Bowie Ferris Investments Pty Ltd v Woollahra Municipal Council

[2024] NSWLEC 1774

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Bowie Ferris Investments Pty Ltd v Woollahra Municipal Council [2024] NSWLEC 1774

Hearing dates:

15-16 August 2024

Date of orders:

29 November 2024

Decision date:

29 November 2024

Jurisdiction:

Class 1

Before:

Dixon SC

Decision:

The Court orders:

(1) The appeal is dismissed.

(2) Development application no. DA 243/2023 for a change of use from the existing hotel to a retail and commercial use and minor works, including shopfront, internal floor plan changes and identification signage at 9-11 Glenmore Road, Paddington is determined by refusal of consent.

(3) The exhibits are to be returned following publication of the judgment except for Exs A-D and 2.

Catchwords:

APPEAL – development application – change of use from the existing hotel use to a retail and commercial use – adverse impact on heritage significance of the local heritage item (The Village Inn) and the Paddington Conservation Area – social impact on the locality – public interest

Legislation Cited:

Environmental Planning and Assessment Act 1979, ss 1.5, 4.15, 8.7

Environmental Planning and Assessment Regulation 2021

State Environmental Planning Policy (Biodiversity and Conservation) 2021, Pt 6.2

State Environmental Planning Policy (Industry and Employment) 2021, Pts 3.1, 3.2; Sch 5

Woollahra Local Environmental Plan 2014, cll 1.2, 2.2, 4.3, 4.4, 4.6, 5.10, 5.21; Sch 5 Pt 1

Cases Cited:

Stockland Development Pty Ltd v Manly Council (2004) 136 LGERA 254; [2004] NSWLEC 472

Woollahra Municipal Council v SJD DB2 Pty Limited [2020] NSWLEC 115

Texts Cited:

Australia ICOMOS, The Burra Charter: The Australian ICOMOS Charter for Places of Cultural Significance, 2013

Woollahra Development Control Plan 2015

Woollahra Section 7.1 Development Contributions Plan 2022

Category:

Principal judgment

Parties:

Bowie Ferris Investments Pty Ltd (Applicant)
Woollahra Municipal Council (Respondent)

Representation:

Counsel:
A Pickles SC (Applicant)
I Hemmings SC (Respondent)

Solicitors:
Mills Oakley (Applicant)
HWL Ebsworth Lawyers (Respondent)

File Number(s):

2023/273911

Publication restriction:

Nil

JUDGMENT

Introduction

1. This is an appeal pursuant to s 8.7 of the Environmental Planning and Assessment Act1979 (EPA Act) against the refusal by Woollahra Municipal Council of a development application (DA 243/2023) for the use of the Village Inn Hotel at 9-11 Glenmore Road, Paddington, as a shop; and, therewith, the associated works to facilitate that use. The case hinges on the Hotel’s heritage status and the impact upon what is a significant local establishment were it to cease trading as a licensed premises.

2. Currently operating as a licensed hotel/pub, still a distinctive landmark despite modifications, the premises are identified as an Item of local heritage under Sch 5 Pt 1 of the Woollahra Local Environmental Plan 2014 (LEP). Built in 1851, the Rose and Crown (and Durty Nelly’s), stands as one of the earliest established hotels in Paddington; one of the longest serving hotels in the Paddington Heritage Conservation Area (HCA).

3. The Statement of Significance for the Item identifies its continued use and operation as a “pub”; and its being an element of historic, social and cultural significance. It has been asserted the proposed cessation of that use affects the heritage significance of the Item, which makes it a relevant consideration in the assessment of this DA under cl 5.10(4) of the LEP. Relevant also, is the consideration that cl 5.10(10) provides incentives for adaptive reuse of heritage items in particular circumstances.

4. In conceding its historical significance, the applicant submits this application should not be assessed as a “change of use” application because “…the cessation of the use of the Item as a pub is simply a ‘by-product’ and not actually ‘the development’ that is required to be assessed under s 4.15 of the EPA Act” (Tcpt, 15 August 2024, pp 25-27 and 145-146). The applicant argues the community’s expectation that “special reason needs to be demonstrated for changing its use, the existing use”, is erroneous, a misconception (Tcpt, 15 August 2024, p 145); and that there is no requirement at law to obtain development consent to cease the current operation of the Hotel. The Village Inn, the applicant maintains, could cease trading and no DA consent would be required to do so.

5. Properly focused, the applicant submits that what is being applied for is an application to use the site as a shop. It follows, the applicant asserts, that the social planning evidence brought forward by the Council dealing with the cessation of the establishment’s current use as relevant under s 4.15(1)(b) of the EPA Act is, in fact, irrelevant. It does not arise on the facts. Nor does the economic impact derived from anything to do with the financial viability of the Hotel. The applicant argues that cl 5.10(4) asks for a consideration of the impact of the development, the retail use, on the heritage significance of the Item or area and not the impact of a loss of the use of the Hotel (Tcpt, 15 August 2024, p 27(25-30)).

6. The Council disagrees. The Hotel’s heritage significance rests with its continued operation as a pub, it maintains.

7. It follows, therefore, whatever way it is viewed, this application turns on the change of use of an operating hotel to become a shop, and whether this change should be allowed on the evidence.

Decision

8. Clause 5.10(4) of the LEP called up by s 4.15 of the EPA Act mandates consideration of the impact of the development on a heritage item. In this case, the continued operation of the Hotel has been specifically identified as an element of its heritage significance; and the loss of that pub-use is, on the current evidence, an adverse heritage impact that must be avoided.

9. While I understand all too well that I cannot force the continuation of the Village Inn’s operation as a pub, in the absence of satisfactory evidence which demonstrates that the existing pub use is unviable, I am not prepared to approve the proposed change of use to a shop as this would adversely impact the primary heritage significance of the Item being its use as a pub. My reasons follow.

Facts

10. The NSW Heritage Inventories (SHI) provides the foundation for the Item’s statutory heritage listings, both as an individual heritage item and as part of the Paddington HCA. The SHI also enables an understanding of the significance of a place to be communicated.

11. Whilst there are some instances where the SHI forms supporting heritage are outdated, as Ms Holtham identifies in her evidence, the subject SHI form is both detailed and recent.

12. The Statement of Significance for the subject site states:

“The Village Inn, formerly the Rose and Crown Hotel, and Durty Nelly’s, was built c.1851 as a small but fine Victorian period, Classic Revival/Italianate hotel, to draw upon the increasing trade along the South Head Road, and in particular the new military barracks whose construction stimulated both building work and settlement in the emerging Paddington area. Around it, built at first were small homes for the workers building and serving the new barracks, forming the village which was quickly to grow and consolidate, becoming increasingly urbanized through densely composed terrace house rows.

The Village Inn is one of the earliest established hotels in Paddington, comparable with the Paddington Inn (1848), and thus one of the longest serving hotels in the suburb, but distinctive for being in its original but somewhat modified building. Like other Paddington hotels it also enjoyed a long association with Tooth & Co., who owned, leased and sub-leased many of the suburb’s early and historic hotels.

Although of modest scale on a small, constrained site, the Hotel became and remains a local landmark, prominent in the narrow streets and amongst the closely spaced cottages of Glenmore Road and Gipps Street, just off South Head Road - now Oxford Street. As an elaborately decorated example of its style, the Village Inn has been thoughtfully enlarged through the addition of an upper floor, carefully integrated with and enhancing its highly-styled facades. Extended to cover its whole site, the building has also been internally re-arranged, wringing out the space and efficiency possible from its small footprint. Despite changes, the interiors retain significant elements such as posts and beams (structural framing), pressed metal ceilings and other original decorative elements.

The Village Inn is of historical significance for the long tradition of hotel trade on this site, of historic and aesthetic significance for its architectural and streetscape contributions to the suburb, and of social significance for its continuing contribution to the sense of identity within the area for the local and wider community. As an element of the Paddington Heritage Conservation Area, and one of the distinctive group of hotels in Paddington, it may also prove, on further investigation, to have significance as part of an unusual group of hotels, important in their suburban context.”

(Amended Application; Tab 2 Heritage Impact Statement (HIS) p 34)

13. The Statement of Significance for the Paddington HCA in Part C of the Woollahra Development Control Plan 2015 (DCP) (p 6) which highlights the retained significant building types and other matters such as the objectives and controls for the Paddington HCA 3.9 provides as follows:

“Paddington is a unique urban area which possesses historical, aesthetic, technical and social significance at a National and State level. An important factor in the significance of Paddington is its exceptional unity, encompassing scale, character, history, architecture, and urban form.

The built environment of Paddington is an excellent example of the process of 19th century inner city urbanisation of Sydney which was largely completed by 1890. The predominant Victorian built form is an excellent representative example of the phenomena of land speculation and a ‘boom’ building period between 1870 and 1895.

The terraces of Paddington clearly trace the evolution of the imported English Georgian and Regency terrace models into the distinct Australian style evident in the Victorian era terraces.

Paddington retains many significant types of buildings that represent all phases of the suburb’s historical development. These building types range from modest, small-scale, single storey timber and masonry cottages to remnant examples of former gentry mansions, boom style middle-class terrace houses, apartment blocks and contemporary infill development, all of which are set in a varied network of streets, lanes and pedestrian accessways which reflect the phases of subdivision and development.

Paddington has a multitude of important historical and social associations. It is linked with the early transport routes along South Head Road (Oxford Street) and Point Piper Road (Jersey Road), the construction of Victoria Barracks in the 1840s, the gentry estates, prominent figures of the early colony, the speculative building boom between 1870 and 1890, and the development of Australian tennis at the White City site. Its historical and social associations extend to the periods of occupancy by immigrant groups and minority groups including the Chinese market gardeners, the Jewish community around the turn of the century, the European immigrants in the 1950s and an alternative artistic and intellectual population in the 1960s and 1970s. Today Paddington has a high level of social esteem and is regarded as one of Sydney’s most desirable inner-city urban areas. The changing sociology of Paddington demonstrates phenomenal variations in status and changes in community attitudes to the 19th century suburb.

Paddington has important associations with the evolution of the conservation movement in Australia, in particular with the actions by the National Trust and the Paddington Society, which ensured its conservation at a time of redevelopment threat in the 1960s. It is significant as the first suburb classified by the National Trust, a community based, non-government organisation committed to promoting and conserving Australia's heritage. Paddington has a unique aesthetic significance due to the superimposition of the built form on a sloping topography which overlooks Sydney Harbour and its foreshores. The coherent and extensive Victorian built form comprising groups of terrace buildings on narrow allotments which step down hills, turn corners or sit in ranks along tree lined streets produces a singularly recognisable image.

Paddington provides vast opportunity for research, education and interpretation through the physical layout of its road network, its subdivision pattern and the varied form of buildings.

These buildings provide an excellent record of past technologies and domestic lifestyles through features such as original external and internal building fabric, detailing and room layouts. Terrace houses, semi-detached dwellings, flat buildings and freestanding houses all show the evolving attitudes towards families and the home from the early 19th to the late 20th century.”

(HIS Appendix D)

14. The Heritage Map 001 reproduced below shows heritage items and Conservation Areas in the vicinity of the site, which is coloured brown and numbered ‘256’ and indicated by the blue outline:

15. The evidence is that the Village Inn meets the threshold for local heritage on all seven of the criteria for heritage listing (Heritage JER filed 29 July 2024 (Ex 3)). And, relevantly there are repeated references in the historical, social, rarity and representative criteria to the continuous use of the heritage Item as a pub being integral to its heritage significance:

“SHR Criteria A – Historical Significance

The Village Inn, formerly known as The Rose and Crown Hotel and Durty Nelly’s, is of historic significance to Paddington and the Woollahra Municipality as an example of one of the early hotels of Paddington. The site has been continuously used as a hotel since the construction of the original Rose and Crown Hotel circa 1848-1851. The Hotel, an example of the small but architecturally ambitious hotels built in Paddington, is of historical and social significance for its design, its story of adaptation over the years to suit the community, and the long tradition of continuous hotel trade on this site.

SHR Criteria B – Historical Association

The Village Inn is strongly associated with the early development of Paddington, having been one of its earliest hotels and contemporary with the development of Victoria Barracks, which gave impetus to the settlement of the Glenmore Road precinct. It was also associated with Tooth & Co. one of the pre-eminent brewers, distributors and owners or lessees of hotels in NSW during the late 19th and early 20th Centuries, and a major hotel owner in Paddington over that time.

SHR Criteria C – Aesthetic Significance

The Village Inn, formerly the Rose and Crown Hotel, and later, Durty Nelly’s, displays a strong aesthetic significance as a fine example of a small Victorian period hotel, commanding the distinctive, intimate precinct of which it is a prominent streetscape component and constituting a landmark in the wider locality.

SHR Criteria D – Social Significance

The Village Inn is of social significance as an enduring reference point for community identity, together with the group of similar older and long-established trading hotels of Paddington. The existing hotel occupies a site which has been used for a hotel since its establishment by subdivision, and descends from a building built 1848-1851 - thus bestowing an importance upon the hotel in the historic and social identity of Paddington. As popular meeting places, and destinations for both locals and visitors, Paddington’s older hotels like the Village Inn are part of its distinguishing and appealing personality, and an important part of the social fabric of the suburb as well as its commercial appeal. Paddington and its residents have a history of community activism and this has inevitably been facilitated by the tradition of meeting and socialising locally in the network of corner pubs in the area.

SHR Criteria E – Research (Technical) Significance

The Village Inn is of local significance to Woollahra and Paddington, as an example of how its distinctive and distinguishing corner pubs have evolved to serve their changing community and clientele, reflecting socio-economic changes in their context.

SHR Criteria F – Rare Assessment (Rarity)

As one of the small and decreasing number of historically significant hotels still trading commercially in the distinctive and historic urban “village” of Paddington, and still a vibrant element of its urban fabric and local streetscapes, the Village Inn is uncommon, and rare. Market challenges and an increasingly valuable site, attractive for conversion or redevelopment for housing use, make the Hotel part of an endangered and threatened group in Paddington, also evident in other innercity suburbs. Although relatively small, it may be attractive for residential conversion, and at risk.

SHR Criteria G – Representative Assessment (Representativeness)

The Village Inn is important as one of the older Paddington hotels, occupying the site of possibly the longest continual hotel use in the suburb, from 1848; it is a prominent Victorian period commercial building, and a particularly satisfying corner hotel building – key character elements of the Paddington Heritage Conservation Area.”

(Emphasis added) (Ex 3)

16. The historic contribution of the public house on the site since 1848 to the social fabric of the suburb and the city in general is not disputed by either heritage expert (Ex 3 (per Mr Phillips)). Both experts are agreed that a relevant significant component of the Item’s heritage is its continuous use as a pub or public house together with its fabric.

Zoning

17. The site is located within zone MU1 Mixed Use under the LEP and its use for a commercial premises (including a retail use and pub) is permissible with consent. Therefore, the conservation intent in cl 5.10(10) is not relied upon in this case.

Locality

18. The surrounding development is predominately made up of two-storey development that exhibits a variety of uses, including retail outlets with an emphasis on fashion-based retail, other retail, services, cafes, and residential dwellings.

Public submissions

19. The notification of the DA generated significant community objection (Ex 1). Some 236 submissions were received, 233 by way of objection and 3 submissions in support. The notification of the amended DA generated further objections.

Determination

20. As it happened, the DA was refused consent by the Woollahra Planning Panel on 5 October 2022.

Appeal

21. The Class 1 appeal was lodged on 30 August 2023.

The statutory framework

22. The principal environmental planning instruments applying to the DA are as follows:

1. Environmental Planning and Assessment Act 1979 (EPA Act)

2. Environmental Planning and Assessment Regulation 2021

3. State Environmental Planning Policy (Biodiversity and Conservation) 2021

1. Part 6.2 - Development in regulated catchments

4. State Environmental Planning Policy (Industry and Employment) 2021

1. Part 3.1 - Aims and Objectives

2. Part 3.2 - Signage Generally

3. Schedule 5 - Assessment Criteria

5. Woollahra Local Environmental Plan 2014 (LEP)

1. Clause 1.2 - Aims of Plan

2. Clause 2.2 - Zoning of land to which Plan applies

3. Land Use Table (Zone MU1 - Mixed Use)

4. Clause 4.3 - Height of buildings

5. Clause 4.4 - Floor space ratio

6. Clause 4.6 - Exceptions to development standards

7. Clause 5.10 - Heritage conservation

8. Clause 5.21 - Flood planning

9. Schedule 5, Part 1 - Heritage items

6. Woollahra Development Control Plan 2015 (DCP), specifically:

1. Chapter C1: Paddington Heritage Conservation Area, including:

1. Part C1.2.4: Desired future character

2. Part C1.3.9: Pubs

1. Part C1.4.1: Principal building form and street front zone of contributory buildings

2. Part C1.4.2: Side elevations to streets and lanes

3. Part C1.4.3: Rear elevations, rear additions, significant outbuildings and yards

4. Part C1.4.4: Roofs and roof forms

5. Part C1.4.5: Building height, bulk, form and scale

6. Part C1.4.10: Acoustic and visual privacy

7. Part C1.5.3: Windows, doors, shutters and security

7. Woollahra Section 7.1 Development Contributions Plan 2022.

Expert evidence

23. The following experts provided expert evidence in the proceedings:

Expertise	Applicant	Respondent	Joint Expert Reports
Heritage	James Phillips	Vanessa Holtham	Ex 3
Planning	Anthony Betros	George Fotis	Ex 4
Social Impact	Sarah George	Roberta Ryan	Ex 5

Contentions

24. The Council raises four contentions in its Amended Statement of Facts and Contentions (ASOFC) filed 11 June 2024. They related to:

1. adverse impact on heritage significance (Contention 1),

2. social impacts on the locality (Contention 4),

3. adverse acoustic and visual privacy impacts (Contention 6), and

4. public interest (Contention 8).

25. However, the changes to the fabric of the building have after amendment been agreed and are acceptable to the Council subject to the imposition of the Council’s conditions. The contentious issue remains the proposed change of use.

Public submissions

26. In accordance with the Court’s usual practice, several objectors to the DA addressed the Court at the commencement of the hearing. Collectively, they expressed concern about the loss of the Hotel and the resulting adverse impacts on the Village Inn’s historical, social and cultural significance. These submitters included a representative from the Paddington Society, Councillor Ms Price and the Hon. Alex Greenwich MP for Sydney and a local resident and business owner.

27. Ms Noonan, the local resident, resides opposite the site and is concerned about the amenity impacts arising from the change of use of the Item’s rear terrace; particularly increased noise and a loss of her privacy. She invited the Court into her home to better appreciate the opportunity for overlooking from that terrace area directly into her bedroom and study.

28. Mr Onisforou, the local business owner, objects to the loss of the historic pub and its replacement with another homogenous dress shop. He gave evidence that he had been in negotiations with the previous owner of the Item to purchase the site for a pub. He said that he had a continued interest in pursuing the purchase of the Hotel for use as a pub, if the current owner was receptive to further negotiations. As a local resident for many years, and a business owner in the immediate area, Mr Onisforou said that pub use was a long-standing vibrant addition, and that the outdoor seating in the parklet was a magnet for people to gather and socialise.

29. As part of the Council’s bundles, the Court also received copies of the large volume of written submissions received by the Council during the notifications of the application (Ex 1). Collectively, the written submissions reflect the concerns of the oral objectors who do not want to lose their local pub to a shop. Many of the submitters said that they patronised the Hotel and that it was a social meeting place which attracts locals and tourists.

Heritage evidence

Mr Phillips’ heritage evidence in relation to the change of use

30. Mr Phillips gave evidence that he was engaged after his client had purchased the site for use as a shop. Relevantly, he had been retained to prepare the HIS for lodgement with the DA (HIS p 44).

31. In assessing the appropriateness of the changes to the heritage Item, Mr Phillips said he followed “best practice” and had been informed by the Statement of Significance. “You start with the Statement of Significance,” and he explained, “…consider the proposal; and be guided by reference to the articles of the Burra Charter – in a very general sense” (Tcpt, 16 August 2024, p 75(1-6)).

32. While Mr Phillips did not specifically make reference to the Burra Charter in the HIS, in his oral evidence he confirmed that he had adopted a “cautious approach” in his assessment of the proposed development consistent with the relevant articles of the Burra Charter (Articles 3 and 7).

33. Relevantly, Mr Phillips accepted Ms Holtham’s assessment that the continued use of the Item as a pub is an important element of its heritage significance. However, Mr Phillips said his assessment was based on an understanding that it had been demonstrated that “the historic contribution of the pub use was no longer viable” (Tcpt, 16 August 2024, pp 80(1)-85(1); Ex 3 pars 14-16). He gave evidence that he was supportive of the proposed change to a shop because of the existing premises’ unviability. He repeated this justification in both the HIS and the joint report:

“As with many listed buildings, its current use as a Public House is no longer viable and as happens to many heritage items, an appropriate adaptive reuse is sought. Where a change of use occurs with a heritage listed buildings, an interpretation strategy and plan are put in place to ensure the former use can be recognised and understood by the general public...

In this case a use that is sympathetic to the building is proposed as it has been demonstrated that operation as a hotel is not viable” (Ex 3 pars 14, 16, 25-26; HIS).

…poor ongoing patronage, ongoing debt, and failure during the recent sales campaign to sell the hotel to a publican to enable the continued Hotel use” (HIS p 43).”

“…the economic viability of the property as a pub was not sustainable” (HIS p 45).”

34. Mr Phillips said that the reason that he believed the pub use was unviable was because the vendor’s real estate agent, Mr Handy, had told him that “no pub operators were interested in purchasing the [Hotel] and leasing it” (HIS p 44).

35. An affidavit prepared by Mr Handy dated 12 August 2024 was filed in the proceedings (Ex F). It reflects Mr Phillips’ evidence to the Court. In short, Mr Handy deposed that despite a “well-publicised sales campaign” there was no interest at the price of $6.5 million from any hotel or pub operators”. Consequently, “he sold it to the applicant for use as a shop”.

36. Additional to Mr Handy’s advice, Mr Phillips communicated that he also relied on his general observations of the operation of the Hotel. He identified the need for the additional patronage in the “parklet” seating on Glenmore Road as evidencing some sort of financial stress for the Hotel operator. Mr Phillips also spoke of a gradual and continual decline of the use of hotels in the area – due to a changing demographic as supportive of his conclusion that the change of use is acceptable (Tcpt, 16 August 2024, pp 80(39)-83(17)).

37. That said, Mr Phillips acknowledged the argument for the continuation of an historical use where that use can be reasonably undertaken. And while he accepted that the change of use from a pub to a shop would result in “a diminution of the social significance of the Item because the social significance is ascribed to the Hotel” in this case, he gave evidence that it is justified because the continued use cannot be reasonably undertaken as illustrated by the sales campaign.

38. For those reasons, Mr Phillips said he endorses the adaptive reuse of the Item, as anticipated by Objective O6 in Chapter C1 Paddington HCA in Section C1.3.9 of the DCP, in circumstances where:

“This activity [a pub use] has undergone a long decline over time as regulation and external pressures have substantially reduced the need for hotels. Good heritage practice acknowledges adaptive reuse. Clause 5.10(10) of the LEP makes explicit provision for a wide range of adaptive reuse to facilitate the conservation of such buildings”. (Suppl. JER Heritage p 3 (per Mr Phillips))

39. Albeit Mr Phillips accepted that the DCP provisions are silent as to how you, as heritage consultant, make a decision about either the appropriateness of the continuation of the use or its adaptive reuse.

40. In this case, Mr Phillips volunteered that “I have had to make a decision based on other evidence … starting with the Statement of Significance” (Tcpt, 16 August 2024, p 134(26-34)), and finishing, it seems, with Mr Handy’s commercial assessment about unviability, and his client’s advice.

41. Desirably, Mr Phillips said that the proposed change of use from a hotel to a retail store would enable “…a planned and continuous program of maintenance and repair of the heritage Item in accordance with the objectives for works for alterations and change of use to a heritage item within a conservation area as set out by the LEP and DCP” (HIS p 59).

Ms Holtham’s heritage evidence in relation to change of use

42. Ms Holtham gave evidence that the primary significance of this heritage Item is the continuation of its use as a pub (Tcpt, 16 August 2024, pp 92(48)-93(29)); and that consequently, in her expert assessment - the removal of the pub use is inconsistent with established heritage principles as reflected in the LEP and DCP and set out in the Burra Charter and other published heritage guidelines. In short, Ms Holtham’s evidence is that the social significance of the heritage Item would be predominantly lost [if the DA is approved] because the intangible heritage – people gathering – cannot easily be interpreted (Tcpt, 16 August 2024, p 135 (38-41)).

43. Ms Holtham believes that heritage is a statutory priority embedded within the overarching terms of the LEP, which include an objective “to ensure the conservation and enhancement of built and natural environmental heritage”; and also in the provisions of cl 5.10. It is, therefore, her considered opinion that the removal of the pub use would directly and adversely affect its heritage significance in contravention of the aims of the LEP cl 1.2(2)(f) and the heritage conservation objectives provided at cl. 5.10(1)(a) and (b) of the LEP.

44. Ms Holtham relies on the repeated references in the statutory listing in Sch 5 to the continuation of the pub use at the site and, too, to its recorded reference in c1860s as a “public house”, a place of public gathering, entertainment or event as evidence of the particular heritage significance of this Item.  Whereas often, adaptive reuse will result in changes that encourage a degree of public interaction or appreciation of a place, this proposal (for a high-end dress shop) she believes discourages such public interaction, access by families, elderly people, those who have low socio-economic status, unassisted individuals bound to wheelchairs etc. 

45. Ms Holtham maintains that there are obligations on custodians of a heritage item to maintain its significance. In this case, the site’s heritage listing and its Statement of Significance, as well as this site’s reference in other background studies (such as the 2019 Paddington Pub Study - commissioned by Council following a potential loss of significant hotels) all existed prior to the current custodian’s purchase.

46. Ms Holtham emphasised to the Court that the relevant DCP sets out guidelines in relation to pubs as a building typology recognising their significance in the historic and social fabric in Paddington specifically. She also referred to the various best practice documents - such as the Burra Charter that objectively outline the need to retain historic uses where these are integral to a place significance.

47. In that context, Ms Holtham expressed the expert view that this proposal plays down the significance of the place; and seeks, unjustifiably, to remove it from the heritage Item. She criticised the HIS prepared by Mr Phillips, which she does not believe adequately justifies the removal of the historical and significant pub use.

48. After having considered the Statement of Significance which focuses on this continued use as a pub; and the general and specific objectives and controls for pubs in Chapter C1 and Section C1.3.1 of the DCP, Ms Holtham gave evidence that the proposal was inconsistent.

49. While Ms Holtham accepts that uses can become redundant and there is opportunity for adaptive reuse in cl 5.10(10), when it facilitates the conservation of an item, she is firmly of the view that this is not the case at hand (Tcpt, 16 August 2024, pp 106 (50)-107(15)). The proposed use could only be permissible if a valid argument were to be put forward to establish the existing heritage significant use was not viable; and where an application - in such circumstances - better aligned with the intent of the original place - for people gathering, being a public place - were to be successfully filed.  It is her opinion the significant heritage use of this Item must be preserved; and she concluded that an approval of this application could set a detrimental precedent for ongoing conservation of the significant values of heritage places in the Woollahra LGA - particularly the Paddington HCA.  

The applicant’s position

50. The applicant relies on its written and oral submissions to support the proposed application, relevantly the change of use. It submits that “…at the heart of the contentions in relation to social impact and heritage impact there lies an assumption that the proposal to be assessed is the loss of the pub use on the site”. That assumption, it submits, is an incorrect lens with which to consider the DA.

51. As stated at the outset, the applicant’s primary position is that the cessation of the use is not the “development”, at issue and as defined under s 1.5 of the EPA Act. Therefore, the applicant submits that it is “infelicitous” to describe the proposal as a “change of use”.

52. The applicant proposes a use as a shop and no part of the expression “use of land” in the EPA Act requires a focus on the current or past use (see s 4.15 matters for consideration). Therefore, the only relevance of the social planning evidence is in relation to the use of the shop not the loss of the Hotel. The applicant also rejects the evidence of the objectors in respect to the loss of the Hotel claiming it to be irrelevant.

53. The applicant maintains that development consent is not required to cease the use.

54. The applicant submits that the term “heritage significance” of the Item in cl 5.10(4) of the LEP is defined in the LEP (p 154) to mean “the historical, scientific, cultural, social, archaeological, architectural, natural or aesthetic value” (Tcpt, 16 August 2024, p 153(37-40)). It is not confined to the Statement of Significance, which it submits is “an adjunct to the DCP” and, as such, cannot define “heritage significance” for the purposes of the inquiry in cl 5.10(4) of a statutory instrument: Woollahra Municipal Council v SJD DB2 Pty Limited [2020] NSWLEC 115 (SJD).

55. Accepting that the Statement of Significance is not a binding document under the LEP the applicant contends that it is not a basis to conclude that a change of use is going to have an adverse impact upon the significance of the Item due to the loss of social significance, cultural significance or historical significance. While the applicant does not go as far as submitting that the Court should ignore the Statement of Significance, it contends, by reason of the definition under the instrument, the Court can rely on many things to conclude what is the significance of the Item (Tcpt, 16 August 2024, p 154(4-7)). And, even if the Court were to conclude in favour of Ms Holtham’s view that the pub use is the primary significance, it still does not mandate the answer that the Council contends for because of the generality of the description of “heritage significance”.

56. In submitting that the loss of that use is not going to undermine the heritage significance in accordance with cl 5.10(4) (Tcpt, 16 August 2024, p 154(22-27)) The applicant relies on the Court’s reasoning in SJD. In that case, the meaning of “desired future character” was not defined in the LEP and the Court held that it could not be defined by the definition in the DCP for the purposes of the LEP. In this case, the Council cannot argue the Statement of Significance referenced in the DCP can be exported into the LEP.

57. In this case, as there is no heritage management document referred to in cl 5.10(4) the applicant submits the Statement of Significance, relevantly sits as an adjunct to the DCP.

58. In that context, the applicant invites me to read the whole of cl 5.10 and accept that the clause does not suggest that “…there is some prohibition of change of use”. Rather, the application invites the Court to “…consider the impact of the change of use against the objectives of cl 5.10(1) in order to conserve the heritage significance of items in conservation areas, including associated fabrics, settings and views”. The applicant maintains that the objectives in cl 5.10(1) “…tend to emphasise …the fabric, settings and views (i.e. of the buildings), more highly than the proposition that you should continue to use the land for the purpose for which it was originally used” (Tcpt, 16 August 2024, p 152(16-20)).

59. With respect to the zone objectives, the applicant emphasises that they do not prioritise the pub use over a retail use but they do seek to encourage diversity of business, retail, office, light industrial land uses that generate employment etc.

60. The applicant maintains that the continuation of the use of this pub as significant is overstated. The Pub Study (Annexure D to Ex 3) refers to all of the studied pubs being significant for their use. However, the applicant submits that that outcome is not embodied in the Council’s DCP which emphasises the building’s fabric rather than the use and, in this case, it is submitted that none of the controls in C1-C17 in the DCP are infringed now that the fabric issues have been essentially resolved.

61. Accepting that the social/cultural significance of the Item may be lost with the proposed change of use, the applicant submits that this outcome is “just a fact of life that some buildings, such as pubs, come and go” (Tcpt, 16 August 2024, p 158(28-29)). However, after identifying that three pubs in Paddington area have already gone, the applicant submits that this has not undermined the cultural and social significance entirely of those buildings - they still have heritage significance and are listed.

62. The applicant believes that the Council’s reliance on the Burra Charter for this DA assessment ignores the fact that it has implicitly been adopted by the DCP provisions. The embodiment of the principles, like those in the Burra Charter and other documents of generality such as Better Places - relied upon by Ms Holtham – broad policy documents have already informed the DCP (Tcpt, 16 August 2024, p 155(35-39)).

63. The applicant submits that the approach in the DCP should be applied in this case because the Council has gone to the trouble of preparing a Policy that deals not just generally with heritage conservation but this type of building in the conservation area. A detailed Policy that does not require the continuation of the pub use or impose any constraints upon proposed uses.

64. The applicant also emphasises that the Statement of Significance does not state that the pub use cannot be changed. And, while Ms Holtham gave evidence that that is not the place where recommendations for management are made, in the absence of a plan of management the applicant submits the specific provisions in the DCP for management should be followed.

65. Accordingly, as none of those DCP provisions contain any specific constraint on a change of use, and objective O6 obviously applies to both buildings that were currently or formerly a pub, the applicant submits that this indicates that the policy wants to continue to manage buildings that have ceased to be pubs so they continue to look like pubs. As such, the applicant submits that this objective does not suggest that identified heritage Items have lost their significance because they have ceased to be a pub use, rather that the presence of the building is important and retains the heritage significance. “Therefore, if you fulfil the controls, it is thereby expected that you will have fulfilled the objectives of the controls. In this case, there is no control which seeks the continued pub use therefore objective O6 is fulfilled without the need to continue the pub use as the building is maintained” (Tcpt, 16 August 2024, p156(33-38)).

50. Ultimately, the applicant submits that the Court should give greater weight to the controls in the DCP than the Statement of Significance because the Statement of Significance, in terms, is required to be looked at through the lens of the DCP (Tcpt, 16 August 2024, p 159(8-11)). In respect of the social experts’ evidence about the social impacts of the loss of the Hotel, the applicant submits that it is entirely irrelevant; it is not called up by the development. Use is only called up by the heritage significance of the Item (as discussed).

51. The applicant invites me to place little weight on the submissions and petitions signed by people who failed to identify themselves or include any address as their evidence cannot be tested. And, with respect to those who did identify themselves, the applicant submits that their support and patronage of the Hotel is at best overstated. Furthermore, to the extent that the submissions suggest that the Village Inn attracts international patronage this suggests that this is no longer a historic “local pub” but a tourist destination.

52. The applicant also identifies as relevant as to weight the fact that many of the identified objectors, including the local member, had previously lodged complaints with the Council in respect to the pub use so their changed evidence needs to be read in that context.

53. Ultimately, the applicant submits that if the DA is not approved then the pub use is likely to cease and the land will lay fallow and that is not orderly and efficient use of the land.

The Council’s position

70. The Council, as stated, takes a different view and focuses upon the use. In doing so it emphasises that both heritage experts, Mr Phillips and Ms Holtham, adopt a similar approach to their heritage assessment of the Item, and neither adopt the approach suggested by the applicant (summarised above).

71. To consider whether consent can be granted to the heritage Item, the Council submits both experts agreed that the significance of the Item first must be understood. For that, you go to the Statement of Significance. After review, again both heritage experts agree that use of the Hotel is a relevant significant component of its heritage significance. No one has suggested that the Statement of Significance is wrong. In fact, Mr Phillips’ HIS adopts the Statement of Significance and he repeats it in the joint report.

72. That said, the Council does not resile from the fact that the Statement of Significance also identifies fabric and rarity characteristic but submits that use and fabric are two different elements of the heritage significance of this building that need to be considered (Tcpt, 16 August 2024, p 162(38-42)). Fabric has been considered and the experts are agreed that the proposed changes are acceptable. The Council submits that use needs to be considered, and again both experts agreed it is an important element of the Item’s heritage significance.

73. Ms Holtham’s evidence is that the historical use is significant, and you can change it, but you need to justify it. However, in this case she is not satisfied that a change from a shop to a dress shop has been justified on heritage grounds.

74. Mr Phillips supports the change of use, and he does it for one reason – because the pub use is not viable. Yet viability is not relevant to the question that Mr Phillips should be determining. If the reason for changing the pub use be satisfied by that fact, then the Council submits that the Court simply has no proper evidence as to unviability.

75. Moreover, the applicant has made the decision in this case not to call expert evidence about viability. Mr Handy tells us about the sales campaign. A brief sales campaign with a price expectation and the Council submits that:

“…it was a foregone conclusion, because [Mr Handy said] he didn’t think someone operating a pub could afford it, the price expectation. That is why he did the co agency, so it was given to a developer. The viability of the preordained conclusion of the sales campaign, unless there was someone like Mr Onisforou coming out of the woodwork”.

(Tcpt, 16 August 2024, p 163(28-32))

76. The Council submits that the Court should reject the hearsay evidence of Mr Phillips that “Mr Handy sent me a letter which said its not viable” as the main basis for justifying the change of use. Once that is accepted, then it follows that viability is not relevant as there is no evidence to say it is unviable. The Council had raised a viability contention and the applicant had said it was not relevant and elected not to call any evidence.

77. With respect to the submission that the property will remain vacant if this change of use is not approved, the Council submits that one of two scenarios will occur. The applicant will obtain some evidence about unviability and try again with a new application. Alternatively, the premises will be sold to an operator – and there is someone out there Mr Onisforou, who in writing, and under oath in Court said he would buy it in a heartbeat.

78. The Council submits that once we accept that for the purposes of s 4.15 of the EPA Act the Court is required to consider the LEP, and in turn the requirements of cl 5.10, both of the heritage experts have relied on the Statement of Significance so as a matter of evidence it must be a relevant consideration.

79. In a Stockland v Manly sense, the Council submits that the Statement of Significance is one of those policy documents – while not a statutory document it has been prepared with community consultation, has been in force and is enforced so it is a policy document to taken into account of (Stockland Development Pty Ltd v Manly Council (2004) 136 LGERA 254; [2004] NSWLEC 472). More particularly, in forming a view for the purposes of the cl 5.10 requirement, to determine whether the grant of consent is appropriate from a heritage point of view, which, the experts agree, must consider whether it is appropriate to stop the hotel use, to get there, the Council submits that you must consider the Statement of Significance.

80. Moreover, in the absence of any evidence to depart from the Statement of Significance, the Council submits that is where the Court should start in its assessment of this DA. Where there is room for departure, having accepted that the Statement of Significance identifies that the use is important, whether you should then allow it – the Council submits that the applicant fails on the evidence. Mr Phillips says you would but only because it is not viable but there is no evidence to support that proposition.

81. Therefore, Ms Holtham’s assessment supported by her evidence should be accepted.

82. The Council submits the question left open on the evidence is - what is the thing that has changed given that the Hotel has been able to adapt to changes in society for over 170 years to justify the change of use? It submits that Mr Phillips’ assessment that the drinking behaviour of people in Paddington has changed, is not supported by any proper evidence. Similarly, the applicant’s approach to the Burra Charter should be rejected as it is misguided. The Council maintains that the Burra Charter is widely accepted by government agencies at all levels for heritage conservation practice; that is, the practice by the heritage experts. While the DCP may well adopt definitions for the terms “conservation” and “restoration” from the Burra Charter in C1.16, they are just definitions.

83. In respect of the DCP, the Council submits that objective O6 of the DCP provides little support one way or the other but supports use and adaptive reuse of pubs. Yet, the objective is not referring to the Hotel building it is focused on the pub use.

84. The Council accepts that in some cases adaptive reuse is appropriate, but as Ms Holtham’s evidence states it need to be justified (Ex 3 p 76). Mr Phillips accepted in cross-examination there are no operative provisions that assist the implementation of that objective. Therefore, rather than looking at the controls to decide whether to allow adaptive reuse, in this case where there is no management document, as a heritage expert you apply the conservation principles set out of the Burra Charter, by reference to the Statement of Significance to form a view as to whether adaptive reuse is appropriate.

85. In this instance, the Council submits that four of the discursive statements in the Statement of Significance refer to use and four of the seven criteria relate to use. It submits for the social criteria that the Court is entitled to take into account the heritage experts and the social panners evidence in respect to use. The social planning evidence (Ex 5) is that the pub use is socially significant, and that evidence assists an assessment under s 4.15 of the EPA Act consideration of social impacts. The continuing social significance of the use of the Hotel is relevant to a heritage ground and can be informed by the social planners. Separately, the impact of the development can be taken into account the sense of loss – as a likely impact of the development and certainly as part of the public interest.

86. Ms George’s evidence about the adverse social impacts of the Hotel must be balanced against the 233 submissions in support. The Council is critical of Ms George’s reliance on past complaints and submits that Prof Ryan’s evidence to the effect that the existing Hotel is an enduring reference point for the community identity is well researched and compelling.

87. For all those reasons, the Council submits that the Hotel has occupied the site since 1884 - one of the oldest hotels, possibly the longest continual use in the suburb (Statement of Significance) and based on the existing evidence that use should continue.

The public interest

88. There can be no dispute that the public interest is relevant to my consideration of this application under s 4.15 of the EPA Act. And, as the Council submits, the objections received following the notification of the DA overwhelmingly express the view that the closure of the Hotel will be a loss for the community. Some describe it as a “social hub” and as having a major role in the strong character of the area in terms of the appearance of the Hotel and of the social life it brings to that area. As the only pub in the direct vicinity, the Hotel is attributed in some submissions as keeping the intersection at Glenmore Road lively during the evening time; a benefit in terms both of social life and community safety. Many of the submissions echo the highly publicised community campaign to Save the Village Inn.

89. The applicant argues that to the extent that these submissions lament the loss of the Hotel they must be given very little weight. The matters to be considered are the matters of relevance to the development, that is the use of the land for the purpose of a shop, the subject of the DA. Therefore, the likely impacts of that development do not call up a comparison of the current loss and the proposed use which is the focus of the social evidence of Professor Ryan. Therefore, the environmental impacts and the social impacts for the purposes of s 4.15(1)(d) that are to be considered are those relating to the proposed use, and not the cessation of the pub use.

Consideration

90. I appreciate that the proposed retail use is permissible with consent in the MU1 Mixed Use zone, and this proposed commercial use is consistent with the relevant objectives of the zone including “to encourage a diversity of business, retail … land uses that generate employment opportunities”. A pub is just one species of a permissible retail use of the land.

91. In that regard, I also accept, consistent with the objective of the zone, that this development will include an active street frontage (retail) to attract pedestrian traffic and to contribute to vibrant, diverse, and functional streets and public spaces. As amended, the proposal will also minimise conflict with land uses within the zone and land uses within the adjoining residential zone as the proposed change of use will reduce the intensity of use and impact that are associated with a hotel use in proximity to residential properties.

92. The proposed hours of operation are within those approved for the Hotel and do not include any unacceptable use of the outdoor areas and deliveries/waste disposal will have less impact to the current pub use.

93. The heritage evidence is that the exterior of the building has a moderate to high degree of integrity. As observed at the site view, the building retains some of its original architectural detail particularly when viewed from Glenmore Road. Whereas the rear of the building has been significantly altered with much of the original interior removed. That said, the planners and heritage experts now accept that the external works as amended are acceptable. They generally retain the building’s existing Glenmore Road and Gipps Street elevations and provide for an appropriate program of conservation works. The disagreement about the treatment of the window/awning on the Glenmore Road frontage is also in my assessment satisfactorily resolved by the imposition of the amended design and the Council’s conditions of consent.

94. The public’s ability to understand the building as a historical pub would not be lost by the proposed physical changes, which are predominately internal, and in areas that have already been highly altered and modified by the removal of internal walls, removal of finishes and joinery, relocation of stairs and removal of fireplaces.

95. The only issue now remaining is the impact of the cessation of the pub use on the heritage significance of the Item as called up by cl 5.10 of the LEP.

96. Mr Phillips supports the change of use as being acceptable because he accepts that the pub use is unviable. The main reason given for the unviability of the pub use is Mr Handy’s advice in respect to the sale and his client’s advice to that effect. In the joint report, Mr Phillips also refers to the changing demographic in Paddington and a decline in the use of hotels as relevant.

97. Frankly, as the Council’s submits, Mr Phillips’ opinions about viability or the pattern of drinking in Paddington today are outside his area of expertise and his views as expressed irrelevant in my assessment of this DA.

98. I accept that it is not in the Council’s remit to insist on maintaining a use that is unviable or to refuse consent for a use that is permissible within the zone where it will have minimal and acceptable heritage impact on the fabric of the building. That is not the case under assessment. The loss of the use of this pub is relevant because of the requirement to give consideration to the effect of the proposed development on the heritage significance of the Item under cl 5.10(4) of the LEP.

99. It is to be noted that the term “heritage significance” is defined in the LEP to include its social and historical significance.

100. The Statement of Significance, as both heritage experts agree, is the starting point for understanding the heritage significance of the Item. These experts are also agreed that the continuation of the pub use is an identified element of its heritage significance.

101. The continued operation of this heritage-listed hotel over the last 170 years (SHR Criteria A – Historical significance) which is a primary reason for its heritage significance and listing, is clearly a relevant consideration when assessing the effect of this DA under cl 5.10(4). Mr Phillips gave consistent oral and written evidence that he supported the proposed development because he believes that the continued pub use is unviable. The basis upon which he reaches that conclusion is on the advice of the former owner’s sales agent, Mr Handy, that there was no interest during the marketing campaign for the sale of the Item as a pub at the market price of $6.5 million (HIS p 44; Ex F). Relevantly, there is no evidence before the Court supporting Mr Handy’s assertion that the asking price of $6.5 million was a realistic market price for the Hotel. No valuation evidence in respect to the property. Nor any financial evidence adduced directed to the question of viability, no profit or loss evidence or financial records to support the assertions made by Mr Phillips’ in the HIS that the applicant had needed to reduce the rent to obtain a licences to run the Hotel and that such a continuing pub use was unprofitable and therefore unviable.

102. As Ms Holtham observes, the unceasing use of the heritage Item as a pub is integral to its significance and statutory listing in Sch 5 (Ex 3). I accept Ms Holtham’s expert assessment that the social heritage value of the heritage Item will be essentially lost if this DA is approved because the pub use will cease. As the cessation of that use will adversely affect the heritage significance of the Item, there needs to be some reasonable basis and weighing of all the evidence to justify that heritage effect and outcome.

103. Having carefully considered all evidence (including the LEP, and the zone objectives, the provisions of the DCP, and importantly the heritage experts’ evidence and the public interest), I do not accept that the resulting adverse impact on the heritage Item should rest upon unproven evidence of the unviability of the Hotel’s continued operation. To be plain, there has been no satisfactory “demonstration that the operation of the Hotel is not viable”.

104. Accordingly, I find that the removal of the pub use directly and adversely affects its heritage significance of the Hotel in contravention of the aims of the LEP in cl 1.2(2)(f) and of the relevant heritage conservation objectives and provisions in cl 5.10.

Conclusion

105. For these reasons, the development application is refused consent.

106. Accordingly, the Court orders:

1. The appeal is dismissed.

2. Development application no. DA 243/2023 for a change of use from the existing hotel to a retail and commercial use and minor works, including shopfront, internal floor plan changes and identification signage at 9-11 Glenmore Road, Paddington is determined by refusal of consent.

3. The exhibits are to be returned following publication of the judgment except for Exs A-D and 2.

……………………..

S Dixon

Senior Commissioner of the Court

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Amendments

02 December 2024 - Correction to typographical error at [7].

Decision last updated: 02 December 2024