Caltex Australia Petroleum Pty Ltd v Manly Council (No 2)

[2007] NSWLEC 350

Land and Environment Court

of New South Wales

CITATION:

Caltex Australia Petroleum Pty Ltd v Manly Council (No 2) [2007] NSWLEC 350

PARTIES:

APPLICANT
Caltex Australia Petroleum Pty Ltd
RESPONDENT
Manly Council

FILE NUMBER(S):

10592 of 2005

CORAM:

Pain J

KEY ISSUES:

Existing Use Rights :- whether existing use rights abandoned.

LEGISLATION CITED:

Contaminated Land Management Act 1997
Environmental Planning and Assessment Act 1979 s107, s108
Land and Environment Court Rules 1996 Pt 13 r 16(h)
Petroleum Retail Marketing Franchise Act 1980 (Cth) s17, s17B
State Environmental Planning Policy 55

CASES CITED:

Caltex Australia Petroleum Pty Ltd v Manly Council [2007] NSWLEC 105;
Dosan Pty Ltd v Rockdale City Council (2001) 117 LGERA 363;
Drummoyne Municipal Council v Cavallaro (1982) 46 LGRA 416;
Hudak v Waverley Municipal Council (1990) 18 NSWLR 709;
Star Property Investments Pty Ltd and Anor v Leichhardt Municipal Council [2000] NSWLEC 235;
Waverley Council v Hairis Architects (2002) 123 LGERA 100;
Woollahra Municipal Council v Banool Developments Pty Limited (1973) 129 CLR 138;
Woollahra Municipal Council v TAJJ investments Pty Ltd (1982) 49 LGRA 123

DATES OF HEARING:

27/07/2006,
28/07/2006,
14/08/2006,
15/08/2006,
04/09/2006,
17/11/2007 (Written submissions),
27/11/2006 (Written submissions),
14/3/07 (Judgment No 1),
3/4/07 (Hearing on whether abandonment of existing use rights should be decided).

 
DATE OF JUDGMENT: 

15 June 2007

LEGAL REPRESENTATIVES:

APPLICANT
Mr M Craig QC with Mr D Wilson
SOLICITOR
Middletons

RESPONDENT
Mr T Robertson SC
SOLICITOR
Abbott Tout

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

15 June 2007

10592 of 2005 Caltex Australia Petroleum Pty Ltd v Manly Council (No 2)

1 Her Honour: In Caltex Australia Petroleum Pty Ltd v Manly Council [2007] NSWLEC 105 I made a finding that the Applicant did not enjoy existing use rights for its premises at 2 Clontarf Street, Seaforth. The consequence is that the development application before the Court in these Class 1 proceedings cannot be approved by this Court. The parties have now asked me to make a finding on the issue of abandonment of existing use rights. This finding will be entirely obiter given my earlier judgment but I will accede to both parties’ request to make a further finding on that issue as both consider there is utility in that course.

Abandonment of existing use rights

2 On the assumption that my finding of no existing use rights is incorrect and that the Applicant does have existing use rights, the Council argued these have been abandoned. The relevant factual background is set out in my earlier judgment at [2] – [16] as follows:

History of development consents issued by Manly Council

1953 – Development consent 194/53
Manly Council (the Council) granted Building Application No 194/53 pursuant to Pt 11 of the Local Government Act 1919 (the LG Act 1919) on 16 June 1953 in relation to the land. Pursuant to s 41(2) of the County of Cumberland Planning Scheme Ordinance 1951 (CCPSO) which came into effect on 27 June 1951 this is considered to be a development application. The land was zoned “Living Area” under the CCPSO. The use of the land for a service station was permissible with consent. The development was carried out in or about 1954 and assumed to commence trading at about this time.

1961 – Development Application 120/1961
On 24 March 1961 Ampol Petroleum Ltd made an “Application for Approval to Build” development described in the application as “additions to existing [service] station comprising of brick cavity walls, corrugated iron roof with reinforced concrete floor”. The application was approved in or about April 1961 and was for the addition of a service bay in brick and corrugated galvanised iron. The approved development was carried out in or about 1962.

1968 – Development Application DA115/68 and Building Application BA503/68
On 29 November 1968, Ampol Petroleum Ltd made application to the Council to carry out development described as “new sales rooms, pumps, islands and canopy”. The Council approved the development application and the building application on 16 January 1969 and 3 February 1969 respectively.

Further development consents were issued in 1977 and 1986 but are not material to these proceedings. The principal consent in issue is the 1953 consent.

The land was used as a service station from about 1954 until on or about 25 July 2003. The most recent operator of the service station was P Richards Pty Ltd under a dealer agreement which expired on 30 October 2001.

By agreement dated on or about 18 May 2001, between the Applicant and P Richards Pty Ltd, the dealer agreement was extended indefinitely beyond 30 October 2001 in accordance with the terms of a letter dated 2 April 2001. Either party could give one month’s notice of termination.

A Notice to Quit dated 20 May 2003 was served by the Applicant on P Richards Pty Ltd. On 4 June 2003, the Applicant approved a “divestment proposal” for the land. P Richards Pty Ltd executed a Deed of Termination on 25 July 2003 and vacated the land in or about July 2003.

On 30 July 2003 a pre-development application meeting was held at Manly Council with representatives of the Applicant.

On 14 October 2003, the Applicant gave notice under State Environmental Planning Policy 55 (SEPP 55) to carry out Category 2 remediation work on the land.

On 20 October 2003, Foster & Associates, architects, on behalf of the Applicant lodged a development application with the Council for the construction of a carwash and cafe (DA97/04). Foster & Associates on behalf of the Applicant also lodged a development application with the Council for the demolition of existing buildings and related structures (DA507/03).

The underground tanks and fuel lines were removed from the land in or about early March 2004. All other above ground structures, other than petrol bowsers, remain on the land.

By Notice of Determination dated 6 September 2004, the Council notified approval of DA507/03. The development approved in DA507/03 has not been carried out.

Notification by Manly Council of the refusal of DA 97/04 was given on 6 September 2004.

On 15 November 2004 an application to review the determination in DA97/04 pursuant to the provisions of s 82A of the Environmental Planning and Assessment Act 1979 (the EP&A Act) was lodged. On or about 24 March 2005, the s 82A Review was determined by confirming the refusal of DA97/04.

On 15 June 2005 Class 1 appeal proceedings were commenced in this Court.

3 In addition, a contract for the sale of land for use as a carwash/cafe was drawn up for an auction in November 2005. That auction did not take place and the contract was not exchanged with anyone.

4 Section 107(1) of the Environmental Planning and Assessment Act 1979 (EP&A Act) provides:

(1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use.

5 A provision dealing with abandonment of existing use rights was introduced into the EP&A Act by s 107(2) in 1985, which states:

(2) Nothing in subsection (1) authorises:

…

(e) the continuance of the use therein mentioned where that use is abandoned.

6 There is a statutory presumption of abandonment in s 107(3) if an existing use is not exercised for twelve months. This is a rebuttable presumption.

7 Section 108 of the EP&A Act provides that regulations may be made in relation to existing use rights.

8 Clause 41 of the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation 2000) provided at the relevant time:

…

Evidence

9 The Applicant relied on four affidavits, being an affidavit of Glenn Byrne, an employee of the Applicant, affirmed on 14 June 2006, two affidavits of Malcolm Graham Campbell, a consultant property adviser for the Applicant, sworn 6 June 2006 and 28 July 2006, and an affidavit of Warrick Hobart, the Manager of Corporate Real Estate for the Applicant, affirmed on 9 June 2006. All the deponents were cross-examined.

10 In his affidavit sworn 14 June 2006 Mr Byrne stated his work involved making decisions for the Applicant as to whether service station sites were economically viable for the Applicant as part of their network. If he made a decision that a Caltex site was not economically viable, the Applicant would consider the future of the site. He analysed the performance of the Caltex station at 2 Clontarf Street from late 2001 to early 2003. He stated that he considered a number of different options for upgrading the site, none of which were economically viable for the company. He informed the Marketing Property Group of this conclusion, and that group then prepared a divestment proposal for the site signed off in May 2003, which was attached to his affidavit. Mr Byrne stated in his affidavit that he had a meeting with Peter Richards in around June 2003. He denied that he said to him, “don’t worry, rest assured, there will never be another service station on this site”, but stated that he said words to the effect that there would never be another Caltex service station on the site.

11 In cross-examination he agreed that he could not recall the exact terms of the conversation he had with Mr Richards on 21 June 2003 and did not have any notes to use to refresh his memory.

12 In his affidavit sworn 6 June 2006 Mr Campbell, consultant to the Applicant, stated that during the period from 2003 to 2004, he assessed a carwash/cafe as the highest and best use of the Clontarf St Caltex station. Given the traffic and noise associated with the operation of a service station and its hours of operation, his view was that a carwash/cafe would generate less noise, less traffic and operate fewer hours. Therefore, he anticipated that a development application for this would be uncontroversial and would be likely to be approved. The site was put into his hands to maximise its value. The continuance of its existing use rights was important to the Applicant to ensure that the site could be developed in the most appropriate way. He stated that the Applicant did not abandon the existing use, he did not purport to surrender or abandon any existing use, and that it was always his intention to continue the existing use and rely on it to make other development applications permitted by law.

13 Mr Campbell stated in his affidavit sworn 28 July 2006 that it was his understanding that if the Applicant sold the site, it would continue to be liable for site contamination and could be served with a notice for site remediation even after it had ceased to be the owner of the site. Therefore, it was both economical and sensible to remediate a site prior to sale, and the decision to remediate was unrelated to abandonment.

14 Mr Hobart attests in his affidavit sworn 9 June 2006 that Mr Campbell managed the Clontarf St development project from June 2002 to June 2006. In this role he was authorised by the Applicant to make decisions about the use and development of the site, and that these decisions were made for and on behalf of the Applicant.

15 The Council relied on four affidavits, being two affidavits of Mr Richards, a director of P Richards Pty Ltd, the former franchisee of the site, sworn 26 February 2006 and 5 July 2006, an affidavit of Mrs Richards, another director of P Richards Pty Ltd, sworn 5 July 2006, and an affidavit of Mr Yangoyan, a former mechanic at the site, sworn 7 July 2006. All the deponents were cross-examined.

16 In his affidavit sworn 26 February 2006 Mr Richards stated that in about June 2002 he had a meeting with Mr Byrne on the site where he was told about the change in ownership of the service station from Ampol to Caltex, and a possible upgrade of the shop. He stated that he was told that his company was to be retained as a franchisee, but that the future of the site was unknown. In May 2003, in a telephone conversation with Mr Byrne, Mr Richards enquired about the proposed upgrade and was told again that the site’s future was uncertain but it may have to be closed down. On 21 June 2003, in a meeting with Mr Byrne on site, he was told by Mr Byrne “don’t worry, rest assured, there will never be another service station on this site”. He stated that he wanted to negotiate a new franchise agreement with the Applicant and continue to operate the business.

17 In his affidavit sworn 5 July 2006, Mr Richards reiterated the agreement between his company and the Applicant that he would be given six months notice of termination of the franchise by Caltex, and that Mr Byrne told him at the meeting on 21 June 2003 that there would never be another service station on the site. He did not specifically refer to there never being another Caltex service station on the site. He also stated that Mrs Richards and Mr Yangoyan were both present when that statement was made.

18 The affidavit of Mrs Richards sworn 5 July 2006 confirmed that she was present at that meeting. She stated that she agrees with the contents of Mr Richard’s affidavits. Further, she states that Mr Byrne did not use the words “Ampol Seaforth” or “Caltex” during that meeting. By agreeing Mr Richards affidavits, Mrs Richards may be taken to state that Mr Byrne made the statement that that there would never be another service station on the site. The affidavit of Mr Yangoyan also attests to this same set of facts.

19 A number of the Applicant’s documents concerning the divestment proposal and decision, site remediation and preparation of the site for sale, were also tendered in the proceedings.

20 The Handley Paris & Partners valuation report for 2-4 Clontarf Street Seaforth, dated 28 April 2003 stated the current market value of the land for use as two residential blocks was $900,000. For an alternative use to a service station, as a potential development site (subject to approval from Manly Council) the value ranged between $1,250,000 and $1,500,000 and as an operating service station, $1,500,000.

21 A divestment proposal signed by numerous employees of the Applicant during May/June 2003 stated that approval was given to divest the Ampol service station for an alternative use because of poor returns and the high level of capital expenditure required to bring the site to an acceptable standard. The document also stated that the possibility existed for a purchaser to reopen the site as a service station under a different brand, with possible associated discounting, but that the site was low profile and not in a location for a major brand to supply direct. The proposal stated that this approval was not an abandonment of existing use rights.

22 On 14 October 2003, Simon Caples, environmental consultant to the Applicant, sent a letter to Manly Council which stated:

As you are aware Caltex Australia Petroleum Pty Ltd has temporarily ceased trading at the former Service Station site at 2-4 Clontarf Street in Seaforth…Caltex proposes to use this opportunity to investigate and remediate the site. The activities are being performed to comply with the relevant legislation including the Contaminated Land Management Act 1997 and the Dangerous Goods Regulations. These activities do not constitute an abandonment of the Existing Use Rights that benefit the site. Indeed these activities are designed to maintain the existing use rights on the site and allow Caltex to manage this property with proper regard to its environmental responsibilities…

23 A Site Validation Report for the service station site was prepared on 20 July 2004. The executive summary of the report stated:

Urban Environmental Consultants Pty Ltd have undertaken validation works associated with the excavation and removal of primary (underground storage tanks, fuel lines and bowsers) and secondary (soil impact) hydrocarbon sources within the former Ampol Service Station, Seaforth…This report documents the results from the validation works undertaken following decommissioning of the service station in March 2004.

The site formerly consisted of seven underground storage tanks, a sales building, two workshop buildings, and canopy over the pump islands. The majority of the site was covered with a concrete forecourt, with bitumen along the western edge and grass areas in the south west and north east corners of the site. All petroleum related infrastructure was removed in March 2004 during decommissioning activities conducted by Quantum Environmental Services Pty Ltd. The service station building and canopy remain at the site…

Based on the validation sampling conducted, Urban Environmental Consultants Pty Ltd conclude the soil concentrations are within the NSW EPA (1994) Guidelines for Assessing Service Station Sites and the NSW EPA (1998) Guidelines for the NSW Site Auditor Scheme – Health based soil investigation levels (NEHF A). Groundwater concentrations are within the NSW EPA (1994) guidelines and the ANZECC (2000) trigger values for marine waters. The site has been remediated to a level suitable for commercial or residential development.

24 The contract for the sale of land drawn up for an auction in November 2005 stated at cl 18:

18.1 Removal of Tanks
(a) The Vendor will remove from the property all underground tanks for the storage of petroleum products, the existence of which tanks is known to the Vendor.

…

18.2 Works
The Purchaser acknowledges and agrees that
(a) After the Vendor removes the tanks in accordance with clause 18.1, the Vendor will cause an environmental consultant to reduce the levels of petroleum hydrocarbon pollution in the property caused by the use of the property as a service station, depot or terminal (as the case may be) to a level which does not prevent the use of the property for any use permitted under the zoning of the property existing at the date of this contract…

25 An information memorandum dated November 2005 prepared for the site for the Applicant by CB Richard Ellis, a real estate services company, stated that the benefits of the site to a purchaser would include the potential for further commercial/business development (with Council approval.

Council’s submissions

26 The presumption of abandonment in s 107(3) applies as there has been no use of the land for a service station since July 2003. The Applicant had abandoned the service station use over the whole of the land by its action in discontinuing that use and removing the tanks, fuel lines, bowsers and part of the service station building in 2004, and undertaking remediation works. The presumption of abandonment in s 107(3) of the EP&A Act cannot be rebutted in light of those objective facts.

27 The Council relied on a number of the Applicant’s documents as set out at par 17 – 23 in order to submit that when the Applicant decided to divest itself of the premises in May 2003 it had commenced a process of abandoning the existing use of service station on the site. The operation of the Petroleum Retail Marketing Franchise Act in relation to the termination of the franchisee confirms that, as do the terms of the contract for the sale of land. These decisions and the remediation action of removing all tanks and pipes on the premises rendered its continued operation as a service station impossible unless a further development consent was granted. This was all evidence of abandonment of the use of the existing site as a service station.

28 The development consents allowing the service station use no longer authorise the continuing use (assuming s 107 is subject to them by dint of s 109B(1)) because of the removal of tanks and fuel lines. A new development consent is required if these were to be reinstated. The use cannot be conducted on the land now without a new development consent being obtained.

29 The facts distinguish this case from Woollahra Municipal Council v Banool Developments Pty Limited (1973) 129 CLR 138 (Banool) and Woollahra Municipal Council v TAJJ Investments Pty Ltd (1982) 49 LGRA 123 (TAJJ) in which both discontinuance of existing use and an application to change the use were held not to give rise to abandonment of the existing use. Both cases were decided before s 107(3) was introduced and must be considered in the light of different legislation. The approach of Hope J in Hudak v Waverley Municipal Council (1990) 18 NSWLR 709 (Hudak) which emphasises consideration of objective factors rather than expressions of subjective intention is correct.

30 The subjective intention of the Applicant, as evidenced by contemporaneous statements made by the Applicant’s officer, Mr Byrne, in discussion with Mr Richards, was that the site would not be used in the future as a service station. This is supported by the approval of the divestment proposal, which made it clear that the existing use was uneconomic and that the Applicant could sell the land because a competitor (such as another service station proprietor) would not purchase the property for that use. The physical use as a service station ceased in July 2003 and was abandoned at that time.

Applicant’s submissions

31 The Applicant submitted that a relevant subjective intention to continue the existing use can be seen from all of the circumstances of the case and the evidence of Mr Campbell. Between May 2003 when a Notice to Quit was served on the franchisee, P Richards Pty Ltd, and 15 June 2005 when Class 1 appeal proceedings were commenced in this Court against the Council’s refusal of an application lodged 20 October 2003 for a carwash/ cafe, all actions were taken in reliance on the right of the Applicant to change the existing use under cl 41(1)(d) of the EP&A Regulation. The development application for a carwash/cafe was lodged in October 2003 shortly after Mr Richards vacated the site in July 2003. It was a development application which could only have been made pursuant to the existing use provisions of the EP&A Act and the Regulations thereunder. The making and pursuing of the development application were consistent with the subjective intention to continue the existing use.

32 Apart from securing the site upon the vacation of the premises by the franchisee in July 2003, the physical works of remediation were undertaken in or around March 2004 while the development application for a carwash/cafe was pending. A suggestion that the site remediation was evidence of abandonment is inconsistent with the pursuit of the pending development application for a carwash/cafe.

33 The site remediation pursuant to SEPP 55 was not inconsistent with the continuance of the existing use. The letter to Council from Mr Simon Caples, Environmental Consultant to the Applicant, dated 14 October 2003, stated that the Applicant intended to maintain the existing use rights on the site. The site was not rendered incapable of being used as a service station. Firstly, there was no physical impediment preventing the re-establishment of a service station with underground tanks and facilities. Secondly, there was no impediment to the lodgement of a development application to re-establish a service station with the facilities which previously existed. Thirdly, there was no requirement that a service station use be carried out on the site with those facilities that were removed in place when regard is had to the essential characteristics of a service station: Drummoyne Municipal Council v Cavallaro (1982) 46 LGRA 416.

34 The development consent for the demolition of existing buildings and related structures (DA 507/03) granted on 20 October 2003 has not been commenced. The subjective intention to continue the use is to be held by the relevant person, that is, the company. Mr Byrne, its employee, could not hold the intention and had no relevant authority to abandon the use. Any statement to Mr Richards that there was not to be any further service station on the site was not a reflection of the intention of the Applicant. The conversations between Mr Byrne and Mr Richards took place prior to the cessation of the use of the land as a service station and prior to the lodgement of the development application for a carwash/cafe in October 2003.

Finding on abandonment
Case law

35 The parties referred firstly to TAJJ and Banool. Banool is a case decided before the EP&A Act came into effect and therefore before s 107(3) was introduced. In Banool the premises enjoyed existing use rights. Application for development consent for a new use was made, which use was otherwise prohibited in the zone under the planning scheme ordinance in place at the time. The council did not grant consent to the applications. At first instance, the Supreme Court of NSW single judge decided that the development applications could not be approved because the existing use rights which had applied to the site had been abandoned. The Court of Appeal took a different view. On appeal to the High Court, Mason J (Barwick CJ, McTiernan and Gibbs JJ concurring) stated at 149 in relation to existing use rights that:

It is plain enough that the Respondent has at all times intended that the premises should be used as a service station and for car parking and that the only reason why that intention has not been executed is that the Council refused to grant the application and that litigation has ensued. In the circumstances the lapse of time, since the premises were last used as a motor garage, although considerable, is not enough to warrant the conclusion that the existing use was abandoned or terminated.

Mason J also held that the making of an application for new development on land with existing use rights cannot necessarily be taken as evidence of an intention to abandon those existing use rights.

36 TAJJ involved a shop premises used for tyre sales, which was a nonconforming use of the premises, when the Woollahra Planning Scheme Ordinance came into effect in 1972. In 1977, the council consented to the change of use to a shop selling hi-fi equipment. The tenant conducting this activity vacated the site. Another tenant then used the premises as a shop for selling plants and garden equipment. Its development application to the council for consent for this use was refused because the council believed the premises had lost any existing use rights through the granting of leases for other uses. In the Court of Appeal, Glass JA (Hutley JA in agreement, Mahoney JA dissenting) held at 128:

The owner, according to the established principle (Banool) was entitled to take the view that he would apply for consent to change the use and, if consent was refused, would revert to the existing use. In other words, the application could be made without prejudice to the right to retain the existing use. This material justified the assessor in inferring that the owner’s intention in the event of refusal was to fall back upon the existing use for its own sake and also as a basis for another application and to terminate the non-conforming use. This was an inference which could reasonably be thought to enjoy a margin of probability over the competing inference for which the council contended viz the intention, if consent were not given, to renounce completely all prospect of letting the premises as a shop.

37 In Hudak, decided under the EP&A Act provisions, the presumption of abandonment in s 107(3) operated. That case concerned premises lawfully used as a residential flat building from 1976 to 1980, after which time the premises were left unoccupied and allowed to deteriorate. The owner of the premises claimed that it was his intention to restore the premises to a habitable state and have them occupied again after certain other problems were resolved. Hope AJA held (Kirby P and Mahoney JA agreeing on the result) at 716 - 717 that:

It is difficult to imagine that an existing use will continue indefinitely despite absence of actual use merely because an owner has an intention to carry on the existing use or to resume it at some time in the future. It was suggested that [the owner’s] intention would operate to continue the existing use if the delaying factor was related to some consideration relevant to the restoration of the use…I have no doubt that these may be relevant considerations but as it seems to me the existence of an intention based on some such factor should and does not necessarily continue the existing use…As it seems to me, it is necessary to have regard to the whole of the circumstances, including the subjective intention of the relevant person, and to determine whether in the light of all those matters the cessation of actual use proved by the facts is outweighed by an asserted subjective intention to continue the use…[if] years go by without actual use and particularly where the factor said to be delaying a resumption of the existing use is something of an indefinite character…there would be little difficulty in concluding that the cessation of use for a similar period of time involved an abandonment.

38 In Star Property Investments Pty Ltd and Anor v Leichhardt Municipal Council [2000] NSWLEC 235 an application for development consent for the demolition of existing buildings and construction of five townhouses on the premises was refused by the Council. The applicants appealed to this Court, which had to determine whether any existing use rights for wood working purposes had been abandoned. In 1955, development consent for light industry had been granted to the subject land, and various development consents were granted for the site between 1955 and 1970. From 1984 to 1991 various tenants occupied one of the premises, pursuant to leases containing a covenant that the lessee would not use the premises for any purpose other than as a shop or commercial premises and for the carrying on of light industry. Talbot J held at [65] that:

…in this instance where the existing use has not been continuous, there is an onus on the Applicants to demonstrate to the Court that at all times they manifested the requisite intention to maintain the existing use and thus that there was no abandonment of the existing use.

Talbot J found at [77] - [78] that as the Applicants had not established continuous use, the existing use had been abandoned.

39 Dosan Pty Ltd v Rockdale City Council (2001) 117 LGERA 363 concerned a development application to construct a residential flat building. Since at least 1945 there had been five buildings on the site, each with a separate street number. The site was in common ownership but let as separate occupancies. Some sites had been used for various purposes such as printing shops, repair shops and sales between 1973 and the present. The issue of abandonment of existing use rights arose. Lloyd J held at [49] that:

Woollahra Municipal Council v TAJJ Investments Pty Ltd confirms the important point that insofar as intention is relevant in determining whether existing use rights have been abandoned, it need not be an intention to continue the then specific use authorised by the existing use rights, but may also be an intention to continue to take advantage of existing use rights in some other way, such as by seeking to substitute another prohibited use. That case was concerned with the interpretation of a subordinate instrument, the Woollahra Planning Scheme Ordinance, not with the provisions of the EP&A Act, but the same principles apply. There was and is the same preservation of existing use rights, with provision under the regulations for consent to be sought to change an existing use to a different prohibited use. For the legislative scheme to be effective it must also be possible to take steps toward changing the use without abandoning the existing use.

40 Lloyd J took into account that it was the subjective intention of the person relying on existing use rights to continue a non-conforming use on the site after it was vacated in holding that existing use rights continued to apply. The Council stated that its submissions were possibly at odds with that finding in Dosan.

41 In Waverley Council v Hairis Architects (2002) 123 LGERA 100 (Hairis Architects) premises used for a club had been vacated for several years. The presumption in s 107(3), that a use is presumed to be abandoned unless the contrary is established, therefore arose. A development consent had been approved for redevelopment as residential apartments, a car park and a club which relied on the existing use of a club and incorporated a club in the new development. A further development application was lodged which sought consent for the building without a club. This had not been approved by the council. Taking into account the evidence of a director of the company wishing to redevelop the site, the court was satisfied that the company had all times since June 2001 maintained the necessary subjective intention to maintain the existing use. Talbot J accepted that evidence and held at [41] that:

The pursuit of the alternative use is truly no more than the exploration of the availability of an alternative use which, in itself, is indirectly dependant upon the establishment and maintenance of the existing use.

He considered the case against abandonment was stronger given that “no relevant use conflicting with the existing use has been physically undertaken on the land since the club use ceased. . .”.

42 It is necessary to apply the principles in these cases to the facts of this case. Hudak is authority that:

it is necessary to have regard to the whole of the circumstances, including the subjective intention of the relevant person, and to determine whether in the light of all those matters the cessation of actual use proved by the facts is outweighed by an asserted subjective intention to continue the use…

In the other cases referred to above this Court and the Court of Appeal have held that steps taken to change the use, including the lodgement of a development application and pursuit of an appeal in a court in relation to that application, are steps taken in reliance on an existing use right. Cases such as Dosan , Star Properties and Hairis Architects distinguish between the intention to maintain existing use rights and the intention to rely on those rights to effect a change of use.

43 Accordingly, the steps taken by the Applicant in reliance on existing use rights to change the use of the site to a carwash/cafe, such as lodging a development application and a Class 1 appeal to the Court, do not alone prove there has been any abandonment of the existing use rights on the site by the Applicant. It is necessary to consider all the relevant circumstances in this case.

44 Generally the Council has the onus of proving that the Applicant did abandon its existing use rights. The onus shifts in this case to the Applicant as s 107(3) raises a rebuttable presumption of abandonment on the facts, given that the use ceased in July 2003. It is clear from the evidence that the Applicant did not itself wish to continue the use of the site as a service station after May 2003, given the divestment proposal approved the termination of the franchise agreement and the steps taken to give that effect leading up to the contract for sale for a carwash/cafe in November 2005.

Subjective intention to rely on existing use rights

45 The Applicant’s case does demonstrate that there was a subjective intention held by the Applicant to rely on the existing use of service station to enable a change to another prohibited use. The statement by the Applicant’s consultant Mr Caples in the letter of 14 October 2003 to the Council that reliance was placed on existing use rights demonstrates that intention. It was written well before the 12 month period referred to in s 107(3) expired.

46 Mr Richards’ version of the conversation with Mr Byrne on 21 June 2003 that Mr Byrne said there would never be another service station on the site is likely to be correct given that Mr Byrne stated in oral evidence that he could not recall the exact terms of the conversation. Mrs Richards and Mr Yangoyan both confirm Mr Richards’ recollection of that conversation. The conversation between Mr Richards and Mr Byrne on 21 June 2003 is not conclusive of the Applicant’s subjective intentions in relation to its intention to rely on its existing use rights for a change of use of the site.

47 The evidence of Mr Campbell relied on by the Applicant makes clear that its intentions were to rely on the existing use. Mr Campbell’s affidavit evidence was that it was his intention to rely on the Applicant’s existing use rights in making the development application for the carwash/cafe. Mr Hobart’s evidence is that Mr Campbell had the requisite authority from Caltex to act as he did. However, those statements of subjective intention by the Applicant’s consultants do not prevent a finding that the Applicant had abandoned the service station use as an objective fact given other action taken by the Applicant, but should be taken into account.

Contrary objective circumstances

48 A key fact to consider in weighing up the objective circumstances suggesting that the Applicant had abandoned its use of the site as a service station is the decision by the Applicant’s consultant, Mr Campbell, to have the site remediated in accordance with SEPP 55 and take out and destroy the underground petrol tanks. This action prevented the physical use of the site as a service station by the Applicant or anyone else from March 2004. The service station use can only be resumed after a development application is approved by the Council for the restoration of the tanks. The Applicant argued that as all the buildings and bowsers where otherwise intact the premises could still operate as a service station, relying on the characteristics of “service station” identified in Cavallero. Without the underground petrol tanks in place however, I do not agree that the use of a service station could continue given that the sale of petrol was not possible.

49 According to his evidence, Mr Campbell’s decision to have the site remediated to a level suitable for uses permissible in the underlying zoning was part of his usual practice when selling a site for the Applicant. The reason for this was to ensure that there was no future liability for the Applicant under the Contaminated Land Management Act 1997 should a site ultimately be used for a “higher” use. As the Applicant’s liability for remediation continues after sale, it was both economical and reasonable for a site to be remediated prior to sale. The Applicant’s actions under the Contaminated Land Management Act and SEPP 55 are indicative of the Applicant’s desire to reduce that risk of future liability, according to Mr Campbell. That explanation of the Applicant’s actions does not override the practical outcome that the service station use could not continue without a further development consent being obtained. That statement by Mr Campbell that he would revert to the sale of the site as a service station if need be does not overcome the practical effect of the Applicant’s actions.

50 While reliance was placed by the Applicant on statements in the divestment proposal that another operator but not a major brand might wish to continue the operation of the service station, it is the Applicant’s actions that are important given that the divestment proposal was to sell the site for a different use and the Applicant took very active steps on the site to achieve that outcome. The conversation between Mr Richards and Mr Byrne on 21 June 2003 is relevant in this context. Mr Byrne’s statement that there will never be another service station on the site reflected a relevant view within the Applicant at that time. That view is confirmed by the subsequent actions of the Applicant on the site in removing the underground petrol tanks and taking steps to sell the site for a different use, albeit these plans being unrealised to date. Those actions are further objective evidence of abandonment of the use by the Applicant.

51 Of all the cases referred to, it is the circumstances in HairisArchitects which have some similarity to this case. Talbot J in Hairis Architects at [36] stated that a distinction should be drawn between an intention to maintain an existing use on the land to which it attaches and a subjective intention to rely on existing use rights. In that case his Honour noted the respondent’s case (asserting the persistence of existing use rights) was stronger because no relevant use conflicting with the existing use had been physically undertaken on the land since the club use relied on as the existing use ceased in October 1999.

52 In this case, the Applicant has taken action which prevents the resumption by it or anyone else of the use as a service station without a further development consent being obtained. That circumstance must be considered together with its actions in seeking to sell the property for a use other than as a service station, with a contract for sale prepared with the special terms and conditions relied on by the Council (see par 22). Each case must be considered on its own particular facts and I find abandonment has been established. I do not consider a finding of abandonment in this case is in conflict with the findings of Lloyd J in Dosan.

53 I note for completeness that the Council relied on the operation of the Petroleum Retail Marketing Franchise Act 1980 (Cth) particularly s 17 under which the ability of the franchisor to end a franchise agreement is constrained. For example, there was an obligation to give a franchisee the right of “first refusal” in the event of the sale of premises where a franchise was conducted and this did not occur in relation to P Richards Pty Ltd. The Applicant identified that s 17B(4)(b) and (c) applied as the franchise agreement in this case had been extended twice and therefore exceeded nine years. Consequently, if the franchisor did not voluntarily extend the franchise agreement again, s 17 inter alia did not apply. The Petroleum Retail Marketing Franchise Act provisions relied on by the Council are not therefore of assistance in determining the issues before me.

Conclusion

54 In conclusion, the Applicant has not rebutted the presumption of abandonment in s 107(3). On the assumption that the Applicant had existing use rights for a service station, these have been abandoned. As noted at the outset of this judgment the consequence of my finding in my earlier judgment is that this appeal cannot proceed. This matter was referred under Pt 13 r 16(h) of the Land and Environment Court Rules 1996 and should be remitted to the Senior Commissioner for the making of the necessary final order dismissing the appeal and reserving the question of costs.