CITYGATE PROPERTIES PTY LTD and CITY OF BUNBURY - [2009] WASAT 249

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: DEVELOPMENT & RESOURCES

ACT: PLANNING AND DEVELOPMENT ACT 2005 (WA)

CITATION: CITYGATE PROPERTIES PTY LTD and CITY OF BUNBURY [2009] WASAT 249

MEMBER: MR D R PARRY (SENIOR MEMBER)
MR J JORDAN (MEMBER)

HEARD: 18 NOVEMBER 2009 - WRITTEN SUBMISSIONS FILED 30 NOVEMBER 2009, 1 DECEMBER 2009 AND 9 DECEMBER 2009

DELIVERED : 15 DECEMBER 2009

FILE NO/S: DR 296 of 2009

BETWEEN: CITYGATE PROPERTIES PTY LTD
Applicant
AND
CITY OF BUNBURY
Respondent

Catchwords:

Town planning - Development application - Mixed use development comprising showrooms, service industry (cheesecake shop), takeaway food outlet and offices - Bunbury Mixed Business zone - Whether offices should be approved Office is 'D' use - Whether offices are consistent with zone objectives - Whether offices complement, but do not compete with, the City Centre zone in terms of regional primacy of the City Centre - Orderly and proper planning - Promotion and enhancement of Bunbury Central Business District as the prime regional office centre - Weight to be given to region plan and commercial strategy premised on zoning under which offices was 'X' use Local planning policy discourages offices in area of site Discussion of role and purpose of planning policy in planning assessment Cogent and adequate reason to depart from policy

Legislation:

City of Bunbury Town Planning Scheme No 6
City of Bunbury Town Planning Scheme No 7 , cl 1.6.3(a), cl 3.4, cl 4.2.1.4, cl 4.3, cl 5.9.4.1, cl 5.9.4.2.2, cl 5.9.4.5, cl 5.9.4.5.1, cl 5.9.4.5.2, cl 5.9.4.5.3, cl 10.2.1, Sch 1
Planning and Development Act 2005 (WA), s 252(1)

Result:

Application for review allowed
Development approval granted subject to conditions

Category: A

Representation:

Counsel:

Applicant: Mr JCW Skinner
Respondent: Mr CA Slarke

Solicitors:

Applicant: Jackson McDonald
Respondent: McLeods

Case(s) referred to in decision(s):

Adbooth Pty Ltd and City of Perth [2007] WASAT 76
Adbooth Pty Ltd v City of Perth [2007] WASC 218
Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226
Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; (2002) 122 LGERA 433
Fryer and City of Subiaco [2006] WASAT 199
Nicholls and Western Australian Planning Commission [2005] WASAT 40; (2005) 149 LGERA 117
Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472; (2004) 136 LGERA 254
Thio and Western Australian Planning Commission [2009] WASAT 88
Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589; (2001) 115 LGERA 373

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

This case concerned a development application for the construction and use of seven 200 square metre offices at the Homemaker Centre, Bunbury. The City of Bunbury contended that approval of the offices would be inconsistent with orderly and proper planning. In particular, the City of Bunbury argued that the proposed offices exceeded the maximum floor space development standard for offices in the relevant zone, would significantly compete with office floor space in the Central Business District and would be inconsistent with the policy framework.
The Tribunal determined that the proposed office development is consistent with orderly and proper planning and warrants conditional development approval.
The Tribunal held that the maximum floor space provision applies to each office, not to each lot and, therefore, that the proposal complies with that standard. The Tribunal found, on the evidence of an experienced economist and strategic planner, that the proposed development would not compete with the Central Business District in terms of its regional primacy as the principal office centre, but rather, would complement it, because the development would provide for a different market segment to the Central Business District.
The Tribunal addressed each element of the policy framework and discussed the purpose and role of planning policy in planning assessment. It found that provisions of the BunburyWellington Region Plan and the Local Planning Policy Commercial Strategy should be given minimal weight, because they were written and adopted at a time when it was expected that offices would be a prohibited form of development on the site. The Tribunal found that the proposal is not inconsistent with the Interim Greater Bunbury Commercial Centres Strategy, because it would not affect the role of the Central Business District as the primary focus for offices. Finally, while the Local Planning Policy Office Use within the Mixed Business Zone implicitly discouraged office development on the eastern side of Blair Street, where the Homemaker Centre is located, the Tribunal determined that there is a cogent and adequate reason to depart from the policy in the circumstances of this case. This is because there is no relevant distinction, in terms of either character or proximity to the Central Business District, between the part of the Homemaker Centre fronting Blair Street and the opposite side of Blair Street, where offices are not discouraged.

Introduction

The Bunbury Homemaker Centre (Homemaker Centre) occupies a 9.4 hectare allotment (Lot 107 on Deposited Plan 479749) located on the eastern side of Blair Street, approximately 1 kilometre south of the Bunbury Central Business District (CBD). The Homemaker Centre is the largest development of its type in Western Australia and the fifth largest in the country. The Homemaker Centre comprises 50,136 square metres of net lettable area in eight blocks. The tenants of the Homemaker Centre include Bunnings, The Good Guys, The Furniture Spot, Rick Hart and a large number of other generally bulky goods retailers. The Homemaker Centre has an internal (private) street system and pedestrian footpaths and contains at grade parking throughout the Centre.
On 18 May 2009, Citygate Properties Pty Ltd (Citygate), the owner of the Homemaker Centre, lodged a development application with the City of Bunbury (City or Council) for approval under the City of Bunbury Town Planning Scheme No 7 (TPS 7 or Scheme) for the demolition of two buildings in the southwestern part of the Homemaker Centre, near Blair Street, and the construction of a twolevel building comprising three showrooms, a service industry (cheesecake shop) and a takeaway food outlet on the ground level, and seven offices, each with an area of 200 square metres, and common facilities with a combined area of 205 square metres, on the second level (development application). The development application proposes to increase the net lettable area at the Homemaker Centre from 50,136 square metres to 52,361 square metres.
The Homemaker Centre, together with the area to its east and south on the eastern side of Blair Street, and the area across the road to the west of Blair Street and to the south of the CBD, is zoned Mixed Business under TPS 7. The CBD is zoned City Centre under TPS 7. Under cl 4.3 of the Scheme, in the Mixed Business zone, a showroom and the cheesecake shop (which falls within the definition of the land use class 'Industry: Service' in Sch 1 of the Scheme) are each a 'P' use, meaning that they are 'permitted by the Scheme', a fast food outlet is an 'A' use, meaning that 'the use is not permitted unless the local government has exercised its discretion and has granted planning approval after giving special notice', and an office is a 'D' use, meaning that it is 'not permitted unless the local government has exercised its discretion by granting planning approval'. Under the zoning table, therefore, each of the proposed uses in the development application is capable of approval.
On 15 July 2009, the City refused the development application. The City's reasons for refusal related solely to the seven proposed offices on the second level. On 30 July 2009, Citygate sought review by the Tribunal of the City's decision pursuant to s 252(1) of the Planning and Development Act 2005 (WA). The only component of the proposed development that was opposed by the City in the proceeding was the offices.

Issue for determination

In its amended statement of issues, facts and contentions filed on 15 October 2009, the City raised an issue of permissibility in relation to the proposed offices. In particular, the City contended that as the office component of the proposed development is not ancillary to the predominant use of the land and comprises more than 20% of the net lettable area of the development, it is 'not compliant with cl 5.9.4.2.2 of the Scheme, and is incapable of approval pursuant to that clause'.
Clause 5.9.4.2.2 of TPS 7 states as follows:
Notwithstanding any other provision of the Scheme relating to the Mixed Business zone, the local government may permit an office use or development within the zone providing it is, in the opinion of the local government, ancillary to the predominant use of the land and such use is not to comprise more than 20% of the net[t] lettable area of development on the land or each individual business premises.
However, in its closing submissions, the City altered its position and contended as follows:
Clause 5.9.4.2.2 is not intended to apply in circumstances such as those in the present case, and therefore it is not a provision of the Scheme relevant when assessing the merits of the applicant's proposal.
The City's position as expressed in its closing submissions is correct. Clause 5.9.4.2.2 was written as part of the draft Scheme when the zoning table in cl 3.4 prohibited the use of land in the Mixed Business zone as an office. It appears that when the draft Scheme was presented to the Minister for Planning, the Minister required that it be changed to make offices a discretionary use in the zone. Nevertheless, the intention of cl 5.9.4.2.2 is to provide for the approval of incidental offices in the zone, not offices that are not incidental to a dominant land use (as such offices were to be prohibited). While cl 5.9.4.2.2 does not use the word 'incidental', when the clause is read as a whole, it is apparent that it is concerned with an 'incidental use' as defined in Sch 1 of the Scheme to mean:
A use of premises which is ancillary and subordinate to the predominant use.
Clause 5.9.4.2.2 requires that the office use to which it refers be 'ancillary to the predominant use of the land'. It also requires, by imposing a cap of 20%, that the office use be subordinate to the predominant use.
There are also two textual indications that support the City's ultimate position. First, the introductory words of cl 5.9.4.2.2, namely, '[n]otwithstanding any other provision of the Scheme relating to the Mixed Business zone', indicate that the intention of the clause is to make permissible a land use that is otherwise prohibited under the Scheme. Second, the concluding words of the clause, namely 'such use is not to comprise more than 20% of the net lettable area of … each individual business premises', indicates that the clause is concerned solely with incidental office use, not with nonincidental office use. The expression 'each individual business premises' includes each individual tenancy. It would be nonsensical to impose a development standard limiting nonincidental offices to 20% of the net lettable area of each office tenancy. Such offices necessarily occupy the whole of their tenancy.
While the City's final position in relation to this issue is correct, it should have articulated this position and sought leave to amend the amended statement of issues, facts and contentions, prior to the hearing. A large part of the parties' evidence and contentions filed prior to the hearing, and of the evidence and discussion during the hearing, was devoted to an analysis of whether the proposed development satisfies the requirements of cl 5.9.4.2.2 of TPS 7. This effort was wasted.
As the permissibility issue identified by the City in its amended statement of issues, facts and contentions has fallen away, the sole issue for determination can be expressed as follows:
Whether the offices proposed in the development application are consistent with orderly and proper planning having regard to cl 5.9.4.5.3 of TPS 7, the objectives of the Mixed Business zone and relevant planning policies.

Is the proposed office development consistent with orderly and proper planning?

The City contended that the proposed office development is inconsistent with orderly and proper planning. The City presented essentially three arguments against the proposal.
The first argument advanced by the City against the proposed development was that the office component does not comply with the maximum floor space development standard prescribed in cl 5.9.4.5.3 of TPS 7. It is useful to set out the whole of cl 5.9.4.5 of TPS 7 because, in the Tribunal's view, the earlier parts of the clause assist in determining the legislative intention of cl 5.9.4.5.3. cl 5.9.4.5 of the Scheme states as follows:
5.9.4.5.1In the Mixed Business zone the minimum net lettable area of each individual showroom or business premises that will be permitted by the local government is to be 200 [square metres]. The minimum floor area for showrooms and other premises is to apply whether the use has developed under a single lot or under a strata title development.
5.9.4.5.2The above minimum floor area of 200 [square metres] does not apply to lunch bars, home stores and other uses which are specifically restricted to a lower floor area as stated under Schedule 1 'Dictionary of Defined Words' and Expressions or as determined by Council.
5.9.4.5.3.Office floor space in the Mixed Business Zone shall be limited to not more than 200 [square metres] NLA. (emphasis added)
Mr Gary Fitzgerald, a town planner and the City's Senior Manager, Development Services, gave evidence that, since the gazettal of the Scheme, cl 5.9.4.5.3 has been interpreted and applied by the Council as imposing a restriction of 200 square metres on office floor space per lot, rather than per office premises. In effect, the Council has applied the clause as if it read as follows:
Office floor space in the Mixed Business Zone shall be limited to not more than 200 [square metres] NLA (per lot).
Mr CA Slarke, counsel for the City, submitted that the Council's practice reflects the proper interpretation of cl 5.9.4.5.3. Mr Slarke submitted that the practice is consistent with the planning purpose of limiting the extent to which office uses can establish in the zone. In particular, he suggested that the City's construction of the clause would prevent the establishment of office 'clusters' on a single lot.
However, the natural and ordinary meaning of the words of cl 5.9.4.5.3 does not accord with the City's construction. The words indicate that the floor space of each office in the zone is to be no more than 200 square metres net lettable area. There is no basis in the clause or context to insert the limitation 'per lot'. Indeed, the context, and in particular the preceding parts of cl 5.9.4.5, confirm that the clause intends to restrict each office in the zone to no more than 200 square metres, rather than to restrict all office uses on a lot to no more than 200 square metres. Clause 5.9.4.5.1 prescribes a minimum net lettable area of 200 square metres 'of each individual showroom or business premises'. Clause 5.9.4.5.2 excludes lunch bars, home stores and other uses which are specifically restricted to a lower floor area in Sch 1 of the Scheme from the minimum floor area of 200 square metres in cl 5.9.4.5.1. Read in the context of the preceding parts of cl 5.9.4.5, cl 5.9.4.5.3 of the Scheme clearly refers to the net lettable area 'of each individual [office]' in the zone.
The planning purpose suggested by the Council of limiting the extent to which office uses can establish in the zone and, in particular, to prevent office 'clusters' on a single lot, cannot be discerned from cl 5.9.4.5.3 of TPS 7, or the provisions of the Scheme generally. Rather, the legislative intention manifested in cl 5.9.4.5 of TPS 7 is to preclude small (that is, less than 200 square metres net lettable area) business premises, other than offices and uses specifically restricted to a lower floor area in the definition, from being established in the Mixed Business zone, and to preclude large offices (that is, more than 200 square metres net lettable area) from being established in the Mixed Business zone. The area of each of the proposed offices in the development application is consistent with the development standard in cl 5.9.4.5.3 of the Scheme.
The City's second argument in opposition to the proposed office development was that it is inconsistent with objectives of the Mixed Business zone.
Clause 4.2.1.4 of TPS 7 states that the broad objectives of the Mixed Business zone are:
To provide for a wide range of light and service industry, storage, wholesaling, showrooms, trade and professional services and a limited range of other mixed business uses which, by reason of their scale, character, operational or land requirements, are not generally appropriate to be accommodated within the City Centre, Shopping Centre or Industry Zones.
While the use of land for offices is not expressly contemplated in the broad objectives of the Mixed Business zone, an office is a use that is capable of approval in the exercise of discretion within the zone. Furthermore, each of the town planning witnesses who gave evidence, Mr Fitzgerald, Mr Paul Kotsoglo (who gave evidence on behalf of Citygate), and Mr Brian Haratsis (a strategic planner and economist who also gave evidence on behalf of Citygate), agreed that the predominant use of the land comprising the Homemaker Centre is presently showroom/warehouse, including bulky goods, and that the predominant use will not change if the proposed office development were carried out. The proposed offices would constitute less than 3% of the net lettable area of the Homemaker Centre and the total office floor space on the site would be less than 5% of the net lettable area of the Centre. If the proposed development were carried out, the development on the Homemaker Centre site would continue to satisfy the broad objectives of the Mixed Business zone.
Clause 5.9.4.1 of TPS 7 states as follows:
The local government's specific objectives in controlling development within the Mixed Business zone are to provide for a range of development which complements, but does not compete with, the City Centre and Shopping Centre zones in terms of regional primacy of the City Centre (especially as the principal retail, office, civic, cultural entertainment and administrative centre) nor the main retail and related functions of Shopping Centre zones.
Mr Fitzgerald considered that the proposed development would be inconsistent with the specific objectives, because:
The proposed extensive office floor space (1400 [square metres]) would compete to a significant extent, in my view [with the City Centre zone].
Mr Fitzgerald gave two bases for this view. First, he noted that, between 1998 and 2006, while there was an increase in the amount of office floor space across the City, there was a decline in the share of the office floor space in the CBD, from 62% to 57%. While Mr Fitzgerald acknowledged that 'the reasons for this declining trend within the CBD are complex', he said that it seems 'clear that allowing stand alone offices in the Mixed Business zone is likely to reenforce the downward trend [and the trend] will significantly increase'. Second, Mr Fitzgerald observed that 50% to 60% of offices in the CBD are 200 square metres or less in area. Mr Fitzgerald considered it likely, therefore, that the construction of seven 200 square metres offices on the site will result in seven less offices occupied in the CBD.
Mr Haratsis is a strategic planner and economist with more than 20 years' experience in economic analysis of planning proposals. Mr Haratsis explained that, across metropolitan cities and regional centres such as Bunbury, there are three key forms of office accommodation, namely:
•'incentre or city centre office' mainly confined to the Bunbury CBD in smallscale first floor premises or large multitenant office towers;
•'outofcentre campus style office' mainly provided on industrial/business park/mixed use zoning; and
•'outofcentre ancillary office' provided to accommodate management and administrative functions of companies on industrial or mixed use zoning.

Mr Haratsis explained that the 'incentre or city centre office' category generally comprises boutique offices, businesses in a strong growth phase of their life cycle, regional and national businesses, government/community/health organisations and businesses whose client market is within the CBD. Mr Haratsis gave the following evidence:
The proposed development including seven x 200 [square metres] office tenancies will cater for an entirely separate business and tenant market to that of the Bunbury CBD …
The type of tenants likely at the proposed office development are unlikely to be suited to a CBD location as they are not yet large enough to require a regional administrative facility in the CBD or a larger premises on industrial zoned land.
The floor space is likely to accommodate a mix of tenant requirements including office, meeting rooms, storage and is suitable for building and construction related businesses not suited to traditional office floor space.
The type of tenants would exhibit the following characteristics with the following requirements:
aGrowing workforce and storage … requirements
bNo longer able to operate from home or 'back of van'
cRequire easy access for inandout client visitation but still need office for administrative functions and quasistorage purposes
dNot yet large enough to require warehouses or any … direct need to locate on industrial lands
eIndustries with direct linkages to the subject site and bulky goods precinct
In relation to the last characteristic, Mr Haratsis provided a table of 15 categories of tenants for the proposed offices and their respective onsite linkages to existing tenants in the Homemaker Centre.
Mr Haratsis also responded to Mr Fitzgerald's two bases for his view that the proposed office component of the development application is inconsistent with the specific objectives of the Mixed Business zone because it would compete with the CBD. Mr Haratsis explained that the identified local trends of an increase in the amount of CBD office space and a reduction in the proportion of office space within the CBD are entirely consistent with observed trends around Australia. These trends occur because there are limitations in Central Business Districts in terms of the availability and cost of floor space. Mr Haratsis noted that, typically, rents for offices in a CBD market can be up to 50% more than in supporting centres. This is the case in Bunbury, where the average CBD rent for vacant office floor space is $265 per square metre while the average rent in the Mixed Business zone is about $160 per square metre. In relation to Mr Fitzgerald's observation that 50% to 60% of all tenancies in the CBD are 200 square metres or less in area, Mr Haratsis said that the type of tenants who would be attracted to the proposed development would be different to typical CBD tenants and that, in any case, even if all seven tenancies came from the CBD, the ordinary growth in demand for office space in Bunbury would be greater over the period of construction than this number of office premises.
Mr Haratsis concluded that the proposed development would not compete with the City Centre in terms of its regional primacy as the principal office centre, but rather would complement the City Centre. The development would provide office space for 'a completely different market and land use segment that the CBD cannot cater for'. Rather than undermining the CBD, the proposed development would strengthen it, by providing an appropriate location for tenants with different characteristics outside, but close to, the CBD who may also have direct linkages to existing uses in the Homemaker Centre.
The Tribunal prefers Mr Haratsis' evidence over Mr Fitzgerald's evidence, because of Mr Haratsis' significant, relevant experience in relation to economic analysis and because of the effective way in which he was able to refute the two bases offered by Mr Fitzgerald for his opinion. While Mr Haratsis was challenged in crossexamination in relation to a number of issues, he ably responded to each challenge. Furthermore, although it was submitted on behalf of the City that the weight to be given to Mr Haratsis' evidence 'must be considered in light of his unwillingness to acknowledge any point contrary to his client's interest', having observed the crossexamination, Mr Haratsis' unwillingness to acknowledge points made to him in crossexamination was due to the fact that he was correct and confident in his evidence, which was based on extensive experience.
The third argument presented by the City in opposition to the office component of the proposed development was that it is inconsistent with the policy framework. The City contended that all of the relevant policy documents either discourage, or at least do not encourage, the development of office uses in the Mixed Business zone east of Blair Street.
The specific objectives of TPS 7 include:
To assist the effective implementation of regional plans and policies, including the State Planning Strategy, Bunbury - Wellington Region Plan and Industry 2030. (cl 1.6.3(a) of TPS 7)
The Bunbury - Wellington Region Plan (Region Plan) was published in November 1995 and includes the following recommendations to establish a hierarchy and guidelines for commercial centres:
244.Prevent office, restaurant, entertainment and predominantly retail uses (other than large showrooms and bulky goods display) from establishing in the Bunbury Central Service Commercial Area and in similar service commercial areas. …
246.Discourage the ad hoc development or expansion of shops, offices and other commercial uses outside existing and planned commercial centres.
The Homemaker Centre is located in the Bunbury Central Service Commercial Area under the Region Plan. Similarly, the City's Local Planning Policy Commercial Strategy (Commercial Strategy) states as follows in relation to the then proposed Mixed Business zone under what was draft TPS 7:
Further development of retail, office, professional offices, restaurants are to be restricted in the mixed business and other zones to premises where the use lawfully existed at the date of gazettal of the proposed Town Planning Scheme.
However, these provisions of the Region Plan and the Commercial Strategy were written and adopted at a time when offices were proposed to be prohibited in the Mixed Business zone. The provisions were overtaken by the zoning of the site in TPS 7 as made, under which offices are a discretionary use. The above-quoted provisions of the Region Plan and Commercial Strategy are, therefore, to be given minimal weight in the assessment of the proposed development.
The Commercial Strategy sets out the following 'vision':
To promote and enhance the Bunbury Central Business District as the prime retail, office, administration, entertainment, governance and civic centre for the City of Bunbury, the Greater Bunbury Region and the overall South West Region.
Having regard to Mr Haratsis' evidence discussed earlier, the proposed development is not inconsistent with this 'vision'. The proposed office development would not adversely affect the primacy of the CBD as the office centre for the region.
The Interim Greater Bunbury Commercial Centres Strategy (Interim Strategy) was published by the Western Australian Planning Commission (Commission) in April 2007. The Interim Strategy states that:
•the CBD is 'the primary focus for … office … activities' (cl 4.2.2);
•The primary function of the Bunbury Central Mixed Business Area [essentially the Mixed Business zone under TPS 7] is for forms of retail whose floor space requirements make them unsuited to other forms of commercial development' and 'generally, location of office uses … will not be supported in this area' (cl 4.2.3); and
•'the preferred location for major office developments is the Bunbury Central Business District' (cl A3.2.1).
However, these provisions are inconsistent with the statement of 'centre functions' for Strategic Regional Centres (which includes the area comprising the Homemaker Centre) set out at 11 of the Interim Strategy. The centre functions of Strategic Regional Centres include 'major offices of businesses and government' and 'professional offices'. In the City's closing submissions, Mr Slarke sought to explain the inconsistency on the basis that the statement of centre functions at 11 of the Interim Strategy 'is no more than a "cut and paste" of the same Table in Appendix 1 of [State] Planning Policy No 9 Metropolitan Centres Policy Statement for the Perth Metropolitan Region'. However, this submission was not based on any evidence. The Commission should address the clear inconsistency in the Interim Strategy.
In any case, the proposed development is not inconsistent with the abovequoted provisions of the Interim Strategy. On the evidence of Mr Haratsis, the proposed offices would not affect the role of the CBD as the 'primary focus' for offices. While the Interim Strategy states that 'generally, location of office uses … will not be supported' in the Mixed Business Area, it does not seek to preclude the approval of offices in the area. On the evidence presented to the Tribunal, the proposed development is consistent with the Interim Strategy and appropriate on the site, because it is not likely to adversely affect the primacy of the CBD for offices, nor the primary function of the Mixed Business Area, because, as found earlier, the Homemaker Centre would remain characterised as having the predominant use of showroom/warehouse, including bulky goods, and, as Mr Haratsis said, the role of the Mixed Business zone 'could be further strengthened by providing onsite business synergies such as the proposed smallscale office development'.
The City placed particular emphasis on its Local Planning Policy Office Use within the Mixed Business Zone (Office Policy). The Office Policy is very poorly drafted and confusing. It requires the urgent attention of the Council and, ideally, its replacement with a document drafted by the City's solicitors. Nevertheless, it is possible to discern from the Office Policy, as Mr Slarke urged the Tribunal, an implicit discouragement in the Office Policy of office development on the eastern side of Blair Street. This is because Appendix A of the Office Policy is a map showing the policy area divided into 'Strategic Centre: Policy Area Offices within the Mixed Business Zone' (the area zoned Mixed Business on the western side of Blair Street) and 'Strategic Centre: Mixed Business Other' (the area zoned Mixed Business on the eastern side of Blair Street).
Unfortunately, the Office Policy does not state the planning rationale for the division of the policy area into two. Mr Fitzgerald sought to fill this vacuum by suggesting two planning bases for this distinction. First, Mr Fitzgerald suggested that, in contrast to the area to the east of Blair Street, the area to the west of Blair Street 'seamlessly connects to the CBD' to the north via Spencer Street. Second, Mr Fitzgerald suggested that there is a difference in characteristic lot sizes to the east and west of Blair Street. Mr Fitzgerald expressed the opinion that, in consequence of these factors, the western side of Blair Street is more suitable for offices than is the eastern side.
Mr Fitzgerald's evidence does not provide an entirely satisfactory explanation for the implicit discouragement of offices on the eastern side of Blair Street, particularly on the part of the Homemaker Centre proximate to Blair Street. While it is correct that Spencer Street provides access from the western part of the Mixed Business zone to the CBD, part of the area between Spencer Street and Blair Street does not have convenient access to Spencer Street and would more readily access the CBD via Blair Street. Furthermore, as Mr Haratsis observed, there is no discernible difference between the area zoned Mixed Business on the western side of Blair Street and the part of the Homemaker Centre proximate to Blair Street that is directly across the road, in terms of either character or proximity to the CBD. It is also not clear how the difference in characteristic lot sizes is relevant. Although conjectural, the more likely explanation for the apparently different treatment of the two sides of Blair Street under the Office Policy is that suggested by Mr Slarke in his opening, namely that the policy reflects the zoning of the area under the former City of Bunbury Town Planning Scheme No 6 (TPS 6). Under TPS 6, the area to the east of Blair Street was zoned Light Industry, in which offices were prohibited, whereas the area to the west of Blair Street was zoned Commercial C, in which offices were capable of approval.
Clause 10.2.1 of TPS 7 requires the Council (and the Tribunal on review) to have 'due regard' to 'any Local Planning Policy adopted by the local government under cl 2.4', which includes the Office Policy. While planning policy is 'essential to town planning' (Stein LA, Principles of Planning Law, (2008) at 101), it does not have 'a legislative, binding effect' (ibid p 87). The purpose and role of planning policy is to guide or inform the exercise of planning discretion in the assessment and determination of individual planning applications. As Professor Stein explains, 'in the quest for the best planning outcome, policy forms the background for the consideration of a planning application by planning authorities, planning courts, and tribunals', and, indeed, may become 'the primary consideration because it contributes to or fully explains the 'sentiment' of the case: the sense of what is orderly and proper planning in the circumstances' (ibid at 87).
In Adbooth Pty Ltd and City of Perth [2007] WASAT 76 (Adbooth), the Tribunal discussed the function of planning policy in planning assessment at [208] [209] in the following terms:
It is correct, as Mr Caddy said, that the Signs Policy is not the only test to apply to a development application for signage in the City. It is one of the matters to which regard must be had in determining the application. However, having been specifically formulated by the City and adopted under CPS 2 in order to guide the exercise of planning discretion in relation to signage, the provisions of the Signs Policy are material in the proper determination of these proceedings. The Signs Policy is a fundamental element in or a focal point of the decisionmaking process: Fryer and City of Subiaco [2006] WASAT 199 at [56] citing Zhang v Canterbury City Council [[2001] NSWCA 167; (2001) 51 NSWLR 589;] (2001) 115 LGERA 373 at [75].
As Barker J held in Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [[2002] WASCA 276;] (2002) 122 LGERA 433 at [24], the existence of a policy cannot replace the discretion of the decisionmaker in the sense that it is to be inflexibly applied regardless of the merits of the particular case. However, 'the relevant consideration in many applications will be why the "policy" should not be applied; why the planning principles that find expression in the "policy" are not relevant to the particular application'. There is no cogent reason in this case to depart from the precinct plans or the Signs Policy.
The Supreme Court refused leave to appeal from this decision: Adbooth Pty Ltd v City of Perth [2007] WASC 218. In Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226 (Botany Bay) at [24] [33] per Macfarlan JA (with whom Ipp JA, at [1], and Hoeben J, at [39], agreed), the New South Wales Court of Appeal recently endorsed the statement of principle in Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589; (2001) 115 LGERA 373 expressed by Spigelman CJ at [75] (with whom Meagher and Beazley JJA agreed at [99] and [100]), referred to by the Tribunal in Fryer and City of Subiaco [2006] WASAT 199 at [56] and in Adbooth at [208], that planning policy 'has to be considered as a "fundamental element" or a "focal point" of the decision making process'. In Botany Bay, the New South Wales Court of Appeal also agreed, at [35], with the views expressed by McClellan CJ (as he then was) in Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472; (2004) 136 LGERA 254 that 'consistency of decisionmaking must be a fundamental objective of those who make administrative decisions' and that 'that objective is assisted by the adoption of development control plans [planning policies] and the making of decisions in individual cases which are consistent with them' (at [88]). Justice Barker said much the same thing in Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; (2002) 122 LGERA 433 at [24]: 'Good public administration demands no less an approach'.
In light of the Tribunal's earlier analysis, there is a serious doubt as to whether the implicit discouragement of offices on the eastern side of Blair Street under the Office Policy reflects sound town planning principles. However, this application can be appropriately determined on the assumption that this aspect of the Office Policy is based on sound town planning principles, because there is a cogent and adequate reason to depart from the policy in this respect in the circumstances of this case. The cogent and adequate reason is that referred to by Mr Haratsis, namely, that there is no relevant distinction between the area of the Homemaker Centre fronting Blair Street and the properties on the opposite, western side of Blair Street, in terms of either character or proximity to the CBD. In particular, access to the CBD from either side of Blair Street in this location is likely to generally require a motor vehicle travelling along Blair Street (rather than Spencer Street). The two sides of the road in this location appear to be, as Mr Haratsis said, 'one unit'.
It follows that the approval of the proposed offices in the development application would be consistent with orderly and proper planning in the circumstances of this case. The proposal is capable of approval in the exercise of discretion, is consistent with the maximum area development standard in cl 5.9.4.5.3 of the Scheme, would not compete with the City Centre in terms of regional primacy, and would not be inconsistent with the policy framework.
While Mr Fitzgerald expressed the concern that approval of the proposed office development would set an undesirable precedent for further development in the area, in light of the Tribunal's earlier findings, the proposed development is unobjectionable and the issue of adverse planning precedent is not, therefore, a relevant planning consideration: Nicholls and Western Australian Planning Commission [2005] WASAT 40; (2005) 149 LGERA 117 at [74] [75]; Thio and Western Australian Planning Commission [2009] WASAT 88 at [46] [47]. Furthermore, although the area of the Homemaker Centre fronting Blair Street to the north of the proposed building has the same characteristics as the location of the proposed development, the area to the north is fully developed with substantial buildings leased to tenants such as Bunnings and The Good Guys. There is, therefore, not more than a mere chance or possibility that there may be later undistinguishable applications. Precedent is not relevant for this reason as well. In any case, future applications would need to be assessed on their merits. Whereas the proposed development is consistent with the objectives for the Mixed Business zone under TPS 7, it is conceivable that additional office development on the Homemaker Centre may begin to compromise the objectives of the zone, either in terms of impact on the City Centre zone or the character of the Homemaker Centre and wider Mixed Business zone.

Conclusion

Approval of the office component of the proposed development is consistent with orderly and proper planning. In particular, the proposal would not compete with, but rather would complement, the City Centre. The size of the proposed offices is consistent with the Scheme. There is a cogent and adequate reason to depart from the Office Policy insofar as it implicitly discourages offices on the eastern side of Blair Street, namely that there is no relevant distinction between the character and location of the site and the area directly across the road on the western side of Blair Street, where offices are not discouraged by the policy.

It follows that the application for review should be allowed and the decision of the respondent to refuse development approval should be set aside and in its place development approval should be granted to the development application subject to conditions. The conditions were generally agreed between the parties on a without prejudice basis. The City proposed a more detailed condition to ensure that the net lettable area of each office does not exceed the development standard of 200 square metres prescribed by cl 5.9.4.5.3 of TPS 7. For more abundant caution, the City's proposal should be endorsed.

Orders

The Tribunal makes the following orders:
1.The application for review is allowed.
2.The decision made by the respondent on 15 July 2009 to refuse development approval for the construction of a twolevel building comprising showroom, service industry, fast food outlet and office uses at Lot 107 on Deposited Plan 479749 is set aside and in its place a decision is substituted that development approval is granted subject to the following conditions:
a)All development shall be generally in accordance with the approved plans prepared by Robert Nicholson Architect, being Drawing A1 (Site Plan) dated 6 July 2007, Drawing A2 (Floor Plan) dated 16 May 2009 and Drawing A3 (Sections and Elevations) dated 16 May 2009.
b)The various units contained in the premises shown on the approved plans may only be used in accordance with the use class definition from the City of Bunbury Town Planning Scheme No 7 set out below:
Units 1, 2 and 3 Showroom
Unit 4 Service Industry
Unit 5 Fast Food Outlet
Units 6 12 Office.
c)In order to ensure that the net lettable area of any office comprising Units 6 12 in the approval plans does not exceed 200 square metres:
i)No two office units may be let to, or used by, the same tenant, or by related entities as defined in s 9 of the Corporations Act 2001 (Cth);
ii)Every office unit must operate as a separate business premise; and
iii)The 'partitions' shown on the approved plans must not be moved to allow any office to exceed 200 square metres net lettable area.
d)This approval shall expire unless the works hereby authorised have been substantially commenced within two years of 15 December 2009 or within any extended period for which Council has granted written consent. Any application for such consent shall be received within one month prior to the expiration of the development approval.
e)All areas not used for buildings, parking and access being planted, established and reticulated at the time of occupancy, and to be maintained as landscaped areas at all times.
f)The proposal is to incorporate the implementation of elements of the Stormwater Drainage Strategy (29 June Revision D) to the satisfaction of the City Engineer, to include the following:
•additional soakwells;
•connection pipe work to the existing soakwell network; and
•raise kerb and pavement levels to ensure above ground storage containment across the entire lot is achieved.
g)Any alterations or relocation of existing infrastructure within the road reserve shall be carried out and reinstated to the specification and satisfaction of the City Engineer at the developer's expense.
h)Road assets Damage bond of $1,000 shall be paid by the applicant prior to the issue of the building licence as per Council's Local Planning Policy 'Bonds'.
i)Designated footpaths and pram ramps to be provided to ensure the continuity of pedestrian movement.
j)An access ramp is to be provided to the proposed bin store area.
k)The property shall be connected to the Water Corporation sewer.
l)All conditions other than conditions b, c and d must be satisfied prior to the commencement of the uses, the subject of this approval.

I certify that this and the preceding [56] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR D R PARRY, SENIOR MEMBER