Woolworths Limited v The Warehouse Group

APPLICANT Mr M S Henry (Barrister) SOLICITORS Mallesons Stephen Jacques

FIRST RESPONDENT LEGAL REPRESENTATIVES: Mr T F Robertson SC SOLICITORS Deacons

SECOND RESPONDENT Submitting Appearance

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40805 of 2002 Woolworths Limited v The Warehouse Group (Australia) Pty Ltd and Another

JUDGMENT 1 Talbot J: On 19 December 2003 I determined that a development consent granted to carry on the business described as "Clints the Warehouse" in Unit 1, 1 - 3 Sappho Road, Warwick Farm was valid, but that The Warehouse Group (Australia) Pty Limited ("the first respondent") was using the premises otherwise than in accordance with the development consent, contrary to s 76A of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). 2 On 12 March 2004 I made the following orders by consent:-

1. On or before 19 March 2004 the first respondent cease selling from its store at unit 1, 1-3 Sappho Road, Warwick Farm (also known as lot 10 in deposited plan 788368) ("the store") the following goods:- (a) giftware; (b) books; (c) stationery; (d) craft; and (e) suitcases.
2. On or before 29 March 2004 the first respondent cease offering for sale all small grocery and households goods from all parts of the store other than the convenient store.
3. On or before 22 April 2004 the first respondent cease selling the following non-electrical goods from the store:- (a) kitchenware; (b) toys; (c) sporting goods; (d) hardware; and (e) automobile accessories.
4. The first respondent file and serve an affidavit from an authorised officer of the first respondent confirming the carrying out of the actions referred to in order No. 1, order No. 2 and order No. 3 above on or before 23 April 2004.

5. The matter be stood over for further mention before Talbot J at 9:30am on 29 April 2004.
6. The first respondent pay the applicant's costs to 12 March 2004 as agreed or assessed. 3 On 15 November 2004 I made an extempore determination that Orders 1,2 and 3 were made on an interlocutory basis for the purpose of reflecting the progressive steps that the respondent foreshadowed it would be taking, at that time, to bring the operation of the business into compliance with the terms of the development consent. Initially when the matter was subsequently listed after 12 March 2004, the applicant had raised a doubt as to whether the orders were in truth, interlocutory. The transcript of what took place on 12 March 2004 discloses that it was clearly the intention of both parties, and hence the Court, that the orders were made on an interlocutory basis for the abovementioned purpose. They have long since expired by effluxion of time and therefore do not need to be discharged. 4 There has been a further hearing to determine what the form of final orders, if any, should be having regard to the manner in which the first respondent is now conducting the business. 5 The consent granted by Liverpool City Council ("the Council") was for the purpose of a bulky goods salesroom (Clints the Warehouse). 6 The definition of a bulky goods salesroom was incorporated in condition 4 of the development consent in the same terms as the definition in cl 6 of Liverpool Local Environmental Plan 1997 ("LEP 1997"). Clause 51 of the LEP stipulates minimum gross floor areas to be used for the sale, storage and display of the categories of goods specified in the definition of a bulky goods salesroom. The conditions of development consent and the relevant provisions of LEP 1997 are fully set out in my first judgment (Woolworths Limited v The Warehouse Group (Australia) Pty Ltd and Another [2003] NSWLEC 350, unreported) published 19 December 2003. They do not bear repeating here but reference will be made to them. 7 The first respondent now contends that it is operating the business as a bulky goods salesroom and that it is therefore inappropriate and unnecessary to make final orders. The applicant contests that position and says that the definition and constraints imposed by the LEP are not satisfied. Even if they are, orders should be made to mandate lawful use of the premises in the future. 8 Although the General Manager of the first respondent, Tim Andrews, initially gave conflicting evidence regarding the present configuration of the store layout, he has caused a diagram to be produced which purports to show the current racking layout and floor space allocation as at 19 November 2004. 9 The floor space allocation is claimed to be as follows:- Furniture 1000m2 Electrical Goods 1002m2 Outdoor products 500m2 Convenience store 124m2 Amenities/storeroom 40m 2 2666m2

10 Ms Duenow, the solicitor representing the applicant, attended the store on 10 November 2004 when she observed Christmas trees and decorations in each of the areas designated for the sale of furniture, electrical goods and outdoor products. She also observed four aisles of manchester (including sheets, pillows and pillowcases) in the area of the store designated by Mr Andrews for the display of furniture. Her evidence is to the effect that, in her opinion, only about one third of the area designated for furniture display was used for that purpose.

11 On 18 November 2004, Ms Duenow again attended the store and purchased 40 items selected from the range of goods offered at diverse locations within the store. It is submitted on behalf of the applicant that the display and sale of the items purchased by Ms Duenow was not authorised by the consent. Ms Duenow also identified the location of the following items of goods displayed for sale within the store:-

(a) pre-recorded videos, CDs and audio tapes; (b) dog kennels; (c) plastic storage containers and garbage bins; (d) power tools, drill bits, sand paper, grinders, compressors; and (e) baby strollers, prams and car seats. 12 On 19 November 2004 I undertook a comprehensive site visit and inspected most areas within the store in the company of the representatives of the parties.

13 Apart from the discrepancies identified by Ms Duenow the parties are in dispute as to whether particular items displayed in the store and offered for sale fall into any of the designated categories.

14 The first respondent claims the items currently displayed are in conformity with the definition in cl 51 of the LEP, specifically within the categories of furniture, electrical goods and outdoor products. Undoubtedly there are items that fit into those categories. Others do not readily fit a designated category or they also answer the description of some other category such as floor coverings.

15 In order to persuade the Court that the store is operating in accordance with the terms of the consent the applicant must satisfy me that the prohibition in condition 5 does not apply A plethora of goods offered for sale in the furniture section, such as Christmas decorations and manchester do not readily fall within the common understanding of furniture. Mr Robertson SC contends that on one view they are all furniture, or alternatively are at least ancillary items generally associated with household use in conjunction with furniture. Similarly, the first respondent claims items such as paint and some kitchen implements are readily identifiable as outdoor products. Moreover, the applicant contends some items in the electrical goods section such as blank CD's, audio tapes and work benches cannot be regarded as electrical goods. 16 If the first respondent is correct, many items such as paint (hardware), lino (floor coverings), teddy bears (toys), lamps (lighting), car covers and child's car seat (automotive parts and accessories) have a dual or alternative classification as either furniture, outdoor products or electrical goods. This approach is indicative of the first respondent's attitude to squeeze as many items as possible into its store. 17 The combined effect of cl 51 of the LEP and conditions 4 and 5 of the development consent is that the gross floor area of the building used for a designated purpose must comply with the minimum area requirement. Condition 5 is not, in my view, a relaxation of that requirement. It reflects the precondition to the exercise of the power to grant consent for a bulky goods salesroom or showroom contained in cl 51.

Furniture 18 A number of cases referred to by Mr Robertson SC are cited for the purpose of supporting his argument that furniture has such a wide connotation that it includes any items or goods that contribute to the use or convenience of the occupants of a house, office or ornament of a building. Most of the cases relate to the construction of a particular testamentary disposition of "furniture" made by a testator or the ambit of the reference to "furniture" in the given circumstances of the deceased (Kelly v Powler (1763) Amb 605 at 610; Cremorne v Antrobus 7 L.J.O.S Ch. 88 at 92; Re McLuckie [1943] V.L.R 137 at 140; Re Willey 45 T.L.R 327 at 327; Re Cripsin's Will Trusts, Arkwright and others v Thurley and others [1974] 3 All ER 772 at 775) or tenancy law where it has been held "furniture is to be construed in accordance with its common or popular meaning" (Gray v Fidler [1943] 1 KB 694 at 710; Wilkes v Goodwin [1923] 2 KB 86 at 95; Property Holding Co Ld v Mischeff [1946] 1 KB 645 at 650). 19 I do not find that the abovementioned authorities offer a great deal of assistance in the planning context of an Industrial - Special 4(b) zone and the discrete provisions in the Liverpool LEP that specifically deal with a bulky good salesroom or showroom, as defined. It is appropriate to search for the meaning of the consent issued in that context ( House of Peace Pty Ltd and Another v Bankstown City Council (2000) 48 NSWLR 498 at [30]. 20 The Australian Oxford English Dictionary and the Macquarie Dictionary Third Edition have comparable definitions of furniture as follows:- … the movable equipment of a house, room etc eg tables, chairs and beds (Oxford) …the movable articles, as tables, chairs, bedsteads, desks, cabinets, etc, required for use or ornament in a house, office, or the like. (Macquarie) 21 The consent operates in rem and it enures beyond the use of the premises by the initial grantee of the consent. Accordingly, the task is to ascertain "what, objectively determined, it might be said the Council meant by the permission which it gave" to the first respondent (ACR Trading Pty Ltd and Another v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 at 77). In this respect the Council would have been aware that the definition in cl 6 of the LEP and the provision in cl 51 of the LEP made a distinction between furniture, office furniture, floor coverings and kitchen or bathroom showrooms. The reason for this distinction with its potential for overlap is not clear. It obviously leaves the application of the provisions open to conflicting interpretations. However, what is apparent is that an object of the provisions is to confine retail selling in the zone to a particular category of goods that would normally be associated with a large showroom with a sufficient floor area to accommodate items that are generally regarded as bulky goods. Manchester items, curtain tracks and tassels, a baby's bib, a dog toy, packs of hooks, spoons and other small items purchased from the furniture section by Ms Duenow would not fall into this category. The same can be said about the Christmas decorations on display. These range from Christmas trees down to Christmas cards. 22 In my view the selling of these incidental goods is not an ancillary use to the sale of furniture within the widely accepted approach adopted by the Court of Appeal in Foodbarn Pty Limited and Others v Solicitor General (1975) 32 LGRA 157 at 161 in circumstances where there is, as there is in this case, a special condition relating to ancillary items. Condition 5 as modified includes the added dimension of requiring any item to be "dependant upon the sale" of furniture. 23 The first respondent has not shown that any of the so called ancillary or incidental items may only be purchased on condition that they are purchased in conjunction with an item that falls concisely within the designated category such as a piece of furniture, for example a bed. Alternatively, it has not been demonstrated that the sale of items that are not strictly furniture, rely upon or are controlled or determined by, the sale of furniture items in a sense that makes the sale of the former dependant upon the sale of the latter. The sale and display of items that do not meet the "ancillary to and dependent upon" test are prohibited by Condition 5. 24 The first respondent contends that the Christmas decorations are ancillary items incidental to Christmas trees, which in turn are central seasonal ornaments and therefore "furniture" for the purposes of cl 6 of the LEP. There is no suggestion that the Christmas decorations or the other small items referred to above are for sale only on the basis that they are dependant upon the sale of a Christmas tree. In any event, I do not regard Christmas trees as furniture in the context of the consent given pursuant to Liverpool LEP. They are symbols of a festive season. 25 Arguably, curtains might be regarded as furniture but the same cannot be said about sheets, bath mats and towels. One cannot be definitive about every item displayed in the furniture section. The inventory is comprehensive, variable and wide ranging, including such things as a child's potty, birdcages, plastic storage containers, pillows and quilts. Although there are beds, chairs and desks on display, the impression of a furniture showroom is subsumed by the plethora of small items. I am not satisfied that the area allocated by management for the sale and display of furniture is being used solely for that purpose in accordance with the development consent. Outdoor products 26 Paint that can be used internally and externally, a car cover, a paint scraper, a dust mask, food storage containers, a potato masher and a peeler pack are all likewise items that cannot be readily categorised as outdoor products, thereby raising similar issues of non-compliance in the area allocated by management for the sale of outdoor products. Electrical goods 27 Some of the contested items in this designated area are located immediately adjacent to the approved convenience store and arguably are within the area approved for that purpose. The argument that blank CD's, light globes, drill bits and work benches (to mention a few items in dispute) are not electrical goods does not persuade me that there is a continuing breach which justifies making an order on that account alone. Generally 28 The adjusted layout of the store and the presentation of the products for sale gives the impression that the eclectic range of goods on offer is generally associated with the business of a variety store or small discount shop.

29 The first respondent is clearly anxious to offer a plethora of goods that go beyond the class of goods the buying public would expect to find in a bulky goods store dedicated to either furniture, electrical goods or outdoor products or a combination of those categories. It is apparent that the interlocutory orders made on 12 March 2004 were not strictly complied within the time specified. The operation of store is still inconsistent with the consent. Accordingly final orders are appropriate. 30 It is not appropriate to make particular orders that incorporate detailed specification of what goods may or may not be displayed and sold on the premises, as the applicant contends. Any shortcomings in the practical application of the terms of the current consent cannot be addressed in class 4 proceedings. If considered necessary, those matters should properly be the subject of class 1 merit proceedings following an appropriate further application to Council for a fresh consent or for modification of the present consent pursuant to s 96 of the EP&A Act. 31 Although an order merely requiring the first respondent to comply with the terms of the development consent, or as it may be modified from time to time, may require constant vigilance and surveillance as distinct from direct supervision, that result will probably be as a consequence of a fault in the terms of the consent, rather than a deficiency in the order that I propose to make (Patrick Stevedores Operations No.2 Pty Ltd And Others v Maritime Union of Australia And Others (1998) 195 CLR 1). The difficulty is compounded because it is open for the first respondent to change the category of items displayed or sold within the ambit of the consent. It is incumbent upon the first respondent to realise that it is not entitled to operate a general variety or discount store in the zone or for that matter or any other type of shop other than the category of shop or retail outlet nominated in the LEP and then only with appropriate consent, within the terms of that consent. Costs 32 There has not been any detailed address of the issue of costs after 12 March 2004. Nevertheless, as the applicant has been successful in resisting the first respondent's argument that the Court should exercise its discretion not to make any orders, the applicant is prima facie entitled to the exercise of the Court's discretion to make an order in its favour in respect of that matter. It is not clear whether there is still an issue regarding the costs payable in relation to argument concerning the status of the orders made on 12 March 2004. 33 I would expect there is a reasonable prospect that the parties can agree on the question of costs. I will nevertheless make a self-executing order in favour of the applicant on the basis that it will be effective subject to any agreement between the parties to the contrary or an application by way of notice of motion by either party seeking a distinct costs order within one month from this date of judgment. The period of one month recognises the pending commencement of the law vacation. Orders

The Court makes the following orders:-

1. The first respondent, its servants, agents and assigns carry out development for the use of Unit 1, 1-3 (Lot 10 DP 788368) Sappho Road Warwick Farm as Bulky Goods Salesroom (Clints the Warehouse) in accordance with the terms and conditions of Development Consent No. 358/02 granted on 20 September 2001 as it may be modified from time to time pursuant to s 96 of the Environmental Planning and Assessment Act 1979 ("EP&A Act") or otherwise in accordance with the provisions of the EP&A Act.
2. The first respondent pay the applicant's costs incurred since 12 March 2004, unless an agreement is made to the contrary, within one month from the date of this order or either party files and serves a Notice of Motion seeking an alternative costs order within one month from the date of this order.
3. The exhibits be returned.

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