Woolworths Limited v The Warehouse Group - [2003] NSWLEC 350 - NSWLEC 2003 case summary — Zoe

NSWNSWLEC

Woolworths Limited v The Warehouse Group

[2003] NSWLEC 350

Land and Environment Court (NSW)|2003-12-19|Before: Talbot J, Ms J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2003-12-19

Before

Talbot J, Ms J

Source

Original judgment source is linked above.

Judgment (44 paragraphs)

[1]

Introduction 1 Woolworths Limited ("the applicant") has commenced these proceedings against a trade rival, the Warehouse Group (Australia) Pty Limited ("the first respondent"). 2 The first respondent operates a sale outlet for a wide range of goods in Unit 1 No. 3 Sappho Road, Warwick Farm within the area of the City of Liverpool ("the site"). The site is located within the Industrial - Special 4(b) zone pursuant to Liverpool Local Environmental Plan 1997 ("the LEP"). Shops are prohibited in the zone whereas a bulky goods salesroom or showroom and a convenience store are uses permitted with development consent. 3 There are two aspects to the applicant's claim. Firstly, it is alleged that the development consent No. 1937/01 granted on 6 April 2001 ("the first consent") to which the first respondent purports to carry on business was not responsive to the development application lodged on 15 February 2001 to carry on a development described as "Clints the Warehouse" and, accordingly, had no legal effect and is a nullity. Secondly, the business as it is conducted is inconsistent with the first consent, which was granted for a "bulky goods salesroom". 4 Development consent No. 358/02 was subsequently granted on 20 September 2001 in respect of the same site ("the second consent"). The second consent permits the use of part of the site for a convenience store. The second consent is relied upon by the applicant as evidence of the manner in which goods will be displayed and sold in order to show the true character of the overall store.

[2]

[28]

(d) No part of reg 124(1)(c) is complied with as the notice is silent about public inspection. 35 The terms of s 101 and reg 124 must be strictly complied with. Accordingly, the notice is invalid and it does not have the effect that the consent cannot be questioned in the proceedings. The proposal in the development application for the conduct of the business 36 It is the applicant's case that the documents lodged in support of the development application, and in particular the supporting material provided by Hirst Consulting Services, is indicative of a type of retailing inherent in the concept, format and operational aspects of Clints the Warehouse typified by the description taken from the document referred to in [13] and [14] above. A brochure was produced to the council in support of the development application. The brochure described Clints the Warehouse as the "Bulk Retail Division of another "Clints Crazy Bargains"", which provides:- s Furniture s Furnishings s Garden & Outdoor s Lighting & Lamps s Electrical Good s Prints & Frames s Camping Goods s Car Accessories s Rugs & Floor-coverings s Office Equipment s Hardware Plus All the general range of product that has made "Clints" stores such a popular destination for shoppers for so long" 37 Various photographs taken from existing stores are included to demonstrate and illustrate the format, the sale/storage racking and display and the general appearance of stores in Shellharbour, Villawood and in New Zealand locations. In addition to the items listed above, the photographs depict signage identifying kitchenware (including laundry detergent), bedding and décor, games, personal care, photo albums and giftware items. 38 The Court agrees with the first respondent that the definition of a bulky goods salesroom or showroom in cl 6 does not define the permissible items by direct reference to their shape, weight or size. Although some items such as furniture can be bulky, others such as toys and hardware are not, in the main, bulky by nature. 39 If cl 51(a) of the LEP is to be construed so that the gross floor area of the part of the building used for the nominated category of items is to be regarded as distinct for each category, then the site on its own does not contain sufficient area to accommodate the simultaneous use of the different categories described in the development application. The development application form merely identified the use by reference to Clints the Warehouse whereas the accompanying material and supporting documents subsequently lodged with the council prior to the grant of consent specifically referred to, inter alia, furniture, garden and outdoor, lighting, electrical goods, floor coverings and hardware, all of which are designated in cl 51(a) for the purpose of calculating a minimum gross floor area. On a literal construction of cl 51(a) these items alone demand at least 4,250 m2.

[30]

44 The material lodged with, or in support of, the development application did not attempt to rationalise the way in which the floor space would be organised or used except to the extent of the examples used at other sites for existing development. Although the development application did not stipulate that the site would be used for the purposes of a bulky goods salesroom, the submission was capable of being interpreted as a use that could comply with the provisions of the LEP. The council was careful to grant consent to Clints the Warehouse as a bulky goods salesroom and to reinforce its intention by ensuring the first respondent had to comply with the definition in cl 6 of the LEP by making an express provision to that effect, namely in condition 4. 45 It can be readily understood from the development application and submissions in support of it that the range of products stocked from time to time would not be constant, depending to a large extent on opportunistic job lot bulk purchases by the retailer. 46 The Court is satisfied, on the balance of probabilities, that the development consent was an appropriate response to the application. Properly understood, it allowed the first respondent to carry out the use of a bulky goods salesroom catering for goods and items specified in the definition, subject to the proscription in condition 5. 47 Implicit in the consent is the satisfaction of the council in respect of the area specification in cl 51 of the LEP. Although the proposed development was capable of being construed as a shop, it nevertheless was open to constrain the use to the type of shop that rendered it permissible as a bulky goods salesroom use. 48 In the whole of the circumstances, the council had jurisdiction to receive, consider and determine the development application so that the issues determined in Chambers v Maclean Shire Council and Others (2003) 126 LGERA 7 do not arise. The actual use of the premises 49 As I have already pointed out, the Court has the benefit of a view and that pursuant to s 54 of the Evidence Act the Court proposes to rely on what it saw or otherwise noticed during the inspection. Various witnesses have given evidence in respect of their observations and a copy of a recent store inventory has been tendered and accepted as an exhibit. It is not disputed that clothing and footwear items are no longer sold from the site and the first respondent recognises that there is no entitlement to do so in the present circumstances. 50 Andrew Phillip Duggan is a Town Planner who swore affidavits on 2 April 2003 and 5 September 2003 in support of the applicant's case for the purpose of relating the observations he made in respect of the layout of the site on 10 March 2003, 15 March 2003 and 21 August 2003. In a later affidavit sworn on 6 November 2003 he identifies material obtained from the first respondent's website. Mr Duggan observed signs in the store adjacent to or above aisles containing shelves. The signs displayed in the store, as confirmed on the view, identified the following categories of goods for sale:- Giftware Baby Pet Care Laundry Craft Toys Kitchenware Manchester Gallery Furniture Luggage Automotive Hardware Camping Gardening Electrical Party Supplies Convenience Store Stationary 51 The signs, in a general sense, are indicative of the range of goods on display and offered for sale in the general area of the individual aisles. In addition to the goods displayed in the aisles and on shelves, crates containing various other items for sale are scattered throughout open areas in the store. The goods on offer range from small ornaments and trinkets of no great value such as artificial flowers, party supplies, puzzles, pens and picture frames through plant seeds, toys, sheets, pillows, books and tools to larger and more expensive items such as electrical appliances, large toys and paint. The Court also observed that various items of furniture were for sale, including futons, computer desks, plastic chairs, blinds and curtain fixtures. 52 During his inspections on 10 and 15 March 2003, Mr Duggan made observations of shelving units, stands and crates which held goods that, in his opinion, were within the bulky goods categories specified in condition 4 of the first consent. During that same inspection he observed other goods (outside the convenience store section of the store) and calculated that the total number of shelving units and crates holding these latter items were as follows:- (a) 101.5 large shelving units (38% of large shelving units in the Store);

[33]

(d) 8 crates (28% of crates in the Store). 53 In addition he estimated that three large shelving units of stationary occupied approximately 22m2 of the floor area of the store and that units containing such items as cushions, sheets, blankets, vases, cotton throws and pillows occupied approximately 148m2 whereas 16 small shelving units of video tapes, cassettes, CDs and DVDs and three medium shelving units of audio visual accessories and batteries represented approximately 41m2 of the floor area of the store. In his opinion, the floor area occupied by the categories of goods permitted to be sold by condition 4 of the first consent are as follows:- (a) Furniture 273 sq m (b) Electrical Goods 122 sq m (c) Toys and Sporting Equipment 303 sq m (d) Office Furniture 43 sq m (e) Hardware 109 sq m (f) Outdoor Products 324 sq m (g) Floor Coverings 22 sq m (h) Automotive Parts and Accessories 50 sq m 54 The above areas do not include areas occupied by items that Mr Duggan might regard as un-ancillary to the categories identified by reference to condition 4. If he had included those items, which he described as potentially ancillary to the categories of goods permitted to be sold by condition 4, an additional area of 649m2 would have been included in his calculation. 55 It is not in dispute that the warehouse store occupies 2,666m2 of floor space in total. 56 Another Town Planner, Neil Ingham, carried out an inspection on 21 March 2003 and observed that included in the product categories sold from the store were:- …read and write items, craft items, giftware, pet supplies, picture frames, laundry accessories, cards and wrap, personal care items, shoes, clothing, sunglasses, food items outside the convenience store, manchester, CDs and videos. 57 The only other expert relied upon by the applicant is Martin Andrew Meade Hill, a Land Economist and Property Consultant, who made an attempt to establish the proportion of bulky goods sold from the premises against the proportion of non-bulky goods for sale using an estimate of turnover based on a national average turnover for all goods sold at the store by multiplying the floor areas dedicated to the sale of each category of bulky goods by an applicable turnover rate. The evidence of Mr Hill does not assist the Court to make any relevant finding. 58 None of the applicant's expert witnesses were cross-examined. Their evidence, in so far as observations regarding the operation of the business, required no special expertise and did no more than confirm what the Court observed for itself on the view.

[41]

64 The conclusions reached by the Court are based upon the observations made on the view corroborated by the evidence of Mr Duggan and Mr Ingham. The evidence of Mr Schneider provides no answer to the challenge. It is entirely feasible that the store could be brought into a state of compliance but the evidence before the Court does not disclose that the store has been operating as a bulky goods salesroom or that the observations made by the Court and the witnesses were of an aberration. There is no unique or particular characteristic of the use that distinguishes it from the conduct of the business of a general shop selling a wide variety of goods. 65 For the reasons explained above it is not sufficient for the first respondent to show that it is selling some goods within the categories listed in cl 51 requiring a minimum floor area and then rely upon the total available gross floor area of 2,666m2 to satisfy the respective standards set by cl 51. Taking a common sense approach to the ordinary meaning of the words used in cl 51, they stipulate minimum areas that must be actually used for the sale, storage and display of the specified items. This interpretation would, in my view, best meet the aims and objectives stated in cl 50(2) of the LEP, which the Court is entitled to take into account pursuant to s 25(3) of the EP&A Act if, contrary to the Court's opinion, cl 51 is genuinely capable of the different interpretation relied upon by the first respondent. 66 Even accepting the first respondent's contention that the site itself forms part of a larger building, the development consent applies only to Unit 1. The first respondent is not entitled to rely on uses of other parts of the composite building comprising the Homemakers Centre to make up any deficiency in the areas of its own use. 67 The first respondent, by its own admission confirmed by the evidence, is selling goods including furniture, electrical goods, toys and sporting equipment, office furniture and hardware. The evidence is that the available floor area does not facilitate a compliance with cl 51. 68 The provision of condition 5 as modified is of no assistance to the first respondent. Taking account of ancillary items does not overcome the overall flaw identified as a non-compliance with the designation of minimum areas. Arguably, the selling of many of the claimed ancillary items is independent from any legitimate designated category in cl 51. It is not necessary nor possible on the evidence to make a final determination as to whether or not the so-called ancillary items are being sold in an independent way that is not merely incidental to a nominated category in the sense identified in Foodbarn Pty Limited and Others v Solicitor-General (1975) 32 LGRA 157. However, as I have already said, if they were all treated as ancillary the evidence of Mr Duggan confirms that the requisite minimum gross floor area is not physically being used for a permissible purpose. If the uses are independent uses then the extent of non-compliance is further compounded. 69 The applicant queries whether the definition of a "bulky goods salesroom or showroom" contained in cl 6 of the LEP contemplates the sale or display of any items other than those listed. Although assessment of extent and degree will always play a part in defining whether a use is independent or ancillary, my tentative view it that the clause is not so specific that the introduction of ancillary items is not permissible. On the present facts, the issue of non-compliance can be determined on the accepted evidence without having to finally decide that question.

[42]

70 The finding that the current use is not in accordance with the definition does not demand that the Court determine what the actual use is, except for the purpose of dealing with the argument raised by the first respondent that if the use is a shop then it is authorised under the alternative source of power contained within cl 10(10) of the LEP. However, having decided that the consent granted by the council achieves what it states on its face, namely to approve the use of the site as a bulky goods salesroom it is not necessary to delve into the effect of cl 10(10) as an alternative source of power to grant development consent. The development consent does not authorise the use of the site as a shop except for the specific type of shop defined as a bulky goods salesroom. Obviously, the actual use is as a shop of some kind but the first respondent does not have consent to carry out development for the use of the site as the species of a shop described in cl 10(10) even if that is what in fact it proves to be. 71 It is not readily apparent to me how the items referred to in condition 4, which sets the parameters for the range of goods to be sold from the site, could be regarded as serving the daily convenience needs of the local workforce. These needs presumably could be satisfied by the convenience store that operates pursuant to the second consent. 72 The facts in this case show that on the balance of probabilities the source of power relied upon by the council when it granted the first consent was contained in cl 9. Clause 9 prescribes distinct conditions precedent to those for exercise of power pursuant to cl 10(10). The conditions of the first consent point inexorably to the exercise of power to grant consent under cl 9. Moreover, cl 10(10) appears as a matter of construction to be a limitation on the power to grant development consent for the species of a shop which is a convenience store, namely to grant consent only if the convenience store serves the daily needs of the local workforce. Curiously, the same logic might be applied to the bulky goods salesroom or showroom use if that use is to be regarded as a shop for the purpose of cl 10(10). I hasten to add that no such argument has been raised in relation to the bulky goods salesroom or showroom use, presumably because cl 51 applies specifically to that use.