Administration and Marketing Solutions Pty Limited & Anor v. Bardsley-Smith & Ors

[2014] HCATrans 59

[2014] HCATrans 059

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S185 of 2013

B e t w e e n -

ADMINISTRATION AND MARKETING SOLUTIONS PTY LIMITED

First Applicant

DAMIEN MICHAEL GANCE

Second Applicant

and

JANIS MARGARET BARDSLEY‑SMITH

First Respondent

IAN PATRICK STUBBS

Second Respondent

PENRITH CITY COUNCIL

Third Respondent

Application for special leave to appeal

CRENNAN J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 MARCH 2014, AT 1.42 PM

Copyright in the High Court of Australia

____________________

MR R.P.L. LANCASTER, SC:   May it please the Court, I appear with MR N.M. EASTMAN for the applicants.  (instructed by Rotstein Lockwood Reddy Lawyers)

MR J.E. ROBSON, SC:   May it please the Court, I appear with my learned friend, MR C.R. IRELAND, for the first and second respondents.  (instructed by McPhee Kelshaw Solicitors)

CRENNAN J:   Yes, thank you, Mr Robson.  You need an extension of time.  Is that right?

MR LANCASTER:   Yes, your Honour.

CRENNAN J:   It is not opposed, I dare say.  Yes, you have that.

MR LANCASTER:   Thank you, your Honour.  Your Honours would accept that a frequently recurring issue in planning courts, certainly in New South Wales, and no doubt elsewhere, is the characterisation of the use of land for the purpose of determining whether that use is permissible on the one hand or prohibited on the other, whether by statute or instrument or consent. 

In the same category is the question of the application of provisions preserving the continuation of existing lawful uses and we put the general significance of those matters at the forefront of the application, that this case presents an occasion for this Court to consider that area of law that is irregularly visited by this Court with the added virtue of, in this proceeding, correcting a decision of the Court of Appeal that was wrong, and in some respects, we say, unfair.  Can I identify first the main errors that we rely upon?

CRENNAN J:   On this issue of unfairness, as we understand it, a question arises about whether the use in breach of the consent was always in issue.  Is that it?

MR LANCASTER:   No, the primary way in which we put the unfairness point is that the Court of Appeal adopted a construction of the consent that used the terms “PBS items and OTC drugs” in circumstances where the meaning of those terms was never pleaded or in issue or the subject of evidence in the Land and Environment Court and was never the subject of explicit reference in the Court of Appeal.  Rather, the first time that my client became aware of the suggested limitation of its use of the premises to only those retail goods that can be described as PBS items and OTC drugs - over the counter drugs - was reading the judgment of the Court of Appeal.

CRENNAN J:   But there was always an assertion, was there not, about there being a breach of a consent in the context that – as I understood it – that the premises were being run as a retail pharmacy?

MR LANCASTER:   In the Land and Environment Court, correct, but not in the Court of Appeal.  There was a finding of his Honour Justice Sheahan in the Land and Environment Court that what was being done by way of retail sale was ancillary to the main distribution centre use of the premises.  That finding was not the subject of any ground of appeal, was not disturbed by the Court of Appeal and the Court of Appeal expressly disavowed deciding the appeal on the basis of an allegation of breach of the consent.

CRENNAN J:   Well, just going to that part of the Court of Appeal’s decision for a moment, if I may, if one looks at page 166 of the application book, paragraph 99, their Honours make the observations that it was not:

suggested that if the argument had been advanced at trial they would or could have adduced further evidence relevant to that issue.

MR LANCASTER:   No, there was no such suggestion because it was not put to counsel appearing in the Court of Appeal, for example, what about limitation of this consent to retail sales only for OTC drugs and PBS medicine.  So the occasion ‑ ‑ ‑

CRENNAN J:   But what would preclude a Full Court from looking at the same material that was before the primary judge and coming to a conclusion about the ambit of the consent?

MR LANCASTER:   Of course it could, but in the context of our unfairness point it must do so in a procedurally fair way and in a way that gives the parties an opportunity to refer to matters in evidence, proven at trial, or to make the submission that the issue was never raised at trial in a way that made it fair to be determined or considered in the Court of Appeal, and so ‑ ‑ ‑

CRENNAN J:   In a paradoxical sense you did slightly better than the present respondents were contending for.

MR LANCASTER:   Yes, and that point is made against us in that we came out of the Court of Appeal hearing with a valid consent, but restricted in a way that had never been part of our opponent’s case by reference to criteria that had never been the subject of evidence, and your Honours would have seen that ‑ ‑ ‑

CRENNAN J:   But is not that restriction implicit in your opponents’ case?

MR LANCASTER:   No, not at all, your Honours, because it relied on, in particular, the phrase “OTC drugs”.  Justice Sackville with the Court of Appeal in between the two decisions of the Court of Appeal asked for submissions as to what that should mean and that was necessary because that had never been a topic addressed at trial.  We sought to put in submissions and, indeed, an affidavit from an expert pharmacist to say what he considered the phrase “OTC drugs” to refer to and in the second Court of Appeal decision that was effectively dismissed as going beyond the grant of leave that had been given to address submissions to the terms of the proposed order. 

So the circumstance was that our opponents ran the case in the Land and Environment Court in respect of breach of consent by making allegations about excessive volume or income derived from retail use on the one hand compared to distribution centre use on the other.  There was absolutely no question of the nature of the products that were being sold as the discrimen for what took it outside of the consent. 

We got to the Court of Appeal, argument was had at the hearing and then for the first time when judgment was delivered there is suddenly a restriction by reference to the nature of the products that were to be sold from these premises, namely pharmaceutical benefits, on the one hand, or OTC drugs on the other hand, and that was done in circumstances where we just had not had the opportunity to put forward the kind of evidence that that affidavit that we put to the Court of Appeal could – your Honours would accept - would have been available and would have been put forward by us had we been alerted to a possibility that the outcome would be the limitation of the use in that particular way.  That is the way we put the unfairness point. 

It is particularly emphasised by that fact that I mentioned, that Justice Sheahan had found no breach of the consent because retail sales were ancillary within the meaning of condition 4 of the consent, and that was not the subject of a ground of appeal. So the way it was put by our opponents in the Court of Appeal was an independent suggestion that there was, contrary to section 76B of the Environmental Planning and Assessment Act, an unlawfulness of prohibition by reason of the nature of the use, irrespective of what the consent said. 

For reasons that we have developed in writing it is, in the structure of the New South Wales litigation, impossible, we contend, to come to a view that immediately before the 2010 LEP took effect we were operating unlawfully without determining a question of breach of consent.

CRENNAN J:   But does that follow that one has an existing use in circumstances where a consent has been construed as it has here and there is an obvious difference between the use permitted under that valid, but narrow, consent and a large scale retail pharmacy?  Why would it be necessary, why would it be a step that would have to be taken that there has been a breach of the consent?  Putting it another way, how can it be said that a valid, but narrow, consent confers the existing use status on a wider use?  I hope I am making myself clear.

MR LANCASTER:   Yes, your Honour.  The problem we identify in the Court of Appeal is at a prior stage in the analysis, and your Honour took me to paragraph 99 of the reasons, but as your Honours would have seen from paragraphs 97 and 100, this section of the reasons identifies that so far as the Court of Appeal were concerned, our opponents had not suggested that the use of the premises was unlawful simply because it is not in conformity with the consent and, in paragraph 100, at the end of that paragraph:

It is therefore not necessary to decide the appeal on a ground not advanced at the trial.

In my submission, that, with respect, undercuts the assumption of your Honour’s question to me in the sense that there was no consideration of the question of breach of the consent, be it broad or narrow, that was determined by the Court of Appeal. Rather there was a leap, as we would respectfully suggest it is, to the proposition that prohibition under section 76B can arise irrespective of considering the question of breach of consent.

Can I go to the provisions to indicate why we say that, as a matter of construction of the legislation that just cannot occur?  We have provided an authorities bundle.  On page 2 of that 76B is reproduced - 76C, in my submission, must be noticed:

This Division is subject to the other provisions of this Act, unless express provision is made to the contrary.

One of those other provisions is of course the existing use provision in section 107. That is on page 3 of our bundle. Section 106 refers to two types of existing use. We are dealing with that in paragraph (b) in this case:

the use of a building, work or land:

(i)for which development consent was granted before the commencement of a provision of an environmental planning instrument having the effect of prohibiting the use, and

(ii)that has been carried out . . . in accordance with the terms of the consent –

So, when we came to 107(1), which is the preservation provision, that is, that preserves the continuance of an existing use, the necessary question to ask and resolve for the purpose of determining whether what we asserted was an existing use was an existing use was to ask whether the development consent that had been granted, and that the Court of Appeal found to have been validly granted and to be a subsisting consent, involved a use or carrying out of development that had been done in accordance with that consent.

CRENNAN J:   But is not the problem that that consent as construed by the Court of Appeal did not cover a large scale retail pharmacy?

MR LANCASTER:   Yes, correct, but the ‑ ‑ ‑

CRENNAN J:   So, I am having trouble understanding how that can be an existing use in circumstances where the consent did not cover that use.  I suppose I am challenging, I think, paragraph 32 of your written submissions, to be found on page 208 of the application book, where you say it must be the case that the use of the subject premises was an existing use, notwithstanding a finding that the consent did not cover that use.

MR LANCASTER:   We would contest the proposition, with respect, that there had been a finding that it did not cover an existing use.  In other words, that was what expressly disavowed in paragraphs 95 to 100 of the Court of Appeal’s reasons.  The final sentence of paragraph 100 was that it was “not necessary to decide the appeal on a ground” not argued.

CRENNAN J: Well, I do appreciate that, but I am raising with you, how is it logically possible to have a determination of a valid consent which is narrow, which then can give rise to an existing use for the purposes of sections 106 and 107, the preservation legislation, when that – if I can call it – existing use was not covered by the consent?

MR LANCASTER:   Well, the process of characterisation of the use that is classified as the existing use is the first step in the analysis, in my submission.

CRENNAN J:   Why would not the first step be the consent, the ambit of the consent?

MR LANCASTER:   Consents allow development on land, in other words, the use of that land for a purpose explained ‑ ‑ ‑

CRENNAN J:   As permitted, yes.

MR LANCASTER:   ‑ ‑ ‑ as in the consent.

CRENNAN J:   Yes.

MR LANCASTER:   From that its purpose is derived.

CRENNAN J:   See, the Court of Appeal goes straight to the question in paragraph 100 of whether or not the large scale retail pharmacy use is for the purpose of the shop and hence prohibited under either of the LEPs.

MR LANCASTER:   Yes.

CRENNAN J:   Accordingly, in relation to the 1996 LEP, it was not an existing use as at the time of the 2010 LEP because it was not covered by what they have found to be a valid consent.

MR LANCASTER: Your Honour, the difficulty there is the existing use provision had to have been applied in this particular context of our opponents’ suggestion that the 2010/2011 use of the premises was prohibited under the 2010 LEP and therefore unlawful by reference to section 76B. So, the application of existing use provisions picks up - the phrase “The commencement of provision of an EPI having the effect of prohibiting the use” is that 2010 LEP. On the finding of the Court of Appeal, immediately before the commencement of that LEP, there was a subsisting valid consent, as your Honour has identified, on the Court of Appeal’s construction, for a limited purpose.

CRENNAN J:   Yes.

MR LANCASTER:   But the Court of Appeal did not take the step of identifying the limited nature of the consent and breach of that consent in coming to its conclusion of unlawfulness.  It simply did not consider the question of breach of the consent in the context of identifying whether or not the existing use provisions applied.

CRENNAN J:   Went straight to the shop issue, did it not?

MR LANCASTER: It went straight to the shop issue, which was the error, because it treats section 76B as though the unlawfulness attached to prohibited uses is exclusive or overriding in some way of other provisions of the Act when in fact the contrary is the position, and that a lawful subsisting consent, be it wide or narrow, must be – that existed before the date of a subsequent instrument that prohibited that use, one can only get to a position of a conclusion of illegality or unlawfulness if that consent is being contravened. The Court of Appeal expressly said we do not decide the appeal on that basis. So the basis that it was decided upon was the erroneous basis that we suggest involves a misconstruction of these significant provisions of the State legislation.

Now, there is a second category of error that we raise, which is the characterisation of the use of the relevant land.  We contend that there was a failure to comply by the Court of Appeal with the requisite approach stated by Justice Kitto in Shire of Perth v O’Keefe where his Honour identifies that - the case is reproduced in our bundle.  Page 12 - if I could take your Honours to that briefly - is the gist of Justice Kitto’s findings.  At about point 3 of the page:

The application of the by‑law in a particular case –

There was an old by‑law again preserving existing uses –

has therefore not to be approached through a meticulous examination of the details of processes or activities, or through a precise category of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose –

We say the Court of Appeal was erroneously meticulous and particular in referring to PBS items and OTC drugs as the proper character of the use that was permitted in the consent.

CRENNAN J:   What if they had said the consent does not encompass a large retail scale pharmacy about their reference to PBS and OTC?

MR LANCASTER:   Well, subject to questions of certainty that may have been available if, again, that had been an issue that had been litigated and if the parties – if it was understood what it was that that “large scale retail pharmacy” actually meant.  The real difficulty here is highlighted, considering the examples given, by Justice Kitto.  His Honour refers to – at about point 7 or 8 of the page - that when one is characterising a shop use, for example, it might not be such an easy matter.  There may be reason to become more specific in one’s characterisation of the use if there is a planning reason for becoming more specific. 

So, a butcher’s shop, because it deals with raw meat and delivery of large beasts and so on, there might be planning consequences that must be taken into account to achieve a greater specificity of purpose.  On the other hand, his Honour says, a general store, or it does not really matter what you sell, because for planning purposes it is all much the same. 

We pick up on that observation to make the observation in respect of the Court of Appeal’s characterisation that there was no case run by our opponents, and there was no reference by the Court of Appeal to any planning justification for a more particular characterisation of what this consent permitted at the chemist warehouse.  In other words, there was nothing about the fact that one box that could be bought at the pharmacy contained medicines rather than vitamins, or that one bottle that could be bought contained medical lotion, on the one hand, or body wash on the other hand, that would justify the type of specificity of saying, all you may sell are medicines, which is the effect of the order. 

So the characterisation and the level of which one adopts a specific characterisation or not is very much driven by town planning considerations, as his Honour’s phase in the middle of the page says, the characterisation of:

the purpose is likely to appeal to practical minds as appropriate in the application of town‑planning legislation -

So it is not concerned with reinforcing Commonwealth controls over medicines that one characterises the use, it is what the town planning consequences are, and so far as selling one box of goods compared to another there is no warrant for a different approach.  I see that I have a red light, your Honour, might I have two more sentences?

CRENNAN J:   Yes, certainly.

MR LANCASTER:   The third group of errors to which we point is in the construction of the consent itself and this may look like a small point, but in one way it does play a substantial part in the eventual decision of the Court

of Appeal.  The Court of Appeal said that correspondence passing between an applicant for consent and the council cannot be taken into account in construing what the consent means.  So what the Court of Appeal did was say, well, the statement of environmental effects, which is something the applicant puts in at the time of the application, may be taken into account in construing the consent, but not information subsequently imparted to the council. 

We say there is no principle of law to that effect, or there should not be, because it is merely a question of timing as to when an applicant might provide salient information to a council for the purpose of supporting its application, and in this case there was correspondence between the applicant and the council that explained the nature of the use that the Court of Appeal did not take into account, but that Justice Sheahan had taken into account to give context to what it was that was being sought to be approved. 

So, the principle did come home to bite because the Court of Appeal construed the consent narrowly by reference to the statement of environmental effects and, in substance, said, well, all you asked for was a chemist warehouse from which to sell PBS drugs and OTC drugs, so that is what you get, whereas the other information provided in letters, upon which we sought to rely, for the purpose of construction, described it much more generally as the retail sale of smaller items over the counter.  For those reasons, your Honour, the procedural fairness issue that underlies the errors of statutory construction and characterisation that I have identified, in my submission, warrant a grant of special leave.

CRENNAN J:   Thank you.  Yes, Mr Robson.

MR ROBSON:   If the Court pleases.  Your Honours, could I just have a short indulgence and I will come to the matters raised specifically by your Honour Justice Crennan, in due course?  The proceedings, as the Court will be aware, were commenced by three pharmacists in 2009.  What was of concern and what remained concerned at first instance and, indeed, the Court of Appeal was found to be the conduct from that time of a large scale retail pharmacy.  When I say “large scale”, on the evidence almost as a start up at $500,000 a month turnover, and it was well before the hearing date. 

The applicants took the view, of course, at first instance - the respondents took the view at first instance it was unlawful.  It is not a small neighbourhood chemist shop on any view.  It had been conducted – it had now been conducted for five years.  Shops are clearly prohibited.  The essential issue was the council when it gave consent – this is an argument we were unsuccessful on – was of the view, we say, with respect, misled, which Justice Sackville agreed with, that there was some use that required the use of a dispensary or hole in the wall under the National Health Act. 

From that requirement the council apparently became convinced that you could have a fully blown, fully functional retail chemist shop which - what was really required was some dispensary/hole in the wall as an adjunct to a distribution centre which otherwise would have been permissible.  So under the guise of that small dispensary or hole in the wall, the council gave a consent.  The argument which we were unsuccessful on was that it was always a shop. 

In our argument in the Court of Appeal, which was summarised by Justice Sackville at AB 153 and at 154, which is at 57 to 60, is precisely that which we put and we would ask the Court to give that some consideration.  Put simply, the Court of Appeal found at paragraphs 90 through to 96 to which you have already been taken, that the use of the premises was as a large scale retail pharmacy and that went well beyond the use permitted by consent. 

The Court of Appeal also found that the present use was in fact for a shop and it was prohibited - and that is at paragraph 64 at application book 155 - the Court of Appeal, as my friend has undertaken, construed the consent to allow a limited retail use for the supply of PBS items and OTC drugs to the public on the basis that the court found that what the consent, properly construed, allowed was some, if I can use the expression, indulgence apart from that which otherwise would be prohibited in order to have the distribution centre under the National Health Act and no more. 

So it is true that the applicants received an indulgence that was not otherwise put by the respondents and what we say is there is no dispute and there was not any dispute, that that which has been undertaken on the site involves large quantities of wide‑ranging products ordinarily sold through pharmacies and that which was being sold there was not limited to PBS items or OTC drugs and going well beyond any internet or distribution activity.  So the use of the premises as a large scale retail pharmacy does not comply with the terms of consent.  That is what was found at 95. 

When that is understood by way of the background, the matter which is put against us is, first of all, there is an unfairness.  It is put against us that the finding of the Court of Appeal in the present case, when it uses the expression “breach of consent” on the basis that the claim was not pleaded at first instance or in the Court of Appeal and that it was not the subject of argument and we say very simply that is incorrect - I will go very quickly through that. 

The pleadings before the trial judge, which appear in my learned friend’s application book at tab 4 at page 26 in paragraph 13H of the points of claim - which are on page 26, as I indicated - 13C pleads the uses.  It goes on “Breach of Condition 4”, 13H reads:

The Present Use is being carried out in breach of and contrary to Condition 4 of the Consent in that the retail sales component of the Present Use is not ancillary to the use (if any) of the Land as a “distribution centre” –

et cetera.  I will just direct your attention to 13I as well.  Now, that is how it was pleaded.  The pleading in the Court of Appeal, your Honours only need to go to application book 107, 109, it is the notice of appeal.  In particular, it starts at 104, in particular paragraphs 11iii, it “was not ancillary”, 11iv, the “use, to the extent that it included the retail shop” was prohibited at the time.  Paragraph 17 on page 109, 19ii makes it abundantly clear, we say:

His Honour ought to have found:

. . . 

ii.While the National Health Act did require public accessibility for the dispensing of PBS listed pharmaceuticals . . . this requirement could be satisfied by an internal office or counter which the public could access, or by a traditional “hole in the wall” hospital style –

Paragraph 20, pleaded:

His Honour erred by not deciding that the present use of the subject premises . . . was a use which was independent –

Paragraph 23i, that is the next page, 110:

The present use of the subject premises was a prohibited use . . . 

ii.That innominate prohibited use, not being for a “distribution centre” –

and iii the existing use rights did not arise.  Now, leaving the pleadings to one side, the trial judge, Justice Sheahan, at application book 9, 10, paragraph 12.3 – may I just take the Court to that, with respect?

CRENNAN J:   Sorry, page number again?

MR ROBSON:   Page 9.

CRENNAN J:   Thank you.

MR ROBSON:   And going on to 10 – I will paraphrase for time.  Paragraph 12 on page 9 of the application book says:

The applicants say that their challenge, as framed, raised four substantive arguments –

May I just ask your Honours to look at 1), 2) and 3) -

Is that present use in breach of the terms of the consent, particularly condition 4, which, as amended, requires any retail sales to be no more –

So is that present use in breach of terms of the consent?  This is his Honour summarising the submissions that were made and the issues before him.  Might I also suggest, with respect, if your Honours go to 97 and 98 at 298 and 299.  Condition 4 which your Honours may remember is a condition that any retail sales be ancillary, that is what his Honour was undertaking – what his Honour was considering, but I also say that deals with, in the first instance, in the Court of Appeal we say the breach of consent point was argued on the appeal.  If your Honours go to application book 215 and 216, and I will come back to this in a moment, but the summary of argument in paragraph 25 sets out where these matters – my learned friend suggested where it said:

did not assert a breach of the Consent is simply wrong and an incorrect reconstruction of the record. 

We are given references there as to where that took place.  It is in footnotes 11 and 13.  What we say is taking those matters into account it is obvious in the findings of the Court of Appeal if your Honours then go to 164 to 166 at 91 to 99, and we place some emphasis upon 99 which my friend has already taken you to:

If it were necessary to decide the case on the basis that the present use as a large scale retail pharmacy is in breach of the Consent and thus could not constitute a protected “existing use”, I would be prepared to do so.  The Respondents have not suggested that if the argument had been advanced at trial they would or could have adduced further evidence relevant to the issue.

To which that is relevant.  But more importantly what his Honour found, of course, having all the matters before him and the court was unanimous, at 100:

However, for the reasons that follow, the appellants are entitled to succeed on their principal contention, namely that the use of the Premises as a large scale retail pharmacy is for the purpose of a shop and thus is prohibited under both the 1996 LEP and the 2010 LEP.

So, if I can put it very simply, what we argued before the Court of Appeal was that the present use was for a shop, that shops were prohibited, that consent cannot be granted for a prohibited development.  The consent was granted to authorise a present use and the consent is wholly invalid and the present use should be wholly restrained.

What his Honour found was that, particularly at 64, the present use was in fact a shop and shops are prohibited and he agreed that the consent cannot be granted for prohibited development.  He agreed, at 64, that the consent simply did not authorise the present use.  I know my learned friends raise a point that he made a mistake with the construction.  We say that does not arise but, in particular, it follows from 64, that whether or not the court had adopted a narrow view or our broader construction of the consent was irrelevant as to whether the present use – it is a large scale pharmacy, apart from a very small component of it – that is the dispensary window – was restrained and, further, his Honour’s narrow construction only operated in the applicant’s favour, saving the dispensary from some restraint.

In those circumstances, we say, the correct reasoning of the Court of Appeal – I will take your Honours to it – paragraphs 123 and 124 – 122 and 123 – what we say is that that reasoning could never save the present consent.  The present consent cannot be saved by an existing use because it is not being conducted properly.  It was never authorised by the consent and was never able to be authorised by the consent.  We say there is no unfairness in the Court of Appeal’s finding that the consent did not authorise the present use as it upheld the respondent’s primary argument, which his Honour clearly found.  The fact that the Court of Appeal invested the consent with a limited area of operation – in my respectful submission I have indicated four – favours the applicant on one view and his Honour, the court, was entitled to make those findings on the evidence.  It was a clear re‑hearing.

My learned friend raises section 109.  It is a provision – to put it simply.  State legislation, as the Court well knows, which operates with the effect to continue the force and effect of a development consent granted by a consent authority under a planning instrument and a subsequent planning instrument, usually an LEP – either by way of amendment or otherwise – deems that type of development which has a consent to be prohibited, otherwise the consent would not inure.

The applicants now appear to argue that section 109B could have saved the present use from the court’s finding that it was a prohibited use as a shop. We say that argument is wrong purely at the words of section 109 which provides that nothing in an environmental planning instrument prohibits the carrying out of development in accordance with the consent that has been lawfully granted and is in force.

So, it is clearly saying, with respect, that which has been carried out in the present circumstances is not in accordance with the consent as found by the Court of Appeal.  We say section 109, therefore, only applies to consents that are lawfully granted.  To the extent that it could be said against that argument that consent was lawfully granted we say that the conduct which has been undertaken, purportedly, pursuant to the consent, is not lawfully granted and that conduct does not amount to that which has been – sorry, whatever may have been lawfully granted by the consent is not reflective of and is not the conduct which is presently being undertaken and, indeed, not the conduct that has been undertaken for the last five years.    

So, his Honour covered this situation at paragraph 64, at application book 155 because he specifically found that if the development consent had been granted for the present use – that is the shop use – the present use it was being conducted for – it would have been invalid, at least to that extent.  What he further says at 122 and 123 is that the use of the premises as a retail pharmacy is not a use permitted without consent under the 2010 LEP.  He also finds, again, at 123:

In any event, use of the Premises as a large scale retail pharmacy is prohibited under the 2010 LEP.  It follows –

and we say, understandably -

that the current use of the Premises as a retail pharmacy is in breach of the EPA Act.

Therefore, we say, it could not have been lawfully granted.  Therefore, section 109 does not arise in the circumstances. 

CRENNAN J:   Were you referring to 107?

MR ROBSON:   Section 109 – 109B and 106 and 107 as well.  They have to assume – existing use has to assume that it is a lawful existing use.  The consequence of my learned friend’s argument, with respect – which might have been alluded to by your Honour, with respect, was that you could get a consent from a local government authority or any other decision‑maker that allows you to do something that is prohibited, on one view, and because another LEP comes in and renders it prohibited again, it inures because you have a consent.  We say that cannot be the case and it is not the way it should be applied, not the way it has been applied in the past.

Indeed, the suggestion made by my learned friend that the authorities – so you do not go into any meticulous articulation of what is being done in order to classify what the consent is – in the Shire of Perth, we say that the appropriate approach – I think we put this in paragraph – sorry, I thought I was referring to a footnote in our submissions.  We made submissions to the Court of Appeal to this effect, but the current, we say, appropriate authorities – Weston Aluminium v EPA which was decided – I will have to give you the local government authority. It is [2007] 156 LGERA 283. We put it in our list but we have not brought the authority. It is in 82 ALJR 74, which simply says, at paragraph [17]:

The general approach to construction of development consents advocated by Alcoa was not disputed by Weston.  It is an approach reflected in a number of decisions of the Court of Appeal of New South Wales to which reference was made.

It is to be construed liberally without confining a use to the precise methods of process and activity.  But what we are looking at here is the construction of a consent.  What we are looking at here, with respect, is the manner in which the council considered it – the manner in which it was operated.  We did not, on our primary argument, enjoy success.  We say what his Honour was entitled to do on the evidence before him is to find that the consent, properly construed – and my learned friend takes some point that correspondence coming to council afterwards, or in the process of council’s consideration, should be construed – his Honour, we say, was entitled to adopt the law as he did.  He was entitled, quite properly, to consider that which the applicant put in its primary documents supporting the application and entitled to form a view in relation to construction.

Now, put simply, the construction we put which we were unsuccessful on was that it was always a shop in every aspect and in those circumstances we say that there was no fault in what his Honour found at all.  Your Honours, finally, we say there is no error, there has been no denial of procedural fairness.  The manner in which his Honour sought some further submissions in relation to various drugs which, of course, his Honour was minded to grant relief or modify - or relief limited to what we had sought in our claim and in order to give that relief the specificity which could be followed he sought some submissions in relation to matters in evidence where how these drugs were used, how were they clarified, how

they were described was all in evidence before him.  He wanted that clarified.  He ended up accepting the submissions and making orders in accordance with those.

In those circumstances, we say, there is no error.  There is no unfairness.  There is no misconstruction of the consent.  It is not a matter, we say, specifically of public importance in relation to the construction of a development consent for a pharmacy or chemist shop in Penrith, New South Wales.  We say any suggested legal question in relation to the application of 106 does not arise in these proceedings.  His Honour was entitled to construe the consent as he found and, in any event, there is nothing in this case that we say, with respect, would provide an appropriate vehicle for those matters to be ventilated, even if it were the case. 

We say it is not a commonplace for a user of land to claim some form of existing use in circumstances where it has newly commenced a start‑up development which itself is prohibited at a time when the commencement under a subsequent LEP might have rendered it prohibited.  I put that in a convoluted way, but we say you cannot by way of relation back.  Your Honours, unless there is any other matter.

CRENNAN J:   No, thank you, Mr Robson.  Yes, Mr Lancaster.

MR LANCASTER:   Your Honour, my learned friend referred to and relied on paragraph 95 as though it were a finding that what was being done was in breach of the consent, but that is in a part of the Court of Appeal’s reasons that two paragraphs later in paragraph 97 begins with a “But”, a very significant “But”, so that what was relied on in 95 and then what was said in 96 are put to one side by the Court of Appeal.  It is of no advantage to my learned friend’s case to refer to 95 in the same category as paragraph 99.  It speaks volumes that the two paragraphs relied on by our friends in answer to the case rely on two paragraphs in a part of the reasons that were clearly not dispositive, expressly said not to be dispositive of the appeal.

In respect of paragraph 99 moreover, that observation was made by Justice Sackville in the context of his Honour’s construction of the consent which for the other reasons that I have put was derived not procedurally fairly and was derived incorrectly by reference to the characterisation of the use that was involved and by reference to insufficient material passing between the council and the proponent of the development. 

Added to that in respect of paragraph 99, I refer again to the finding of Justice Sheahan at application book 97 to 98, where his Honour found, considering the question of was there a breach of condition 4 of the consent, there was no such breach because retail sales were “ancillary” and that was not in the field of play before the Court of Appeal, it was not appealed from. 

In respect of section 109B, to which my learned friend took your Honours, it is reproduced at page 5 of our authorities bundle. The structure of this division as to existing uses, of course, is that section 107 continues existing uses – section 109B saves the effect of existing consents. There is nothing to deny the application in section 109B in this case, as my learned friend has suggested.

It was found by the Court of Appeal that my clients enjoyed a subsisting valid consent, 109B therefore attached to it, subject to the consideration of whether the development was carried out in accordance with it. The Court of Appeal did not determine that question expressly, so it could not be the case that this division as to existing uses could be put to one side and a conclusion simply made that there was a relevant unlawfulness by reason of contravention of section 76B because 76B is expressly made subject to these provisions, whether it be 107 or 109B.

Finally, in reply, my learned friend seems to suggest that procedural fairness in respect of PBS items and OTC drugs as a limiting description of what may be sold from the premises was accorded by what was done between the first and second Court of Appeal judgments.  In my respectful submission, that was not so.  The Court of Appeal in its first judgment identified that descriptor and then called for further submissions about what OTC drugs might mean. 

When we put on our submissions, which are in the supplementary materials at tab 5 from page 28, and when we put in the affidavit of Mr Quigley at page 32, we sought to draw attention to the fact that OTC drugs does not have the narrow meaning that the Court of Appeal had in its first judgment seemed to suggest that it had.  When the Court of Appeal came to determine in its second set of reasons for decision this question, the affidavit that had been sent in got the shortest of shrifts.  At page 184 of the application book in paragraph 7 it simply said:

The Respondents –

my clients –

went beyond the terms of the Orders by filing an affidavit by a pharmacist which expresses opinions about the meaning of the expression “OTC drugs”.

Nothing more was said about it at all and, of course, their Honours’ eventual definition of OTC drugs at page 187 of the application book is

merely by reference to medicines identified in the Poisons Act – items identified in the Poisons Act.  Mr Quigley’s affidavit was precisely the kind of evidence that we would have lead in the Land and Environment Court if this proposed construction of the consent had been raised in terms because evidence was relevant to it and would have been addressed towards it.  For those reasons there was not a satisfactory accordance of procedural fairness between the first and second reasons of the Court of Appeal.  May it please the Court.

CRENNAN J:   The applicant seeks special leave to appeal from orders made by the Court of Appeal of the Supreme Court of New South Wales allowing an appeal from orders of the Land and Environment Court.  The outcome of an appeal to this Court would turn substantially on the construction of a development consent adopted by the Court of Appeal.  The applicant complains that there was an insufficient opportunity to address on that question of construction. 

Noting that, we are of the view that there are insufficient prospects of disturbing either the Court of Appeal’s construction of the development consent or a related finding that the use of the premises in question was used for a prohibited purpose under the Penrith Local Environment Plan 1996 (Industrial Land). Accordingly, we are not persuaded that this application gives rise to more general questions about the operation of sections 76B, 106, 107 and 109B of the Environmental Planning and Assessment Act 1979 (NSW) as might warrant a grant of special leave. Nor are we persuaded that considerations concerning the administration of justice would support a grant of special leave. Special leave to appeal is refused with costs.

Adjourn the Court to 10.15, Tuesday, 1 April in Canberra.

AT 2.36 PM THE MATTER WAS CONCLUDED