Council of the City of Sydney v Base Backpackers Pty Ltd

[2015] NSWLEC 63

Land and Environment Court

New South Wales

Medium Neutral Citation:	Council of the City of Sydney v Base Backpackers Pty Ltd [2015] NSWLEC 63
Hearing dates:	31 March 2015
Date of orders:	01 April 2015
Decision date:	01 April 2015
Jurisdiction:	Class 1
Before:	Preston CJ
Decision:	(1) Dismiss the appeal. (2) Order the applicant to pay the respondent's costs of the appeal.
Catchwords:	APPEAL – appeal against Commissioner’s decision on a question of law – granting of modification to development consent to extend hours of operation and amend a plan of management for a hotel – whether Commissioner failed to take into account development control plan – whether Commissioner misdirected herself and asked herself the wrong question – whether Commissioner adopted and applied policy other than policy in development control plan – Commissioner’s reasons for decision must be read as a whole and considered fairly – Commissioner correctly identified applicable provisions of development control plan – Commissioner did not err on question of law in construction and application of development control plan COSTS – Court not to make order for costs in Class 1 appeal unless fair and reasonable in the circumstances – whether order for costs fair and reasonable in the circumstances – Court to consider all circumstances – appeal limited to questions of law – no examination of evidence or conduct of parties in proceedings below – no circumstances that point against making order for costs – no disentitling conduct by successful party – fair and reasonable that unsuccessful party be ordered to pay costs of successful party
Legislation Cited:	Environmental Planning and Assessment Act 1979 ss 79C(1), 97AA Land and Environment Court Act 1979 s 56A(1) Liquor Act 2007 s 102 Land Environment Court Rules 2007 r 3.7
Cases Cited:	Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226; (2009) 172 LGERA 338 Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 Hemmes Trading Pty Ltd v Council of the City of Sydney [2010] NSWLEC 1124 Mike George Planning Pty Ltd v Willoughby Municipal Council (No 4) [2014] NSWLEC 187 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Tricon Services Group Pty Ltd v Manly Council (No 2) [2011] NSWLEC 253 Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589
Category:	Principal judgment
Parties:	Council of the City of Sydney (Applicant) Base Backpackers Pty Ltd (Respondent)
Representation:	Counsel: Mr P R Clay SC (Applicant) Ms S A Duggan SC with Mr M D Seymour (Respondent) Solicitors: Council of the City of Sydney, Legal Department (Applicant) Back Schwartz Vaughan (Respondent)
File Number(s):	11099 of 2014
Publication restriction:	No
Decision under appeal	Court or tribunal: Land and Environment Court Jurisdiction: Class 1 Citation: Base Backpackers Pty Ltd v Sydney City Council [2014] NSWLEC 1249 Date of Decision: 2 December 2014 Before: Morris C File Number(s): 10808 of 2014

Judgment

The appeal against the Commissioner’s decision

1. The Council of the City of Sydney (‘the Council’) appeals under s 56A(1) of the Land and Environment Court Act 1979 (‘the Court Act’) against the decision and orders of Commissioner Morris on 2 December 2014 to uphold an appeal under s 97AA of the Environmental Planning and Assessment Act 1979 (‘EPA Act’) by Base Backpackers Pty Ltd (‘Base’) to modify a development consent to extend the hours of operation and amend a plan of management for a hotel. The hotel is known as the Scary Canary Hotel and is located at 469-477 Kent Street, Sydney (‘the hotel’).

2. The development consent had a condition of consent that restricted the base trading hours to between 12 noon and 12 midnight, seven days a week (condition 3(a)) but permitted extended trading hours to 3.00am for a trial period of 12 months (condition 3(b)). The trial period had continued by various modifications approved by the Council, with the last trial period expiring on 22 December 2013. Base continued to trade for extended hours under a grace period.

3. Base had applied to modify the consent for a further continuation of the late night trading hours for a trial period of five years (ie, up to 22 December 2018). The Council refused to modify the consent and Base appealed that decision. After a hearing on 13 and 14 November 2014, Commissioner Morris delivered judgment on 2 December 2014 upholding Base's appeal and modifying the consent to permit a further trial period of 12 months for the late night trading hours: Base Backpackers Pty Ltd v Sydney City Council [2014] NSWLEC 1249.

4. An appeal against a commissioner's decision under s 56A(1) of the Court Act is restricted to questions of law. The Council in its summons commencing the appeal identified four grounds that it said were errors on questions of law:

1.   The Commissioner failed to properly take into account the provisions relating to late trading of the Sydney City Development Control Plan (‘the DCP’).

2.   The Commissioner misdirected herself and asked herself the wrong question by asking herself whether there were a sufficient number of repeated and serious incidents arising from poor management that would justify not considering a further trial period for extended hours.

3.   The Commissioner in determining to allow the appeal adopted and applied a policy other than the policy in the DCP.

4.   The commissioner failed to properly construe and apply the DCP.

The applicable DCP provisions

5. Each of these grounds turns on the Commissioner’s construction and application of certain provisions of the Sydney City Development Control Plan 2012 (‘DCP’) dealing with trial periods for late night trading.

6. The hotel is categorised under the DCP as a Category A - High Impact Premises, being a hotel within the meaning of the Liquor Act 2007 that is not designated as a general bar licence (see definition in s 3.15 of the DCP). The hotel is located within a City Living Area under the DCP.

7. Category A Premises within a City Living Area can have base trading hours of 7.00am to 11.00pm but can have extended trading hours of 7.00am to 5.00am (for indoor areas): Table 3.7 Late night trading hours and s 3.15.4(1) of the DCP. Base's extended hours of 12 noon to 3.00am fell within these permitted extended hours for Category A Premises in a City Living Area.

8. Section 3.15 – Late Night Trading Management of the DCP applies to - applications for Category A Premises seeking an extension or renewal of trial trading hours: s 3.15.1(2)(c) and s 3.15.2(2). The objectives of s 3.15 of the DCP include:

(b)   Ensure that late night trading premises will have minimal adverse impacts on the amenity of residential or other sensitive land uses.

(c)   Ensure that a commitment is made by operators of late night trading premises to good management through the monitoring and implementation of robust plans of management.

9. Section 3.15.4 regulates the process for making and determining an application for renewal or extension of trial trading hours. Of critical importance to this appeal is s 3.15.4(10) that establishes a precondition that needs to be satisfied before a renewal or extension of trial trading hours is permitted. It provides:

A renewal or extension of trading hours that are subject to a trial period may only be permitted if Council is satisfied that a late night trading premises has demonstrated good management performance and compliance with a plan of management, or premises management checklist, following the completion of a satisfactory trial period.

10. If the Council determines under s 3.15.4(10) that the trial period has been unsatisfactory, s 3.15.4(11) provides that the trading hours will revert to the base late night trading hours or whatever hours have been approved as the maximum trading hours prior to the commencement of the DCP. For the hotel, this would be 12 noon until 12 midnight.

11. Section 3.15.4(6) permits various lengths of trial periods, depending on whether the trial period sought is the first, second, third or subsequent trial periods. For third and subsequent trials, trial periods may be permitted up to five years: s 3.15.4(6)(c). The hotel had had two previous trials and therefore could apply for a trial period of up to five years.

12. Section 3.15.5.1 requires a plan of management to accompany an application for an existing Category A Premises that seeks a renewal or extension of existing approved trading hours. Section 3.15.5.2 regulates applications for renewal or extension of trading hours that are subject to a trial period. It provides:

At the termination of a trial period, applicants should consider changes in the nature of the operation that have occurred during the operation of a premises that have given rise to unforseen impacts on the amenity of the area or have been the basis for a substantiated complaint made to Council or the State licensing authority against the premises.

In reviewing a Plan of Management at the termination of a trial period, it will be necessary for this information [sic]. This should be in the form of a new Plan of Management which includes a statement of revisions of the previous Plan of Management, if any are required to accompany an application for a renewal or extension of trading hours so that Council can determine whether adequate steps have been taken to resolve any problems that may have arisen from the operation of the premises during a trial period.

The Council will undertake its own review of the level of compliance with the Plan of Management and whether the current operation has been successful on any application to extend a trial period or on any review. The matters considered by Council will include, but not be limited to:

(1)   consideration of complaints to Council and the State licensing authority under the Liquor Act 2007;

(2)   an assessment of inspections by Council Officers during trial periods; and

(3)   consideration of Police complaints.

13. Clause 3.15.3 sets out the matters for consideration in the determination of appropriate trading hours for late night trading premises, including:

(g)   submission of a plan of management that demonstrates a strong commitment to good management of the operation of the business, particularly in relation to managing potential impacts on adjoining and surrounding land uses and premises, as well as the public domain.

The Commissioner’s decision

14. In her reasons for decision, the Commissioner identified the DCP, and in particular s 3.15, as being applicable. The Commissioner quoted the introduction to s 3.15, the objectives of the controls, the matters for consideration in s 3.15.3, and the particular provisions concerning trading hours and trial periods in s 3.15.4 and for monitoring and review of premises during trial periods in s 3.15.5.2 (at [15]-[21]). The Commissioner identified the hotel as Category A Premises and the base and extended hours applicable under Table 3.7 (at [17] and [20]). The Commissioner noted that there were three contentions in the case:

whether there has been a failure to display good management, there are any unacceptable amenity and safety impacts and whether the extension of the trial period would be in the public interest (at [23]).

15. The Commissioner also noted that Base contended that the trial period should be extended for five years but would accept 12 months should the Court consider that there needed to be an assessment of the new matters included in an updated plan of management (‘POM’) (at [23]).

16. The Commissioner summarised the evidence called by the Council and Base (at [24]–[42]). The evidence included documents produced by the NSW Office of Liquor, Gaming and Racing (‘OLGR’) (at [25]), the Council (at [26]), Base (at [32]) and the NSW Police (at [30]) concerning incidents, complaints and inspections of the premises. The Commissioner noted that there was much debate as to whether the incidents and the actions taken by Base "constitute good management and appropriate responsiveness" (at [31]) or "good management practices" (at [34]).

17. The Commissioner summarised the evidence of Mr Rippingill, a town planner called by Base, that the hotel was well managed, although there had been a failure to effectively implement the current POM, and his proposed amendments to update the POM (at [29], [35] and [38]).

18. The Commissioner summarised the evidence of Mr Saville, the Council's Licensed Premises Coordinator, and Mr Smith, its Late Night Compliance Officer, that "the failure to successfully implement the provisions of the POM and comply with the conditions of consent demonstrates that there is an issue at the management level of the premises" (at [36]). The Commissioner noted that Mr Smith and Mr Saville had made comments on the further amendments to the updated POM proposed by Mr Rippingill that would address their concerns. With these further amendments, the Commissioner observed that:

all experts agreed that, provided it was properly implemented at all times, the procedures were such that they would address the main issues of concern, those being queuing, patron numbers, role of security, management of footpath areas in the vicinity of the site and provision of additional CCTVs (at [38]).

19. The Commissioner also summarised the evidence of Ms Elbotaty, a town planner called by the Council, that:

the response of those who manage the premises has not been adequate in terms of reducing or mitigating the ongoing breaches identified during the trial period nor has it satisfactorily responded to management and operational issues and as such has consistently demonstrated poor management performance throughout the trial and grace periods. For that reason, she says the privilege of extended hours of operation should not be accorded to the premises until such time as the applicant can demonstrate the ability to display good management (at [39]).

20. The Commissioner noted that Ms Elbotaty also considered that the fact that OLGR has issued correspondence under s 102 of the Liquor Act 2007 demonstrated poor management as good management would not allow promotions of the type subject to the investigations to occur. Ms Elbotaty agreed that, as soon as management was advised of the views of OLGR, it ceased the promotions and complied with the directions given (at [40]).

21. In relation to the length of the trial period, if one were to be permitted, the Commissioner noted the different views of Mr Rippingill and Ms Elbotaty (at [41]).

22. Finally, the Commissioner summarised the evidence of the Council officers as being that:

management has not competently demonstrated good management. For that reason, they consider it would not be in the public interest to approve a further continuation of the trial period for premises that has shown ongoing disregard for their obligations (at [42]).

23. Having set out the evidence, the Commissioner then made findings and drew conclusions (at [43]–[59]). The Commissioner started this consideration by saying:

Having regard to the evidence, it is clear that the operation of the Scary Canary Hotel has not been without incident. Similarly, there is evidence that there have been breaches of both the conditions of consent, in relation to capacity of the venue and compliance with the POM. Having regard to this evidence with the DCP as a focal point of my consideration, it is necessary to determine whether any extension to the extended hours of operation should be granted (at [43]).

24. The reference to the DCP as a focal point for her consideration was evidently a reference to the admonition by the Court of Appeal in Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 51 NSWLR 589 at [75] that a DCP has to be considered as a "fundamental element" or a "focal point" of the decision making process. The DCP to which the Commissioner referred was evidently s 3.15 – Late Night Trading Management of the DCP that the Commissioner had referenced and quoted earlier. This section contained the provisions requiring an applicant to demonstrate "good management".

25. The Commissioner then addressed what constituted "good management" under the provisions of the DCP. Both the Council and Base had referred the Commissioner to a prior decision of a commissioner of this Court that considered the concept of "good management" under a prior DCP of the Council. The Commissioner referred to this decision saying:

Whilst Brown C in Hemmes Trading Pty Ltd v Council of the City of Sydney [2010] NSWLEC 1124 considered the provisions of the council's 2007 developed control plan, similar provisions have been incorporated into the 2012 DCP. In Hemmes the Commissioner considered the requirements of the DCP, what constitutes good management and formed a decision as to whether or not good management has been demonstrated. In addition, he looked at whether there were any adverse impacts, particularly to residential uses.

In assessing what is good management, at [71] he states:

…the test of good management includes how management responds at the time of the incident and how management responds through ongoing or revised management practices. Conversely, poor management may include a large number of unacceptable incidents or whether there was a consistent pattern of unacceptable incidents (at [43]–[44]).

26. The Commissioner then turned to address the question of whether there had been good management demonstrated by referring to the three main issues that had been identified through the evidence:

the issue of overcrowding, the management of persons awaiting access to the premises and compliance with the POM (at [45]).

27. The Commissioner addressed these three issues as follows:

46.   It is apparent that the 340 person capacity of the premises has been breached on occasions however, the extent of that breach is unclear, as is the evidence in relation to the numbers of persons on site at the time of inspections. Similarly, there have been issues associated with the length of queue of persons seeking entry to the site. At other times, the premises were found to be operating in full compliance with the POM and consent conditions.

47.   Based on the evidence, whilst there has been breaches of capacity and consent conditions, there has been a response from management, albeit, on occasions not immediately, for example, the removal of the cash collection booth from the footway. When advice was received from the OLGR regarding promotions, immediate cessation of those events occurred.

48.   The Court notes that no complaints have been made to the Council, Police or OLGR during the trial period, other than one unsubstantiated complaint to the council. The school was notified of the application and did not lodge a submission. A letter of support from the owner of an adjoining convenience store for the extended trading hours and the associated security that [it] provides was tendered as Exhibit B.

49.   I am satisfied that the operation of the premises does not result in any adverse impacts on the amenity of residential or other sensitive land uses. The amenity issues raised by the council are primarily associated with the problems caused from the lack of an orderly queue management system and the difficulties that presents pedestrians attempting to pass the site. The applicant proposes to amend the POM to address this issue and also limit the length of the queue. Council officers agreed with the amendments proposed and advised that, if implemented, it would address their concerns.

50.   In relation to the capacity of the venue being exceeded, the evidence shows that this has occurred on a number of occasions and that at times there was no count undertaken by staff responsible for ensuring compliance with the consent condition. The applicant now seeks to address this issue through the installation of a computerised counting system. The council officers have briefly reviewed documentation provided by the applicant and consider that it would be suitable if it delivers what the applicant says it will. To have a system that is more reliable than manual counting would be desirable and this has been agreed by all parties.

51.   The DCP recognises the need for the POM to be a robust document and, whilst the initiative of management to address the issues identified by the council and police is linked to this application rather than ongoing review, I consider that it is appropriate to allow a 12 month trial period to assess whether it will address the issues of overcrowding and queue management.

52.   Having regard to the evidence and the fact that the premises is a licensed premises that caters for up to 340 persons, I am satisfied that management has responded to issues when raised by the council and OLGR. I acknowledge the response to council's issues has not be consistent or timely on occasions and do not consider that management has been to a high standard, however, based on the evidence before me, I am not satisfied that there are a sufficient number of repeated and serious incidents arising from poor management that would justify not considering a further trial period for extended hours (at [46]–[52]).

28. There are a couple of points to note about the language used by the Commissioner in this discussion. First, the conclusion at [49] that the operation of the premises had not resulted in any "adverse impacts on the amenity of residential or other sensitive land uses" picks up the language of objective (b) of s 3.15 of the DCP. Second, the reference in [51] to the DCP recognising the need for the POM to be a "robust" document, is a reference to objective (c) of s 3.15 that operators of late night trading premises should have a commitment to good management through the monitoring and implementation of "robust" plans of management.

29. The Commissioner continued after this discussion to address the issue that had been raised by the applicant of the length of any trial period that might be permitted. The Commissioner said:

53.   The police have asked to be called more regularly than occurs at the present time and the amended POM provides for this. I accept that it is Constable Gyde's view that the trial should not be extended however I consider that the changes that would be made through the amended POM have considerable merit and are worthy of a shorter trial period. Management of the 1.30am lockout is also a factor that needs to be considered during the trial period.

54.   In the event that the changes proposed to the POM do not address the concerns of the council and the police, or are not fully implemented by management, there would be no reason to provide a further extension of the trial period and the hours should revert to the base hours.

55.   It is incumbent on management to continue to address issues associated with the POM and work with the council to address any issues that may arise. It needs to ensure that the POM is a robust document that addresses change. It is not appropriate to review the document at the end of a trial period and address concerns at that stage, rather, management should take the lead from the council officers who attempt to work with operators rather than go down the path of penalties. If something is not working then it needs to be discussed and to do so would demonstrate a commitment to good management.

56.   The DCP also requires that one of the matters to be considered is that the premises do not operate exclusively during late night hours. I am satisfied that the premises provide facilities for workers during the day and attract a different clientele at night. To do so is consistent with the DCP. So too is the fact that the site is located in close proximity to Town Hall Railway Station and the Nightrider Bus Service.

57.   For the reasons outlined above, I am not satisfied that management has demonstrated a sufficient responsiveness to justify the 5 year extension sought however, I do see that there is merit in the changes that are proposed through to amendments made to the POM. (at [53]–[57]).

30. The Commissioner concluded:

58.   The council has reviewed that document with the final version filed with the Court on 28 November 2014. Accordingly, it is appropriate to allow a 12 month extension to the extended hour trial period. That trial should not commence until such time as the computerised counter and identity scanners are installed and the CCTV system is upgraded as described to the Court by Mr Rippingill. The applicant should advise the council when that work has been completed and the trial period would start when the council is satisfied that it is operational.

The Council’s submissions that the Council erred

31. The Council submitted that the Commissioner was required by s 3.15.4(10) of the DCP to consider the question of whether, and be satisfied that, the hotel "has demonstrated good management performance and compliance with a plan of management". However, the Council submitted, the Commissioner "at no point addressed that question" and "misdirected herself". The Council submitted that the Commissioner’s error is exposed in the reasons for a judgment in three ways.

32. First, in [51], the Commissioner said that she considered that it was appropriate to allow a 12 month trial period to assess whether the amended POM proposed by Base will address the issues of overcrowding and queue management. The Council submitted that the Commissioner had identified failures in management but rather than addressing the question posed in s 3.15.4(10) of whether the hotel had demonstrated good management performance and compliance with the plan of management in the past trial period, the Commissioner considered it appropriate to allow a further trial period to assess whether the failures will be addressed.

33. Secondly, in [52], the Commissioner acknowledged that the hotel’s response to the Council's issues "has not been consistent or timely on occasions" and she did "not consider that management has been to a high standard," but then said that she was "not satisfied" that there are a sufficient number of repeated and serious incidents arising from poor management that would justify not considering a further trial period for "extended hours". The Council submitted that, in so finding, the Commissioner did not ask herself the question required by s 3.15.4(10) of whether good management was demonstrated but instead asked the question of whether or not poor management had resulted in serious incidents on so many occasions as to disqualify Base from having a further trial period.

34. Thirdly, in [53] to [57], the Commissioner deliberated on whether the management of the hotel has demonstrated sufficient responsiveness to justify the five year trial period sought. In [54], the Commissioner noted that if the amended POM proposed by Base did not address the concerns of the Council and the Police, or are not fully implemented by the hotel's management, there would be no reason for a further period of extended hours at the conclusion of the new 12 month trial period. In so doing, the Council submitted, the Commissioner was permitting a further trial period in which the hotel could demonstrate good management rather than addressing the question in s 3.15.4(10) of whether the hotel had demonstrated good management in the trial period that had been completed.

35. In [57], the Commissioner said she was not satisfied that the hotel's management had demonstrated sufficient responsiveness to justify the five year trial period sought by Base but nevertheless concluded that a one year trial period should be permitted. The Council submitted that the Commissioner found that "management was bad enough for it not to receive a five year period of extended trading but (impliedly) not so bad as to not have a one year period of extended trading hours."

36. The Council noted that while it was open to the Commissioner to decide the length of a trial period, before doing so the Commissioner first had to ask and answer the question of whether there had been good management. The Council submitted that the Commissioner did not do this but instead addressed the question of the length of the trial period without first addressing the question of whether there was good management and which would therefore entitle the premises to a further period of extended hours.

37. The Council submitted that in failing to address the question required by s 3.15.4(10) of the DCP and addressing a different question, or in substituting a different policy to that in the DCP for permitting a further trial period for extended trading hours, the Commissioner failed to take into consideration the DCP in the manner required by s 79C(1)(a)(iii) of the EPA Act: Zhang v Canterbury City Council [76]: Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226; (2009) 172 LGERA 338 at [32]; Tricon Services Group Pty Ltd v Manly Council (No 2) [2011] NSWLEC 253 at [20].

Base’s submissions that the Commissioner did not err

38. Base submitted that the Commissioner did not ask herself the wrong question or substitute a different policy to that in the DCP. Base submitted that the Commissioner knew from the outset that the question she had to ask under s 3.15.4(10) of the DCP was whether Base had demonstrated good management performance and compliance with a plan of management and her reasons for judgment involved answering that question.

39. The Commissioner identified and set out the relevant provisions of s 3.15 – Late Night Trading Management and the particular control in s 3.15.4(10). The Commissioner expressly noted that these provisions of the DCP must be a focal point of her consideration (at [43]).

40. The Commissioner expressly noted that one of the contentions in the case was whether there had been a failure to display "good management" (at [23]) and summarised the evidence of incidents and actions taken in response in terms of whether they constituted "good management" (for example at [31], [34], [39], [40] and [42]).

41. The Commissioner expressly addressed the question of what constitutes good management (in [43] and [44]). As the parties had suggested that she should do, the Commissioner referred to the consideration of Brown C in Hemmes Trading Pty Ltd v Council of the City of Sydney as to what constitutes good management under the Council's former DCP dealing with late night trading management. She quoted an extract from [71] of Brown C's judgment in Hemmes. Both the Council and Base had submitted to the Commissioner that she would be assisted by Brown C's discussion of what constitutes good management for the purposes of the DCP.

42. In the extract quoted by the Commissioner, Brown C suggested a positive way (what is good management) and a negative way (what is not good management) of ascertaining what constitutes good management. The positive way had two components: first, "how management responds at the time of the incident," and, secondly, "how management responds through ongoing or revised management practices." The negative way - what may not constitute good management but rather constitute poor management - also had two components: first, "a large number of unacceptable incidents" and, secondly, "whether there was a consistent pattern of unacceptable incidents".

43. Base submitted the Commissioner adopted and applied these two ways of ascertaining whether the hotel had demonstrated good management. As to the positive way, the Commissioner identified and analysed the evidence of the incidents that had occurred in the trial period and the hotel’s response at the time of the incident and through ongoing or revised management practices (in the Commissioner's discussion of the evidence (at [24]-[42]) and in her findings (at [43]-[52])). As to the negative way, the Commissioner drew upon her discussion of the incidents that had occurred in the trial period and made a finding of fact that there were not "a sufficient number of repeated and serious incidents arising from poor management that would justify not considering a further trial period for extended hours" (at [52]).

44. Base submitted that the Commissioner in the latter clause of this last sentence in [52] was referring to the structure and effect of s 3.15.4(10) and (11) of the DCP. If the Commissioner had found that there had been a sufficient number of repeated and serious incidents arising from poor management, then the Commissioner would have determined that the trial period had been unsatisfactory and, by operation of s 3.15.4(11), the trading hours would revert to the base late night trading hours or previously approved maximum trading hours. The Commissioner would not have been permitted to grant a further trial period for extended trading hours under s 3.15.4(10).

45. However, the Commissioner in fact found that there had not been a sufficient number of repeated and serious incidents arising from poor management, so that the Commissioner did not determine that the trial period has been unsatisfactory under s 3.15.4(11), and hence the Commissioner was permitted - was justified - in considering a further trial period for extended hours under s 3.15.4(10).

46. Base submitted, therefore, that what the Commissioner was saying and doing in [52] was consistent with asking the questions and applying the tests required under s 3.15.4(10) and (11) of the DCP and was not substituting a different question or test.

47. Base submitted that the Commissioner’s approach of considering whether there was a sufficient number of repeated and serious incidents was not outside what is proper consideration of what constitutes "good management" for the purposes of cl 3.15 of the DCP. The DCP does not define the term "good management". The term bears its ordinary meaning. When a statute uses words according to their ordinary meaning and it is reasonably open to hold that the facts of the case fall within those words, the question as to whether they do or do not is a question of fact: Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 395.

48. Base submitted that the Commissioner’s approach, adopting the approach suggested by Brown C in Hemmes, involved holding that certain facts fell within or without the term "good management": an insufficient number of repeated and serious incidents may still constitute good management, but a sufficient number of repeated and serious incidents may not constitute good management.

49. Base submitted that the Commissioner’s approach involved making an evaluative judgment on the question of whether there was "good management" or whether the trial period had been "unsatisfactory". That process of assessment and formation of a judgment involved questions of fact, not law, and involved no misdirection regarding s 3.15.4(10) of the DCP.

50. Base submitted that the Commissioner’s discussion in [53] to [57] was a separate and subsequent exercise to the earlier exercise of determining whether the premises had demonstrated good management. The Commissioner had determined by the end of [52] of her reasons for judgment that the hotel had demonstrated good management and hence she was justified in considering a further trial period for extended hours. The second exercise was to determine the length of the trial period, whether the five year period sought by Base or a lesser 12 month period.

51. Base submitted that the Commissioner did not conflate the two exercises: first, determining whether good management had been demonstrated so as to enliven the power to grant a further trial period for extended hours and, secondly, exercising the discretionary power to determine the length of any further trial period.

52. Base submitted that the first exercise looks at the past: whether late night trading premises has demonstrated good management performance and compliance with a plan of management. But the second exercise looks forward and not only back: whether adequate steps have been taken to address problems that may have arisen and to manage potential problems that may arise in the future.

53. Base submitted, therefore, that the Commissioner’s discussion in [53]–[57] about the amended POM and its ability to address problems that might arise during any further trial period did not reveal that the Commissioner addressed the wrong question. This discussion was not concerning the first exercise of whether good management had been demonstrated so as to justify considering a trial period, but rather the second exercise of the length of any trial period that should be permitted. The factors the Commissioner was considering in the second exercise included those in s 3.15.5.2, s 3.15.3(g) and objective (c) of s 3.15 of the DCP.

54. In summary, Base submitted that, on a fair reading of the Commissioner’s reasons for judgment, the Commissioner did not ask a question or apply a test different to the question or test required under the DCP. The present case is different to Zhang v Canterbury City Council, Botany Bay Council v Premier Customs Services Pty Ltd and Tricon Services Group Ltd v Manly Council where the decision-maker applied something different to what was required under the applicable DCP.

Commissioner did not err on a question of law

55. I do not consider that the Council has established that the Commissioner erred on a question of law by failing to consider the provisions relating to late night trading in the DCP, misdirecting herself as to those provisions, asking the wrong question under those provisions, or adopting and applying a policy other than the policy in the DCP.

56. The Council's argument was that these errors on questions of law were manifest in the Commissioner’s reasons for decision. Particular attention was given to the Commissioner expressing her findings using some words or terms not found in the DCP (such as "poor management" or "repeated and serious incidents") and not expressing her findings using the particular formulations of words in the DCP (such as those in s 3.15.4(10)). The Council also juxtapositioned statements in different parts of the Commissioner’s reasons to establish that the Commissioner erred in her approach.

57. The Commissioner’s reasons for decision must be read as a whole and considered fairly. A verbal slip or infelicity of expression does not necessarily warrant drawing an inference of an error of law: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 291 and Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 and 368.

58. On this fair reading of the Commissioner’s reasons as a whole, I consider the Commissioner has not been shown to have erred in her approach. I accept the submissions of Base as to how the Commissioner approached and went about the tasks of determining whether there had been good management demonstrated and whether a further trial period for extended trading hours should be permitted.

59. The Commissioner correctly identified the applicable provisions relating to late night trading in the DCP (at [15]–[21]) and the question that she had to answer in s 3.15.4(10) of the DCP (at [19]). The Commissioner identified this question under s 3.15.4(10) as the first contention in the case: whether there has been a failure to display good management (at [23]). The Commissioner identified as a separate question the third contention in the case of whether the extension of the trial period would be in the public interest. This third contention involved determining the length of any trial period that might be permitted, whether five years or 12 months (at [23]).

60. The Commissioner’s formulation of the contentions in the case and the manner in which she dealt with the contentions reveals that the Commissioner was aware that the second question of the length of the trial period only arose if the Commissioner was satisfied, in answer to the first question, that there had been displayed (demonstrated) good management.

61. The bulk of the Commissioner’s reasons deal with the first question of whether the hotel had demonstrated good management. The Commissioner's summary of the evidence called by the Council and Base referred to and summarised the debate about whether the incidents that had occurred in the trial period and their seriousness, and the actions taken in response and their timeliness and appropriateness, constituted good management (for example at [31], [34], [35], [39], [40] and [42]).

55. The Commissioner commenced her section on findings with the self-admonition that the DCP is to be the focal point of her consideration in determining whether any extension to the trial period for extended hours should be granted (at [43]). The particular provision of the DCP that the Commissioner believed must be the focal point of her consideration was that requiring determination of whether or not good management has been demonstrated (in s.3.15.4(10) of the DCP).

56. This is revealed by the Commissioner, immediately after her self admonition, referring to Brown C's consideration of the similar provisions in the Council's former DCP dealing with late night trading hours as to what constitutes good management and forming a decision as to whether or not good management has been demonstrated (at [43]).

57. The Commissioner quoted part of what Brown C said may or may not constitute good management - the positive way in which management responds at the time of incidents and through ongoing or revised management practices, and the negative way where there is a large number of unacceptable incidents or a consistent pattern of unacceptable incidents (at [44]). The Commissioner then identified three issues in the evidence relevant to determining whether there has been good management: overcrowding, management of persons awaiting access to the premises, and compliance with the POM (at [45]).

58. The Commissioner’s analysis in [46] to [52] of her reasons addressed the incidents concerning these three issues and the timeliness and appropriateness of the hotel’s response to the incidents. The evident purpose of such analysis was to do what she had said in [43] needed to be done of forming a decision as to whether or not good management has been demonstrated.

59. The Commissioner’s discussion of the third issue of compliance with the POM included what she said in [51] of her reasons. The Council seized upon the language used by the Commissioner in this paragraph as its first indication that the Commissioner had asked the wrong question. I do not agree. The Commissioner was still answering the correct question that she had raised earlier of whether the hotel had demonstrated good management. One of the ways in which good management could be demonstrated was how the hotel responded through reviewing and revising its management practices, including the POM. The Commissioner’s reference to the need for a POM to be a robust document picks up the language of objective (c) of s.3.15 of the DCP that operators of late night trading premises need to commit to good management through the monitoring and implementation of robust plans of management.

60. The Commissioner brings her discussion of the question of whether the hotel has demonstrated good management to a conclusion in [52]. She does so utilising the two ways in which Brown C had said in Hemmes that good management may or may not be demonstrated: the positive way of management's response to incidents and issues raised and the negative way of a large number of incidents.

61. As for the positive way, the Commissioner was satisfied about how and when the hotel had responded to issues raised by the Council and OLGR - the response had not been consistent or timely on occasions and management had not been to a high standard, but nevertheless it was sufficient. As to the negative way, the Commissioner says she was not satisfied that there had been a sufficient number of repeated and serious incidents arising from poor management that would justify not considering a further trial period for extended hours. This is a finding that the number of incidents of a particular kind were not so numerous as to demonstrate that there had not been poor management, this being the corollary of good management.

62. It is true that a finding that the number of incidents has not been so numerous as to demonstrate poor management does not necessarily mean that good management has been demonstrated. This negative way of addressing the question of whether good management has been demonstrated is only helpful if decided in one way; that the number of incidents are so numerous as to demonstrate poor management.

63. If the Commissioner had decided that way, then she could not have been satisfied that the hotel had demonstrated good management. But this does not mean that the Commissioner asked the wrong question. She was still asking the question of whether the premises had demonstrated good management. Examining the number of incidents of a certain kind was one way in which the Commissioner answered that question.

64. I also consider that there is force in Base's submission that the Commissioner’s use of the word "justify" in [52] was consistent with the Commissioner’s understanding that she needed to be satisfied about the matters in s 3.15.4(10) before she could consider a further trial period for extended hours. This accorded with the two questions the Commissioner had earlier said were contentions in the case: the first of whether good management had been displayed or not and the second of whether there should be an extension of the trial period and if so for what length. The number of repeated and serious incidents arising from poor management was relevant to the first question.

65. A sufficient number of such incidents may be evidence that good management has not been demonstrated, in which event the Commissioner would not be justified in considering a further trial period. Section 3.15.4(10) would not permit a further trial period for extended hours and s 3.15.4(11) would operate. If, however, the Commissioner was satisfied that there were not a sufficient number of such incidents, then the Commissioner would be justified in considering a further trial period for extended hours. Section 3.15.4(11) would not apply and s 3.15.4(10) would operate to give the Commissioner a discretion to permit a further trial period for extended hours.

66. I therefore do not accept the Council's submission that the language in which the Commissioner expressed herself in [52] was a second indication that the Commissioner misdirected herself or asked herself the wrong question under s 3.15.4(10).

67. I also do not accept the Council's submission that the Commissioner's consideration of the length of the trial period in [53]-[57] is a third indication that she misdirected herself or asked the wrong question. In these paragraphs of her reasons, the Commissioner was no longer answering the first question of whether good management had been demonstrated. That question had been answered in the preceding discussion in [43] to [52], culminating with the conclusion in [52].

68. Having found that she was satisfied that there had been good management, the Commissioner moved on to address the second question of whether permitting a further trial period for extended hours was in the public interest and, as part of that question, addressing what should be the length of the trial period. I accept Base’s submissions concerning the Commissioner's approach in this section of the Commissioner's judgment.

69. The Commissioner was entitled to not just look back at what had occurred in the trial period that had concluded, but also could look forward to determine the hotel management's commitment to managing potential incidents and impacts that might arise in any future trial period. This is consistent with s 3.15.5.2, s 3.15.3(g) and objective (c) of s 3.15 of the DCP.

70. For these reasons, the Council has not established that the Commissioner erred on a question of law in her consideration of the late night trading provisions of the DCP.

71. The Council's appeal should therefore be dismissed.

Costs of the appeal

79. Base applied for its costs if the appeal is dismissed. The Council submitted that the Court should not make an order for costs. The Council noted that the appeal is in Class 1 of the Court's jurisdiction and that r 3.7 of the Land Environment Court Rules 2007 (‘Court Rules’) applies, but under rule 3.7(2) the Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include those in r 3.7(3) including:

(a)   that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such a question:

(i)   in one way was, or was potentially, determinative of the proceedings, and

(ii)   was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings.

80. The Council relied on the decision in Mike George Planning Pty Ltd v Willoughby Municipal Council (No 4) [2014] NSWLEC 187. In that case Pepper J disagreed (at [32]) with the submission of the successful party in that s 56A appeal that:

once it could be demonstrated that the appeal involved as a central issue a question of law, or of mixed fact and law, which, as in the present appeal, was actually determinative of the proceedings, this was sufficient to render an order for costs fair and reasonable (at [31]).

81. The Council submitted that that decision establishes that it is insufficient to show that the appeal falls within the circumstance in r 3.7(3)(a). The Council submitted that no other circumstance has been established that would make it fair and reasonable to make an order for costs.

82. I consider that it is fair and reasonable in the circumstances of this appeal to make an order for costs. It is true that this appeal under s 56A(1) of the Court Act is in Class 1 of the Court's jurisdiction and that therefore r 3.7 of the Court Rules applies. Hence, r 3.7(2) operates and the Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. The circumstances in which the Court might consider the making of a costs order is fair and reasonable include the circumstance in r 3.7(3)(a).

83. It is true that the proposition put by the successful party in Mike George Planning Pty Ltd v Woollahra Municipal Council was too bold. The mere fact that an appeal falls within the circumstance in r 3.7(3)(a) is not determinative of how the discretion under r 3.7(2) to make an order for costs is to be exercised.

84. The determination under r 3.7(2) of whether the making of a costs order is fair and reasonable requires the Court to consider all of the circumstances, not just whether the proceedings fall within the circumstance in r 3.7(3)(a). There may be other circumstances that suggest that the making of a costs order would not be fair and reasonable in the circumstances. These could include unreasonable conduct by the party that has been held to be ultimately successful on the appeal, such as in the circumstances leading up to the commencement of the appeal or in the conduct of the appeal, including arguments made in the appeal. There may be other disentitling conduct of the party that has been ultimately held to be successful on the appeal. The Court needs to consider all of the circumstances before determining whether it is fair and reasonable to make a costs order.

85. This appeal was, of course, one limited to questions of law. It involved no examination of the evidence or the conduct of the parties in the proceedings below. This particular appeal turns on an analysis of the Commissioner’s reasons for judgment to ascertain whether or not the Commissioner had misdirected herself or asked herself the wrong question concerning the provisions of the DCP. The appeal falls within the circumstance in r 3.7(3)(a). There are no other circumstances that would point against making a costs order. There is no conduct of the successful party, being the respondent to the appeal, that would disentitle it from costs or would suggest that the making of a costs order in its favour would not be fair and reasonable.

86. I consider that in the circumstances of this appeal, it is fair and reasonable that there should be an order for costs that the Council, who has been unsuccessful in its appeal against the Commissioner’s decision on questions of law, pay the costs of the appeal of Base, who has been successful in defending the appeal.

Orders

87. I make the following orders:

1. Dismiss the appeal.

2. Order the applicant to pay the respondent's costs of the appeal.

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Decision last updated: 27 April 2015