Dexus Wholesale Property Ltd v Townsville City Council
[2013] QPEC 14
•30 April 2013
PLANNING & ENVIRONMENT COURT
OF QUEENSLAND
CITATION:
Dexus Wholesale Property Ltd v Townsville City Council and Ors [2013] QPEC 14
PARTIES:
DEXUS WHOLESALE PROPERTY LTD
(appellant)v
TOWNSVILLE CITY COUNCIL
(respondent)and
STOCKLAND DEVELOPMENT PTY LTD
(co-respondent)and
CHIEF EXECUTIVE, DEPARTMENT OF TRANSPORT AND MAIN ROADS
(co-respondent by election)FILE NO/S:
4580/2011
DIVISION:
Appellate
PROCEEDING:
Adverse submitter appeal
ORIGINATING COURT:
Brisbane
DELIVERED ON:
30 April 2013
DELIVERED AT:
Brisbane
HEARING DATE:
12-15, 19 March 2013
Site Inspection: 11 March 2013
JUDGE:
Robin QC DCJ
ORDER:
Appeal dismissed, subject to imposition of a condition delaying commencement of new uses
CATCHWORDS:
Sustainable Planning Act 2009 s 314, s 326 – rival shopping centre owner’s appeal against approval of large expansion of a shopping centre – whether economic need for the proposal – whether planning need for it or “public need” – appellant’s economic expert’s analysis was that important retail components of the proposal would not achieve “benchmark” performance levels for several years, so long that it would be inappropriate to grant approval subject to a condition deferring “establishment” – whether proposal “too big, too soon” – whether conflict with planning scheme or with a preliminary approval controlling development on the site which varied the effect of the Planning Scheme – City of Thuringowa Planning Scheme 2003
COUNSEL:
G Gibson QC with N Kefford for the appellant Dexus Wholesale Property Ltd
S Ure for the respondent Townsville City Council
D R Gore QC with B D Job for the co-respondent Stockland Development Pty Ltd
SOLICITORS:
Johnson Winter & Slattery for the appellant
Townsville City Legal Service for the respondent
Corrs Chambers Westgarth for the co-respondent
This is another instalment of the Townsville shopping centre wars being waged by rival operators of successful centres. On the back of Stockland’s appeal against Council approval of a large expansion of Dexus’ facility at Thuringowa city centre (The Willows)[1] comes this appeal by Dexus against approval of a similar expansion (large in relative terms) at Burdell, Stockland North Shore, which is located a little over 10 kilometres north-northwest from The Willows. Stockland’s appeal was essentially in defence of its twin centres at Aitkenvale, together constituting a regional centre, located something less than five kilometres east-northeast of The Willows.
[1]Stockland Development Pty Ltd v Council City Council [2012] QPEC 84, currently the subject of an application for leave to appeal to the Court of Appeal.
The numbers the court has been given for floor areas, existing and proposed, have not necessarily been consistent and variations in respect of the proposal have occurred. Nothing really turns on identifying precise numbers. Stockland North Shore at present is a supermarket based centre, having a supermarket of 3609 m2, retail specialties of 1123m2 and non-retail services 1047m2. Under the approval, these “GLA” (Gross Lettable Area) areas increase to 4611m2, 4223m2 and 1544m2, to which will be added a discount department store of 7189m2 and “mini-majors” (tenancies exceeding 400m2) of 2479m2. Those details are taken from the expert economists’ joint report, and are subject to some variation, as noted. The centre’s GLA (retail) would increase from 4732m2 to 18,502m2.
A similar appeal (624/2011) lodged by Bushland Grove Pty Ltd, a company interested in residential and commercial development at Mount Low, northwest of the site, has recently been withdrawn. It was listed for hearing with the current appeal. The range of issues presented to the court for consideration has narrowed; traffic matters, the bulk and scale of the intended built form and the like have gone away. Stockland was concerned that reliance not be placed on views of planning and economic experts engaged by Bushland Grove to be found in joint expert reports, given inability to test those experts’ views at the hearing. Those views coincided in large measure with those of Dexus’ corresponding experts, who made a point of indicating their agreement with other aspects, where such agreement was not set out in joint reports. In the result, therefore, there was nothing which the court might have been required to disregard.
The appellant Dexus argues that the approved proposal is asking for too much, too early, is “too big, too soon”, in Mr Schomburgk’s summary. It asserts conflict with the current planning scheme, the City of Thuringowa Planning Scheme 2003, which, of course, extends to only part of the Council’s local government area, and may be replaced by the end of 2013. That is what the Council envisages. No information whatever was forthcoming as to what the new planning scheme might provide. Conflict is asserted, as well, with a preliminary approval covering a much larger area of land incorporating the site the subject of the present proposal. The preliminary approval is constituted by a consent order made in this court on 29 March 2007 (filed 24 April 2007) in appeal D2 of 2005, a conditions appeal bought by Stockland Developments Pty Ltd. The court ordered that the development application for a preliminary approval pursuant to s 3.1.6 (Preliminary approval may override a local planning instrument) of the Integrated Planning Act 1997 for a material change of use for uses in accordance with a Plan of Development (PoD) in respect of land situated as Burdell Road, Garland Road, Faulkner Street, Griffey Street and other un-named roads off Burdell, be approved, subject to the conditions contained in annexure A. Part of the schedule of conditions in turn incorporated schedule 1, a Plan of Development 1 and schedule 2 Maps. The preliminary approval, so far as it goes, overrides the planning scheme, so that the scheme’s allocation of the site to the Residential Planning Area or the Rural Planning Area becomes irrelevant.
That development application for a preliminary approval was lodged on 23 May 2003, that is before the current planning scheme commenced on 20 October 2003. The Council’s (essentially favourable) decision notice issued on 14 December 2004. No detailed examination was made of this, but it rather appears that Council consideration of the development application and work on the new (2003) planning scheme were going on in tandem. There is some overlapping of matters covered. I took it to be accepted that if there occurs any conflict, the preliminary approval would prevail, relevantly, whatever planning scheme was in effect.
The current shopping centre was approved by a decision notice issued for a shopping centre and commercial premises on 14 August 2008 consequent upon a development application for material change of use of 8 February 2008. The present appeal concerns a development application for material change of use for a shopping centre (discount department store, mini-major and specialty retail shops) of 23 December 2010 which affects about 6.15 hectares of the overall 1000ha or so of the Plan of Development Area, where some; 4200 residential allotments are to be created. The Council’s decision notice is dated 30 September 2011.
The Sustainable Planning Act 2009 is the governing legislation.
Although successful before the Council in the first round, Stockland has the onus of establishing that the appeal should be refused, rather than Dexus bearing an onus to show it should be allowed: s 493(1). By section 495(1), the appeal is by way of a hearing anew, so that the court stands in the shoes of the assessment manager. Because the application would lead to the shopping centre having a GLA in excess of 5000m2, the application was impact assessable. The submitters were the appellant, Bushland Grove, and a third company whose interest (if any) was not disclosed and did not emerge during the appeal, in which it decided not to participate.
Section 314(2) requires the assessment manager (now the court) to assess “against each of the following matters or things to the extent the matter or thing is relevant to the development –
… (h) a preliminary approval to which s 242 applies;…
(i) a planning scheme”
Sections 324 and 326 contain rules governing the assessment manager’s decision. The latter is:
“326 Other decision rules
(1) The assessment manager’s decision must not conflict with a relevant instrument unless—
(a) the conflict is necessary to ensure the decision complies with a State planning regulatory provision; or
(b) there are sufficient grounds to justify the decision, despite the conflict; or
(c) the conflict arises because of a conflict between—
(i) 2 or more relevant instruments of the same type, and the decision best achieves the purposes of the instruments; or
(ii) 2 or more aspects of any 1 relevant instrument, and the decision best achieves the purposes of the Instrument
(2) In this section—
relevant instrument means a matter or thing mentioned in section 313(2) or 314(2), other than a State planning regulatory provision, against which code assessment or impact assessment is carried out.”
The planning scheme establishes planning areas, including 3.3 Centres Planning Area, centres being “shown” mapped (3.3.1(e)); as well as Maps 3.3 and 3.3A, one might refer to Map 3 Planning Areas. The provision referred to establishes a centres hierarchy in ascending order of scale: Convenience Centres, Neighbourhood Centres, District Centres and Sub-regional Centres. The site is not mapped as a centre or as part of the centres planning area in any way. Events have led to its being identified as the sub-regional centre in Mount Low-Deeragun, for which it is conceded to be suitable. The parties agreed about this. Although located on principal roads rather than on arterial roads, it is appropriately isolated from residential areas as regards traffic patterns. The intended sub-regional centre might well have been located elsewhere. There are three shopping centres (an older Woolworths based one and a new Coles based one included) near to each other at Deeragun south of the Bruce Highway, one of which is Centro Woodlands and identified in the character statement for the centres planning area:
“3.3 CENTRES PLANNING AREA
3.31 CHARACTER STATEMENT
(a) At the Commencement Date, premises within the Centres Planning Area consisted of –
(i) development of varying scale and intensity; and
(ii) other development that may be inconsistent with the future intent for the centres Planning Area described below.
(b) The Centres Planning Area is intended for a mix of Commercial Development that contributes to the amenity and landscape of the Centres Planning Area. In particular –
(i) buildings and structures are sited to protect the amenity of adjoining premises;
(ii) a high level of visual amenity is provided through the design of building, landscaping, Streetscapes and public art that results in a distinctive character;
(iii) the design layout of development is secure, safe and legible, and
(iv) development is adequately serviced by infrastructure.
(c) Public transport, clear pedestrian routes, bikeways, adequate onsite manoeuvring and on and offsite parking are provided to meet the needs of proposed users, customers and employees.
(d) Development, other than Commercial Development, and Residential Development, or development that does not have a nexus with Commercial Development, is inconsistent with the desired outcomes for the Centres Planning Area.
(e) A Centres hierarchy based on convenience, neighbourhood, district and sub-regional functions has been identified. These centres are shown on maps 3.3 and 3.3A – Centres Planning Area: Convenience Centre, Neighbourhood Centre, District Centre and Sub-Regional Centre. In particular –
(i) Convenience Centre is identified in Schedule 3.3. The development of Convenience Centres at these locations is consistent with the desired outcomes for the Centres Planning Area.
Convenience Centres –
A. provide for the particular needs of a specifically defined community with high levels of local accessibility,
B. have a maximum 1,000m2 GLA, comprised of Commercial Development and Service Premises; and
C. Are designed to be sympathetic to the local environment and Residential Development in such matters as overall scale, building height and boundary treatment and are consistent with the desired development outcomes for a particular community.
(ii) At the Commencement Date, the identified Neighbourhood Centres are located at Greenwood, Mt View, Parkside and Kirwan North. The development of Neighbourhood Centres at these locations is consistent with the desired outcomes for the Centres Planning Area.
Neighbourhood Centres –
A. provide for the everyday local shopping and commercial needs of local residents for its immediate population catchment between 3,500 and 6,000 persons and are easily accessible to pedestrians, cyclists and local residential traffic;
B. have a maximum 8,000m2 GLA, comprised of Commercial Development not exceeding 5,000m2 GLA and Service Premises not exceeding 3,000m2 GLA; and
C. are designed to be sympathetic to adjoining Residential Development in such matters as overall scale, Building Height and boundary treatment.
(iii) The identified District Centres are Upper Ross Shopping Centre and Woodlands Shopping Centre.[2] The establishment of additional District Centres within the life of this Planning Scheme is inconsistent with the desired outcomes for the Centres Planning Area.
[2]The Woodlands Shopping Centre is expected to expand on premises to the south-east of the existing Centre, on premises identified as Commercial Area in the Concept Plan for the Mt Low Deeragun Area as shown in the Urban Growth Boundaries Planning Scheme Policy
District Centres are intended to cater for the needs of their respective residential catchments.
District Centres –
A. cater for the weekly needs of a population of up to 25,000 persons and act as a Neighbourhood Centre for its immediate population catchment;
B. have a maximum 15,000m2 GLA, comprised of Commercial Development not exceeding 10,000m2 GLA and Service Premises not exceeding 5,000m2 GLA; and
C. are located on arterial roads to prevent non-local traffic entering residential areas.
(iv) The identified Sub-Regional Centre in the Mt Low-Deeragun and the Thuringowa City Centre.
The establishment of a Sub-regional Centre in the Mt Low-Deeragun area is intended beyond the life of this Planning Scheme. This centre will start as a Neighbourhood Centre, progress towards a District Centre and ultimately develop into a Sub-Regional Centre.
The Thuringowa City Centre is intended as the primary focus for the City catering for the needs of locals and visitors. This centre is completely integrated, directly linked to Riverway and characterised by five sub-areas that complement each other – the Commercial 1 sub-area; the Commercial 2 sub-area; the Commercial 3 sub-area; the Commercial 4 sub-area; and the Commercial 5 sub-area. These sub-areas are shown on map 3.3A – Thuringowa City Centre and …”
Note the references to “establishment” in (iii) and (iv).
In respect of the economy, the relevant desired environmental outcome in the planning scheme is:
“2.5.1 DEO 5
Economic development in the City is strong, diversified, supports local employment and enhances quality of life.”
In my opinion this strongly supports Stockland’s proposal. One of the specified strategies is significant, and contended by Dexus to tell against the proposal:
“2.5.2(v) establishing and supporting a hierarchy of Centres
and preventing ribbon development”
The importance long ascribed in this court to preserving the integrity of planning for centres hierarchies was recognised and apparently endorsed by the Court of Appeal in Australian Capital Holdings Pty Ltd v Mackay City Council [2008] QCA 157 at [58]:
“The importance of the hierarchy of retail shopping centres or precincts established by planning schemes and the necessity of not acting so as to prejudice the viability of the established hierarchy has been recognised in a number of planning decisions”.
A distinction between that case and this is that, here, the Council, which is the planning authority, supports rather than opposes the developer’s proposal. The proposal would bring Stockland North Shore somewhere around the cusp separating district centres and sub-regional centres, it being largeish for the former but a minnow for the latter, for which GLA of something like 55,000m2 is contemplated.
As to timing for the Mount Low–Deeragun sub-regional centre, the point was made, particularly by the Council’s planner, Mr Perkins, that the planning scheme is coming to the end of its life, raising the question of whether any good end is served by waiting for it to finally go. Of course, we do not know what will replace it. The Council’s support for the proposal may be a straw in the wind. To the extent that Dexus was submitting that Stockland North Shore should go through the stages of neighbourhood centre, district centre, etc, that seems to me totally pointless and no more than a way of condemning all interests affected to avoidable episodes of disruption and inconvenience. The question is whether an appropriate time has come - or looms - for a small sub‑regional centre, assuming that is what it is, to be established. It was accepted, and even by the appellant’s planner Mr Schomburgk (in the end), that the time as at which judgements are made is that of “establishment”, when a centre is up and running, rather than the time of approval. There will inevitably be a certain amount of delay in the finalisation of designs and construction (including detaining further requisite approval or permits) and it was accepted that conditions of approval may impose a longer (or a defined) delay if appropriate. Dexus says the delay should be so long that the correct decision is to refuse approval.
The plan of development incorporates its own delaying mechanisms. As recognised in s 1.4(1), it functions as part of the preliminary approval which varies the effect of the local planning scheme for the structure plan area, overriding the planning scheme by:
“(a)Stating the assessment categories for development in the structure plan area that are different to the assessment categories for the developments stated in a local planning instrument applying to the structure planning area; and
(b)Identifying codes applying to development in the structure plan area that –
(i)are different to codes in a local planning instrument applying to the structure plan area; and
(ii)apply to development in the structure plan area differently to how codes in a local planning instrument apply due to development in the structure plan area.”
By subsection (2) the development to which the plan of development and preliminary approval apply is to be completed within 25 years of the preliminary approval taking effect. The structure plan is map 1 which identifies the structure plan area and the planning areas within it, also roads and major drainage paths; 2.2 Planning areas indicates the preferred dominant land use of the relevant structure plan area - the planning areas are: the residential planning area, the open space planning area and the commercial planning area. The last is located at the south of the site which has frontage to the Bruce Highway. It is divided into a “neighbourhood centre”, being the eastern portion, and a mixed use area.
Section 4.4 Overall outcomes for the structure plan area includes the following:
“(7)The structure plan area is to be developed for community and commercial facilities to –
(a) service the residents of the structure plan area, residents of the region, and the travelling public; and
(b) ensure that residential amenity is not detrimentally affected.”
Specific outcomes desired for the planning areas follow, including:
“4.7 Specific outcomes for the commercial planning area
(1)The commercial planning area is to be developed for a mixed use sub-area and a neighbourhood centre sub-area.
(2)The commercial planning area is to be confined by defined boundaries which will control points of access and ensure separation from the residential planning area while maintaining a linkage between the adjoining neighbourhood centre sub-area and the mixed use sub-area.
(3)The commercial planning area is to provide a transitional buffer from the impacts along the national highway to the residential planning area to the north.
(4)The mixed use sub-area is to be developed for uses that take advantage of its proximity to road and rail transport infrastructure and accessibility to regional catchments especially uses that would benefit from a high level of vehicular access, possible rail access and visual exposure to a national highway such as showrooms, warehouses, hardware stores, timber and building supplies and the like.
(5)The neighbourhood centre sub-area is to be developed for a supermarket, a range of comparison and specialty retail uses and commercial uses.
(6)The neighbourhood centre sub-area is to be developed to satisfy a public need that correlates with community spending patterns.
Close to Stockland’s site, construction is underway of a service station and a Bunning’s (due to open in August), adding to facilities already operating, such as a McDonald’s restaurant. Dexus asserts conflict with (5) and (6) consistently with the general “too big, too soon” assertion. At a more specific level, albeit in Division 4 Commercial Planning Area Code under the heading 7.6 Overall Outcomes for the commercial planning area, one finds:
“7.6 Purpose of the commercial planning area code
The purpose of the commercial planning area code is the overall outcomes for the commercial planning area.
(1)The commercial planning area is to comprise a range of retail uses, commercial uses, service industrial uses and associated activities that will service the growing development within the structure plan area and surrounding districts.
(2)The neighbourhood centre sub-area is to maximise access to facilities and services for the residents of the structure plan area by encouraging medium to higher density housing components.
(3)The shops and shopping centre within the neighbourhood centre sub-area are developed (GLA greater than 5000m2 retail floorspace) where –
(a) Either –
(i)the population of the suburbs of Bushland Beach, Mt Low, Burdell, Deeragun, Shaw and Jensen reaches 20,000 persons; or
(ii)the population of the structure plan area reaches 1000 households; and
(b)the uses satisfy a public need that correlates with community spending patterns.
(4)The commercial planning area is to be developed in an integrated and co-ordinated fashion with priority placed on safe pedestrian and vehicular movements.
(5)The commercial planning area is designed to achieve a high level of integration and visual cohesion within the commercial planning area.
(6)The commercial planning area is to be developed for visually attractive development which compliments both the natural and man-made features within the commercial planning area.
(7)The commercial planning area is developed in a manner that ensures that the amenity of adjacent residential uses is not detrimentally affected.
(8)The commercial planning area is to be designed to take account of the requirements of public transport operators and pedestrian and cyclist movement to and within the commercial planning area.”
Shopping centre is defined in the dictionary as having the meaning given in the transitional planning scheme[3] (being the 1996 scheme) and including a major shopping centre development as defined in that planning scheme[4]. Subsection (3) is in harmony with the assessment tables for the neighbourhood centre sub-area in 7.4:
[3]“SHOPPING CENTRE” means (a) any shop or group of shops which have a gross floor area of 600 square metres. (b) any shop or group of shops which used wholly or predominantly for the retailing to the public and which in the opinion of the Council function as an integrated complex due to the combination and range of goods and services offered and the on-site co-ordination of pedestrian and vehicular movements. The term includes any of the following uses where such uses are considered to be a component of the integrated function of the premises Fast Food Outlet, Indoor Entertainment (Theatre Only), Medical Centre, Restaurant, Showroom.
[4]“MAJOR SHOPPING DEVELOPMENT ” means a development or an extension of or part of a development which development, extension or part is in the form of a shopping centre and is predominantly or wholly used for retailing to the public and includes - (a) the use, for that purpose, of land exceeding 2.5 hectares in area (or such other area as the Governor in Council may from time to time prescribe); or (b) the erection of or use, for that purpose, of an area of a building or structure or part thereof exceeding 6,000 square metres gross floor area (or such other area as the Governor in Council may from time to time prescribe). For the purpose of the scheme the term includes a Shopping Centre that complies with (a) or (b);
Column 1
Use
Column 2
Assessment categoryColumn 3
Codesassessable. If code assessable –
(a) Structure plan area code.(b) Commercial planning area code.
(c) Standards.
Shop.
Shopping centre.
Code assessable if not impact assessable.
Impact assessable if the total GLA of shops and shopping centre existing or approved in the neighbourhood centre sub area exceeds 5000m2.
Structure plan area code.
Commercial planning area code.
Standards
Finally, there are specific outcomes for the sub-areas which relevantly include:
Specific Outcomes Acceptable solutions – if self assessable
Probable solutions – if code assessable
Particular development in the
Neighbourhood centre sub-areaO15 The neighbourhood centre sub-area is developed for an adequate number and range of retail uses and commercial uses to service the structure plan area and surrounding districts. S15.1 None applicable. O16 There is an economic need and a planning need for development for shops and a shopping centre in the neighbourhood centre sub-area. S16.1 None applicable.
The proposal intrudes a small distance into the mixed use sub-area. About this, no point was taken. It is asserted that it conflicts with O15 and O16, also 7.6(3).
I reject the argument that “an adequate” in O15 means “the bare minimum” or “no more than the essential” or something similar. Even without reference to Stockland’s authorities indicating that “adequate” may be equivalent to “ample” or “generous” depending on the context, such as Gledhill v Liverpool Abattoir Utility Co Ltd [1957] 1 WLR 1028, at 1034 and R v Secretary of State for the Environment, ex parte Gosford Allotments and Gardens Association (1996) 72 P&CR 38, I would not be inclined to regard the term as intended to limit what is provided unless it be of a scale would obviously be ridiculously excessive for the structure plan area and surrounding districts.
O16, however, establishes a real hurdle for the developer which may see its proposal in conflict with the provision. To avoid a finding of conflict, both an economic need and a planning need must be shown. In my opinion, O16 is satisfied if the test in 7.6(3) is satisfied. It is a two part test. I agree with Mr Dimasi’s estimate that by around December 2014, a year before the proposed expansion would be permitted to be “established” or “developed”, one can say with a high degree of confidence that for the purposes of s 7.6(3)(a)(i) the population of the named suburbs will reach 20,000 persons. That view is based on an increase from the 2006 census to the 2011 census from 9271 persons to 15,193. There was an average annual growth of 1184 persons or 10.4%. As regards the number of households required to satisfy paragraph (a)(ii), Mr Motti, Stockland’s planner on 1 February 2013 counted 910 completed dwellings in the structure plan area and another 60 under construction. The court’s inspection of the area on the first day of the hearing confirmed that construction is proceeding apace, currently (in particular) in a sizeable cluster of dwellings of various designs which will doubtless the offered two potential purchasers very soon, if they have not been already. On the balance of probabilities, the 1,000 benchmark will be achieved by the end of next year, even allowing for a reasonable number being excluded as not yet “households” constituting a population. Stockland sells residential lots subject to a covenant requiring a house to be constructed within three years. St Clare’s Catholic School is already operating near the shopping centre (across North Shore Boulevard) and Townsville Grammar School is expected to open its campus nearby in early 2016.
Does Stockland satisfy 7.3.1(b)? I took the parties to be in agreement, as am I, that “public need” would equate to “planning need” in O16. No guidance has been available as to what is involved in “community spending patterns”; this is probably another way of requiring “economic need”, and I approach it in this way. Effectively, 7.6(3)(b) replicates 4.7 (6).
The crucial issue in this appeal is whether the developer satisfies the twin tests of need. As can be seen, in my view, that replicated provision and O16 have been shown to be satisfied. I accept that development proposals that are premature ought not to be approved. See Adam v Gold Coast City Council [2007] QPEC 025; [2007] QPELR 379. In a context such as the present, however, prematurity ought to be approached as it was in Westfield Ltd v Gold Coast City Council [2002] QPELR 542. I am grateful for the reference, as the following views accord with those I was inclined to reach in any event:
“Prematurity
[63]Westfield has alleged that approval of the Pacific Pines centre is premature, apparently on the basis that the total population which the facilities will ultimately serve is not yet in place.
[64]Prematurity is usually only a reason for refusing an application if it involves some substantial public disbenefit. The classic example is where the provision of infrastructure (such as water and sewerage) to a development will prejudice or make more expensive the provision of such services throughout a locality. This circumstance is not present here.
[65]There is no principle that a commercial facility cannot be provided until population of its catchment is all in place. There are authorities to the contrary. See for example Cairns Real Estate Pty Ltd v Cairns City Council [1996] QPELR 319 at 327) where Daly DCJ said:
‘I should say that I accept the submission that it is not necessary for it to be established that either stage be immediately viable upon opening. It must be a rare investor who thinks a capital investment of this kind would give an immediate return.’
[66]In reality a growing population enjoys early benefits if developers are prepared to provide them with facilities sooner rather than waiting for the catchment population to be filled. It is not good planning to allow a population to be created without any facilities, forcing it on to the arterial road system to obtain, for example, its convenience shopping. Furthermore it is difficult to see prematurity when the DCP specifically locates a shopping centre at the site. The people of Pacific Pines will benefit from the facilities and even if the developers (Westfield and perhaps Stockland and Hospitality too) do not immediately enjoy large profits from their developments that is of no real importance in considering the planning merits.
Conclusion
[67] There is no express conflict with the provisions of the Strategic Plan or the DCP in the development proposed by Stockland and Hospitality. Even were it to be the case that some technical conflict can be established, there are sufficient planning grounds (particularly need) to justify the approvals notwithstanding that conflict. The appeals are therefore dismissed.”
Although those views are attributed to me in the report (at page 543L) the credit belongs to Senior Judge Skoien.
The quoted passage is not applicable here in its entirety. In particular, the lack of controls referred to in the first sentence of [65] is inconsistent with the plan of development requirements of minimum population and/or number of households. I accept the opinions of the developer’s economic expert, Mr Dimasi, as to impacts of the proposal, that:
·The proposed development will not have any inappropriate impact on existing centres
·The proposed development will not prejudice the delivery of lower order centres within the catchment.
The joint economic report includes his table produced in support of his conclusions:
Table TD6 Stockland North Shore: Estimated Impact on Specific Centres* Projected 2014/15 Estimated Without With Est.Impacts Centres Unit 2011/12 Expansion Expansion $M % Within MTA $M 41.1 44.9 95.9 51.0 113.60% Stockland North Shore Other MTA centres Bushland Beach Plaza $M 6.0 7.7 7.6 -0.2 -2.0% Centro Woodlands $M 38.3 49.2 46.8 -2.5 -5.0% Deeragun (Coles) $M 31.5 40.5 35.8 -2.0 -5.0% Mt Louisa SC $M 13.8 15.6 15.3 -0.3 -2.0% Total other MTA centres $M 89.6 113.1 108.2 -5.0 -4.40% Beyond MTA Hyde Park $M 216.6 236.7 221.3 -15.4 -6.50% Aitkenvale $M 350.0 360.5 316.1 -14.4 -4.0% Thuringowa Central $M 384.2 395.8 381.5 -14.2 -3.60% Total Beyond MTA $M 950.9 993.0 948.9 -44.1 -4.4% Total other centres $M 1,040.40 1,106.10 1,057.10 -49.0 -4.4% Other retail floorspace $M -2.0 Total $M -51.0 * Consistent 2011/12 dollars & including GST Source: Stockland; MacroPlan Dimasi
Mr Owen was the economist engaged by Bushland Grove. For what it is worth, given that company’s withdrawal of its appeal, his views on this aspect as set out in the joint economic report were:
“Mr Owen considers
3.73Owen concurs with Dimasi that the proposed development will not have an inappropriate impact on any existing centre.
3.74The primary impact will be on the specialty retailers within the subject centre for the reasons stated previously. While this may seem inconsequential as it only affects private business, it is important for the following reasons:
· An underperforming centre with numerous vacancies can actively deter shoppers as a lack of activity can leave a centre with the reputation for being unsafe or unpopular. These shoppers in turn will seek out other more active and attractive retail destinations. Consequently, the centre may fail to fulfil its intended function.
· The lack of activity will deter business and social investment within the general centre precinct needed to support the emerging community and create local jobs.
3.75An underperforming retail centre is often used as a reason to defer or stop new retail centres even though the new centre may not have any material connection with the reasons for underperformance. Consequently, the subject site (as a premature development) may prejudice the delivery of lower order centres in the catchment.
3.76The proposed centre (with a 289% increase in floor area) does not conform with the centres strategy as it is premature when considered against the population of the catchment.”
Mr Brown’s views were:
“3.77Brown agrees that the impacts of the proposed expansion of the North Shore centre would not be of sufficient scale to undermine the viability of any existing sub-regional or higher order centres within the Townsville region.
3.78Brown considers it likely that the expansion of the supermarket at the North Shore centre is likely to have some impacts on the trading performance of the Woolworths and Coles supermarkets located at Deeragun. While these impacts may make the operational environment of these two supermarkets challenging there would remain some scope for competitive responses providing centre owners had sufficient access to capital.
3.79Brown agrees with Owen that the expansion of the North Shore centre is premature, with Brown estimating the extent of prematuring to be between five and eight years. Brown agrees with Owen that the presence of a large underperforming sub-regional centre would suppress the perceived need for additional centre facilities within the PTA. Brown agrees with Owen that this would undermine the delivery of lower order centres that meet convenience needs.”
It was asserted (without contradiction) that “sufficient access to capital” was enjoyed by the Deeragun owners on the basis of their presumed identities.
Nothing from Mr Owen or Mr Brown dissuades me from accepting Mr Dimasi’s view, which, on this aspect of lack of adverse impacts, they appear to share. It might be noted that economists apply a fairly robust concept of acceptable impacts from new competition in the range of 15%, with which one would not necessarily expect existing players in a market to be happy. The impacts here are well inside the economists’ benchmark.
The notion that planned convenience centres may not eventuate because of Stockland’s expansion at North Shore is entirely hypothetical. I think it should be disregarded. One of the centres mapped in the 2003 planning scheme under the title Carinya will never eventuate, the developer having elected (long before Stockland’s current development application) to use the mapped area for residential development. The court heard of another centre which had an approval that the developer allowed to run out (before expansion at North Shore was mooted). The Deeragun centres, partly shown on the “Carinya” map, are the ones I would have thought might struggle, especially as there is currently a high vacancy rate in at least a couple of them. I defer to the economists’ lack of serious concern about them. As to Mr Owen’s thought that the real strugglers will be operators of the new specialty stores envisaged at North Shore, resulting in a depressed centre that will turn shoppers off, I think it reasonable to place some weight on Stockland’s apparent confidence. Stockland is an outfit which knows how to operate shopping centres. There is much to be said for leaving them to it, in the circumstances of lack of adverse impacts anywhere else, in line with the Westfield case.
As typically encountered, even under the current rules defining the responsibilities of experts, the views of the economic and planning experts engaged by the parties happened to coincide with what might be thought be relevant party’s preferred outcome of this appeal. That comment does not imply any criticism of the experts, collectively or individually. The appellant’s planner, Mr Schomburgk, provided some helpful comments regarding the unusual appearance in a single planning instrument, being the plan of development forming part of the preliminary approval, of the “need” for proposed development to be “economic”, “planning” and “public”. There are yet more references using other terms that would appear to deal with the same concept. In respect of specific outcome 15, considered unusual (at least if it were a planning scheme) for lacking more specificity, for example as to maximum GFA or GLA limits, Mr Schomburgk said at T5-59 lines 35 to 55:
“… an adequate number must relate, in my opinion, to the issues of economic need and, I suppose, public need, planning need to that extent as well, but would relate to what amount of – what number and range of retail uses was considered by particularly the economists to be appropriate. That translates then similarly into specific outcome 16, the economic need. We’ve seen the economic reports. Planning need is a slightly different subset but relies very heavily on economic need, but also throws into the mix, if you like, issues of competition and convenience and choice. It may or may not be dealt with in the same extent in an assessment of economic need.
HIS HONOUR: I thought economists cared about convenience and choice, too?-- They do, your Honour, but I suppose planning need takes those elements usually further than what the economists might do on a strictly mathematical assessment.
Are you suggesting planners might be keener on competition than economists are?-- Arguably, but certainly I think we’re more keen on convenience than economists necessarily are.”
Those views are consistent with ones expressed in the court. In Westfield Ltd v Gold Coast City Council [2002] QPLR 542, 549, reference was made to what was said in Elfband Pty Ltd v Maroochy Shire Council [1995] QPLR 290:
“Planning need is no doubt a more general issue than economic need, but it seems to be obvious in cases such as this that unless there is an economic need there will be no planning need. It is therefore essential that the evidence establish … that there is an economic need for a shopping centre such as Maroochydore Marketplace within the Sunshine Coast Retail Network. The issue of planning need then focuses upon the question whether the particular development proposed should be permitted, involving as it does an amendment to the planning scheme. This involves a consideration of planning principles, and in particular the provisions of the strategic plan and draft strategic plan.”
Stockland’s submissions note that the decision was “reversed on other grounds: Yu Feng Pty Ltd v Maroochy Shire Council [2000] 1 Qd R 306”.
Economic need
Stockland’s written submissions in paragraph 38 conveniently collect features of the agreed main trade area (MTA) served by its North Shore centre now proposed to be expanded:
“(a)the forecast population in 2016 of the MTA is 34,000 (increasing by more than 4% per annum for the 10 years to 2026 to 52,400);
(b)the average household income level for MTA households ($99,621) is ‘significantly higher’ than the benchmarks for the total Townsville metropolitan area ($90,541) and Australia ($88,205), and even higher within the primary sector ($104,141), which contains most of the MTA population (e.g. 66% in 2016);
(c)the population of the MTA is relatively young, with the dominant family type being couples with dependent children, consistent with the area being ‘a rapidly growing outer suburban location’;
(d)over the inter-censal period 2006-2011, the MTA population has become ‘generally wealthier’;
(e)between 2012 and 2016, the retail expenditure capacity within the MTA will increase by $91M;
(f)there are various significant developments occurring or proposed in the primary trade area, including Stockland North Shore (c.5,000 dwellings), Greater Ascot (c.2,200 dwellings), Bushland Beach (c.3,000 dwellings), Sanctum (c.1,300 dwellings), Kingston Park (c.1,000 dwellings), Brendale (c.1,500 dwellings).”
Reference to p 13 of the joint report shows that the comparison in (d) is not between the population of the MTA “then” and “now” but between that population and national benchmarks.
Mr Dimasi’s opinion (joint economic report 3.38) was:
“
•The scale of the proposed development is not excessive given the size in population of the catchment and particularly given the growth outlook. The scale of the proposed development is appropriate.
•The proposed development is not premature if it is to be completed in order that 2014-2015 will be its first full year of trade. Indeed, there is a strong and rapidly growing need and demand for the development.”
Stockland’s proposal now is that 2015-2016 would be the first full year of operations, indeed that the opening not occur before December 2015. Mr Dimasi, as an economist, further considered that catchment residents’ needs could not properly have be met by facilities existing or approved or likely to emerge within the main trade area, the residents being compelled to travel significant distances (greater than 10 kilometres) to access one of the higher order shopping centres located generally to the east to satisfy needs that would be met by the proposed expanded Stockland North Shore.
Dexus’ economic expert Mr Brown presented a competing view that there exists at present no sufficient need for the expansion, indeed that it will be several years before a need exists for all elements of the proposed expansion. As the joint report reveals:
“3.45Brown summarises his market share assumptions in Table 5 below. Table 5 outlines the anticipated market penetration of the various retail drivers of the expanded North Shore centre. Assumptions have also been made regarding the proportion of trade anticipated to be sourced from outside the identified trade areas. Normally, this represents between 10% and 20% of centre turnover, however given the location of the North Shore centre on the fringes of Townsville and the geographically expansive trade areas identified, Brown anticipates the centre would draw a lower proportion of its trade from outside the identified trade areas than a more centrally located centre (e.g. Castletown, Stockland Townsville, etc).
Table MB5: Centre performance assumptions for expanded North Shore Centre.
Supermarket DDS Mini-Major General retail specialty Specialty food Food, catering & retail services Floor space 4.611 7,189 2,479 2,100 1,050 1,050 Market shares PTA 32.5% 12.0% 5.0% 5.0% 12.5% 12.5% STAE 20.0% 7.0% 3.5% 3.5% 7.5% 7.5% STAW 25.0% 10.0% 4.0% 4.5% 10.0% 10.0% % of trade from non-TA sources 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Note: Specialty retail has been apportioned based on industry experience. Totals may not directly sum due to rounding.
3.46The anticipated performance of the expanded North Shore centre by retail driver (as estimated by Mr Brown) is outlined in the tables below.
Table MB6: Anticipated supermarket performance in expanded North Shore Centre, 2014-2021
PTA STAE STAW NON-TA TOTAL $/sqm 2014 $26.9 $4.4 $8.1 $2.1 $41.4 $8,986 2015 $29.3 $4.5 $8.3 $2.2 $44.3 $9,611 2016 $31.9 $4.7 $8.3 $2.4 $47.3 $10,250 2017 $34.5 $4.9 $8.5 $2.5 $50.4 $10,935 2018 $36.9 $4.9 $8.7 $2.7 $53.1 $11,522 2019 $39.5 $5.0 $8.7 $2.8 $56.1 $12,161 2020 $42.2 $5.0 $8.9 $3.0 $59.1 $12,809 2021 $45.1 $5.2 $9.1 $3.1 $62.5 $13,554
Table MB7: Anticipated DDS performance in expanded North Shore Centre, 2014-2021.
PTA STAE STAW NON-TA TOTAL $/sqm 2014 $10.8 $1.8 $3.3 $0.8 $16.6 $2,315 2015 $11.8 $1.8 $3.3 $0.9 $17.8 $2,472 2016 $12.7 $2.0 $3.4 $0.9 $19.0 $2,636 2017 $12.5 $2.0 $3.3 $0.9 $18.8 $2,617 2018 $14.6 $2.1 $3.3 $1.1 $21.1 $2,933 2019 $15.7 $2.1 $3.4 $1.1 $22.4 $3,112 2020 $16.6 $2.1 $3.6 $1.2 $23.5 $3,270 2021 $17.8 $2.1 $3.6 $1.2 $24.8 $3,450
Table MB8: Anticipated mini-majors performance in expanded North Shore Centre, 2014-2021.
PTA STAE STAW NON-TA TOTAL $/sqm 2014 $4.5 $0.9 $1.3 $0.35 $7.0 $2,837 2015 $4.9 $0.9 $1.3 $0.38 $7.5 $3,029 2016 $5.3 $1.0 $1.3 $0.40 $8.0 $3,232 2017 $5.2 $1.0 $1.3 $0.40 $8.0 $3,210 2018 $6.1 $1.1 $1.3 $0.45 $8.9 $3,595 2019 $6.5 $1.1 $1.4 $0.47 $9.4 $3,810 2020 $6.9 $1.1 $1.5 $0.50 $9.9 $4,000 2021 $7.4 $1.1 $1.5 $0.52 $10.5 $4,218
Table MB9: Anticipated general retail specialties performance in expanded North Shore Centre, 2014-2021.
PTA STAE STAW NON-TA TOTAL $/sqm 2014 $4.5 $0.9 $1.5 $0.4 $7.2 $3,430 2015 $4.9 $0.9 $1.5 $0.4 $7.7 $3,657 2016 $5.3 $1.0 $1.5 $0.4 $8.2 $3,899 2017 $5.2 $1.0 $1.5 $0.4 $8.1 $3,874 2018 $6.1 $1.1 $1.5 $0.5 $9.1 $4,327 2019 $6.5 $1.1 $1.5 $0.5 $9.6 $4,584 2020 $6.9 $1.1 $1.6 $0.5 $10.1 $4,813 2021 $7.4 $1.1 $1.6 $0.5 $10.6 $5,070
Table MB10: Anticipated specialty food performance in expanded North Shore Centre, 2014-2021.
PTA STAE STAW NON-TA TOTAL $/sqm 2014 $3.19 $0.51 $1.00 $0.2 $4.9 $4,706 2015 $3.47 $0.53 $1.03 $0.3 $5.3 $5,031 2016 $3.78 $0.54 $1.03 $0.3 $5.6 $5,363 2017 $4.09 $0.56 $1.05 $0.3 $6.0 $5,721 2018 $4.38 $0.56 $1.08 $0.3 $6.3 $6,028 2019 $4.69 $0.58 $1.08 $0.3 $6.7 $6,360 2020 $5.00 $0.58 $1.10 $0.4 $7.0 $6,698 2021 $5.34 $0.60 $1.13 $0.4 $7.4 $7,086
Table MB11: Anticipated food, catering and retail services performance in expanded North Shore Centre, 2014-2021.
PTA STAE STAW NON-TA TOTAL $/sqm 2014 $3.25 $0.60 $0.90 $0.3 $5.0 $4,762 2015 $3.50 $0.60 $0.90 $0.3 $5.3 $5,013 2016 $3.75 $0.60 $1.00 $0.3 $5.6 $5,363 2017 $4.13 $0.68 $1.00 $0.3 $6.1 $5,815 2018 $4.38 $0.68 $1.00 $0.3 $6.4 $6,065 2019 $4.75 $0.68 $1.00 $0.3 $6.8 $6,441 2020 $5.00 $0.68 $1.00 $0.4 $7.0 $6,692 2021 $5.50 $0.68 $1.00 $0.4 $7.6 $7,193 3.47Based on the above analysis and a first full year of trade being 2014 for the expanded centre, Brown considers:
•
The expanded supermarket would achieve benchmark sales rates for recently established supermarkets (i.e. ~$8,000-$9,000/sq.m) with trade approaching benchmark trading levels for well-established supermarkets (>$10,000/sq.m) within two to three years of expansion;
•The proposed DDS will perform well below benchmark trading levels (i.e.~$3,000-$3,500/sq.m) until 2019 at which time it will perform at the lower end of the performance spectrum;
•The proposed mini-majors are anticipated to perform at better levels than the proposed DDS, but will perform below benchmark trading (i.e.~$4,000-$5,000/sq.m) levels until 2020; and
•The proposed specialty tenants are anticipated to perform better than the mini-majors and DDS, but likely to trade below benchmark trading levels which are typically between $4,000/sq.m to $7,000/sq.m, until around 2016-2018.
Hence, it is Brown’s view that the proposed development in its entirety is between five to eight years premature.”
In the end, Mr Brown’s work does not dissuade me from a view that concerns to do with possible prematurity can be overcome by imposing a condition to preclude commencement of operations in the expanded shopping centre before December 2015. There was no suggestion, and none has been made by me, that the numbers selected for inclusion in the MB tables were selected with an eye to ensuring a desired outcome of prematurity in the proposal, to be based on a demonstration of non-viability of retail components of it for greater or more modest periods of years after opening, as growth of the spending population occurs. The tables contain errors, for example the drops in 2017 in MB7, MB8 and MB9, when one would expect increases. There is no reason for those drops to occur, suggesting that some mistake was made. Such carping is by the by. Mr Dimasi’s work was criticised for lacking transparency, lacking detail that might either confirm or discredit assertions in the overall analysis. But as Mr Dimasi pointed out, quantifying important elements of the “inputs” is very much a matter of professional judgment. He considered that the 5% figure percentage of trade from non-Trade Area sources (for which reasons were given) was inadequate, Mr Brown having acknowledged (Exhibit 10 3.45) that “normally this represents between 10% and 20% of centre turnover”. If Mr Brown turns out to be right, the plan of development notion of the centre serving “residents of the region, and the travelling public” (PoD 4.4(7)(a)) will be proved sadly misguided. The components of the expanded centre will not necessarily experience the shares of total expenditure assigned to them. Mr Brown expects the expanded supermarket to achieve higher earnings from the outset and continuing than does Mr Dimasi, leaving less for other retail categories, and conducing to more pessimistic forecasts about their performance.
Mr Owen came down somewhere in the middle. His predictions for the discount department store year by year (Table WO1) are higher than Mr Brown’s in Table MB7, as are those for the mini-majors (Table WO2, cf. Table MB8) and the supermarket (Tables WO3, MB6) and specialties retail (Tables WO6 and MB11), but his figures for specialities food-based (Table WO4) and specialties catering (WO5) are lower (compare Tables MB10 and MB11). Assumptions have to be made about the floor areas available to the categories, which may well be belied by future events, although the supermarket and DDS areas may be unlikely to change. The point is that estimates made today can be juggled, and the breakdown of retail categories can be adjusted in the real world in the future, with a view to achieving whatever trading benchmarks are aimed at.
The other important area of disagreement is what those benchmarks are. The economists have access to reported data from many shopping centres nationally showing the trading results for the categories of retailers operating in established centres discussed above organised in various ways (for example, metropolitan or non‑metropolitan, single DDS-based centres as opposed to multiple DDS-based centres, and top quartile as opposed to bottom quartile).
All of the data is brought down to expenditure in the outlets per square metre. It seemed to me that there might be other ways than focussing on customer expenditure achievable per square metre as the be-all and end-all of the viability of a new facility; if the aggregate expenditure achievable is quantified (which may or may not depend on the floor area) and the operating costs are predicted, I would expect those concerned to be well-placed to determine whether it was a good idea to proceed with a project, whether to establish a complete shopping centre, or to enter into a lease for a humble retail tenancy within it from both private and public standpoints. It is not for the court to gainsay the experts, however. [5]
[5]Intriguingly, in a following appeal before me involving rival shopping centre proponents in another city, evidence was given that a particular retail outlet, long established, which traded far ahead of benchmarks for its category, was trading unprofitably.
Accepting the “per m2” approach and the “Urbis” numbers (which the parties asked to be accorded “Fielder Gillespie” confidentiality), Mr Brown might have appeared to make his point, that some of the retail categories in an expanded North Shore will fall short of the “Urbis” benchmarks for a few years, even with the “discounts” he thought appropriate for new enterprises, or setting sights on the lowest quartile performance. One must ask, lowest quartile of what? It may be accepted that those in the business, like the commercial parties in this appeal, are aware of and anxious to access the Urbis data; however, we do not know which shopping centres reported to Urbis, and in my opinion issues of viability in particular locations have to be tested against the factors operating in their areas. There was evidence that there are retailers out there anxious to move early into a market to secure a foothold in it; they would not expect “benchmark” results from the outset. Local residents could be expected to welcome the additional facilities made available to them. Another, perhaps minor, consideration is that the “mini‑major” category has undergone redefinition in recent years. The earlier practice of identifying the products/services provided has been supplanted by focus on floor area of 400m2 – a large range of performance in financial terms may be anticipated: a gymnasium, for example, not performing as would a large liquor outlet, per square metre.
There should be noted Mr Brown’s and Mr Owen’s reservations about a population estimate of 48,000 in 2009 for the “North Shore Catchment” in a Centres Hierarchy Strategy prepared by consultants for the Council dated August 2011; 28,000 is suggested to be the correct figure. The Strategy appears to offer strong support for the current proposal for Stockland North Shore. Unsurprisingly, Mr Dimasi quotes from it at length, including the population estimates. He disavowed any reliance on it, stating that he had reached his opinion independently. Although Mr Gore was able to demonstrate a process that showed how the “unexplained” 48,000 might have been arrived at, the estimate for the moment remains under a cloud. Mr Dimasi’s summary (Exhibit 10, 3.21) quotes estimates of population for the “Major Centres Catchment Areas”, being Hyde Park (Castletown), Aitkenvale, Thuringowa Central and North Shore. The first alone is said to be reduced by the influence of North Shore. The reduction is estimated at 19,500, it being unclear whether the 67,500 given is the before or after case. If the latter, then the four catchments would appear to overlap. I understand Dexus’ case to be that the 48,000 appeared to be based on counting locations south of the Bruce Highway which the economists had not included in their agreed main trade area.
Returning to the prematurity issue, it is intriguing to note that while Mr Dimasi considered the proposed expansion of the Woolworths supermarket not likely to produce any great increase in sales immediately (Exhibit 10, 3.35 – no doubt because the present supermarket already satisfies the supermarket needs of those who choose Woolworths), Mr Brown (and Mr Owen even more-so) opined that the expanded supermarket would perform 7 to 10 percent better than did Mr Dimasi. Mr Brown I took to support expansion of the supermarket, even with its concomitant threat to convenience centres in the main trade area. They had the discount department store doing as well or better. It was in respect of the other components that their assessments of performance fell wildly short, in Mr Owen’s estimates by almost 20 percent, in Mr Brown’s by factors exceeding 27 percent and 33 percent. The greater discrepancies arise from Mr Brown’s estimate of total expanded centre performance being less than 92 percent of Mr Dimasi’s ($95.886 million on opening in 2014-15). Mr Owen’s was within 3 percent of Mr Dimasi’s, a difference without much significance. (The foregoing analysis is based on Table 3 in Exhibit 12). It is unsurprising that the judgments or predictions of experienced professional economists vary. I have found Mr Dimasi’s opinions persuasive.
Apropos struggling specialty retailers, it should be noted that some of the space attributed to them (Mr Dimasi estimated 1,500m²) is expected to be taken up by non-retail/commercial uses, for example personal services, financial services and real estate agencies. In the final wash-up, I have gained little assistance from the descent into detail recommended by Mr Brown for what seemed to be sound reasons. It turned out that as detail waxed, confidence in it waned. All experts agreed that “lumpiness” is a feature of the establishment and expansion of shopping centres. Thus Mr Dimasi thought expansion of the supermarket was not urgently required, but was an advisable course if the centre were to be expanded at all, as it should be, if only to provide the discount department store. The population required for one to be sustainable has probably been reached by now. The benchmark indicated in the Joint Economic Report (3.29) was in line with what I have heard from other experts in other appeals, for example Bird v Logan City Regional Council [2011] QPEC 145, [2012] QPELR 502 ([46]).
As to the viability of the discount department store, in this context of disagreement as to the number of years to elapse before a national (or some notional) benchmark in trading is achieved, Stockland has contended that the court should take comfort from the interest shown by Woolworths Ltd in establishing a Big W, referring to cases such as Westfield Ltd v Gold Coast City Council [2002] QPELR 542, 550 and CPT Manager Ltd v Central Highlands Regional Council [2010] QPELR 201, 202. There is some merit in this approach, but perusal of the agreement executed by that company, which presumably wants to secure for itself the “inside running”, shows that it is far from being committed. I place no reliance on Exhibit FG1 in rejecting the argument that “there is no economic need for the proposal because the components will not achieve benchmark performance for some years.”
A further point dividing the economists concerned the benefits by way of employment generation that the proposed expansion could be expected to bring. These would be relevant if, contrary to my view, there was conflict with a relevant planning instrument, and the familiar quest was embarked upon to identify grounds of public interest that might justify approval in face of the conflict. The benefit by way of employment opportunities for the North Shore community is obvious. Mr Dimasi estimated that at 432 persons, based on $51 million in new retail expenditure. The real contest was about his estimating that job losses in the other centres attributable to trade they will lose would be only 22. Mr Brown’s individual report states:
“24.On Mr Dimasi’s figures:
a.The proposed expansion will result in an increase in trading at Stockland North Shore of $51 million (see Table TD6 at page 48 of the JER);
b.An additional 432 will be employed at the centre (see Table TD4 at page 44 of the JER);
c.Other centres in the Townsville region will suffer a $51 million impact; but
d.The loss of employment opportunities at other centres will be 22 employed persons (the 5% impact referred to in Footnote 2 to Table TD4 at page 44 of the JER).
25.On Mr Dimasi’s approach, for every million dollars lost in turnover at a given centre, there will be a loss of only 0.4 employed persons. On the other hand, again on Mr Dimasi’s approach, for every million dollars increase in turnover at Stockland North Shore, retail employment opportunities are created for over 8 persons.
26.I disagree with this approach given the highly responsive nature of employment in the retail industry and the fact that the increase in turnover at Stockland North Shore would be a consequence of redirected expenditure. It is my view that the operational employment effects of the expanded North Shore centre are largely transfers of employment from other centres, as opposed to a significant net increase in retail employment across the Townsville retail sector.”
Mr Dimasi stuck to his guns, explaining this stark discrepancy in terms of difficulties that reductions in staff levels pose for retailers, who usually cannot cut them with the abandon or mechanical approach suggested by Mr Brown. Selling staff aside, a shopping centre may be unable to terminate administrative, cleaning or security staff in line with declining turnover. (In any event, no one suggested that decline in any centre would be concerning. The proposal will, in large measure, involve North Shore’s appropriating the retail opportunities offered by growth in the locality.) I am satisfied that the employment benefits contended for are a “ground” and something desired by the planning instruments. That would remain the case even if Mr Dimasi’s 22 lost positions were increased by multiples in an exercise of focussing on a wider “public” or “community” than North Shore. It would seem that productivity in the other major centres will suffer a decline. However, I am in no doubt that the greater public good lies in the generation of new employment. That and the provision of conveniently located higher order and more varied retail facilities to the growing and presently relatively isolated North Shore community lead me to the view that sufficient grounds are established to override any conflict with planning instruments that might be contended or thought to arise from the proposal, once its starting date is held back to December 2015 or later.
On that basis, economic need is established by Stockland. As to planning need or public need, which I think must be accounted the same thing, I proceed on the footing that it adds into the mix or places additional focus on considerations of competition, convenience and choice. In each respect, the proposal qualifies. Mr Schomburgk thought that planning need had not been demonstrated for the entirety of the proposal (T5-60), that one had been demonstrated for a smaller proposal, but not enough “to get them across the line yet for the full 20,000m²” (T5-61). He did not consider the trade area population disadvantaged by their location over 10km from the nearest discount department store, volunteering that he would be happy to drive such a distance to a discount department store himself (as apparently he is compelled to do from his residence). The insult or “cost” to the planned hierarchy of centres that he perceived outweighed in his thinking the convenience benefit he accepted the expansion ought bring. For reasons apparent elsewhere, in my opinion there is no (or only a purely technical) conflict with the centres hierarchy provisions in the planning scheme, because their focus is on the time of establishment of an expanded centre, rather than the time of application or approval. Mr Schomburgk understandably in the circumstances discusses in a commingled way planning need from the twin perspectives of whether a planning need is shown, other things being equal, and in an immediately adjacent sentence whether (rather grudgingly conceded) disadvantage to the local community yet produces an “overriding planning need” (T5-60) – bespeaking an approach that there is a conflict that needs to be overcome. It is convenient to note here my rejection of suggestions, whether by any planner or any economist, that offering a single discount department store in a centre is no real benefit for consumers, because those wanting the lines carried are engaging in “comparison shopping” and will want to go to one of the larger centres where multiple discount department stores compete. I would expect shoppers to think carefully before committing to an additional 20 or 30 kilometres’ driving in the interests of safety on the roads and a reduction of their carbon footprints/fuel consumption, not to mention the saving of time.
I accept Mr Motti’s reason for the conclusion that a “public need” has been established. See Exhibit 11:
“6.1.2 Mr Motti says that the development will result in a facility that serves the residents of North Shore (the structure plan area), the region and the travelling public as expected by the Overall Outcome 4.4(7)(a) for the structure plan area. It offers a retail and commercial mix that will satisfy a public need by providing convenient access to facilities not otherwise found in the locality and it will provide an expanded range and choice of offer. It also offers local employment opportunities to assist in creating a cohesive and identifiable community.”
One could add to the considerations he mentions that of increasing competition. The tests for the proposal set by the plan of development are satisfied; there is no conflict with the preliminary approval.
As to the planning scheme, limited conflict is conceded. Stockland’s planner, Mr Motti, in his individual report Exhibit 13 at 46.0.2, accepts that there is conflict with the planning scheme in that the proposal is inconsistent with the Rural and Residential Planning Areas. In the joint planners report Exhibit 11 at 7.0.1, the town planning experts agreed there was a reasonable expectation that the Rural Planning Area and the Residential Planning Area provisions applying to the site as per the planning scheme had been overtaken by the preliminary approval and the plan of development. There was disagreement as to whether the later planning instrument supported the scale or timing of the proposal. Mr Perkins (the Council’s planning expert) says at Exhibit 11, 6.2.30 there is conflict with the planning scheme because the site is not in the Centres Planning Area, perhaps the obverse of its being in the Rural and Residential Planning Areas. Of course, the character statement contemplates that to the mapped areas will be added an important centre in the Mount Low – Deeragun area. In my opinion the proposal provides the basis of the “identified Sub-Regional Centre [] … Mt Low Deeragun. That it may come about earlier than “intended” cannot convincingly be presented as conflict: this is a case of intended expansion occurring earlier than envisaged, consistently with the rapid growth of the locality, and with no adverse consequences whatever. Dexus’ submissions in paragraph 61(c) draw attention to s 2.16.3 of the 1996 Planning Scheme, confirming long-standing expectations of development along the lines of the proposal somewhere in the general locality (“somewhere” that has come to correspond with the site):
“2.16.3 Shopping and Commercial
While the Townsville Central Business District contains a significant concentration of commercial, administrative, service and cultural activities, the shopping function has changed and weakened with the advent of large suburban drive-in shopping centres. Stockland Nathan Plaza with a floor area of about 48,000 sqm, which includes the K-Mart Plaza, has the regional shopping role.
Within Thuringowa City the Willows Shoppingtown is the dominant centre and has a sub-regional role. With residential development of land further south along Ross River Road, the Willows Shoppingtown will remain the dominant retail centre in Thuringowa for some considerable time.
With urban development of the areas generally referred to as the Bohle Plains and Mt Low-Deeragun, the need for shopping centres in that area will arise. The establishment of a further sub-regional centre, in that area, is indicated on the Development Control Plan.
…
A sub-regional centre in the Bohle Plains area would be required by about 2020 or when the regional population reaches about 150,000. Initial construction will commence before that time with the centre growing to meet the needs of the population. In the long term, these centres would compliment each other with neither centre dominating.”
The complimentary centres are Dexus’ at the Willows and, as events have turned out, Stockland North Shore. Of course the 1996 Planning Scheme is no longer the planning scheme, although its concept has clearly been carried over into the current one. If it mattered, the 150,000 regional population, taken to be that of Townsville-Thuringowa, has been reached, and some years before 2020.
Mr Schomburgk’s opinion about conflict with the Planning Scheme was that (as assessment against its provisions would confirm) it arose starkly with the Rural Planning Area and the Residential Planning Area; he thought they became relevant because the plan of development in the preliminary approval was not satisfied. My opinion is that those Planning Area designations are overridden by the preliminary approval for relevant purposes. Otherwise, Mr Schomburgk says:
“ Centres Planning Area
6.2.13As discussed above, it is my opinion that a centre of the scale being proposed is in direct conflict with the stated intentions for the Centres Planning Area (section 3.3.1(e)). A centre of this size in this location is not intended within the life of the current Planning Scheme, and I have seen no material to suggest these provisions of the Planning Scheme have been ‘overtaken by events’ as that term is used in town planning terminology. Indeed, the PoD for this site sets its own criteria for expansion, which, based on the material I have seen, have not been reached.
6.2.14The scale of the proposed centre is at least District, if not Sub-Regional, as described in the Centres Planning Area Character Statement (section 3.3.1). Section 3.3.1(e)(iii) provides that ‘the establishment of additional District centres, other than those identified in the Schedule 3.3, is inconsistent with the desired outcomes for the Centres Planning Area”. There seems little doubt that the establishment of this particular proposal, regardless of what Centre classification it might best fall within, is inconsistent with these provisions.
6.2.15The Centres Planning Area Code provides that the GLA of a centre is to be “appropriate for (that centre’s) function within the centres hierarchy” (P1 of the Code). By reference to the provisions of the Character Statement mentioned above, this proposal exceeds that GLA by a substantial factor, given that, within the life of this Planning Scheme, a centre at this general location is not intended to reach Sub-Regional scale, which this proposal does. In doing so, the proposal also offends P20 which seeks to maintain that hierarchy.
6.2.16P22 of the Code is raised as an issue, and deals with CPTED principles (Crime Prevention Through Environmental Design). I do not consider that the subject proposal offends that Criterion, or at worst can be conditioned to ensure compliance.
6.2.17In my opinion, then, the proposal conflicts with provisions of the Centres Planning Area. That conflict is acute, principally as a result of the scale of the proposed development when compared with the Planning Scheme’s stated intentions.”
It comes down to the combined effect of scale and timing. Even if satisfaction of the ‘PoD’ requirements did not do away with the ‘conflict’, it is one that disappears if establishment is delayed to the end of the year after next.
Accepting that matters identified are conflicts with the planning scheme, they are outweighed by the proposal’s conformity with the preliminary approval, which may be summed up as need being satisfied in a fashion identified as suitable. Other “grounds”, for section 326 purposes might be relied on; it is necessary to mention only employment creation.
Dexus’ case was that the proposed development’s prematurity was so gross that approval should not be given at all, the relevant application ought to be rejected out of hand. Stockland’s approach was that this was simply a conditions appeal: conditions could be imposed to ensure that the proposal as developed satisfies the relevant planning instruments. That is the approach which the court has found persuasive.
The appeal should be dismissed, subject to a condition being included in the approval (consistently with an approach of all of the planners thought open) delaying the commencement of operations in the expanded centre until December 2015 or later.
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