club" is to be interpreted by reference to the definition of "registered club" in RLEP and not the definition of "club" in Randwick LEP 1998.
The Council submitted, therefore, that the primary judge did not err by referring to the definition of "registered club" in RLEP, which in turn referred to the Liquor Act.
I find that the primary judge did misdirect himself in the two ways contended for by Woolworths. First, the primary judge did answer the question required by cl 6.13(3)(a) by reference to the Club's operations as a registered club rather than the historical fact of the purpose for which the building was designed or constructed. This is evident from, firstly, the language used by the primary judge in the passages quoted earlier from the primary judge's reasons for judgment (see in particular the references to the Club's current use and operations in [29], [30] and [34] or the judgment); secondly, the approach undertaken by the primary judge in applying cl 6.13(3)(a) (involving consideration of whether the Club's building, "operating as a registered club", can fit within the definition of either "business premises" ([29], [34]-[45]) or "retail premises" ([29], [46]-[51]) and thus "commercial premises" for the purpose of satisfying cl 6.13(3)(a) of the LEP (at [29]), rather than considering whether the Club's building was designed or constructed for the purpose of "commercial premises" as required by cl 6.13(3)(a)); and thirdly, the application of legislative provisions that came into force after the building was constructed (e.g. the Liquor Act 2007 which post-dated the design and construction of the building in 2003).
It is true, as the Council noted, that the primary judge did refer to the development consent dated 28 February 2003 and one of the approved plans for the ground floor furniture layout (see [21]-[26] of the judgment). However, the primary judge did not refer or rely on that consent or approved plan in his consideration of whether the building involved, "operating as a registered club", fell within the definition of "business premises" (at [33]-[45] of the judgment). Nowhere in that analysis is there any consideration of whether the "building…was designed or constructed for the purpose" of business premises. Rather, the analysis involved considering whether a registered club, "in the confined definitional and statutory framework for a registered club", fits within the definition of "business premises" by providing services "directly to members of the public on a regular basis".
The primary judge might have referred to the development consent and approved plan in his consideration of whether the Club's premises potentially fell within the broad umbrella of the range of premises listed in the definition of "retail premises" in RLEP (at [46]). The primary judge noted that "at the very least, the bistro and bar facilities provided would bring the premises within the scope of the listed elements of the definition of 'food and drink premises'" (at [46]). However, the primary judge immediately went on to consider the purpose of the use of the premises (at [47]).
The primary judge referred to the restriction in s 18(1) of the Liquor Act that any sale of liquor on the licensed premises is confined to members or members' guests and held that this restriction takes this limited scope of activity of sale of liquor outside the broad nature of retailing (at [50]). The primary judge's consideration of this restriction in the Liquor Act is evidence that the primary judge did not confine himself, as cl 6.13(3)(a) of RLEP required, to the design or construction of the building, but rather considered the use of the building as a registered club and in particular the restrictions on the retail sale of liquor on licensed premises.
The primary judge misdirected himself in the second way contended for by Woolworths. The primary judge approached the inquiry required by cl 6.13(3)(a) of RLEP by erroneously asking whether a "registered club" can fit within the definition of either "business premises" or "retail premises" and thus "commercial premises" for the purpose of satisfying cl 6.13(3)(a) of RLEP (at [29]). That approach involved asking the wrong question. The relevant question required to be asked by cl 6.13(3)(a) was whether the Club's building (which existed when RLEP commenced and to which the proposed development related) "was designed or constructed for the purpose of commercial premises". That question does not, either expressly or impliedly, require, firstly, categorising the building as a "registered club" or, secondly, ascertaining whether a registered club, "in the confined definitional and statutory framework for a registered club", can fit within the definition of either business premises or retail premises and thus commercial premises. To ask those questions is to ask the wrong questions.
The task of characterisation of purpose required by cl 6.13(3)(a) of RLEP is confined; the only characterisation required is whether the building was designed or constructed for the purpose of commercial premises. It is legally irrelevant to inquire whether the building was designed or constructed for any other purpose, including registered club. The characterisation of purpose required by cl 6.13(3)(a) of RLEP is different from the characterisation of the purpose of a use of land or a building. That characterisation of the purpose of a use of land or a building was required in order to determine the permissibility of the proposed development (the proposed retail liquor outlet) but was not required in order to determine the application of cl 6.13(3)(a) of RLEP. The application of cl 6.13(3)(a) solely turns on whether the building was designed or constructed for the purpose of commercial premises.
Accordingly, the primary judge misdirected himself by characterising the purpose of the use of the building as a registered club and by then asking whether a registered club can be either business premises or retail premises, and hence commercial premises, for the purpose of satisfying cl 6.13(3)(a) of RLEP.
For the same reason, the Council's second contention in its Notice of Contention is erroneous. Clause 6.13(3)(a) of RLEP does not require or permit a characterisation at large of the purpose of the use of the building at the date when RLEP commenced. Clause 6.13(3)(a) requires and permits the inquiry of whether the building was designed or constructed only for the specified purpose of commercial premises and not for any other purpose, including registered club. To characterise the purpose for which the building was designed or constructed as being for a purpose other than commercial premises (such as registered club) leaves unanswered the question required by cl 6.13(3)(a) of whether the building was designed or constructed for commercial premises.
The Council endeavoured to resolve this conundrum by arguing (in its second contention) that the purpose of commercial premises necessarily excluded the purpose of registered club. Hence, if the building was designed or constructed for the purpose of a registered club, it necessarily could not be characterised as being for the purpose of commercial premises. This argument is erroneous.
First, there is no express statement in the definition of commercial premises, or any of the definitions of purposes that nest within the purpose of commercial premises (such as business premises or retail premises), that excludes registered clubs. There can be a definition of "commercial premises" that excludes other purposes elsewhere specified in the environmental planning instrument. An example of such a definition of commercial premises which excluded premises elsewhere specified was considered in Botany Bay City Council v Pet Carriers International Pty Ltd: see the definition quoted at [8]. However, the definition of commercial premises in RLEP is not of this kind.
The definitions of the purposes nesting within the purpose of commercial premises (notably business premises and retail premises) do specify some purposes that are included and some that are excluded. The definition of "business premises" specifies eight purposes that are not included within business premises, being "an entertainment facility, home business, home occupation, home occupation (sex services), medical centre, restricted premises, sex services premises or veterinary hospital". The purpose of registered club is not one of the excluded purposes. The definition of "retail premises" specifies four purposes that are not included in the purpose of retail premises, being "highway service centres, service stations, industrial retail outlets or restricted premises". Registered club is not one of the excluded purposes.
Second, there is no implication in the definitions of "commercial premises", "business premises" or "retail premises" that "registered club" is excluded. It is of importance that the purposes of commercial premises, business premises and retail premises are expressed at a high level of generality and embrace many specific purposes. These general purposes are defined by, firstly, describing characteristics of the purpose and then identifying specific purposes that are included or are not included within the general purpose. The specific purposes identified as being included are quite diverse but have in common the characteristics of the general purpose.
There is nothing inherent in the descriptions of the general purposes or the specific purposes included within the general purposes that necessarily excludes the specific purpose of registered club from being within the ambit of the general purposes. Of course, a particular use of a building for the purpose of registered club, having regard to the nature, extent and other features of the particular use, might properly be characterised as not being for these general purposes. But this is an application of the definitions of the general purposes to the particular facts of the use for the purpose of a registered club and not because the purpose of registered club cannot fall within the definitions of the general purposes.
Third, contrary to the Council's submission, I do not derive assistance in understanding the nature and scope of the particular purpose of "commercial premises" employed in RLEP from an analysis of the development control table for various zones under RLEP. The development control table employs the threefold classification of development that may be carried out without development consent, development that may be carried out with development consent, and development that is prohibited or cannot be carried out with or without development consent: see Chambers v MacLean Shire Council (2003) 57 NSWLR 152; (2003) 126 LGRA 7; [2003] NSWCA 100 at [33]. The classification of particular purposes of development in one of these three categories varies depending on the zone and between zones. I do not find assistance in understanding the nature and scope of the particular purposes employed in RLEP from examining the classification of the particular purposes in particular zones under RLEP. Put another way, the inclusion of a particular purpose in one of the three classifications of development in particular zones under RLEP does not assist in understanding the nature and scope of that purpose. Rather, the nature and scope of the purposes remain to be determined by reference to the definitions of those purposes in the Dictionary to RLEP.
Finally, I would not uphold Woolworths' alternative way in which it put its argument on the second misdirection, or the Council's response. This alternative argument and the response involved a debate about whether the definition of "registered club" in RLEP or the definition of "club" in Randwick LEP 1998 should be used in applying cl 6.13(3)(a) of RLEP. I have earlier found that it is to ask the wrong questions to consider, first, whether the building was designed or constructed for a registered club (or club) and, second, whether a registered club (or club) can fit within the definition of either business premises or retail premises and thus commercial premises for the purpose of satisfying cl 6.13(3)(a). Hence, it matters not whether the definition of registered club in RLEP or the definition of club in Randwick LEP 1998 were to be considered. Either way, the consideration and application of either definition would involve misdirection.
It is therefore also unnecessary to resolve the Council's contention as to the date on which the purpose of the building's design or construction is to be determined. This first contention was only relevant to the alternative way in which Woolworths put its second misdirection. Otherwise, on the facts of this case, the building that existed at the date when RLEP commenced (15 February 2013) was in the same built form as when it was designed and constructed in accordance with the development consent in 2003. Nothing in this appeal turns on whether the date for determining the purpose for which the building was designed or constructed was 2013 or 2003.
For these reasons, I uphold the first category of grounds of appeal that the primary judge asked himself the wrong questions and misdirected himself about cl 6.13(3)(a) of RLEP.

Second category of grounds of appeal: misapplication of cl 6.13(3)(a)

Woolworths submitted that, having asked the wrong questions, the primary judge failed to reach the correct conclusion, which is that the building was designed or constructed for the purpose of "commercial premises" (Ground 3). The primary judge should have found that the purpose for which the building was originally designed or constructed fitted the description of either "business premises" or "retail premises" and therefore "commercial premises" (Grounds 5 and 6). In particular, the primary judge erred in finding that the use of the premises as a club did not involve the provision of services to the public (Grounds 7 c and d).
Woolworths submitted that it was an agreed fact that the Club's premises, being the ground floor of the building, was approved and built for "club premises", including a gaming room, café/bistro area and function room (Agreed Statement of Facts [5], [17]-[19] and [33]). The ground floor of the building additionally had a loading dock and a number of car parking spaces, and the lower level of the building also included a gymnasium, offices and amenities (Agreed Statement of Facts [5] and [22]). Moreover, the plans approved by the 2003 development consent demonstrated that the ground floor was designed, and later constructed, to accommodate the following elements: commercial catering kitchen; servery; female toilets (x 9), male toilets (x 4) and disabled access toilet (x 1); wet bars (x 3); keg storage room; games room; public seating areas for service of food and drinks to patrons; administration offices; communications room; garbage room; storeroom; and floor to ceiling heights of 4.2m and 4.47m. Woolworths submitted that this evidence should have been sufficient to establish design or construction of the building for the purpose of either "business premises" or "retail premises".
Starting with "business premises", Woolworths submitted that the primary judge erred in not finding that the building was designed or constructed for "business premises" in two ways. First, the primary judge failed to consider whether the Club itself constitutes a service provided directly to the public. The purpose of the building was to accommodate the Club. The Club, like all clubs, provides a service directly to the public. As recognised by s 10(1)(e) and (f) of the Registered Clubs Act, clubs serve a societal function in providing premises "for social, literary, political, sporting or athletic purposes or for any other lawful purposes". Section 10(1)(f) also refers specifically to the commercial dimension of a club's operations - a club is required to have "premises…which are provided and maintained from the funds of the club".
The primary judge adverted to this societal function of clubs when he quoted the definition of a club (in the Macquarie Dictionary) as including: "A group of persons organised for a social, literary, sporting, political, or other purpose, regulated by rules agreed by its members."
Woolworths submitted that, on that basis, a building designed or constructed for a club meets the definition of "business premises" (and with it "commercial premises") under cl 6.13(3)(a) of RLEP. Specifically, the capacity to provide the services of the Club to the public, by the offer of membership (with which comes rights and responsibilities) brings the premises within the description of "business premises". The primary judge erred in failing to construe the Registered Clubs Act as enabling the use of the premises as including the inclusion of services to the public.
Woolworths submitted that even if one looks at the particular services provided by the Club, the Club can still be seen to provide services directly to members of the public: "a. Even if membership of the Club were required for an individual to access its facilities, that fact should not of itself disqualify the premises from falling within the description of 'business premises'. Any number of businesses (such as gyms, video rental stores, and broad client based retailors such as Cosco, which is the world's second largest retailor) operate on a membership-based business model. b. Relevantly, s 23 of the Clubs Act expressly authorises, by way of a 'club function authorisation', the attendance and use of club premises by persons who are not members, temporary or otherwise. That is, s 23 authorises admission and use of the premises by the public without the requirement of any form of membership of the Club. c. For persons residing outside a 5 kilometre radius of a club, temporary membership allows access to its services and facilities (s 30(3B) of the Clubs Act precludes persons who reside within a 5 kilometre radius of a club from obtaining temporary membership). Notwithstanding that restriction on temporary membership, a person who resides within the 5 kilometre radius may still obtain access to a club as a guest of a full member, provisional member or honorary member. Accordingly, there are minimal practical obstacles to access and use of the Club's services as a temporary member or guest by the general public."
Second, Woolworths submitted that the primary judge erred in focusing on the fact that the building was approved to operate as club premises and the restrictions involved in operating as a registered club. Woolworths submitted that the primary judge should simply have looked at the design and construction of the building. The fact that the building was designed and constructed to include a loading dock, commercial catering kitchen, servery, bar and seating for food and drink service should be conclusive that its purpose was that it could be used to operate a restaurant or other food service business. The fact that the facilities for such were, in the first instance, part of the operations of a club (with any accompanying restrictions on the public at large accessing its dining facilities: see judgment [43]-[45]) is irrelevant. The character of the building (that is the purpose for which it was designed and constructed) was consistent with it being "business premises".
Turning to "retail premises", Woolworths submitted that the primary judge erred in not finding that the building was designed or constructed as "retail premises". Woolworths relied on the following aspects of the definition of "retail premises": "retail premises means a building or place used for the purpose of selling items by retail, or hiring or displaying items for the purpose of selling them or hiring them out, whether the items are goods or materials (or whether also sold by wholesale), and includes any of the following: … (c) food and drink premises, …"
"Food and drink premises" is in turn defined to mean: "premises that are used for the preparation and retail sale of food or drink (or both) for immediate consumption on or off the premises, and includes any of the following: (a) a restaurant or café … (c) a pub (d) a small bar."
Woolworths submitted that the primary judge erred in his consideration of retail premises in two ways. First, as Woolworths submitted in the first category of grounds of appeal, the primary judge considered whether the Club's current use of the building as a registered club fitted within the definition of retail premises rather than considering whether the building was designed or constructed for the purpose of retail premises. On the latter and correct approach, the food and drink service facilities of the Club, which dated back to the 2003 development consent (judgment [21], [24]-[26]), establish that the building falls within the express "food and drink premises" example of "retail premises" provided by RLEP.
Second, Woolworths submitted that, even assuming the activities of the Club could be a relevant touchstone, the primary judge erred in reaching a contrary conclusion. The sole basis for the primary judge's rejection of the characterisation of the Club as "retail premises" was that, although the relevant definition did not include the phrase "directly to the public" (as does the definition of "business premises"), that concept was to be implied (judgment at [49]). Otherwise, the primary judge found that "the bistro and bar facilities provided [by the Club] would bring the premises within the scope of the listed element of the definition of food and drink premises" (judgment at [46]).
Woolworths submitted that the primary judge was in error in importing the requirement that the retailing had to be "directly to the public". The requirement was not expressly included in the definition of "retail premises", or in the definitions of any of the purposes nesting within that definition of retail premises, including "food and drink premises". The contrast with the definition of "business premises" is telling; that definition does expressly require the provision of services directly to members of the public on a regular basis.
The requirement was also not included by implication from the concept of retailing. The primary judge concluded that the requirement that the retailing be directly to the public was to be implied from the Court of Appeal's decision in Sevenex Pty Ltd v Blue Mountains City Council (2011) 183 LGERA 1; [2011] NSWCA 223 and the dictionary definition of "retail". The primary judge said: "48. I am satisfied that, consistent with the analysis of Young JA in Sevenex, 'retailing', although not expressly incorporating the concept of 'to the public', necessarily involves activities that must be on such a broad basis. In this regard, the relevant dictionary definition is also of assistance. The definition of 'retail' contained in the Macquarie Dictionary is in the following terms: 1. the sale of commodities to household or ultimate consumers, usually in small quantities (opposed to wholesale). 49. Although merely distinguishing between retail and wholesale, it is also implicit that such activity must be at large, in the LEP definitional context, rather than in the statutorily limited fashion set for 'registered clubs'."
Woolworths submitted that the primary judge was in error in both respects. First, the relevant statement from the Sevenex decision does not support the primary judge's conclusion. The relevant statement in [31] of Young JA, with whom McColl JA and Sackville AJA agreed, is as follows: "The 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."
Woolworths submitted that Young JA noted the specific distinction between business premises and retail premises, that the primary judge sought to elide, and said nothing about the restriction that "business premises" involve "a service provided directly to the public on a regular basis" also applying to "retail premises". Rather, Young JA observed that, under the respective definitions, dealings in relation to intangible services fell under "business premises" whereas dealings in tangible items fell under "retail premises". The third sentence in the quoted passage does not support the suggestion that the difference between tangibles and intangibles is the only difference between the two definitions, such that an express element in one (that sales be "directly to the public") should be implied into the other. The view to the contrary offered by the primary judge in this case was thus unsupported by the decision in Sevenex.
Second, Woolworths submitted that the dictionary definition quoted by the primary judge is at best equivocal (and arguably supportive of Woolworths' position) in relation to whether sales of food and drink by the Club to members and guests can be described as retail transactions. Notwithstanding the dictionary definition's reference to sales of "commodities to household consumers" (which might be thought to refer to durable goods), RLEP makes clear that food and drink can be the subject of retail transactions. In respect of the concept of "ultimate consumers", and the distinction with "wholesale" sales, there can be no suggestion that bistro and bar services are not provided to ultimate consumers, or are on-sold. There is, therefore, nothing in the dictionary definition of "retail" which requires an implication in RLEP's definition of "retail premises" that would disqualify the Club's premises. On that basis, Woolworths submitted that the definition relied on by the primary judge either does not shed any light on the proper interpretation of the meaning of "retail premises" as used in cl 6.13(3)(a) of RLEP or, by focusing on "ultimate consumers" of tangible goods, supports Woolworths' position.
Woolworths submitted, therefore, the primary judge erred in applying cl 6.13(3)(a) of RLEP. On the facts found by the primary judge, the building was designed or constructed for food and drink premises and hence retail premises. But for the primary judge erroneously adding a requirement that the retailing be directly to the public, the primary judge would have found that the building was designed for food and drink premises and hence retail premises.
The Council supported the primary judge's finding that the building was not designed or constructed for the purpose of business premises or retail premises, and hence commercial premises.
In relation to business premises, the Council submitted that the primary judge did not err in either of the ways contended by Woolworths. First, the Club did not provide services directly to members of the public on a regular basis. The Council accepted that the Club, as a registered club, serves a "societal function". That is part of the town planning purpose that differentiates the purpose of registered club from other uses. However, providing that societal function does not amount to providing a service. To say that the Club provides a societal function does not mean that the Club's building is one in which a service is provided directly to members of the public, as is required by the definition of "business premises" in RLEP.
Second, even if providing the societal function could be described as providing a service, the Council submitted that the primary judge was correct to find that it is not provided "directly to members of the public on a regular basis". The distinguishing feature of a registered club is the limitation on its membership. It is both the cause and the effect. The cause is the requirement that the premises provide a societal function. The effect is the different town planning amenity impacts because of that limitation. Even if the potential reach of a registered club may be broad - depending upon the societal function that any registered club fulfils - it will inevitably be but a subset of the public.
Third, the Council submitted it is not legitimate, in considering the purpose for which a building was designed or constructed, to descend into each of the component parts of the building, such as a bar, a gaming room, a café or a bistro. Premises are not designed and constructed for each of the component parts. Rather, the design and construction is to serve the purpose of the Club's premises as a whole. As the Council had submitted in relation to the first category of grounds of appeal, the sum of the component parts identify the purpose of the Club's premises, namely a registered club.
The Council further submitted that the fact that the Club's building (or particular component parts of the building) could be used for business premises is beside the point. The fact that the building could be used as a "pub" if (1) it obtained a different development consent, (2) obtained the benefit of different licences and (3) had different town planning impacts, is irrelevant. The relevant inquiry is the purpose for which the building was actually designed or constructed, not the purpose for which it would be potentially used.
In relation to retail premises, the Council accepted that the primary judge erred in reading into the definition of "retail premises" in RLEP the limitation that the retail sales had to be directly to the public. Nevertheless, the Council submitted that the primary judge's conclusion that the Club's building was not designed or constructed for retail premises was still correct.
First, as the Council had contended in its second contention in its Notice of Contention, retail premises (and hence commercial premises) is the wrong characterisation for the purpose of the building. The correct characterisation of the purpose is registered club. Characterisation as registered club necessarily excludes characterisation as commercial premises and any species of commercial premises, including retail premises.
Second, the purpose for which the Club's premises are used - the end to which they serve - is not retail. To focus on the component parts of the building and the purpose for which they are used, such as restaurant, is to undertake the task with the wrong focus.
Third, even if the "restaurant or café" component of the "food and drink premises" component of the "retail premises" could be considered, the definition of "restaurant or café" requires that "the principal purpose" is the preparation and serving, on a retail basis, of food and drink. The principal purpose for which the Club's building was designed or constructed was to serve the societal function of a registered club.
I find that the primary judge did not err in finding that the Club's building was not designed or constructed for business premises but he did err in finding that it was not designed or constructed for retail premises.
Starting with business premises, the primary judge did not err in his consideration of the service provided by the Club. First, it may be accepted that the Club, like other clubs, serves a societal function and constitutes a service provided to the public. But this is insufficient for the purposes of the definition of "business premises" and cl 6.13(3)(a) of RLEP. It is the Club's building and not the Club as a registered club that must provide the services directly to members of the public. To satisfy cl 6.13(3)(a) of RLEP, the building must be "designed or constructed for the purpose of" business premises, being "a building or place at or on which…a service is provided directly to members of the public on a regular basis". The societal function served by the Club (insofar as that can be seen to be a service) is not a service provided at the building itself.
The Club's building does not itself provide the societal function served by the Club being a registered club directly to members of the public. Rather, the Club's building provides particular services, such as are provided by the café/bistro, bars, games room and function room, principally to the members of the Club and secondarily to members' guests or temporary members but not directly to members of the public.
Second, the Club's building does not provide services directly to members of the public on a regular basis. Again, it may be accepted that the services provided at the building, such as are provided by the café/bistro, bars, games room and function room, are not solely provided to full members of the Club. As Woolworths submitted, persons living outside a 5 kilometre radius can gain temporary membership to access the services provided at the Club's building. A club function authorisation can be granted allowing persons who are not members to attend a function at the Club's building. Guests of members, when attending in the company of a member, can also access the services provided at the Club's building. In each case, however, these persons, when authorised to access the services provided at the Club's building in one of these ways, are not attending in their capacity as a member of the public, but rather as a temporary member, or pursuant to a club function authorisation, or as a guest of a member, as the case may be. Furthermore, the provision of services to persons other than full Club members is not the primary purpose of the building; the principal purpose is to provide services to Club members.
Third, the fact that the design and construction of the building is such that it could potentially provide services directly to members of the public is insufficient to satisfy cl 6.13(3)(a) of RLEP. That clause focuses on the purpose for which the building "was designed or constructed", not the purpose for which the building, in the form in which it was designed or constructed, could potentially be used. Hence, the fact that certain areas within the building, such as the kitchen, café/bistro and bar, could be used to operate a restaurant or other food service business catering directly to members of the public is legally irrelevant. The question required by cl 6.13(3)(a) to be asked is whether the building was designed or constructed for that purpose. The primary judge found it was not. There was no error on a question of law in that finding.
Turning to retail premises, the parties agreed that the primary judge erred in adding to the definition of "retail premises" in RLEP the limitation that the retail sale be directly to the public. That limitation is not required, either expressly or impliedly, by the definitions of "retail premises" or "commercial premises" or the terms of cl 6.13(3)(a) of RLEP. It was also not required by the decision of the Court of Appeal in Sevenex or the dictionary definition of "retail", for the reasons submitted by Woolworths. I agree that the primary judge erred in adding this limitation that the retail sale be directly to the public.
But for the primary judge adding this limitation, the primary judge would have found that the building was designed or constructed for retail premises. The primary judge found (at [46]) that: "There can be no doubt that, within the broad umbrella of the range of premises listed in the definition of 'retail premises' in the LEP, these premises potentially fall within this scope. This is because, at the very least, the bistro and bar facilities provided would bring the premises within the scope of the listed element of the definition of 'food and drink' premises".
I do not accept the Council's contentions for affirming the primary judge's conclusion that the building was not for retail premises. The Council's first argument that the building should properly be characterised as having been designed or constructed for the purpose of registered club, and that such characterisation necessarily excludes characterisation for retail premises (or commercial premises), involves misdirection. As I have explained earlier, the question required to be asked by cl 6.13(3)(a) is simply whether the building was designed or constructed for the purpose of commercial premises, which includes retail premises. That question is to be answered by reference to the definitions of commercial premises and the purposes that definition references, including retail premises and the specific types of retail premises such as food and drink premises, and not by reference to the definitions of purposes not referenced in these definitions, including registered club.
Contrary to the Council's second and third arguments, it is legitimate to look at the component parts of the building to ascertain the purpose for which the building was designed or constructed. The fact that the building comprises a loading dock, commercial kitchen, café/bistro with associated seating area, three bars with associated seating areas, function room, storage area including for kegs, and toilets for patrons, and the fact that these areas comprise a sizeable proportion of the floor area of the Club's building, are relevant in determining whether the building was designed or constructed for, say, food and drink premises, and hence retail premises. Such inquiry is not to undertake the task required by cl 16.13(3)(a) with the wrong focus upon the component parts. Rather, these component parts are the physical spaces by which the building is made to serve some purpose. In this case, these physical spaces enable the Club's building to be used for the preparation and retail sale of food or drink (or both) for immediate consumption in the building; they enable the building to be used as food and drink premises and hence retail premises.
The fact that the food and drink will be served primarily to members of the Club for consumption on the Club's premises does not change the purpose for which the building was designed or constructed to be only to serve the societal function of a registered club, as the Council argued. The Club's building can still include a "restaurant or café" as defined, namely: "a building or place the principal purpose of which is the preparation and serving, on a retail basis, of food and drink to people for consumption on the premises, whether or not liquor, take away meals and drinks or entertainment are also provided".
The principal purpose of the physical spaces in the building mentioned earlier, including the kitchen, café/bistro, bars and associated seating areas, is the preparation and serving on a retail basis of food and drink to people for consumption in the Club's building. Whether or not those people who are consuming the food and drink are Club members cannot change the principal purpose.
Accordingly, the primary judge erred in not finding, on the facts found by him, that the building was designed or constructed for the purpose of retail premises, and hence the purpose of commercial premises.

Consequence of determination of the first two categories of grounds of appeal

The consequence of upholding the first two categories of the grounds of appeal, in the ways I have held to be appropriate, is threefold: first, the answers of the primary judge to the two separate questions should be set aside; second, the alternative answers of "no" and "yes" respectively should be substituted; and third, the order dismissing the proceedings should be set aside and the proceedings remitted to the Land and Environment Court for determination of the remaining questions in the proceedings.

Third category of grounds of appeal: existing use

Woolworths' third category of grounds of appeal (Ground 1) only arises if Woolworths were to be unsuccessful in its first two categories of grounds of appeal and the primary judge's determination of the separate questions remains in force.
If cl 6.13(3)(a) of RLEP does not have the effect of preventing the grant of development consent to the proposed development, the clause does not derogate from or have the effect of derogating from the incorporated provisions in s 108 of the EPA Act and Pt 5 of the EPA Regulation. Section 108(3) of the EPA Act would therefore not operate to cause cl 6.13(3)(a) of RLEP to have no force or effect. This would be the result if Woolworths' appeal is resolved in the ways that I have held above are appropriate.
Not only is there no need to determine Ground 1, there is also good reason not to do so. Mr Hemmings SC for the Council made it plain that, at least in one respect, he was not in a position fully to argue whether cl 6.13(3)(a) derogated from the power to grant consent in relation to an existing use. That observation should not be taken critically; the point was raised for the first time on appeal, and the Council made it plain that there was evidence it wished to adduce going to any question relating to existing use.
Further, differing views have been expressed in this Court as to the scope of an appeal under s 57(1) of the Court Act on a question of law to this Court. Without being exhaustive, contrast the differing views expressed in Dial A Dump Industries Pty Ltd v Roads and Maritime Services [2017] NSWCA 73 at [110], [166]-[168] and [169], and Bligh Consulting Pty Ltd v Ausgrid [2017] NSWCA 95 at [12]. It is appropriate to seek to resolve those views in circumstances where doing so is necessary in order to resolve the appeal. Although, contrary to one submission which was made, the principles in Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 do apply to this Court, in light of the above it is appropriate not to determine Ground 1.

Conclusion and orders

I would make the following orders: 1. The appeal is upheld. 2. The answers given by the Land and Environment Court on 7 July 2016 to the separate questions are set aside. 3. Instead, the answers to the separate questions are: 1. Does the development application seek consent for development which does not relate to a building that was designed or constructed for the purpose of commercial premises pursuant to cl 6.13(3)(a) of Randwick Local Environmental Plan 2012? Answer: No. 1. Having regard to the answer to question (a), is it open to the consent authority to grant approval to the development application? Answer: Yes. 1. The order made by the Land and Environment Court on 7 July 2016 that the appeal is dismissed is set aside. 2. The proceedings are remitted to the Land and Environment Court to be heard and determined in accordance with this Court's decision. 3. The respondent is to pay the appellant's costs of the appeal.

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: 25 July 2017

(2011) 180 LGERA 343

(2008) 163 LGERA 245

(2013) 201 LGERA 116

(2007) 151 LGERA 400

(2016) 218 LGERA 411

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