AMP Investments Ltd - v - Newcastle City Council - [1999] NSWLEC 164

No judgment structure available for this case.

Land and Environment Court

of New South Wales

CITATION:

AMP Investments Ltd - v - Newcastle City Council [1999] NSWLEC 164

PARTIES

APPLICANT:
AMP Investments Ltd

RESPONDENT:
Newcastle City Council

NUMBER:

10677 of 1998

CORAM:

Lloyd J

KEY ISSUES:

Construction & Interpretation; Development :-
Development:- appeal - economic considerations - traffic considerations
Construction & Interpretation:- "commercial activities"

LEGISLATION CITED:

Environmental Planning & Assessment Act 1979, s90(1)(d) (now s79C(1)(b))
Newcastle Local Environmental Plan 1989 cl 2, cl 12
Hunter Regional Environmental Plan 1989 cl 18, cl 19, cl 20

DATES OF HEARING:

05/31/1999; 06/01/1999; 06/02/1999; 06/03/1999; 06/04/1999; 06/07/1999; 06/08/1999; 06/09/1999; 07/29/1999

DATE OF JUDGMENT DELIVERY:

08/06/1999

LEGAL REPRESENTATIVES:

APPLICANT:
M H Tobias QC
AND:
A E Galasso (Barrister)
SOLICITORS:
Mallesons Stephen Jaques
RESPONDENT:
J B Maston (Barrister)
SOLICITORS:
Sparke Helmore

JUDGMENT:

Contents

Paragraph

Introduction 1

The Newcastle Local Environmental Plan 1987

(“the LEP”) 6

The Hunter Regional Environmental Plan 1989

(“the REP”) 11

Construction of the planning instruments 15

The evidence on economic impact 24

Mr Hill 26

Mr Jebb 37

Mr Goumas 42

Mrs Goumas 50

Ms Chong 51

Mr Browne 56

Mr Ingham 62

Mr Dawson 66

Mr Lawson 69
Other Evidence 72

Conclusions on economic impact 80

Traffic 93

Ingress and egress to Garden City 94
Intersection of Northcott Drive and Park Avenue 95

Traffic in Lexington Parade 101

Other matters 104

Conclusion and Orders 109

_______________

IN THE LAND AND Matter No: 10677 of 1998

ENVIRONMENT COURT Coram: Lloyd J

OF NEW SOUTH WALES Decision date: 06/08/99

AMP Investments Limited

Applicant

v

Newcastle City Council

Respondent

JUDGMENT

HIS HONOUR:

Introduction

1. In the Newcastle suburb of Kotara, about 6.5 kilometres from the central business district, there is a subregional shopping centre with the high sounding (and paradoxical) name of Garden City. Garden City has about 43,000 square metres of retail space, including two supermarkets, a department store and a number of speciality shops.

2 . The applicant appeals under s 97 of the Environmental Planning & Assessment Act 1979 (“the Act”) against the respondent’s deemed refusal of a development application to expand the centre by a further 11,000 square metres of retail space and the addition of an 8-screen cinema complex. The development application also proposes an additional 423 car parking spaces (from 2413 at present to 2836), the reconstruction and reconfiguration of some of the car parking areas and the reconfiguration of some ingress and egress arrangements.

3. The development application was made on 30 June 1998. Accordingly the application is to be determined under the provisions of the Act as at that time, rather than at present ( Environmental Planning & Assessment Savings & Transitional Regulation 1998, clause 15(1)).

4. A large number of issues were initially identified. Most of the issues were resolved, however, by changes made by the applicant to the proposed development and by the formulation of acceptable conditions of development consent. The remaining major issues are as follows:

(a) whether the proposed development is permissible having regard to the objectives of the 3(b) zone under the Newcastle Local Environmental Plan 1987 and whether the development is consistent with those objectives.

There was also a related issue: whether the proposed development was permissible having regard to the objectives, policies and principles of the Hunter Regional Environmental Plan 1989;

(b) whether the proposed development has an adverse social and economic effect in the locality including the Newcastle central business district;
(c) whether the amount of traffic likely to be generated by the development is appropriate, particularly in relation to the capacity of the road system and the probable effect of that traffic and the movement of traffic on the road system.

5. In addition to these issues the respondent raised two subsidiary issues: the availability and adequacy of public transport; and whether the proposed development would adversely affect the existing and likely future amenity of the neighbourhood. These issues are not of themselves sufficient to determine the outcome of the appeal and can be met, if necessary, by the imposition of appropriate conditions of consent.

The Newcastle Local Environmental Plan 1987 (“the LEP”)

6. Clause 2(2) describes the objectives of the plan as relevantly:

(c) Retailing and Commerce:

(i) to maintain and reinforce the role of the Central Business District as the Hunter Region’s major commercial, administrative, cultural and entertainment centre;
(ii) to maintain and reinforce the viability of existing commercial centres in a manner appropriate to their functional role;

7. Clause 2(3) provides:

(3) The particular objectives of each zone are set out in the Table to clause 12.

8. Clause 12(3) is as follows:

(3) Except as otherwise provided by this plan, the Council shall not grant consent to the carrying out of development on land to which this plan applies unless the Council is of the opinion that the carrying out of the development is consistent with the objectives of the zone within which the development is proposed to be carried out.

9. Garden City is within Zone No 3(b) (District Business Zone). The objectives of the zone are relevantly:

The objectives are -

(a) to provide for a range of retail and commercial activities which could reasonably be expected -

(i) to have the major proportion of their trade influence over a district comprising a population in the order of 20 000-30 000 people; and
(ii) not to prejudice the viability of the Central Business District.

(b) …

10. Mr J B Maston, who appears for the respondent, submits that the cinema component of the proposed development infringes the objectives in clause 2(2)(c) and is prohibited by paragraph (a)(ii) of the objectives of the zone. I shall refer in due course to the evidence relating thereto. Mr Maston does not contend that paragraph (a)(i) of the objectives of the zone is infringed. Neither does Mr Maston contend that the retailing component of the proposed development infringes either clause 2(2)(c) of the general objectives of the LEP. The uncontradicted evidence is that the retail component will have an insignificant effect on the central business district.

The Hunter Regional Environmental Plan 1989 (“the REP”)

11. Clause 18 relevantly provides:

18. The objectives of this plan in relation to planning strategies concerning commercial developments are -

(a) to ensure that commercial service centres are developed to suit the convenience of consumers and to optimise public and private investment; and

(b) …

12. Clause 19 states:

19. In preparing a draft local environmental plan/or considering an application to provide for an increase in commercial or retail development, the council -

(a) should consider whether the development is likely to have a detrimental impact on the existing or potential function of land shown on Schedule 1 as a regional, subregional or district centre; and

(b) should not increase the floor area allowed on land zoned for business purposes, or increase the area of land zoned for business purposes, unless it has been demonstrated that the area is or will be underprovided with business facilities.

Schedule 1, referred to in subclause 19(a) lists “Newcastle CBD” as the regional centre and includes Garden City as one of a number of subregional centres.

13. Clause 20 relevantly provides:

20(1) The Newcastle central business district should be promoted as the major commercial, retail and service centre in the region, comprising a wide range of office and entertainment facilities and establishments providing high quality goods and services.
(2) Councils, in consultation with officers of the Department, should -

(a) encourage retailing, office and associated service functions in the central business district and nominated subregional and district centres;

(b) provide for new or expanded centres in other locations to meet anticipated local needs; and

(c) require the provision of social and community facilities, including environmental improvement, in centres appropriate to the location and scale of development.

…..

14. Clause 4 provides that in the event of an inconsistency between the REP and another environmental planning instrument (other than a State Environmental Planning Policy) applying to the land to which the REP applies, the former shall prevail to the extent of the inconsistency. In the present case there is no inconsistency between the relevant provisions of the LEP and the REP.

Construction of the planning instruments

15. In Almona Pty Ltd v Newcastle City Council (5 April 1995, unreported), Pearlman J considered the meaning of the following objective of the 4(a) zone of the LEP:

To allow commercial, retail or other development only where it is … unlikely to prejudice the viability of existing commercial centres.

Her Honour construed this phrase to mean that it permitted a development only where there is no real chance or possibility that it will disadvantage or detrimentally affect the life or existence of existing commercial centres. In that case the existing commercial centre in question was the Newcastle central business district which, her Honour noted, enjoys some paramountcy over other centres. Her Honour adopted the plain and ordinary meaning of “prejudice”, that is, a disadvantageous or detrimental impact. I adopt her Honour’s construction of the word “prejudice” here.

16. Clause 12(3) of the LEP requires that consent not be granted unless the consent authority is of the opinion that the development is consistent with the objectives of the zone. A development will be consistent with the objectives of the zone if it is not antipathetic to them. It is not necessary to show that the development promotes or is ancillary to the objectives, nor even that it is compatible therewith ( Coffs Harbour Environment Centre Inc v Coffs Harbour City Council (1991) 74 LGRA 185 at 192-193 CA, per Clarke JA; Challister Ltd v Blacktown City Council (1992) 76 LGRA 10 at 13-14, Talbot J; Schaffer Corporation Ltd v Hawkesbury City Council (1992) 77 LGRA 21 at 27, Pearlman J).

17. I therefore construe clause 12(3) and the zoning table in the following way. A proposed development is permissible if the consent authority is of the opinion that it will provide a range of retail and commercial activities which it could reasonably expect not to disadvantage or detrimentally affect the life or existence of the central business district. I refer below to the evidence on this question.

18. Mr Maston submits that although the retail component of the proposed development is permissible, the cinema component is not. As noted in paragraph 16 above clause 12(3) of the LEP provides that the Council shall not grant consent to the carrying out of development unless it is consistent with the objectives of the relevant zone. Moreover, item 3 of the zoning table for the 3(b) zone, which specifies development that may be carried out only with development consent, states:

Any purpose (which in the opinion of the Council, is consistent with the objectives of this zone) other than [ development which is prohibited ]”.

The relevant objective is “ to provide for a range of retail and commercial activities ... ”. In Mr Maston’s submission the cinemas were clearly not a retail activity. Neither, in his submission, were the cinemas a commercial activity. It follows, according to the submission, that the provision of cinemas was not an objective of the zone and were thus prohibited. Mr Maston’s submission depends upon the exclusion of cinemas from the words “ commercial activities ”. In support of his submission Mr Maston relies upon the definitions of “ commercial premises ” and “ place of assembly ” in the Environmental Planning & Assessment Model Provisions 1980 (“the Model Provisions”). There the words “ commercial premises ” are defined as meaning “ a building or place used as an office or for other business or commercial purposes, but does not include a building or place elsewhere specifically defined in this clause ... ”. In Mr Maston’s submission a cinema is a “ place of assembly ” under the Model Provisions, defined as meaning “ a public hall, theatre, cinema, .... ”. Since a cinema was a place of assembly it was not a commercial activity, was thus not a purpose described in the objectives of the zone and was thus not permissible in the 3(b) zone.

19. Although the Model Provisions are adopted for the purpose of the LEP, I have some difficulty in accepting Mr Maston’s submission. The phrase used in the objectives is not the defined phrase, “commercial premises”. The phrase used is “commercial activities”. These are ordinary words which are to be construed according to their current usage or ordinary meaning ( Louinder v Stuckey [1984] 2 NSWLR 354 at 357, 360, CA). Statutory definitions, on the other hand, have no effect except in the construction of the defined words in the statute and do not operate in any other way ( Gibb v Federal Commissioner of Taxation (1966) 118 CLR 628 at 635, Barwick CJ, McTiernan and Taylor JJ). The draftsman could have used the defined expression “commercial premises” but chose not to do so. In my view the phrase “commercial activities” in its current usage or ordinary meaning is a reference to all activities which engage in commerce and thus includes the operations of cinemas.

20. Clause 7 of the REP requires a consent authority, in carrying out its functions under the Act, to consider inter alia the objectives, policies and principles in the plan and relevant to the matter. I have set out in paragraphs 11-13 above clauses 18-20 of the REP which are relevant to the matter.

21. The proposed development clearly complies with the relevant objective in clause 18. The reference in that clause to commercial service centres includes, in my view, such centres as Garden City.

22. Clause 19 of the REP is a provision which expressly applies to the consideration of a development application to provide for an increase in commercial or retail development. It requires the consent authority to consider whether the development is likely to have a detrimental impact on the existing or potential function of the land shown in Schedule 1 as a regional, subregional or district centre. The only regional centre shown on Schedule 1 is the Newcastle central business district. In Almona Pty Ltd v Newcastle City Council , to which I have referred, Pearlman J construed the word “unlikely” in the phrase “unlikely to prejudice the viability of existing commercial centres” to mean “no real chance or possibility”. I therefore construe the word “likely” as being the converse of “unlikely”, namely “a real chance or possibility”. Clause 19 thus requires the consent authority to consider whether there is a real chance or possibility that the development will have a detrimental impact on the existing or potential function of the Newcastle central business district. This question is not dissimilar to the question which arises under clause 12(3) and the zoning table under the LEP described in paragraph 17 above. Again, I refer below to the evidence on this question.

23. Clause 20 provides that the Newcastle central business district shall be promoted as the major commercial, retail and service centre in the region, comprising a wide range of office and entertainment facilities and establishments providing high quality goods and services. It is to be noted that although the clause promotes the Newcastle central business district as “the major” commercial, retail and service centre in the region, it is not promoted as the only commercial, retail and service centre. The REP clearly allows other commercial, retail and service centres in the region, such as in subregional centres of which Garden City is one of several. Nevertheless the questions remain as to whether the proposed development can either be reasonably expected to disadvantage or detrimentally affect the life or existence of the Newcastle central business district, contrary to the objectives of the LEP; and whether the proposed development gives rise to a real chance or possibility that it will have a detrimental impact on the existing or potential function of the central business district, contrary to clause 19(a) of the REP. If the answer to either question is answered in the affirmative then it follows that neither would clause 20(1) of the REP be satisfied, since the development would detract from the role of the central business district. With these considerations in mind it is now appropriate to turn to the evidence.

The evidence on economic impact

24. Evidence for the applicant was given by M B Colston (traffic engineer), Mr R T Jebb (economist), Mr N Ingham (town planner), Mr C Baker (architect) and Mr T E Booler (portfolio manager of AMP Shopping Centre Trust, the owner of Garden City). In addition the applicant tendered without objection a report of an acoustical engineer, Mr S E Cooper (who was not required for cross-examination). Evidence for the respondent was given by Mr C J Stapleton (traffic engineer), Mr M A Hill (land economist), Mr G L Browne (architect and town planner), Mr T Goumas (cinema proprietor), Ms S Chong (businesswoman), Mr P Frost (representing the Save Kotara Action Group, known as “SKAG”), Mr R L Avery (objector), Mr A B Lawson (general manager, Honeysuckle Development Corporation) and Mr D J A Lawson (director of development, Reading Entertainment Australia Pty Ltd). The respondent also relied upon an affidavit of Mrs M Goumas (cinema proprietor) and on 41 written objections to the proposed development.

25. For the purpose of resolving the issue of permissibility, the evidence concentrated upon the economic impact of the cinema component of the proposed development upon the viability of the Newcastle central business district. I thus give particular consideration to the evidence on the issue of whether it could reasonably be expected that the cinema component of the proposed development gives rise to a real chance or possibility that it will have a disadvantageous or detrimental impact on the life or existence of the Newcastle central business district (contrary to the LEP); or on the existing or potential function of the Newcastle central business district (contrary to the REP).

Mr Hill

26. In his report on the economic impact of the proposal, Mr Hill states that the primary trade area for cinemas is generally a 10 kilometre radius. The primary trade area for the proposed cinemas at Garden City would include the Newcastle local government area plus the Lake Macquarie post code areas of Belmont, Swansea, Warners Bay, Toronto, Boolaroo, Cardiff and Charlestown. The primary trade area is influenced by a number of factors including the location of other cinema centres.

27. Mr Hill’s report contains the conclusion that the proposed cinema complex at Garden City would have an adverse impact on the cinemas in the central business district of Newcastle with a decline in trade of around 10% - 20%. Mr Hill’s report states that “ this loss of trade could result in the closure of one of the central business district operators ”. The report goes on to say “ that the closure of a cinema operator in the central business district is a strong possibility ”. The report states that “ the single screen Kensington is probably the cinema most likely to close - although being only a single screen this would have less impact on the CBD ”. As a result of this, according to Mr Hill, there would be an adverse impact on some retailers in the central business district. Retailers such as fast foods, cafes and retailers requiring passing trade near an existing cinema would be most affected.

28. Mr Hill’s report further concludes that the proposed cinema complex at Garden City does not conform to the objectives of the LEP in that “ it will have adverse impact on the entertainment industry in the CBD which will prejudice the viability of the CBD ”.

29. After reviewing the reasons why residents commute to the central business district, Mr Hill’s report states:

Many of these service and entertainment centres are destination places in their own right. In other words these places become the primary reason for people frequently or infrequently commuting to the CBD. In many cases shopping becomes a secondary activity. There is therefore a nexus between the shops and the commercial and entertainment land uses in the CBD. The point of this is that the closure or relocation of these people generators (which include the cinemas) would [ changed to ‘could’ in cross-examination ] have as much adverse impact on the CBD retailers as the expansion of retail stores in the suburbs.

30. Mr Hill had carried out a survey of cinema goers. Of the people surveyed in Kotara and Adamstown 75% nominated Charlestown as their main cinema destination. For people in Charlestown the number was up to 86%. The central business district was the main cinema destination for residents of Merewether, Wickham and Stockton. “ Of the 161 people surveyed 110 gave reasons as to why they go [ to their local cinemas ]. 67% stated ‘proximity’, ‘close to home’ or like responses. Interestingly those that attended the CBD cinemas usually gave a series of other reasons such as ‘meeting friends’, ‘dining out’, ‘different type of movies’. ”

31. Mr Hill stated in his oral evidence that it was likely that the Greater Union cinema chain may be attracted to the proposed cinema complex at Garden City. Mr Hill went on to say that if and when this occurred Greater Union would most likely close its three screen facility in the central business district and concentrate on Garden City. There was other evidence that the three screen Greater Union facility in the central business district was presently in a run-down condition. Mr Hill concluded that there would be a consequential detriment to the viability of the central business district: “ ... we did a survey of people, why they went to the central business district and there’s a large percentage of people going to there for entertainment and if that function of entertainment is reduced that has an effect on the catchment of the central business district not drawing those people. Those people will take their leisure dollars to Garden City or Charlestown, wherever the new cinema is and that has a flow on impact to other retailers ”.

32. Mr Hill asserted in cross-examination that the closure of a central business district cinema or the relocation of the central business district cinema out of the central business district would have an adverse social impact as well as an adverse economic impact on the central business district. In referring to the statement I have quoted in paragraph 29 above Mr Hill stated that the adverse impact there referred to was in an economic sense. Mr Hill changed the statement from “ would have as much adverse impact ... “ to “ could have as much adverse impact... ”.

33. In his report Mr Hill stated that ” without further growth in residential development in the inner suburbs and without an expansion of other activities in the CBD a fall in trade of around 10% - 20% is quite likely for CBD cinemas ”.

34. Mr Hill was asked about the impact on the CBD of the Honeysuckle project, a proposal supported by the State government for the redevelopment of a large area of land along the Newcastle harbour waterfront. As part of that redevelopment there was a proposal for a nine screen cinema complex. Mr Hill said that the Honeysuckle project, being part of the central business district, would have a positive impact upon the central business district. As to the existing cinemas in the central business district Mr Hill said that the Honeysuckle project could have a negative impact, but he went on to say:

.. in planning a city [ you don’t ] try and kill one part of the city, yes [ the Honeysuckle project ] could have a temporary impact or permanent impact on the independents but on the other hand if designed correctly it acts as a cluster and makes a reason to come into the central business district, the parking issue may be solved the security issue may be solved and overall it could be a positive impact, ...

35. Mr Hill had asserted in his report that the closure of the Kensington cinema would have some adverse impact on retailers, namely fast foods, cafes and retailers who require passing trade from the cinema. When asked as to what retailers would be affected and how many such retailers there are around the Kensington cinema, Mr Hill was unable to immediately respond.

36. Mr Hill agreed under cross-examination that the cinema component of the proposed development and its impact on the cinemas in the central business district, taken in isolation, would not prejudice the viability of the central business district. Mr Hill asserted, however, that there would be an impact on other retailers although the impact would be marginal, but may be significant in the immediate area of any affected cinema in the central business district.

Mr Jebb

37. Mr Jebb agreed with Mr Hill that the “ addition of 8 cinemas at Garden City could reduce Newcastle’s CBD cinema trade by 10%-20% ”. Mr Jebb further stated:

Increased competition, however, seldom leads to cinema closures because most cinemas, such as the Greater Union complex in the Newcastle CBD, are operated by chain traders capable of adjusting to different patronage levels. However, again I agree with Hill ... that a decline of 10% - 20% in cinema patronage could lead to the closure of one cinema, such as the single screen Kensington cinema .

38. Mr Jebb said that the closure of one cinema would not threaten or be detrimental to the viability of the central business district of Newcastle “ in any shape or form ..The closure of one cinema is a normal competitive outcome .”

39. Mr Jebb agrees that the closure of one cinema and a reduction of 10% - 20% in cinema patronage would affect retail turnover in the central business district. However, a 15% reduction in cinema patronage would be a reduction of approximately 33,000 patrons per annum and assuming that patrons spend $12 on average on retail items as part of cinema visits, then these 33,000 patrons would spend $396,000 on retail items as part of their cinema visit. The total Newcastle central business district turnover is estimated to be in excess of $200 million per annum. Therefore a reduction of $400,000 per annum represents a reduction of only 0.2%. As Mr Jebb states, “ This figure is inconsequential and has no impact on the viability of the Newcastle CBD ”.

40. Mr Jebb explained that the relationship between shops and a cinema is complex and depends on factors such as how many people go to the cinemas, what the shops are in question, what their respective trading hours are and how good the shop’s product is. Mr Jebb stated that he had not seen any evidence that would indicate that if the Kensington Cinema closed it would necessarily involve the closure of any food-related or other retailers surrounding that cinema. Mr Jebb went on to state that the only shop that might be the subject of closer analysis would be Embassy Cafe which is situated two doors away from the Kensington Cinema. The Embassy Cafe could well draw some of its business from persons attending the Kensington Cinema. No evidence was produced, however, to indicate that the Embassy Cafe would suffer any loss if the Kensington Cinema closed.

41. Mr Jebb agreed that the approval of the proposed development in this case could not be said to promote the Newcastle central business district. He went on to state, however:

In the context of the central business district certainly if the Embassy Cafe, for example, got the majority of its business from the cinemas, which I very much doubt, and if it lost that business, in those circumstances it could close. But there is always change in all shopping centres, and all central business districts, people come and go. That is of absolutely no relevance to the viability of the Newcastle Central Business District.

Mr Jebb disagreed with the suggestion that if the entertainment component of the central business district was significantly reduced then this would prejudice the viability of the central business district itself.

Mr Goumas

42. Mr Goumas is the owner and operator of the Kensington Cinema located in Hunter Street Newcastle. That cinema has one screen and 370 seats. Mr Goumas is also the co-owner with his wife of the three screen Showcase Cinemas in Wolfe Street, in the central business district of Newcastle. Following the opening of the Hoyts six screen cinema complex at Charlestown in 1987, Mr Goumas noticed a “ dramatic downturn ” in his business. He estimates that the downturn in his business was about 50%-60% in terms of box office receipts. Mr Goumas stated that he felt his business “ could tolerate up to a 5% loss of revenue. If the impact was greater than 5% it would almost certainly lead to the closure of [ the Kensington Cinema ] business ”.

43. Using information from the Australian Motor Picture Distributors Association, Mr Goumas stated that it is accepted within the industry that the entire population will go to the movies, on average, three times a year. Thus, in the Newcastle district, with a population of 250,000, there will be a total of 750,000 admissions per annum, shared by 21 screens at present. This works out to be 35,000 admissions per year at $7.75, which gives $270,000 gross per screen per year on average. To this Mr Goumas adds $35,000 candy bar sales which brings the total per annum to $310,000 per screen on average.

44. Mr Goumas lists the following average outgoings: Purchases $20,000; film hire $110,000, being 40% of the average gross revenue; wages per cinema $60,000; advertising $20,000; rent $50,000; other, including electricity, telephone, superannuation, insurances, $35,000. This results in outgoings of $295,000 from a gross revenue of $310,000, which shows $15,000 profit in a good year.

45. If the eight proposed screens at Garden City are added to the 21 existing screens there would be a total of 29 screens in the Newcastle district. The 750,000 admissions per year would therefore need to shared among 29 screens instead of 21, indicating the profits for all cinemas in the district would fall if spread evenly.

46. It was put to Mr Goumas that on his calculations for 29 screens, every screen in Newcastle would show a loss. Mr Goumas said, however, that admissions were not spread evenly among each cinema and it depends on the product which each cinema was screening. Mr Goumas stated that it would be very difficult for all cinemas to survive and inevitably some will have to close: “ My view is that there is no room presently in Newcastle for another cinema complex ”.

47. For the year ending 30 June 1998 Mr Goumas’ accounts for the Kensington show a net loss of $354 for the year, with a cash profit of $150,000. (The net loss results from allowances for depreciation and the payment of rent to the owner of the freehold, who in this case happens to be Mr Goumas.) Mr Goumas said that when allowance is made for the rent thus reducing his cash profit to $100,000, a further 5% loss of revenue could not be tolerated as a sound economic business investment. In other words, if the proposed cinemas at Kotara were established the Kensington Cinema would have to close. As to the Showcase Cinemas, Mr Goumas said that an attempt would be made to keep them open due to the lease commitments involved. Neither Mr nor Mrs Goumas own the freehold of the Showcase Cinemas.

48. As to the quality of films secured by his cinemas, Mr Goumas said that he is able to secure blockbuster films such as “Titanic” and “Star Wars The Phantom Menace”. He also stated that he screens “art house” films, which in Newcastle are shown almost exclusively in his cinemas, but they are not “major crowd pullers”. As he said in his evidence: “ Those entertainments do not gross big money to cover expenses. It is the other films, mainstream films, that finally pay the accounts ”.

49. The Showcase Cinemas are located opposite the David Jones store in the Newcastle central business district. When asked as to the flow-on effect from David Jones to the cinemas Mr Goumas said:

I rather believe that we send people to David Jones because they come specially into the cinema to view a film and then they go into the shops to shop or peruse or to window shop. Cinema patrons go to the shops.

Mrs Goumas

50. Mrs Goumas is the co-owner and operator of the cinema business known as the Showcase Cinemas. It has three cinemas and a seating capacity of 750. She estimates that “ about 50% of Showcase’s patronage are return patrons due to the personal service ”. Mrs Goumas also stated: ” If I suffer a reduction in patronage of about 1% - 2% below what I am presently experiencing I would be operating at a loss ... If the losses in patronage continue beyond a few weeks it would be inevitable that my business would close ”.

Ms S Chong

51. Ms Chong is the proprietor of a hairdressing business in Wolfe Street, two doors from the Showcase Cinemas. Ms Chong is the only business proprietor in the central business district, other than Mr and Mrs Goumas, who gave evidence. Ms Chong expressed a concern that in the last 20 years the Newcastle central business district has become emptier and more and more shops have closed. Ms Chong stated why she moved her business recently to its present location:

I have gradually moved towards the Mall because around me once again there are shops empty. I chose to go into the area where I am now because it’s more the hub of the city in the hope that it would help my business and improve my business.

Ms Chong also said:

It’s difficult if there is nothing to entice people to come into the city, not just a hairdresser, they won’t come in just for me, some will but some don’t, they like the convenience of everything else around me so it doesn’t look good for business either and it doesn’t look as if I am successful if I am surrounded by empty shops ...

52. In her affidavit Ms Chong said that one of the reasons why she moved to Wolfe Street was because she considered that her business “ would enjoy exposure to cinema patrons ”. Under cross-examination, however, it seems that the major reason why she moved her business to its present location was not related at all to cinema patrons. She said:

I moved down there [ Wolfe Street ] because that is more the hub and for the various reasons that I said before, one I thought it was safer, better parking for my clients and that there were more people walking around there.

53. It was further suggested to Ms Chong in cross-examination that the major reasons why she moved her business to its present location were: that it is opposite to the David Jones store, there is plenty of parking, there is good security and it is adjacent to the middle of the Mall. It was further suggested to Ms Chong that the actual existence of the cinema in terms of generating patronage for Ms Chong’s business “ would be very low down the list of factors ”. Ms Chong responded as follows:

I would then say that it was attractive in the sense that the cinema is in the building that I chose to be in, the fact that the cinema is new, I would prefer to be near a complex of new shops versus an area of shops that are empty so I would say that is a factor.

54. Ms Chong said that she traded until 9.00 pm on Wednesdays and Thursdays, until 5.20 pm on Fridays and until 4.00 pm on Saturdays. It is thus apparent that on Friday and Saturday evenings, when the cinemas do most of their trade, Ms Chong’s salon is closed.

55. Ms Chong said that her salon is generally booked out on Wednesday and Thursday evenings. She said:

We have clients that will come to us on a Wednesday night and a Thursday night ... That was set up because we felt that we needed to become convenient to our clients to come to us ...

Mr Browne

56. Mr Browne, relying upon the evidence of Mr Hill, said:

It is not reasonable to conclude that the development of the cinema complex would be consistent with objective (a)(ii) for the 3(d) zone as the proposed eight cinema complex is likely to have a disadvantageous or detrimental impact on the CBD.

In cross-examination Mr Browne said that this remark was a reference to the impact on the CBD as a whole. It seems that Mr Browne’s main concern was as to the size of the cinema complex proposed. In this respect he said:

I think the problem is not that there be no more cinemas but it is the size of the cinema and its level of impact that is the problem.

Mr Browne nevertheless agreed that the clear trend is for cinemas to be in complexes.

57. Mr Browne agreed that if a cinema complex was built in the Honeysuckle development there would be “ a very powerful short-term negative impact ” but he also said that there would be “ a very powerful positive impact both short-term/long-term on the CBD ”. Mr Browne further suggested that some of the independent cinemas in the central business district could specialise in “ art house ” movies.

58. Mr Browne said that if it was certain that the Kensington Cinema were to close due to the impact of the proposed cinema complex at Garden City, then that was sufficient to constitute non-compliance with objective (a)(ii) of the 3(b) zone. He was asked whether the Kensington must be retained at all costs. Mr Browne said:

Certainly not. The Kensington could close and another cinema could open in there, ... It’s the overall drawing power that would be important.

59. Mr Browne also expressed a concern that young persons coming out of the proposed cinema complex at about 11.30 pm might adversely impact upon residential amenity. Again Mr Browne expressed reservations about the size of the cinema component of the proposed development. He thought that an eight cinema complex is an excessive development for this site.

60. An associated concern of Mr Browne is the absence of public transport services in Kotara at night. He said:

The concern really relates to the cinemas, young people being attracted to the cinemas at night and not being able to get away from the area if they arrived by bus ... People hanging about ... I believe can be a worry late at night.

61. Under cross-examination, however, Mr Browne expressed the opinion that if the government (which provides the local bus service) was not responsive and for whatever reasons did not provide buses after the present operating times, then it would be unreasonable to suggest that the proposed cinema complex should be refused.

Mr Ingham

62. Mr Ingham stated that Garden City currently serves a subregional function and draws business from a wide area. In his view the proposed extensions to Garden City are of a moderate scale and appropriate. He expressed the following view:

It is my opinion that the proposed development is entirely consistent with the function and role of Garden City as a sub-regional centre in the Hunter region. I believe the proposal ... will not prejudice the viability of the Newcastle Central Business District.

In relation to the cinema component in particular Mr Ingham expressed the following view:

Cinemas are a community facility and resource ... Garden City provides an ideal location for cinema development with associated convenience of shopping, provision of ample parking and proximity to public transport.

63. Mr Ingham did not accept that if the Kensington Cinema closed then there would be some broad ranging impact on the central business district. He said:

The Kensington Theatre is part of the CBD which is not terribly attractive in any event, and the activities are not ... apart from a milk bar or a couple of milk bars are not those that one could see as being used by people who are going to the cinema.

64. When asked directly whether the loss of the cinema as an entertainment facility prejudiced the viability of the central business district, Mr Ingham said:

It can’t prejudice the viability of the CBD, it might prejudice a couple of shops around it to some extent but the CBD is much bigger and much wider and much more substantial than the Kensington Theatre and what is associated with it.

Q: Do you think that there is any real chance or possibility that these cinemas will disadvantage or detrimentally affect the life or existence of the CBD?
A: I don’t believe it can possibly do that.

65. Mr Ingham was asked, in cross-examination, about the impact upon the CBD if as a consequence of the eight screen cinema component at Garden City the entertainment facilities in the CBD were undermined. Mr Ingham said:

If there was an impact that said all the cinemas will close then that would be a significant impact. If there’s an impact amongst the cinemas in the CBD that says one of them might close if this occurs, I don’t think that’s a significant impact.

Mr Ingham further said:

The loss of one cinema or even four cinemas would not possibly bring about such a change to the CBD that one could say it would have a significant impact on the CBD.

Mr Dawson

66. Mr Dawson is the general manager of the Honeysuckle Development Corporation, a statutory corporation established under the Growth Centres (Development Corporations) Act 1974 and which owns the land to be redeveloped. Mr Dawson described the Honeysuckle land as being in the western part of the central business district of Newcastle. Mr Dawson said that over its 20 year life Honeysuckle is expected to generate 3000 new residents on the land it presently owns and a total of about 4000 new residents when one includes adjacent land not owned by the corporation. Mr Dawson accepted the logical conclusion that this would provide a ready pool of cinema goers. In addition to the residential component of its development, it was the intention of the corporation to extend the civic and cultural heart of Newcastle down to the water front by way of an entertainment and leisure precinct. This included cinemas and a marina.

67. Mr Dawson said that the corporation was currently negotiating with a cinema operator, namely the Reading Group. Under the proposal Reading will own the land and build the cinema complex thereon. The corporation controls the price of the land. Mr Dawson said: “ At the moment the contractual documents suggest a land price which is in excess of the land valuation”. Mr Dawson said that he was concerned that contracts might not be exchanged with the Reading Group if development consent was granted for the proposed cinemas at Garden City . Mr Dawson indicated that other cinema operators would not be interested in establishing a cinema complex in the Newcastle central business district. He said: “ We’d be very concerned that we would lose a cinema if we lost the proponent at the moment ”.

68. Mr Dawson said that the Reading Group was aware of the proposal for a cinema complex at Garden City throughout the negotiations between the corporation and the Reading Group. Mr Dawson said that a final copy of the contract had been sent to the Reading Group and he anticipated that the contract would be “ signed off in the next few days ”.

Mr Lawson

69. Mr Lawson is the director of development of Reading Entertainment Australia Pty Ltd, a subsidiary of a United States company. Mr Lawson has been directly involved in negotiations with the Honeysuckle Development Corporation relating to the proposed cinema complex in the Honeysuckle development. Mr Lawson said that the current proposal is for a nine screen cinema complex, but this has not been approved by his board nor has any development consent been obtained.

70. Mr Lawson thought that the impact of an eight screen cinema complex at Kotara would have an impact of about 20% on the number of visitors to the proposed Reading nine screen complex. That would put the current proposal for a nine screen complex in jeopardy. The current proposal may not be in jeopardy, however, if the cost of the land was renegotiated. It was apparent that Mr Lawson was unaware that the price being negotiated for the land was above market value. Mr Lawson also indicated that the current proposal could be changed by reducing the number of screens.

71. Mr Lawson said that the Reading Group was very keen to get a foothold into Australia. He said that, subject to viability, Reading would seek to renegotiate the position with the Honeysuckle Development Corporation to ensure that the project was not abandoned in the event that the Garden City development is approved. In cross-examination he gave the following evidence:

Q: The simple position at the end of the day however is that you’re not suggesting to this Court that you would abandon Honeysuckle? That you would, if necessary, seek to renegotiate the deal with the corporation?

A: That’s correct.

Other Evidence

72. After the evidence described above had been given and whilst this judgment was reserved the applicant sought and was granted leave to re-open to adduce further and more recent evidence in relation to the Honeysuckle development. I now describe that evidence.

73. On 1 July 1999 the Director of the Department of Urban Affairs and Planning issued the following media release:

HONEYSUCKLE HAVE NINE-SCREEN CINEMA COMPLEX

Honeysuckle Development Corporation has signed a conditional contract for a $12 million nine-screen cinema complex in Newcastle, the Director-General of Urban Affairs and Planning, Sue Holliday, announced yesterday.

The 2000-seat complex will adjoin the Hunter Valley Wine Society’s new premises, adding to Honeysuckle’s momentum in negotiations on its other important sites.

“This major entertainment project will anchor the planned entertainment and leisure precinct in the heart of Honeysuckle,” Ms Holliday said.

“It is expected to open for business early next year.

“It will be a major milestone towards Honeysuckle’s core goal to regenerate the Newcastle CBD, creating new jobs and bringing people back into the city.”

Ms Holliday said the project would create 150 construction jobs, 50 permanent jobs and 450 regional flow-on jobs.

The cinemas will vary in size from intimate 125-seat capacity to others with more than 400 seats, catering to a range of movie tastes.

Honeysuckle Development Corporation is administered by the Department of Urban Affairs and Planning.

Honeysuckle is now in negotiation with, or considering submissions on, several other sites, including a marina, a hotel site, nearby mixed-use development, a visual arts centre and the Harbour Leisure Centre.

“Honeysuckle has generated some $700 million in economic flow-ons for the region,” Ms Holliday said.

“These projects will continue to change the face of inner Newcastle and provide the impetus for private sector growth for years to come.”

Ms Holliday said the planning work of the Department’s Newcastle Office was vital as a complement to Honeysuckle’s achievements.

“The office has put in place the strategic framework of planning instruments for Honeysuckle’s activities.

“The Newcastle Office completed the Honeysuckle Regional Environmental Plan and worked in partnership with the Newcastle City Council to produce the Newcastle City West Development Control Plan

“With the redevelopment of Steel River, the BHP main site, the Port Corporation’s facilities and Honeysuckle’s CBD plans there is an opportunity to reshape the city to a world class example of modern urban planning and sustainable development.”

74. On 23 June 1999 Reading Properties Pty Ltd signed a contract with the Honeysuckle Development Corporation for the purchase by it of Lot 4 in DP 883474. The contract was signed for the purchaser by the company secretary and by Mr Lawson. The contract is in the form of the 1996 edition of the standard contract for the sale of land, but contains a number of special conditions to which I now refer.

75. Special Condition 33.2 of the contract states:

33.2 The vendor in entering into this contract has relied on the purchaser’s representation that the purchaser will construct a 9 screen cinema complex on the property and will operate that cinema complex for a period of not less than 10 years from the cinema complex opening date. The purchaser acknowledges that the vendor would not have entered into this contract had the construction and operation of the cinema complex not been assured.

76. Condition 40.2 provides that the contract is conditional upon the purchaser receiving Foreign Investment Review Board approval within 130 days. (There is no evidence to suggest that such approval will not be forthcoming.) Condition 42.3 requires the purchaser to submit a development application to the vendor within six weeks and if it is not approved by the vendor within 22 weeks of the date of the contract then either party may rescind. “Development” is defined in the contract as a nine screen cinema complex together with appropriate retail activity complementary to the cinemas and a restaurant. Condition 42.4 provides that after vendor’s approval of the development application the purchaser must lodge the development application with the relevant consent authority for development consent. Condition 42.8 provides that if the development application is not determined within 100 days the purchaser must promptly appeal to the Court. Condition 42.9 provides that if development consent has not been obtained within 12 months after the date of the contract then either party may rescind. By condition 42.6 the purchaser is required to use its reasonable endeavours to take all steps reasonably necessary to obtain the development consent as quickly as possible. I note that none of the times specified in the abovementioned conditions are expressed to be of the essence.

77. Condition 45 requires the parties on completion of the contract to enter into a Development Deed in the form annexed to the contract. Clause 4.2 of the Development Deed requires practical completion of the works within 24 months of the date of the Deed. The works are defined as those contemplated by the development consent. By clause 12.2 of the Development Deed the purchaser warrants that it will construct the cinema and operate it continuously for a period of not less than 10 years from the cinema opening date.

78. A number of observations may be made about this evidence. According to the news release of the Director, described in par 73 above, the project will anchor the planned entertainment and leisure precinct in the heart of Honeysuckle and it will be a major milestone towards the goal of regenerating the Newcastle central business district. It seems clear that the Director regards the project as physically part of the central business district and that it will enhance the central business district. There is, in my view, almost no chance of the development application being refused. The Minister is the consent authority and the Director of the Department is also the Chairman of the Honeysuckle Development Corporation. Moreover, special condition 33.2 contains an acknowledgment that the vendor would not have entered into the contract had the construction and operation of the cinema complex not been assured.

79. It is clear to me that this project will enhance rather than prejudice the Newcastle central business district. I can also infer that the Reading Group appears to have taken the view that it can live with the threat of competition of the proposed cinemas at Garden City, of which development it is aware. The contract does not provide any right to rescind or reduce the number of cinemas if the Garden City cinemas proceed.

Conclusions on economic impact

80. The fundamental question is whether the cinema component of the proposed development will have an economic impact on the Newcastle central business district and if so, to what extent. I accept the fact that at least one of the cinemas in the central business district will probably close as a result of competition from the proposed cinema complex at Garden City. That is the Kensington Cinema in Hunter Street. Mr Goumas, whose evidence I accept, said so. This was not disputed by anyone. It is also possible that the viability of the three screen Showcase Cinemas in Wolf Street in the central business district would be jeopardised. I have referred to the evidence of Mrs Goumas on this question. I note, however, that Mr Goumas said that he would attempt to maintain the Showcase Cinemas.

81. I thus conclude that if the cinema component of the proposed development at Garden City were to proceed, then at least the one screen Kensington Cinema and possibly another three screens in the Newcastle central business district would close. That consequence is not conclusive, however, of the questions which I have stated in paragraph 23 above.

82. I have referred to the evidence of Mr Hill that the closure of cinema screens in the Newcastle central business district would (later changed to “ could ”) adversely affect retailers such as fast foods, cafes and retailers depending on passing trade. Mr Hill saw a nexus between entertainment facilities and shops. Mr Hill thus concluded that the cinema component of the proposed development at Garden City would prejudice the viability of the Newcastle central business district. Similarly, Mr Browne expressed the opinion that the proposed cinema component at Garden City is likely to have a disadvantageous or detrimental impact on the Newcastle central business district.

83. The evidence does not, however, support the opinions of Mr Hill and Mr Browne. Mr Jebb quantified the effect of the cinema component of the proposed development on the central business district. I have set out this evidence in paragraph 39 above. The impact of the total turnover in the Newcastle central business district would be a reduction of about 0.2%. I thus accept Mr Jebb’s conclusion that “ this figure is inconsequential and has no impact on the viability of the Newcastle CBD ”.

84. It is a significant fact that, in this case, there was no evidence from any shop keepers that the viability of their businesses could be prejudiced if any of the cinemas in the Newcastle central business district were to close. Only one shopkeeper, Ms Chong, gave evidence. It is notable that Ms Chong did not state that she relied, even in part, on any passing cinema goers for business. The reasons for moving her business to its present location near the Showcase Cinemas were for the various reasons to which I have referred in paragraphs 51 to 54 above. If there are any shopkeepers in the Newcastle central business district who are dependent, if only partly, on passing cinema goers for business, then who and where are they? There was a suggestion in the evidence that one business, the Embassy Cafe near the Kensington Cinema, may be adversely affected if that cinema were to close. In that event I would have expected the proprietor of that business (or of any other business said to be adversely affected) to be called and to give evidence as to the turnover of such business and the proportion of turnover attributable to passing cinema goers. As I have said, no evidence of that kind was called. And the only evidence from a business proprietor in the central business district (Ms Chong) was that she was not dependent on passing cinema goers for her business.

85. In my view the figures referred to by Mr Jebb, which demonstrate that there will be no impact on the viability of the Newcastle central business district, together with the facts I have described in paragraph 76 above, clearly support the opinion of Mr Ingham that the loss of one or even four cinemas could not reasonably be expected to prejudice the viability of the Newcastle central business district. Mr Hill conceded in cross-examination that the cinema component in isolation would not itself prejudice the viability of the Newcastle central business district. Moreover, Mr Ingham said that it is the office, commercial and retail activities that govern the viability of the central business district.

86. I therefore conclude that the cinema component of the proposed development at Garden City could not reasonably be expected to disadvantage or detrimentally affect the life or existence of the Newcastle central business district; neither does it give rise to a real chance or possibility that it will have a detrimental impact on the existing or potential function of the central business district.

87. I accept the likelihood, however, that the viability of perhaps four cinema screens in the Newcastle central business district may be prejudiced. But that is not, of itself, of any relevance. Section 90(1) of the Act (as it then stood) is limited to a consideration of environmental and planning considerations. I repeat what was said on this issue in Fabcot Pty Ltd v Hawkesbury City Council (1977) 93 LGERA 373 at 378-379:

Similarly, economic competition between individual trade competitors is not an environmental or planning consideration to which the economic effect described in s 90(1)(d) is directed. The Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) are the appropriate vehicles for regulating economic competition. Neither the Council nor this Court is concerned with the mere threat of economic competition between competing businesses. In an economy such as ours that is a matter to be resolved by market forces, subject to the Trade Practices Act and the Fair Trading Act . It is not part of the assessment of a proposal under the Environmental Planning & Assessment Act for a consent authority to examine and determine the economic viability of a particular proposal or the effect of any such proposal on the economic viability of a trade competitor. Moreover, it is at least arguable from the fact that the Trade Practices Act now applies to local government councils, that if a local council were to refuse or to limit a proposal for development on the ground of competition it could be guilty of anti-competitive conduct contrary to Pt 4 of that Act.
It seems to me that the only relevance of the economic impact of a development is its effect ‘in the locality’; that is to say, in the wider sense described in Kentucky Fried Chicken v Gantidis (1979) 140 CLR 675 at 687; 40 LGRA 132 at 141 (per Stephen J with whom Mason and Aicken JJ agreed):

If the shopping facilities presently enjoyed by a community or planned for it in the future are put in jeopardy by some proposed development, whether that jeopardy be due to physical or financial causes, and if the resultant community detriment will not be made good by the proposed development itself, that appears to me to be a consideration proper to be taken into account as a matter of town planning. It does not cease to be so because the profitability of individual existing businesses are at one and the same time also threatened by new competition afforded by that new development. However, the mere threat of competition to existing businesses if not accompanied by a prospect of a resultant overall adverse effect upon the extent and adequacy of facilities available to the local community if the development be proceeded with, will not be a relevant town planning consideration.

88. In the present case any cinema facilities presently enjoyed by the community, if lost to the Newcastle central business district, will be made good by the proposed development itself. As Mr Hill has stated, the primary trade area for cinemas is generally a 10 kilometre radius. Garden City is about 6.5 kilometres from the Newcastle central business district. Moreover, I am satisfied by the evidence that the development of a 9-screen cinema complex in the Honeysuckle development is almost assured. This would in turn make good any community detriment within the Newcastle central business district itself if any of the existing cinemas there were to close. One can go further and state that the future of the existing cinemas in the central business district will not be determined by the Garden City project, but rather by the Honeysuckle project.

89. Mr Maston submitted that the economic impact of a proposed development under s 90(1)(d) of the Act must be considered within the framework of the REP, in particular clause 20. The proposed development could not, he submitted, be consistent with promoting the Newcastle central business district as the major commercial, retail and service centre in the region. Mr Maston emphasised that cl 20(1) refers expressly to “entertainment facility” and that subclause 2-(2)(a) refers to “associated service functions”. In Mr Maston’s submission the principle in Kentucky Fried Chicken Pty Ltd v Gantidis applies because there will be a detriment to the central business district and the proposed development will do nothing to make good that detriment. The proposal will, he submits, usurp the function of the central business district in relation to cinemas.

90. It seems to me that there is a number of answers to this submission. A development will be generally consistent with the objectives if it is not antipathetic to them. It is not necessary for an applicant to show that the development promotes or is ancillary to the objectives, nor even that it is compatible therewith ( Coffs Harbour Environment Centre Inc v Coffs Harbour City Council (1991) 74 LGRA 185 at 193, Clarke JA; Challister Ltd v Blacktown City Council (1992) 76 LGRA 10, Talbot J; Schaffer Corporation Ltd v Hawkesbury City Council (1992) 77 LGRA 21 at 27, Pearlman J). Next, whilst Mr Jebb conceded that approval of the proposal could not be said to promote the Newcastle central business district, that was of absolutely no relevance to the viability of the central business district. Next, it seems that the reference in clause 21(2)(a) to “associated service functions” is a reference to such things as computer repair businesses and the like rather than to cinemas (as described by Mr Ingham in his evidence). In short, whilst the proposal may not be said to promote the Newcastle central business district neither is it antipathetic thereto. Indeed, no commercial development anywhere outside the central business district could be said to promote the central business district. Mr Maston’s reliance on Kentucky Fried Chicken is answered, I think, by the matters to which I have referred in paragraph 80 above.

91. For completeness, I should refer briefly to clause 19(b) of the REP. The word “should” is not used in the imperative. The subclause is not, therefore, a precondition to permissibility. Nevertheless the evidence shows that Garden City is underprovided with business facilities. Mr Booler said that Garden City is under-provided with retailers of certain categories, particularly streetwear and sporting goods. Mr Hill conceded that an expansion of retail space is required at Garden City. Mr Booler also referred in his evidence to the absence of cinemas at Garden City. Schedule 1 of the REP list a number of subregional centres in the region. It appears that Garden City is the only subregional centre with no cinemas at present. Accordingly, the proposed development including its cinema component does not infringe cl 19(b) and is entirely consistent with clause 18(a) of the REP, as noted in paragraph 21 above. That is to say, the proposed development will ensure that commercial service centres (in this case Garden City) are developed to suit the convenience of consumers and optimise public and private investment, as required in cl 18(a).

92. I therefore conclude that the economic impact of the proposed development is not such as to be antipathetic to the objectives of the 3(b) zone under the LEP, neither is it antipathetic to the objectives, policies or principles of the REP. Those considerations also lead to the conclusion that, on merit, the development should not be refused on the ground of its economic impact.

Traffic

93 . The applicant proposes as part of the development to carry out improvements to the existing traffic conditions in adjoining streets. The applicant agrees to the inclusion of these improvements as conditions of consent.

94. Ingress and egress to Garden City . Traffic ingress and egress to Garden City is to be controlled as detailed in Appendix B of the “Traffic Management Plan for Cinema Operations” dated April 1999 proposed by Colston Budd Hunt and Kafes Pty Ltd. The applicant proposes, in addition, to install traffic control measures designed to reduce the flow of traffic along Lexington Parade, opposite the development. Those measures have been further amended by adding a median strip opposite the southern entry to Lexington Parade in order to prevent traffic leaving that entry from making a right turn to travel north along Lexington Parade.

95. Intersection of Northcott Drive and Park Avenue . The intersection of Northcott Drive and Park Avenue is to be upgraded at the cost of the applicant generally in accordance with Plan No 4 contained in exhibit “G”, to the reasonable satisfaction of Newcastle City Council and the Roads and Traffic Authority of NSW. That intersection is controlled by traffic signals but, as appears from paragraph 90 below, is operating at an unsatisfactory level of service.

96. In order to establish the level of existing traffic flows in the area, traffic counts were undertaken during a Thursday afternoon and a Saturday peak period by Colston Budd Hunt and Kafes Pty Ltd. It was clear that the highest traffic flows occurred on the major intersection of Northcott Drive and Park Avenue. It was also found that the busiest access driveway into and out of Garden City was the Park Avenue driveway which accounts for 45 percent of all movements in and out of the centre.

97. For traffic signals, the average delay per vehicle in seconds is calculated as Delay / (All Vehicles) equivalent to the following level of service:-

0 - 14 = “A” Good
15 - 28 = “B” Good with minimal delays and spare capacity
29 - 42 = “C” Satisfactory with spare capacity
43 - 56 = “D” Satisfactory but operating near capacity
57 - 70 = “E” At capacity and incidents will cause excessive delays
>70 = “F” Unsatisfactory and requires additional capacity

98. Colston Budd Hunt and Kafes Pty Ltd found that the intersection of Northcott Drive and Park Avenue operates with an average delay in excess of 70 seconds per vehicles on both days on which traffic counts were undertaken. This represents level of service “F”, a poor level of service. This level of services results in long queues at busy times, particularly on Northcott Drive, north and south of the intersection.

99. The proposed extensions at Garden City provide a new “entry only” driveway off Park Avenue between the main centre access and Lexington Parade. Vehicles would be restricted to left turns into the new driveway by the median in Park Avenue. Park Avenue would be widened to provide a slip lane for this entry. This will minimise any impact on westbound through traffic flows in Park Avenue.

100. The proposed changes to the intersection of Northcott Drive and Park Avenue outlined in Figure 4 of Mr Colston’s Statement of Evidence March 1999 (Exhibit “G”) will reduce average delays to level of service “B”. Even with the 2003 forecast traffic flows, this intersection will operate at level of service “C”. The following changes will be undertaken to upgrade the intersection to achieve this improved level of service:-

(i) Additional dedicated left turn lane in Park Avenue, west of Northcote Drive;

(ii) provision of a right turn lane in Northcote Drive south of Park Avenue;

(iii) provision of an addition right turn lane in Northcott Drive north of Park Avenue; and

(iv) replacement of existing “split” phrases in Northcott Drive with “diamond” turn phasing.

Mr Colston concludes that with these improvements the road network in the vicinity of the site will operate at a considerably improved level of service.

101. Traffic in Lexington Parade. Mr Colston notes in his Statement in Reply, April 1999 (Exhibit “H”), that the flow of traffic in Lexington Parade, between the two access driveways to that road will fall. This would be a consequence of the new ingress driveway off Park Avenue and a reconfiguration of the ingress/egress driveway opposite Princeton Avenue. In an attempt to minimise the amount of traffic in Lexington Drive, especially at night, the Traffic Management Plan to which I have referred (in paragraph 86 above) was prepared.

This Plan proposes the following restrictions :-

(i) closure of ramps leading to the roof parking at the end of normal retail trading;

(ii) closure of the southern exit ramp from the roof parking adjacent to Lexington Parade at the end of normal retail trading;

(iii) closure of the northern exit ramp from the roof parking adjacent to Lexington Parade two hours after the end of normal retail trading;

(iv) closure of the entry and exit driveways on Lexington Parade at the end of the normal retail trading; and

(v) closure of the driveway on Cythia Street to Hudson Park at the end of normal retail trading.

102. As noted in paragraph 101 above, the reconfigured entry driveway adjacent to the northern exit driveway on Lexington Parade will be closed after normal retail trading hours. This would require vehicles from the north to enter from either the existing Park Avenue ingress or the new driveway and slip lane off Park Avenue thereby reducing traffic flows in Lexington Parade. The left turn only and median island at the southern entry to Lexington Parade will further avoid use of Lexington Parade by traffic, northbound at all times. The southbound carriageway will be narrowed in the vicinity of the driveway northern exit into Lexington Parade and a traffic calming device will be installed south of the exit to discourage southbound traffic in Lexington Parade.

103. Overall I am satisfied that the various traffic control measures proposed by the applicant will result in a considerable improvement in traffic conditions in the roads and intersections adjacent to Garden City. Mr Maston submitted that this should not amount to a reason for granting consent to the development: the Roads & Traffic Authority will in due course have to effect improvements to the Park Avenue/Northcote Drive intersection because it is at present operating at an unsatisfactory level of service. No one from the Roads & Traffic Authority, however, was called to give evidence. I am unable to infer that the Roads & Traffic Authority is likely in the foreseeable future to carry out improvements to that intersection. I note that the Roads & Traffic Authority supports the proposal.

Other matters

104. Mr P Frost, the President of the Save Kotara Action Group (known as “SKAG”) gave evidence on behalf of that organisation. The major concerns of the Group are traffic, construction noise, operating plant noise, inadequate public transport and a fear that the cinema component will change a residential area into a social meeting place for cinema patrons. The latter will have an adverse affect on nearby residents, especially late at night due to the noise of cinema patrons socialising and leaving the centre.

105. Mr R L Avery, who lives opposite Garden City at 109 Lexington Parade, expressed concerns about noise from standing plant (particularly at night), noise from delivery truck movements, the increase in traffic which has occurred in Lexington Parade, the removal of screening trees adjacent to Lexington Parade, noise and the glare of headlights from cars using the car park and construction noise.

106. I accept the concerns expressed by Mr Frost and Mr Avery as being genuine and real. There is obviously a problem with Garden City at present. I have referred (in paragraphs 93 - 102) above to the improvements proposed to traffic control. The traffic control measures proposed as part of this development will alleviate the kind of complaints which relate to traffic. It is apparent that the proposed measures will effect improvements to traffic flows including a reduction in the use of Lexington Parade by traffic going to and from Garden City. In particular, the measures described in paragraphs 101 and 103 above will alleviate the kind of problems experienced by Mr Avery, such as the glare of headlights from cars using the upper parking deck. Noise has been and apparently is at present a serious problem. This will be alleviated in the proposed development by enclosing the loading docks and enclosing standing plant. A noise assessment by Mr S E Cooper shows that these measures will enable noise to be reduced to acceptable limits. Mr Cooper has suggested an appropriate condition of consent which sets a maximum upper limit for noise generation with which the applicant will have to comply. The present level of noise experienced by Mr Avery will be reduced. Construction noise may also be controlled by limiting the hours of construction and the level of noise generated by means of appropriate conditions of consent. Although the present screening vegetation adjacent to Lexington Parade is to be removed, it is to be replaced by more effective landscaping as shown in the applicant’s landscaping plan.

107. It must be remembered that Garden City is a subregional centre. Unusually for a subregional centre it does not at present have any cinemas. The Traffic Management Plan for Cinema Operations will divert traffic away from the residential environment of Lexington Parade and towards Park Avenue and thus ensure that the impact on residents late at night is minimised. Park Avenue opposite Garden City is a commercial and industrial area. As I have indicated, the overall traffic control measures will result in an improvement to residential amenity. The conditions which are proposed should ensure that the improvements to residential amenity are effected. In short, the present level of residential amenity will be improved as a consequence of the development in its amended form.

108. It follows that there is no merit consideration which compels a refusal of the development application, provided conditions of the kind to which I have referred are imposed.

Conclusion and orders

109. The development application should be approved. Accordingly I make the following orders:

(1) Appeal allowed.

(2) Development consent is granted for extensions and alterations to Garden City Shopping Centre, 89 Park Avenue, Kotara subject to the conditions annexed hereto.

(3) The exhibits, other than Exhibits “A”, “G”, “H” and 14 may be returned.

ANNEXURE

CONDITIONS OF DEVELOPMENT CONSENT FOR EXTENSIONS AND ALTERATIONS TO GARDEN CITY SHOPPING CENTRE, 89 PARK AVENUE, KOTARA

1. The proposed development being carried out in accordance with the details set out in the amended plans dated May (referenced issue B, drawings DA-001 to 003, 016 to 109 and 037 to 047 and Issue C drawings 002 and 006).

2. Any necessary alterations to public utility installations being at the developer/demolisher’s expense and to the reasonable requirements of both Council and the appropriate authorities.

3. No work within the public road being commenced until Council’s separate written approval (which approval shall not be unreasonably withheld) has been obtained.

4. All proposed driveways, parking bays, loading bays and vehicular turning areas being constructed with a base course of adequate depth to suit design traffic being sealed with either bitumen seal, asphaltic concrete, concrete or interlocking pavers and being properly maintained. Full details are to be included in documentation for a Construction Certificate or Building Application.

5. Stormwater being conveyed to the existing property drains by way of a sealed pipe system. The existing drains are to be checked for adequacy and cleared of any obstructions.

6. All proposed planting and landscape elements indicated on the submitted landscape concept plan or otherwise required under the conditions of this consent being implemented and a comprehensive design plan and specification in respect thereof being prepared by a qualified landscape designer. Full details are to be submitted to Council.

Note 1:

Note 2:

Note 3:

7. The applicant complying with all requirements of the Hunter Water Corporation Ltd regarding the connection of water supply and sewerage services, including the payment of any required cash contribution towards necessary amplification of service mains in the locality as a result of the increased intensity of land use proposed. A copy of the Corporation’s certificate of compliance is to be included in documentation for a construction certificate or building application.

8. Adequate facilities being provided in a screened location within the premises for the storage of garbage, including any putrescible matter, discarded or returnable packaging or other forms of trade wastes and arrangements being made for regular removal and disposal of same. Full details are to be included in documentation for a construction certificate or building application.

9. The proposed development complying with all requirements of the WorkCover Authority of NSW.

10. All parking and loading bays being permanently marked out on the pavement surface with loading bays being clearly indicated by signs.

11. The vehicular entrance and exit driveways and the direction of traffic movement within the site being clearly indicated by means of reflectorised signs and pavement markings.

12. Appropriate acoustic treatment being implemented in the design and construction of the proposed development, sufficient to ensure that the use of the premises for the purposes proposed, including the operation of any plant or equipment, vehicle movements, driveway ramp noise and loading bay activities, will not give rise to “offensive noise” as defined under the Noise Control Act , 1975 as amended or any subsequent amending legislation.

Note:

13. There being no interference with the amenity of the neighbourhood by reason of the emission of any “offensive noise”, vibration, smell, fumes, smoke, vapour, steam, soot, ash or dust, or otherwise as a result of the proposed development.

14. Any proposed floodlighting of the shopping centre including carparking areas being so positioned, directed and shielded as to not interfere with traffic safety or detract from the amenity of the adjacent premises.

15. No flashing, chasing or scintillating lighting or promotional material of a visually intrusive nature being installed or displayed on the exterior of the premises.

16. The hours of operation of the extensions to the shopping centre the subject of this consent being restricted to between:

9.00 am & 5.30 pm Monday to Wednesday
9.00 am & 9.00 pm Thursday
9.00 am & 5.30 pm Friday
9.00 am & 5.00 pm Saturday
10.00 am & 4.00 pm Sunday
with the cinemas being restricted to the hours of 9.00 am to 12 midnight 7 days per week.

17. All deliveries and loading docks:

(a) servicing “Major Retailer 1” as shown on plan DA-004 Issue B; and
(b) above the existing Woolworths tenant as shown on plan DA-006 Issue C,

being restricted to the hours:
7.00 am to 8.00 pm Monday to Wednesday, Friday and Saturday
7.00 am to 9.00 pm Thursday, and
8.00 am to 8.00 pm Sunday.

18. The hours of operation of the proposed demolition and construction phases of the development being restricted to between 0700 and 1800 Mondays to Fridays, 0800 to 1600 Saturdays and no work Sundays.

19. The applicants must install on the development site a facility for collecting, treating and disposing of concrete wastes generated in the construction of the development. (Note: in this regard, it will be necessary for the applicant to submit to Council with the required Building Application or Construction Certificate a detailed procedure demonstrating how the concrete wastes are to be collected and treated and disposed of in accordance with the Environment Protection Authority’s Concrete Wastes guide (EPA, 1995).

20. The applicants developing a Waste Minimisation Plan which aims to avoid production of waste and maximise reuse, recycling or reprocessing of potential waste material and a copy of such plan being submitted to Council with the required Building Application or construction certificate application.

21. Building demolition being planned and carried out in accordance with Australian Standard AS2601:1991 (The Demolition of Structures).

22. Any building waste containers used in association with the proposed demolition being located on the site where possible.

Note:

23. Any demolition/waste building material other than concrete being disposed of at Council’s Waste Disposal Depot or other approved site.

24. All building or site works or other written undertakings or obligation indicated in the submitted plans and supporting documentation or otherwise required under the terms of this consent being carried out or implemented prior to occupation of the portion of the premises the subject of this application.

25. The applicant submitting to the Council prior to the cinemas being operated a Cinema Management Plan to the satisfaction of the Council.

Note:

26. The applicant submitting to Council with the required Construction Certificate or Building Application a detailed works programme which demonstrates that the proposed development can be carried out within normal construction hours.

27. Traffic ingress and egress to the shopping centre being controlled as detailed in the ‘Traffic Management Plan for Cinema Operations” dated April 1999 and prepared by Colston Budd Hunt and Kafes Pty Ltd amended by adding that a median island shall be constructed across the southern entry at Lexington Parade in order to prevent right turn into the site by traffic travelling north and to preventing right turn out of the site to travel north.

28. The applicant submitting to Council appropriate documentary evidence that the items detailed within the ‘Schedule of Design Review Items” prepared by Thrum Architects have been satisfactorily addressed.

29. The applicant submitting to Council a construction certificate or building application prior to the commencement of the proposed building works.

30. The developer shall pay to the Newcastle City Council the cost of revising the pedestrian crossings on the Park Avenue frontage of Garden City to the reasonable satisfaction of the Director of Environmental Services.

Note:

31. The intersection of Northcott Parade and Park Avenue shall be upgraded at the cost of the developer, generally in accordance with the plan No 4 and specification contained within exhibit “G”, to the reasonable satisfaction of the Newcastle City Council and the Roads & Traffic Authority of NSW.

Note:

32. A landscaped area in accordance with the plans referred to in condition 1 above is to be provided for along the Lexington Parade boundary of the site as shown on exhibit “A”. Full details to be shown on the required landscape plan submitted with the Building Application or Construction Certificate.

34. The building being provided with adequate means of access for persons with disabilities in order to comply with the Building Code of Australia. Full details to be included in documentation for a Construction Certificate application.

Note: Compliance with the Building Code of Australia can still leave a building professional or building owner in contravention of the Federal Disability Discrimination Act .

35. Cinema Access

The applicant shall provide for cinema drop-off access in accordance with D/a Plan No 002, issue C, and shall ensure that cinema signposting (parking and drop-off) is undertaken in accordance with that plan.

36. Service Vehicles

(i) The applicant shall amend the parking bay configuration of the roof level in accordance with D/A Plan No 006, issue C, to assist with the access of service vehicles to the goods lift and dock above the existing Woolworths tenant.

(ii) The applicant shall ensure that the area shown hatched in the vicinity of the goodslift and dock above the existing Woolworths tenant on the D/A Plan No 006, issue C, (roof level) is restricted to staff parking.
(iii) The maximum class of truck which may access that dock shall be a truck not exceeding 8 metres in length.

37. Access from Lexington Parade

The West Court Escalators to the roof top parking area shall be closed at the same time as the fates referred to in the Traffic Management Plan referred to in condition 27.

38. No part of the additional floor space of the centre approved by this development consent shall be used as a supermarket.

39. The pedestrian crossing at the traffic signals adjacent to the main Park Avenue entrance to Garden City shall be relocated, at the cost of the developer, from the western side of the entrance to the eastern side. The bus bay on the southern side of Park Avenue at the front of the centre shall be relocated at the cost of the developer further west to the satisfaction of the Council.

40. The noise reduction and control measures referred to in the report of S Cooper Acoustics Pty Ltd dated March 1999 (exhibit “L”) shall be implemented to the reasonable satisfaction of the Council.

41. The cumulative noise emission contribution from all mechanical plant at the Garden City Shopping Centre when measured or calculated at residential boundaries shall not exceed 46.3dB(A) and shall be broad band and free from tonal or intermittent characteristics.

42. Prior to the release of the building approval or consent, or any Construction Certificate an acoustic design report and mechanical specifications shall be submitted to the Council detailing the selection of mechanical plant and noise control measures that have been implemented to achieve the nominated residential boundary design contribution 46.3dB(a).

43. A pedestrian crossing shall be provided at the cost of the developer across the existing main entrance/exit driveway to Northcott Drive via Cynthia Avenue generally in accordance with Exhibit “HH”.

44. Video game and pinball game shops shall not be conducted in so much only of the shopping centre as is the subject of this consent.

45. Where in these conditions of consent reference is made to the satisfaction of the Council, or the satisfaction of the Newcastle City Council, such reference shall mean the reasonable satisfaction of the Council’s Director of Environmental Services.

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Citations

AMP Investments Ltd - v - Newcastle City Council [1999] NSWLEC 164

Most Recent Citation

Cartier Holdings Pty Ltd v Newcastle City Council [2001] NSWLEC 170

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2

Direct Factory Outlets Homebush v Strathfield Municipal Council [2006] NSWLEC 318

Cartier Holdings Pty Ltd v Newcastle City Council [2001] NSWLEC 170

Cases Cited

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Statutory Material Cited

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Coffs Harbour Environment Centre Incorporated v Coffs Harbour City Council [1991] NSWCA 58

Gibb v Federal Commissioner of Taxation [1966] HCA 74

CITATION:	AMP Investments Ltd - v - Newcastle City Council [1999] NSWLEC 164
PARTIES	APPLICANT: AMP Investments Ltd
RESPONDENT: Newcastle City Council
NUMBER:	10677 of 1998
CORAM:	Lloyd J
KEY ISSUES:	Construction & Interpretation; Development :- Development:- appeal - economic considerations - traffic considerations Construction & Interpretation:- "commercial activities"
LEGISLATION CITED:	Environmental Planning & Assessment Act 1979, s90(1)(d) (now s79C(1)(b)) Newcastle Local Environmental Plan 1989 cl 2, cl 12 Hunter Regional Environmental Plan 1989 cl 18, cl 19, cl 20
DATES OF HEARING:	05/31/1999; 06/01/1999; 06/02/1999; 06/03/1999; 06/04/1999; 06/07/1999; 06/08/1999; 06/09/1999; 07/29/1999
DATE OF JUDGMENT DELIVERY:	08/06/1999
LEGAL REPRESENTATIVES:	APPLICANT: M H Tobias QC AND: A E Galasso (Barrister) SOLICITORS: Mallesons Stephen Jaques RESPONDENT: J B Maston (Barrister) SOLICITORS: Sparke Helmore