Elanor Investors Limited v Sydney Zoo Pty Ltd (No 5)

[2020] NSWLEC 93

Land and Environment Court

New South Wales

Medium Neutral Citation:

Elanor Investors Limited v Sydney Zoo Pty Ltd (No 5) [2020] NSWLEC 93

Hearing dates:

9, 10, 11, 12 and 13 March 2020

Date of orders:

17 July 2020

Decision date:

17 July 2020

Jurisdiction:

Class 4

Before:

Pepper J

Decision:

Further amended summons dismissed with costs. See orders at [227].

Catchwords:

JUDICIAL REVIEW: competition between two zoos – proper construction of development consent – whether differentiation conditions incorporated into a development consent – principles of construction of development consents –– whether alleged conditions of consent breached – whether distribution of marketing material is “development” for the purposes of planning legislation – if alleged conditions breached whether an appropriate exercise of discretion to grant relief – differentiation conditions not part of consent – no breach of alleged differentiation conditions – further amended summons dismissed with costs.

Legislation Cited:

Environmental Planning and Assessment Act 1979 ss 1.5, 4.2(1), 4.15(1), 9.45, 9.46

Land and Environment Court Act 1979 s 16

Cases Cited:

Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182

Auburn Municipal Council v Szabo (1971) 67 LGRA 427

Bardsley-Smith v Penrith City Council [2013] NSWCA 200; (2013) 195 LGERA 34

Baulkham Hills Shire Council v Ko-veda Holiday Park Estate Ltd [2009] NSWCA 160; (2009) 167 LGERA 395

Bunderra Holdings Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd [2017] NSWCA 263; (2017) 96 NSWLR 434

Cheetham v Goulburn Motorcycle Club Inc [2017] NSWCA 83; (2017) 223 LGERA 43

Crouch Developments Pty Ltd v D & M (Australia) Pty Ltd [2008] WASC 151

Dogild Pty Ltd v Warringah Council [2008] NSWLEC 53; (2008) 158 LGERA 429

Georges River Council v Stojanovski [2018] NSWLEC 125

Glaser v Poole [2010] NSWLEC 143

Grace Bros Pty Ltd v Willoughby Municipal Council (1980) 44 LGRA 400

House of Peace Pty Ltd v Bankstown City Council [2000] NSWCA 44; (2000) 48 NSWLR 498

Hunter Industrial Rental Equipment Pty Ltd v Dungog Shire Council [2019] NSWCA 147

Kentucky Fried Chicken Pty Ltd v Gantidis [1979] HCA 20; (1979) 140 CLR 675

Newbury District Council v Secretary of State for the Environment [1981] AC 578

Omaya Investments Pty Ltd v Dean Street Holdings Pty Ltd (No 5) [2020] NSWLEC 9

Oshlack v Irongates Pty Ltd (1997) 130 LGERA 189

Randall Pty Ltd v Willoughby City Council [2005] NSWCA 205; (2005) 144 LGERA 119

Ryde Municipal Council v The Royal Ryde Homes [1970] 1 NSWR 277; (1970) 19 LGRA 321

Secretary, Department of Planning and Environment v Leda Manorstead Pty Ltd (No 4) [2019] NSWLEC 58

Shell Co of Australia Ltd v Parramatta City Council (No 2) [1972] 2 NSWLR 632

Sutherland Shire Council v Benedict Industries Pty Ltd (No 8) [2017] NSWLEC 4

Tempe Recreation (D.500215 and D.1000502) Reserve Trust v Sydney Water Corporation [2014] NSWCA 437; (2014) 88 NSWLR 449

The Owners – Strata Plan No 4983 v Canny [2018] NSWCA 275; (2018) 233 LGERA 432

Warringah Shire Council v Sedevcic (1987) 10 NSWLR 335

Westfield Management Ltd v Perpetual Trustee Company Ltd [2006] NSWCA 245

Wingecarribee Council v CSR Limited (unreported, Land and Environment Court of NSW, Stein J, 11 November 1993)

Winn v Director-General of National Parks and Wildlife [2001] NSWCA 17; (2001) 130 LGERA 508

Category:

Principal judgment

Parties:

Elanor Investors Limited (Applicant)
Sydney Zoo Pty Limited (Respondent)

Representation:

Counsel:
Mr R Lancaster SC with Mr N Eastman (Applicant)
Mr N Williams SC with Mr J Hutton (Respondent)

Solicitors:
Gilbert + Tobin Lawyers (Applicant)
Addisons (Respondent)

File Number(s):

2018/359630

Judgment

TABLE OF CONTENTS

Topic	Paragraph No
Two Zoos Compete for Business	[1]
Relevant Legislative Provisions of the EPAA	[13]
The Evidence of the Parties	[15]
Sydney Zoo is Granted Development Consent	[17]
Conditions of Consent	[57]
Featherdale’s International Visitor Market	[69]
Marketing Strategy of Sydney Zoo	[76]
The Difference Between Nett and Retail Rates	[78]
2018 Rate Card (Version 1)	[82]
2019 Rate Card (Version 1)	[83]
2019 Rate Card (Version 2) and the 2019 Marketing Letter	[91]
2020 Rate Card	[99]
Attempts by Sydney Zoo to Secure Agreements with International Tour Operators	[100]
Issues for Determination	[104]
The Distribution of Marketing Material is Not “Development” under the EPAA	[105]
The Proper Construction of the Consent	[110]
The Asserted Breaches of the Alleged Conditions of Consent	[116]
The Differentiation Conditions Were Not Incorporated into the Consent	[122]
There Was No Type of Facility Condition	[147]
There Was No Pricing Condition	[155]
There Was No Animal Encounter Condition	[161]
The Differentiation Conditions Were Not Breached by Sydney Zoo	[169]
There Was No Breach of the Purported Type of Facility Condition	[172]
There Was No Breach of the Purported Pricing Condition	[180]
There Was No Breach of the Purported Animal Encounter Condition	[196]
Even Assuming Breach of the Consent, the Court Declines to Grant the Relief Sought	[199]
Conclusions, Costs and Orders	[224]
Annexure A

Two Zoos Compete for Business

1. Featherdale Wildlife Park (“Featherdale”) is located at Lot 258 in DP 752051 known as 217-229 Kildare Road, Doonside (“the Featherdale site”), and has been operating at that site since 1972. It employs 55 full-time staff, three part-time staff, 40 casual staff and 52 volunteer staff.

2. The applicant, Elanor Investors Limited (“Elanor”), owns Elanor Funds Management Limited, the registered proprietor of the Featherdale site, and wholly owned Featherdale between June 2013 to 29 November 2019. Elanor established the Elanor Wildlife Park Fund (“the Fund”) and seeded the Fund by selling Featherdale to the Fund in November 2019.

3. At around the same time, the Fund acquired the Mogo Zoo (now Mogo Wildlife Park) business located at Tomakin Rd, Mogo.

4. The respondent, Sydney Zoo Pty Ltd (“Sydney Zoo”), was the proponent for the State Significant Development Application SSD 7228 (“DA”). The DA proposed to develop and operate a new zoological facility (branded by Sydney Zoo as “Sydney Zoo”) on Lot 101 DP1195067 (now Lot 11 in DP 1247378) (the “Sydney Zoo site”). The Sydney Zoo site is located approximately three kilometres south of the Featherdale site on land leased form the Western Sydney Parklands Trust in Bungarribee, Western Sydney.

5. Sydney Zoo opened to the public on 6 December 2019.

6. Sydney Zoo operates under development consent SSD 7228 granted by the Planning Assessment Commission of NSW (“PAC”) on 8 September 2017 (“the consent”). Prior to the consent being granted, there were communications between the PAC and Sydney Zoo concerning the “differentiation” of the product that Sydney Zoo was offering from that offered by Featherdale. The PAC was concerned about adverse social and economic impacts in the locality if there was not sufficient differentiation between Sydney Zoo and Featherdale. Concessions were made by Sydney Zoo that found expression in the conditions of consent, especially conditions B2 to B9.

7. Elanor contends that the differentiation obligations proposed by Sydney Zoo were central to it persuading the former NSW Department of Planning and Environment (now the Department of Planning, Industry and Environment) (“Department”) and the PAC that any adverse socio-economic impacts in the locality arising from a new zoo could be mitigated to an acceptable level. In other words, the differentiation obligations were fundamental to the Department’s decision whether or not to recommend approval of the DA and the PAC’s decision whether or not to grant consent.

8. According to Elanor, however, after the consent was granted and prior to the opening of Sydney Zoo, it became aware of advertising and marketing material that indicated that Sydney Zoo was conducting itself in a manner that breached, or threatened to breach, a number of the consent conditions relating to differentiation. This conduct is, or has the potential to, harm Elanor’s business.

9. Therefore, by further amended summons filed on 5 March 2020, Elanor seeks declaratory and injunctive relief in relation to breaches of the Environmental Planning and Assessment Act 1979 (“EPAA”) including:

1. declarations that Sydney Zoo carried out “development” (as defined in s 1.5 of the EPAA) other than in accordance with the consent contrary to s 4.2(1)(b) of the EPAA;

2. orders that Sydney Zoo cease distributing certain identified marketing material, as well as any other non-identified marketing material, that would be in actual or apprehended breach of the consent; and

3. orders that nominated persons who have received the impugned marketing material are provided a notice in a form to be agreed by the Court.

10. Several of the breaches alleged by Elanor were abandoned by it prior to the hearing commencing. For example, Elanor no longer alleges non-compliance with conditions B2 to B9 of the consent. Rather, it alleges breaches of differentiation obligations (conditions) that it claims are derived from the documents submitted by Sydney Zoo to the PAC which are expressly referred to in condition B2 of the consent.

11. The non-compliance is said to arise from Sydney Zoo causing or permitting the distribution of marketing material attached to the amended summons. The alleged conditions relate to the type of facility, pricing and the animal encounters offered by Sydney Zoo.

12. In my opinion, the further amended summons must be dismissed principally for the following reasons:

1. first, the distribution of marketing material is not “development” within the meaning of s 1.5 of the EPAA that is prohibited under s 4.2(1)(b) of that Act;

2. second, the conditions that Elanor contends were breached never, upon the proper construction of the consent, formed part of the consent; and

3. third, even if they did, Sydney Zoo has in any event complied with all binding differentiation conditions in the consent.

Relevant Legislative Provisions of the EPAA

13. The relevant legislative provisions to which the Court must have recourse are limited in compass. First, s 1.5 of the EPAA defines the term “development” as:

1.5      Meaning of “development”

(1)    For the purposes of this Act, development is any of the following—

(a)  the use of land,

(b)  the subdivision of land,

(c)  the erection of a building,

(d)  the carrying out of a work,

(e)  the demolition of a building or work,

(f)     any other act, matter or thing that may be controlled by an environmental planning instrument.

…

(3)     For the purposes of this Act, the carrying out of development is the doing of the acts, matters or things referred to in subsection (1).

14. Second, s 4.2(1) of the EPAA states that:

4.2   Development that needs consent

(1)    General If an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies unless—

(a)  such a consent has been obtained and is in force, and

(b)  the development is carried out in accordance with the consent and the instrument.

The Evidence of the Parties

15. In addition to several volumes of documentary material, Elanor relied on a large number of affidavits (10) (especially having regard to the confined issues for determination in the proceedings), namely:

1. an affidavit of Mr Glenn Willis sworn 21 December 2018. Mr Willis is the Chief Executive Officer and Managing Director of Elanor Investors Group, of which Elanor is a member. He is also a director of Elanor. Mr Willis deposed to Elanor’s concerns regarding the existence of a new zoo in close proximity to Featherdale, in particular, its belief that it would undermine the commercial feasibility of Featherdale. It was Mr Willis’s view that the new zoo would adversely impact the profitability of Featherdale, especially if it did not comply with the differentiation obligations contained in the consent. Specifically, he understood that an 84% reduction in visitors due to the development of Sydney Zoo was estimated;

2. three affidavits of Mr Tony Chiefari sworn 21 December 2018, 5 August 2019 and 29 January 2020. Mr Chiefari is the General Manager of Featherdale. Relevantly, in his first affidavit Mr Chiefari deposed to Featherdale’s market, stating that the majority of visitors to the facility were international. He also deposed to the marketing that Sydney Zoo had engaged in and gave his opinion as to what the alleged price condition required Sydney Zoo to do. In his second affidavit Mr Chiefari further deposed to Featherdale’s market, Sydney Zoo’s marketing strategy and the adverse impact of Sydney Zoo’s lower advertised trade rates. In his third affidavit he responded to the evidence of Sydney Zoo and deposed to the fact that because Sydney Zoo was offering rates that were lower than Featherdale’s, Featherdale had to reduce its rates thereby reducing its commercial feasibility;

3. three affidavits of Ms Sara Ang sworn 21 December 2018, 6 August 2019 and 30 January 2020. Ms Ang is the Director of Sales and Marketing at Featherdale and reports to Mr Chiefari. In her first affidavit she described Featherdale’s marketing strategy, stating that there was a difference between how a wildlife park for Australian native animals (Featherdale’s offering) and a zoo were marketed. She deposed to the international and domestic marketing strategy of Featherdale and the impact that Sydney Zoo’s marketing was having on Featherdale. Ms Ang gave similar evidence in her second affidavit, albeit updated and in greater detail. And in her third affidavit she proffered her opinion on the difference between a zoo and a wildlife park and responded to Sydney Zoo’s evidence;

4. an affidavit of Mr Chad Staples sworn on 21 December 2018. Mr Staples is the Director of Life Sciences at Featherdale. His affidavit described the social, educational and conservation programs provided by Featherdale; and

5. two affidavits of Ms Lili Zhai sworn 18 January 2019 and 29 January 2020. Ms Zhai is a Business Development Manager at Featherdale. Her first affidavit annexed examples of the marketing material being distributed by Sydney Zoo. Her second affidavit gave evidence of the lower rates being offered by Sydney Zoo.

16. Sydney Zoo’s evidence in response was more confined. It relied upon:

1. an affidavit of Mr David Tremain affirmed 12 December 2019. Mr Tremain is a registered surveyor engaged by Sydney Zoo to provide a survey of the site;

2. two affidavits of Mr Jonathon Burgess affirmed 12 December 2019 and 27 February 2020. Mr Burgess is the Managing Director of Sydney Zoo. In his first affidavit, Mr Burgess detailed the approval history of the zoo and the difference between Featherdale and Sydney Zoo. Specifically, he noted that Sydney Zoo is a much larger and more expansive facility than Featherdale (almost six times the size), has a number of exotic animals presented within themed safari-like exhibits, as well as some Australian animals integrated within an Aboriginal cultural experience, and primarily (but not exclusively) targets a domestic market. In Mr Burgess’s second affidavit, he responded in detail to the third affidavit of Mr Chiefari and the third affidavit of Ms Ang; and

3. two affidavits of Mr Christopher Rivett affirmed 12 December 2019 and 5 March 2020. Mr Rivett is the Head of Marketing at Sydney Zoo. He is responsible for setting and implementing Sydney Zoo’s marketing strategy. He deposed in his first affidavit that Sydney Zoo was always intended to be a full service zoo which predominantly caters for the local Sydney market with a particular focus on Western Sydney residents. In his opinion, there was no clear distinction between a “wildlife park” and a “zoo” from a marketing perspective. On the contrary, there were, he noted, a number of similar facilities that referenced both “wildlife park” and “zoo” in their offering. These facilities also offered the opportunity to get up close to animals, including Australian animals. As for the rate cards attached to the further amended summons, Mr Rivett deposed that to the extent that those cards were still operative or made public, they were unlikely, in his view, to cause tour operators to believe that Sydney Zoo’s native animal experience was the main event or major focus, or that the Aboriginal Cultural Program was a minor part of the Bungarribee wildlife experience offered at Sydney Zoo. In Mr Rivett’s second affidavit, he stated that although the 2018 rate card was valid until 31 March 2020, its distribution ceased on 20 December 2018. Sydney Zoo had, however, agreed to honour the rate for operators that had been issued with it. It is Sydney Zoo’s intention to move all suppliers to the current standard nett rate of $15.00.

Sydney Zoo is Granted Development Consent

17. Because of the nature of the conditions of the consent said by Elanor to have been breached by Sydney Zoo, it is necessary to set out in some detail the planning approval history giving rise to the grant of consent by the PAC, much of which was uncontentious and was contained in an agreed statement of facts.

18. On 11 August 2015 a Request for the Secretary’s Environmental Assessment Requirements was lodged with the Department by JBA Urban Planning Consulting Pty Ltd (“JBA”) on behalf of Sydney Zoo. On 16 September 2015 the Secretary of the Department issued the Secretary’s Environmental Assessment Requirements.

19. In December 2015 an Environmental Impact Statement (“EIS”) for Sydney Zoo was submitted to the Department by JBA. At Appendix S of the EIA was a report prepared by KPMG in October 2015, viz, Contribution of Sydney Zoo to the Economy of NSW (“the first KPMG report”).

20. The EIS and documents accompanying the DA were placed on public exhibition by the Department from 10 December 2015 to 8 February 2016. A total of 56 submissions were received by the Department, including an objection from Elanor prepared by Urbis dated 15 February 2016.

21. In response to the submissions, the Sydney Zoo SSD 7228 – Response to Submissions (“JBA RTS”) was prepared by JBA on behalf of Sydney Zoo and submitted to the Department in May 2016. The JBA RTS appended the following supporting technical reports, relevantly:

1. Appendix B: Community Consultation Report;

2. Appendix O: Socio-Economic Impact Assessment Report prepared by KPMG dated 9 May 2016 (“the second KPMG report”); and

3. Appendix P: Submission #7 – Specific Responses.

22. Section 5.9 of the JBA RTS addressed the “Socio-economic Impacts” of the proposed zoo on Featherdale. In particular, it examined the submissions that (contrary to the first KPMG report submitted with the EIS) approval to Sydney Zoo would result in unacceptable economic and social impacts, including a detrimental tourism and employment effect, and that it would result in direct competition with Featherdale. It referred to the second KPMG report and observed that it “addresses the socio-economic impacts of the Sydney Zoo on the surrounding region and Featherdale.”

23. The JBA RTS explained the Sydney Zoo’s product offering was “significantly differentiated from that of Featherdale” and that the competitive threat to the latter’s business was relatively low because:

∙   Sydney Zoo having a much broader animal collection with minimal focus on birds, with no plans to have an aviary. Featherdale has an estimated 70% of species and exhibits dedicated to bird species.

∙   Sydney Zoo will be a longer visitation time (3-4 hours), and will have a different purchase decision driver;

∙   Sydney Zoo’s admission fees will be higher than those of Featherdale’s; and

∙   The Australian Animals collection at Sydney Zoo is to be presented in the context of an Aboriginal cultural experience, whereas Featherdale models itself as providing an opportunity to get “up-close” with Australian wildlife. These differing presentations and strategies further differentiate the facilities where there is the greatest potential for overlap.

The Zoo is seeking to provide a different animal experience for the community through the provision of exotic animal species as the main feature of the Zoo. While Australian native animals are proposed in part, it is noted that exotic species are generally under represented within the Western Sydney area, with Featherdale Wildlife Park providing a native Australian experience rather than exotic species. Subsequently, the Sydney Zoo seeks to differentiate itself through the provision of, in the majority, exotic species. Native Australian landscaping and vegetation features will be implemented where appropriate.

24. In section 8.0 “Revised Mitigation Measures” were, however, provided in the JBA RTS. The JBA RTS concluded that “the Zoo will provide for employment and educational opportunities and will not adversely impact on the local or regional economy” and stated in the Community Consultation Report (at Appendix B) that “the proposal will deliver considerable public benefits including a $36 million investment in Western Sydney tourism, $45 million boost to the NSW economy with almost 745,000 visitors expected per year.”

25. Appendix P to the JBA RTS set out in table form Sydney Zoo’s specific responses to the submissions. In respect of the contention that the EIS did not take into consideration the timing of the procurement of exotic animals and that therefore in its first two to three years Sydney Zoo might operate with mostly native animals, which would provide “similar experiences and sourcing patronage from similar markets as Featherdale”, the JBA RTS responded as follows:

The Sydney Zoo product is differentiated from Featherdale and as a result the competitive threat to the Featherdale business should be relatively low. Sydney Zoo makes this statement on the basis that:

∙   Sydney Zoo will be less specialised, having a much broader animal collection and with little focus on birds. There are no current plans to have an aviary in Sydney Zoo, which is a significant part, if not a majority of the exhibits by number at Featherdale.

∙   Sydney Zoo will be longer visit time, at 3-4 hours, and so has a different purchase decision driver.

∙   Sydney Zoo admissions will be priced more expensively than Featherdale.

26. To refute the submission that it was an unrealistic assumption that all Sydney Zoo visits would be new, and would not be diverted from existing facilities such as Featherdale, the JBA RTS referred to “visitor analysis in Section 6 of the KPMG Socio-Economic Impact Assessment (Appendix O) and subsequent analysis in Section 7 which presents economic impacts of different mixes of visitor sources.”

27. And in relation to the claim that Sydney Zoo could “substantially reduce the annual visitation at Featherdale…by as much as -50% to -84%”, the JBA RTS referred to the second KPMG report and noted that:

3)   Budget – families are often budget conscious and would therefore be unlikely to visit two animal attractions within the same period

Sydney Zoo’s price position is intended to be higher than that of Featherdale. If the market is price sensitive then Featherdale will be at competitive advantage to Sydney Zoo in this area. Indeed Elanor highlights “Affordable ticket prices and fee [sic] parking (relative to Taronga Zoo and other animal attractions)” as one of the positive features identified by the focus group (ref P2 of the Urbis report).

28. A response to the JBA RTS was prepared by Urbis on behalf of Elanor and submitted to the Department on 10 June 2016.

29. On 22 August 2016 a supplementary letter to the Department was submitted by JBA on behalf of Sydney Zoo (“Supplementary Information”). The Supplementary Information included the following relevant attachments:

1. Attachment F: Detailed Socio-Economic Response prepared by Sydney Zoo and JBA; and

2. Attachment G: Sydney Zoo Marketing and Comparative Materials.

30. At section “6.0 SOCIO-ECONOMIC IMPACTS” in the Supplementary Information, reference was made to Attachment F and it was noted that Sydney Zoo would deliver a much needed iconic tourism and recreation facility to Western Sydney. Further information regarding “the context and key characteristics of the Sydney Zoo proposal, including a comparison of Sydney Zoo to Featherdale, clearly demonstrating the obvious and substantial differences between the two facilities” was found at Attachment G.

31. Attachment F stated that:

∙   Where there is the potential for overlap in the Australiana exhibits, actively sought to differentiate the Proposal’s presentation by:

∙  utilising different exhibit formats – for example, not including aviaries which are a significant component of the Featherdale exhibitry; and

∙  incorporating an Aboriginal heritage and cultural enrichment strategy that is integrated into the Australiana exhibit. This is something that Featherdale does not do.

32. Table 1 of Attachment F set out Sydney Zoo’s response to various issues raised by Elanor in the response to the JBA RTS prepared by Urbis. Issue 6 raised the concern that there was no evidence presented in support of the claim that the Sydney Zoo product was differentiated from Featherdale and that “the results of the focus group research conducted by Urbis, confirms this is not the case”. Sydney Zoo’s response was detailed and relevantly stated (footnotes omitted):

The Applicant does not agree with this opinion. The issue was comprehensively addressed in the referenced sections of the RTS and Appendices. The Applicant submits that the differences between the two facilities and consequently, their differing appeal, are clear from a summary comparison:

Table 1B: Comparison assessment of Sydney Zoo and Featherdale

Sydney Zoo	Featherdale
Facility	Zoological facility	Wildlife Park

…

Australian Animals (smaller marsupials and mammals) Yes – integrated with Aboriginal cultural experience; less than 1.5ha Yes – focus on petting/”up-close” experience; 100% of facility

…

Reflecting the longer visitation time, larger facility size/amenity and broader animal collection, the Proposal will be priced more expensively than Featherdale and is likely to appeal to a different market and/or satisfy a different tourism/recreation demand.

The Urbis Report summarised feedback for Featherdale from focus groups. A review of the positive features identified by the focus groups is set out below together with the Applicant’s comments on the applicability of the identified features to the Proposal. This helps to further highlight the significant differences between the two facilities.

Featherdale Feature	Comment
Opportunity to get close to animals	Prime focus of Featherdale, esp. Australian animals. Not a prime focus for Sydney Zoo; ‘safari’ style experience and Australian animals will be presented primarily via Aboriginal cultural experience
Affordable ticket prices and free parking (relative to Taronga Zoo and other animal attractions)	Sydney Zoo will be priced comparatively with Taronga Zoo as a full-service facility
Natural look and feel of enclosures, thus feel like a natural habitat	Sydney Zoo intends to develop world class modern enclosures and visitor amenities and will be on a much larger scale than Featherdale, reflecting larger size of facility and different animals (African Highlands, African Grasslands, Sth East Asian, Aquarium, Insectarium)

…

The Applicant also notes that Featherdale will have the key competitive advantage of being lower in price. Price is one of the key favourable attributes highlighted in the Urbis Report for visitors in valuing Featherdale: “Other positive features identified by the focus group respondents include: Affordable ticket prices and free parking (relative to Taronga Zoo and other animal attractions)”.

The Applicant has made the Proposal’s full service offering and subsequent pricing strategy clear. Pricing strategy is evidently a critical differentiator when families are presented with a choice of attractions.

33. Issue 11 concerned the native animal offerings by the two facilities and was in these terms:

It is Elanor’s position that the key differentiation between Featherdale’s customer attractions to other facilities is the interaction between visitors and native animals. The proposed Sydney Zoo includes native animal exhibits, and it is Elanor’s position (as supported by the extensive focus group analysis carried out by Urbis) that, in practice, this will materially impact the economic viability of Featherdale, and result in overall adverse social and economic impacts in the locality.

34. In response Sydney Zoo said:

The Applicant disagrees with Elanor’s conclusion which has been addressed in the items above.

The Proposal is significantly differentiated based on price, time of stay, amenity, the animal collection and the display strategy. In the Proposal’s Australian animals section, the Applicant has sought to further differentiate the Proposal through the inclusion of an Aquarium and insectarium, as well as through the display strategy – for example, by not including aviaries which are a significant component of the Featherdale exhibitry.

The Proposal will be a major Zoo, similar in scale to Taronga, Perth and Auckland Zoos. It will be twice the size of Adelaide Zoo. As a major facility and attraction the Proposal will seek to provide an integrated, full complement of animals.

In order to further differentiate the Proposal’s offering from Featherdale, the Applicant has sought to incorporate an Aboriginal cultural advancement strategy into the Australiana exhibit which seeks to contextualise Aboriginal culture with the Australian Animals. The Applicant is doing this in partnership with Muru Mittigar. The Sydney Zoo board has ratified a 10% FTE Aboriginal employment target for the Proposal to deliver this. Featherdale does not have a similar strategy.

35. The Department engaged HillPDA to undertake a peer review of the economic impacts of Sydney Zoo. On 31 August 2016, HillPDA released its Review of Economic Impacts (“HillPDA review”). A response to the HillPDA review was prepared by Urbis on behalf of Elanor and submitted to the Department on 18 October 2016.

36. On 3 November 2016 a supplementary submission was prepared by Urbis on behalf of Elanor entitled Socio-Economic Impact of the Sydney Zoo – Additional Evidence.

37. On 22 November 2016 the Department completed its Environmental Assessment Report (“EAR”), recommending that the PAC, as delegate for the Minister for Planning (“the Minister”), approve the DA subject to conditions.

38. The EAR discussed the economic impacts of the Sydney Zoo proposal. It observed that the EIS highlighted the differences between the proposed development and the “nearby offerings”, and that the assessment concluded that “there would be sufficient scope within the tourist market to enable the introduction of a new facility that could operate in conjunction with existing nearby facilities.” It further noted that Sydney Zoo considered that the proposed development would differ from Featherdale because it “includes the exhibition of a wide range of international species in safari-like setting with a lesser focus on Australian native animals.”

39. The EAR noted that the HillPDA review had concluded that there would be no economic impact on the locality that could not be mitigated by Sydney Zoo:

The review concluded there would be sufficient population in Greater Sydney to sustain both facilities. Under Section 79C(1)(b) of the EP&A Act the Department is to consider “the likely impacts of (that) development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality”. If Featherdale’s operations were to be impacted by the operation of the Sydney Zoo, it would be unlikely the result of an ‘economic impact in the locality’. The findings note that in the circumstance where Featherdale is unable to remain viable as a result of Sydney Zoo, this is likely a result of competition rather than economic impact upon the locality.

The principles of the Draft SEPP (Competition), state that a consent authority is not to take into consideration the commercial viability of a proposed development nor the commercial viability of other businesses unless the proposed development is likely to have an overall impact on the extent and adequacy of local community services and facilities. Given the proposed development would unlikely result in an economic impact that would reduce the adequacy of local community services or facilities, the HillPDA review concluded there would be no economic impact upon the locality that could not be mitigated by the Sydney Zoo.

…

To minimise and manage the economic impacts of the proposed development, the Department has recommended conditions that require the Applicant to:

∙    detail how the proposed development will differ from existing recreational facilities and businesses;

∙    undertake ongoing engagement with identified key stakeholders and community members (including a commitment to face-to-face meetings at least four times per year); and

∙    provide initiatives that will be implemented to encourage and enhance the continued operation of the proposed development in conjunction with existing local recreational facilities and businesses.

The Department concludes that where there is an impact from the proposed development on other facilities, this is likely to be as a result of competition rather than an economic impact upon the locality. The Department considers that both Sydney Zoo and Featherdale should seek to work in a complementary manner rather than as competitors to boost the tourism offering of Western Sydney, potentially resulting in an increase in economic contribution to the region. The Department’s recommended conditions that encourage differentiation between the facilities and ongoing consultation with each other to develop a regional tourism offering will help to deliver this.

40. The EAR was sent to the PAC by letter dated 22 November 2016.

41. The PAC held a public meeting in respect of the DA on 14 December 2016.

42. On 1 February 2017 the PAC wrote to the Department requesting additional information in relation to the social impacts of the DA.

43. Meanwhile a Social Impact Assessment was prepared by the University of Technology Sydney (“SIA”).

44. The Department replied to the PAC by letter that attached a document entitled Part A – Department’s Response to the Planning Assessment Commission (“Part A Response”). The Part A Response observed that to ensure the co-existence of Sydney Zoo and Featherdale, the differentiation conditions recommended by the Department, especially proposed condition B6, should be imposed:

Economic impacts upon the locality

The Department sought an independent review of the potential economic impacts of the proposed Sydney Zoo upon Featherdale Wildlife Park. As indicated within the Department’s recommendation, the review indicated that there would be sufficient population within Greater Sydney to sustain both facilities and that an [sic] any impact experienced by Featherdale Wildlife Park would be unlikely to be the result of an economic impact upon the locality.

The review indicated that if the experiences at both facilities were differentiated, there may be potential for the facilities to capitalise on each other, potentially to the economic benefit of both facilities.

Whilst this may be the case, the Department recommended conditions to minimise the economic impact upon the locality that would require the Applicant to:

∙    detail how the proposed Sydney Zoo would differ from existing recreational facilities and businesses;

∙    undertake ongoing engagement with key stakeholders and community members; and

∙    detail initiatives to be implemented to encourage and enhance the continued operation of the proposed development in conjunction with existing facilities.

The Department considered the potential impacts of the proposed Sydney Zoo on Featherdale Wildlife Park to the extent that those impacts may reduce the services provided to the locality by Featherdale Wildlife Park, such as local school education programs and native wildlife rehabilitation programs. Impacts in terms of potential reduced visitor revenue or operations of Featherdale Wildlife Park was not, in the Department’s view, a relevant planning consideration.

Social impacts upon the locality

The Department has reviewed the Social Impact Assessment (SIA) prepared by Public Policy and Governance at the University of Technology, Sydney (UTS) on behalf of Sydney Zoo. The SIA expanded the social assessment undertaken for the EIS and also considered the Department’s peer review undertaken by HillPDA.

The SIA was prepared by appropriately qualified and experienced social impact assessors from UTS and was undertaken in accordance with the Department’s Draft Guidelines for Social Impact Assessment and the NSW Government Guide to Cost Benefit Analysis. The SIA assessed the social, education and conservation programs carried out in the locality and details the potential impacts upon these programs, both positive and negative, as a result of Sydney Zoo.

The SIA included engagement with experts from the zoo and wildlife park industry, past employees of Featherdale, current employees of Sydney Zoo, international tourism operators, social and education service providers, and surveys of 650 people. Consultation with these stakeholders, individuals and groups assisted in the determination of the impacts and informed the likelihood and significance of these impacts.

The SIA assessed three scenarios of operation:

∙    Co-existence – Sydney Zoo is approved and co-exists with Featherdale;

∙    Sydney Zoo Only – Sydney Zoo is approved and Featherdale exits the market; and

∙    Featherdale Only – Sydney Zoo is not approved and the status quo is maintained.

The SIA concluded that neither Sydney Zoo nor Featherdale provide a unique offering to the zoo/wildlife park market that existing facilities around the State and country do not already provide, however the two establishments do provide differing offerings to one another. In the ‘Featherdale Only’ scenario, potential positive social impacts such as additional employment opportunities, delivery of NSW Government policy priorities for Western Sydney and additional education programs may not be realised. In the ‘Sydney Zoo Only’ scenario, the change in offering of social programs to the locality would be temporary and negligible.

Results of the SIA indicated there would be sufficient interest in the different offerings of the two facilities and within the market for both facilities to co-exist. The SIA concludes that the most likely outcome would be the co-existence of both facilities.

To best ensure the co-existence of the two facilities, the SIA supported the conditions recommended by the Department, particularly the differentiation (recommended condition B6) and the adaptive management strategies (recommended conditions C8 and C9).

The Department’s review of the SIA supported the conclusion that there would be sufficient market for both Sydney Zoo and Featherdale to co-exist. Furthermore, it is the Department’s view that with the implementation of conditions, the potential negative social impacts of the proposed Sydney Zoo would be mitigated and minimised. Conditions recommended by the Department included that the Applicant:

∙    differentiate the offering of the proposed Sydney Zoo to that of the existing Featherdale Wildlife Park;

∙    involve the surrounding community during construction and operation of the proposed development;

∙   encourage the development of a regional tourism offering; and

∙   develop adaptive management strategies to address any anticipated or unanticipated social issues that may arise.

45. Proposed condition B6 referred to in the extract above was in the following terms:

B6.   Australian native animals shall comprise less than 1.6 hectares of the overall exhibited animal collection and shall be displayed as part of an Aboriginal Cultural Experience (See Condition C21). This area is to be in accordance with the area designated for Australian animals presented within the Site Plan (see APPENDIX A). Any additional Australian native animals can be displayed as part of educational sessions or ‘micro displays’ within the commercial facilities across the site (i.e. restaurants, cafes and shops).

46. In April 2017 Sydney Zoo submitted its Response to the Planning Assessment Commission’s request for further information to the PAC.

47. On 26 July 2017, on behalf of Elanor, Urbis submitted a letter to the PAC in reply to Sydney Zoo’s Response to the PAC’s request for further information and the SIA.

48. Then on 10 August 2017, Sydney Zoo submitted a letter to the PAC entitled The Sydney Zoo – D440/16 – amendment of proposal (“the 10 August 2017 letter”). The letter was expressly stated not to be a “binding proposal or submission”. It went on to describe how Sydney Zoo would ensure that its product offering was materially differentiated from Featherdale across a number of areas, including the animals exhibited and the fact that its Australian animal collection would be displayed as part of an Aboriginal cultural experience. The letter noted that Featherdale’s koala interaction, a separately charged experience as of September 2016, was substantively similar to several other zoos and wildlife parks in Sydney. However, Sydney Zoo acknowledged the PAC’s desire that there be “some material differentiation between the Sydney Zoo koala exhibit and Feaderdale’s Koala offering”. In this regard it stated that it had “not yet developed” its market position, but as a “full service, broad appeal facility our positioning will similarly focus more broadly, thereby allowing Featherdale to continue to occupy the niche of “getting close to the animals”.” Accordingly (footnotes omitted):

Sydney Zoo therefore proposes that under our operating plan, for a period of three years, Sydney Zoo is limited to offering koala interactions that align with the product offerings at Taronga Zoo and WILDLIFE Sydney Zoo (i.e. no touching), as an integral part of the proposed main koala exhibit…

49. The term “interactive program” was defined in a footnote to the 10 August 2017 letter to mean “activities supervised by one or more keepers which encourage a member of the public to touch, feed and/or have close contact with an animal, either inside or outside the animal’s normal enclosure.” A walk-through animal enclosure was not considered to be an interactive program.

50. The letter was signed by Mr Burgess as the Managing Director of Sydney Zoo. Given the importance of this letter it is appended to this judgment at annexure “A”.

51. On 8 September 2017 the PAC:

1. published its Determination Report dated 8 September 2017, detailing its assessment and the reasons for its decision (“Determination Report”); and

2. granted consent to the DA subject to the conditions specified in Schedules B to D.

52. In the Determination Report, the PAC stated that in reaching its decision it had “carefully considered” the following material:

∙   all information provided by Sydney Zoo;

∙   the Department’s assessment report;

∙   advice and recommendations from government agencies;

∙   all written and verbal submissions;

∙   additional information provided to the Commission and described above in Section 4;

∙   State Environmental Planning Policy (Western Sydney Parklands) 2009, including the matters clause 12 requires the Commission to consider;

∙ section 79C of the Environmental Planning and Assessment Act 1979 (EP&A Act) and the matters it requires the Commission to consider.

53. In section “5.2 social and economic impacts”, the PAC remarked that:

The concern expressed by the community and Featherdale led the Department to commission an independent assessment of the potential economic impact on Featherdale that might result from Sydney Zoo. The independent assessment, prepared by HillPDA, indicated there would be sufficient demand across wider Sydney to sustain both facilities. However, it also found this would not necessarily mean that Featherdale could absorb an impact on its visitation numbers. It said that if Featherdale were to close, this would be a result of competition.

Legal authorities suggest that care should be taken in considering the economic impact of a proposed development upon private traders when assessing the economic and social impacts of that development. According to these authorities, the relevant issue in a planning context is the broader social and economic impacts stemming from any economic impact on existing businesses, rather than the fact of increased competition. The Commission’s approach to this issue has been informed by those authorities.

54. The Determination Report summarised Sydney Zoo’s social impact mitigation measures as follows:

Sydney Zoo’s social impact mitigation measures

The social impact assessment also highlighted several mitigation strategies, in the first instance to help avoid the loss of any social goods provided by Featherdale, and secondly to make-up for any such losses, if they occur.

First, Sydney Zoo would collaborate with other attractions located nearby, including Featherdale, to develop a wildlife-based tourism precinct and identity with the object of improving visitation at all facilities in the area. Sydney Zoo said the Department’s recommended condition C9 reflects this strategy and includes, additionally, a requirement for Sydney Zoo to detail how it would be different from existing recreational facilities and recreational businesses.

The Commission made further inquiries of Sydney Zoo about the nature of the arrangements proposed by Sydney Zoo to differentiate the offerings, in order to comply with condition C9, particularly in relation to Featherdale. In response to the Commission’s request, Sydney Zoo proposed (Appendix 6):

∙   at least two-thirds of the exotic species collection would be present upon the zoo opening to the public (so that Sydney Zoo does not open as a native-only facility, like Featherdale);

∙   the Australian animal exhibit would include an aquarium, reptile house, insectarium and nocturnal house upon opening (so that Sydney Zoo’s native animal exhibits include species that are not included at Featherdale);

∙   for a period of three years after opening, there would be no aviaries that house birds that can fly (so that Sydney Zoo does not include most birds that are at Featherdale); and

∙   for a period of three years, visitors would not be able to touch a koala, except as part of an educational program or for school children as part of a school group (so that Sydney Zoo does not include a particular, and widely known, visitor experience that is offered at Featherdale).

Second, if the social benefits currently provided by Featherdale were to be lost due to its closure, or for any other reason, Sydney Zoo’s social impact assessment highlighted a range of mitigation measures. Sydney Zoo said these measures correspond to the requirements of the Department’s recommended condition C8, and include that Sydney Zoo would cooperate with the Australasian Zoo and Aquarium Association to ensure the orderly relocation of Featherdale’s animal collection; as well as identify opportunities to participate in the continuation of its breeding programs; work placements for students; employment for Aboriginal people; community engagement and outreach programs; and educational programs for school students.

55. The PAC’s “findings on potential social impacts and mitigation measures” were in these terms:

While recognising the concerns Featherdale’s owners have about the potential impact of the proposed zoo, the Commission is not persuaded by the suggestion that it requires exclusive access to the drive-time visitor catchment to provide the social, educational and community programs that it currently offers. Featherdale’s assertion that this market would become inaccessible to it is challenged by the weight of the evidence before the Commission, including Featherdale’s historical success in remaining in operation despite the presence of other large-scale competitors, albeit located further away.

The Commission finds that some of the arguments advanced by Featherdale are based on incomplete information. The intercept survey, for example, only captured Featherdale’s customers, which may indicate that it understates supply-induced demand.

On the other hand, Sydney Zoo’s estimation of its economic benefits, and the outcomes considered likely by the social impact assessment are also based on information with limitations. Featherdale’s response to the social impact assessment highlighted concerns with several methodological and evidence issues underpinning the research by University of Technology, including that its survey questions were not neutral, and that there was no compelling evidence to suggest the visitation market was big enough for both Sydney Zoo and Featherdale.

While views vary as to the likelihood and severity of potential impacts from Sydney Zoo’s increased competition on Featherdale’s visitors, and therefore its programs, the collection of information available to the Commission represents a wide range of data; includes a range of possible outcomes; and describes a suite of contingency measures should the worst-case outcome eventuate.

If Sydney Zoo were to be built, Featherdale would be challenged, again, to compete for market share. Featherdale currently enjoys healthy annual visitation, it has long established programs, which are embedded in and enjoy support from various communities, and a widely-recognised reputation for its offering. While some aspects of Featherdale, such as its local community affiliations, are irreplaceable, the Commission also recognises Sydney Zoo’s particular efforts to provide a range of social goods of its own, and to differentiate its native animal offering from that of Featherdale. These factors support a conclusion that both facilities would be attractive to visitors.

If the risks of a significant contraction or loss of social benefits associated with Featherdale’s current operations do materialise, the commission recognises that the social benefits that would be offered by Sydney Zoo, together with its proposed mitigation strategies, will generate other positive social outcomes for the localities in which Sydney Zoo would be present. The Commission does acknowledge that if this were to occur, the impacts would take time to develop, and any adjustments at Sydney Zoo, or Featherdale, would also take time to implement fully and successfully, particularly given the depth of expertise and range of programs at Featherdale. Therefore, the Commission acknowledges that the most recent proposal from Sydney Zoo (described above and in Appendix 6) to differentiate its native animal offering from that of Featherdale, particularly over the first three years of Sydney Zoo’s operation would go a long way toward mitigating impacts arising from the establishment of a new zoo.

…

As Sydney Zoo’s differentiation proposal was submitted after the Department referred the development application to the Commission for a decision, the details are absent from the recommended conditions of consent. Consequently, the Commission has imposed additional conditions, which itemise the details of Sydney Zoo’s strategy. These conditions require:

∙   at least two-thirds of Sydney Zoo’s exotic species collection are to be present upon opening;

∙   the Australian animal exhibit must include an aquarium, reptile house, insectarium and nocturnal house upon opening;

∙   for a period of three years after opening, Sydney Zoo would not include aviaries that house flying birds; and

∙   for a period of three years after opening, visitors to Sydney Zoo would not be able to touch a koala, except as part of an educational program for school children as part of a school group.

56. Finally, the PAC found that the risk and severity of the potential impacts to Featherdale did not warrant the refusal of the Sydney Zoo proposal. This was because:

The Commission is satisfied that if impacts arise, they are likely to be balanced by social benefits offered by Sydney Zoo and its mitigation strategies. These include that Sydney Zoo would cooperate with the Australasian Zoo and Aquarium Association to ensure the orderly relocation of Featherdale’s animal collection; as well as identify opportunities to participate in the continuation of its breeding programs; work placements for students; employment for Aboriginal people; community engagement and outreach programs; and educational programs for school students.

Conditions of Consent

57. As at the date of the grant of the development consent, conditions B2 to B10 of the consent provided that:

B2.   The Applicant shall carry out the Development in accordance with the:

(a)   EIS, ETS and Supplementary Information and Additional Information;

(b)   development layout plans and drawings in the EIS, RTS and Supplementary Information; and

(c)   the Management and Mitigation Measures (see Appendix B).

B3.   If there is any inconsistency between the above documents, the most recent document shall prevail to the extent of the inconsistency. However, the conditions of this consent shall prevail to the extent of any inconsistency.

B4.   The Applicant shall comply with any reasonable requirement(s) of the Secretary arising from the Department’s assessment of:

(a)   any reports, plans or correspondence that are submitted in accordance with this consent; and

 (b)   the implementation of any actions or measures contained within these reports, plans or correspondence.

LIMITS OF CONSENT

B5.   This consent lapses five years after the date from which it operates, unless the Department has physically commenced on the land to which the consent applies before the date on which the consent would otherwise lapse under section 95 of the EP&A Act.

B6.   The display of Australian native animals shall comprise less than 1.6 hectares of the overall exhibited animal collection and shall be displayed as part of an Aboriginal Cultural Experience (See Condition C21). This area is to be in accordance with the area designated for Australian animals presented within the Site Plan (see APPENDIX A) and must include from the commencement of opening to the public an Aquarium, Reptile House and Insectarium and Nocturnal House. Any additional Australian native animals can be displayed as part of educational sessions or ‘micro-displays’ within the commercial facilities across the site (i.e. restaurants, cafes and shops).

B7.   For the commencement of opening to the public the Development must have for display to the public at least two-thirds of the exotic species nominated in the Additional Information.

B8.   For the first three years after opening to the public, the Applicant is prohibited from having Interactive Programs that involve touching a koala except as part of demonstrations in the educational amphitheatre or provided in the context of education of school groups.

B9.   The exhibition of birds at the Development is limited to ratites (flightless birds) and penguins only.

B10.    The hours of operation for the Development are restricted, on any day, to:

Month	Hours of Operation
December and January	9am – 10pm
February to November	9am – 6pm

58. The socio-economic conditions in C7 to C9 were identical to those proposed earlier by the Department and mandated that:

C7.   Prior to the commencement of construction, the Applicant shall provide a dedicated Community Hotline phone number and email address for the provision of information relating to the Development and to make any complaints. This Community Hotline is to be monitored during construction and operation of the Development. The details of these services are to be provided to the residents of Bungarribee, made available on the main website of the Development and placed on any public communications commissioned by the Applicant in relation to the Development.

C8.   Prior to the commencement of construction the Applicant shall prepare, in consultation with the Secretary, a Community Engagement Plan for the construction and operation of the Development to the satisfaction of the Secretary. The plan shall:

(a)   include a profile of the surrounding community and identify key stakeholders and community members and groups;

(b)   include detail of procedures and mechanisms used to consult the community and stakeholders on the Development’s progress and other issues;

(c)   include detail of the opportunities for the community of Bungarribee to be involved with the Development during construction and operation (i.e. as part of decision-making, employment or as visitors through an alternate pricing structure);

(d)   include detail of how the Community Hotline and email address (as required by Condition C7) will be managed and monitored;

(e)   detail the methods for ongoing engagement with identified key stakeholders and community members and groups (including a       commitment to face-to-face meetings at least four times per year); and

(f)   include adaptive management strategies that may be implemented to address any anticipated or unanticipated social issues that may arise.

Development of Regional Tourism

C9.   Prior to the commencement of operations, the Applicant shall submit a report to the satisfaction of the Secretary demonstrating it has made genuine and reasonable attempts to consult with local recreational facilities and businesses (including Featherdale Wildlife Park) to enhance regional tourism in conjunction with the Development. The report shall include:

(a)   details of how the operation of the Development will differ from the existing recreational facilities and businesses;

(b)   detail consultation undertaken with local recreational facilities and businesses;

(c)   outline initiatives implemented to encourage and enhance continued operation in conjunction with local recreational facilities and businesses;

(d)   detail the success or otherwise of these initiatives using recognised social indicators; and

(e)   include detail of the additional activities that will be undertaken for the duration of the Development.

The Secretary may request updates on these initiatives at any time.

59. Finally, condition C21 dealing with the “Aboriginal Cultural Experience” provided that:

C21.   The Applicant is to collaborate with Muru Mittigar and Registered Aboriginal Parties consulted within the EIS to the satisfaction of the Secretary to establish a detailed Aboriginal Heritage Experience Strategy in conjunction with the display of Australian native animals, to the satisfaction of the Secretary. This strategy will form part of the OEMP in Condition D4 and shall:

(a)   be prepared by a suitably qualified and experienced heritage consultant;

(b)   include detail of infrastructure, signage and various other materials to ensure the Australian native animal exhibits of the Development are fully integrated with the presentation of Aboriginal heritage;

(c)   outline how the experience will increase awareness and education in relation to Aboriginal heritage;

(d)   demonstrate how direct contact with Australian native animals will enhance the education of Aboriginal culture; and

(e)   demonstrate how Aboriginal people will have an ongoing participatory role in the experience.

60. The terms “EIS”, “RTS”, “Supplementary Information” and “Additional Information” were defined in the consent:

1. “EIS” means:

Environmental Impact Statement titled Sydney Zoo SSD 7228 – Environmental Impact Statement, prepared by JBA, dated December 2015.

2. “RTS” means:

Response to Submissions titled Sydney Zoo SSD 7228 – Response to Submissions, prepared by JBA, dated May 2016.

3. “Supplementary Information” means:

Supplementary Information submitted by JBA, dated 22 August, 2016

4. and “Additional Information” means:

Additional information comprising documents titled “Response to the Planning Assessment Commission’s request for further information” prepared by Sydney Zoo and dated April 2017; “Social Impact Assessment” prepared by the University of Technology Sydney and undated; and letter titled “The Sydney Zoo – D440/16 – amendment of proposal” signed by Jake Burgess and dated 10 August 2017.

61. The Department’s Director of Industry Assessments, as delegate for the Minister (“Director”), approved Sydney Zoo’s modification application SSD 7228 MOD 1 (“MOD 1”) on 8 May 2018, to authorise a reduction in the size of the administration/curatorial building, to relocate and/or amend the floor space and/or orientation of certain animal enclosures, back of house buildings, amenity blocks and service buildings, and to amend the stormwater management system.

61. On 20 September 2018 the Director approved Sydney Zoo’s modification application SSD 7228 MOD 2 (“MOD 2”) authorising further modifications, namely, to realign the boardwalk access path to the aquatic habitat, to reconfigure the aquarium building including revisions to the built form and internal layout, and administrative changes to the approved landscape plan.

62. The Independent Planning Commission (formerly the PAC) (“IPC”), as the declared consent authority, approved Sydney Zoo’s modification application SSD 7228 MOD 3 (“MOD 3”) on 25 November 2019, allowing modifications to clarify public opening hours, to extend hours of operation for the zoo for maintenance and emergency activities, temporary and community events, the delivery of goods, waste collection, specimen related services, and private zoo experiences, and to rectify an administrative error in referencing.

63. And on 4 July 2019, the Director approved Sydney Zoo’s modification application SSD 7228 MOD 4 (“MOD 4”) to construct two additional sheds at the rear of the nocturnal and reptile building and primary back of house spaces, including holding spaces, landscaping and access pathways.

64. Sydney Zoo lodged modification application SSD 7228 MOD5 (“MOD 5”) on 5 November 2019, seeking amendments to condition B7 in respect of exotic animals. MOD 5 was withdrawn by Sydney Zoo on 4 December 2019.

65. There were several further modification applications lodged by Sydney Zoo since consent was granted.

66. Neither MOD 1 to MOD 4 nor the subsequent modifications made any reference to or had the effect of making express any of the differentiation conditions purportedly forming part of the consent.

67. Accordingly, as modified, condition B2 of the consent (by MOD 1, MOD 2, MOD 3 and MOD 4) stated that:

The Applicant shall carry out the Development in accordance with the:

(a)   EIS, RTS and Supplementary Information and Additional Information;

(b)   development layout plans and drawings in the EIS, RTS and Supplementary Information;

(c)   the Management and Mitigation Measures (see Appendix B);

(d)   the modification application SSD 7228 MOD 1 and supporting documentation;

(e)   the modification application SSD 7228 MOD 2 and supporting documentation;

(f)   the modification application SSD 7228 MOD 3 and supporting documentation; and

(g)   the modification application SSD 7228 MOD 4 and supporting documentation.

Featherdale’s International Visitor Market

69. Given that the asserted breaches of the alleged conditions of the consent concern the distribution of marketing material by Sydney Zoo, it is necessary to examine the marketing practices of the two competitors.

70. The majority of visitors to Featherdale are international visitors comprising three key sources:

1. international day tour operators;

2. international inbound tour operators; and

3. independent travellers.

71. International day tour operators deliver visitors to Featherdale on their own private buses. These operators typically target independent international tourists who want to do a combined day trip package during their visit to Sydney.

72. International inbound tour operators consist of both travel agents and international tour groups. Australian based travel agents are Australian businesses that arrange packages for international tourists to travel to Featherdale on private bus services. International tour groups are private tours to Australia, organised by overseas businesses, which deliver members of that tour group to Featherdale by bus.

73. Independent travellers are international tourists who visit Featherdale by themselves (commonly referred to as “walk-ups”).

74. In the financial year (“FY”) 2017/18 approximately 65% (385,000) of total visitors to Featherdale were international tourists and 35% (207,000) were tourists from the Australian domestic market.

75. In FY 2018/19 approximately 66% of total visitors to Featherdale were international tourists, and 34% were tourists from the Australian domestic market.

Marketing Strategy of Sydney Zoo

76. Sometime prior to 29 January 2018, Sydney Zoo engaged Australian Attractions Pty Ltd (“AA”), a specialist international tourism consultant, to advise it in relation to a sales and marketing strategy for the international tourist market. AA has offices in China and Korea and has contacts with international tour operators. AA was engaged to assist Sydney Zoo to, among other things, attract and secure the business of international tour operators, including AAT Kings and Gray Line.

77. Since January 2018 the marketing carried out by AA on behalf of Sydney Zoo has included the following:

1. the preparation and distribution of marketing material to international tour operators, including rate cards for 2018, 2019 and 2020;

2. attending at least 33 key industry events on Sydney Zoo’s behalf focusing on the international tourist market, including the following:

1. the 2018 Australian Tourism Exchange (“ATE”) in Adelaide in April 2018 (“the 2018 ATE”). The ATE is Australia’s largest annual travel and tourism event, the aim of which is to bring together Australian tourism businesses, wholesalers and retailers from around the globe;

2. the Hana Tour International Travel Show held in Korea in June 2018; and

3. the 2019 ATE in Perth in April 2019 (“2019 ATE”).

The Difference Between Nett and Retail Rates

78. It is not in dispute that pricing is a key strategy for both facilities in targeting the international tourist market. Both Featherdale and Sydney Zoo offer “nett rates” (also known as “wholesale rates” or “trade rates”) to international tour operators. The nett rate is the price that Featherdale or Sydney Zoo charges the operator for every customer that the operator brings to their facility.

79. Both Featherdale and Sydney Zoo typically advertise their nett rates to these operators by preparing “rate sheets” or “rate cards” (also known as “marketing brochures”) which identify the nett rate offered and are distributed to targeted international tour operators.

80. The nett rates are generally offered to these operators for a 12 month period from 1 April to 31 March. This enables the operators to offer standard pricing to their customers during that period.

81. Featherdale and Sydney Zoo also offer “retail rates” (or “rack rates”) to members of the general public for entry into their facilities. The retail rates are usually advertised on the Featherdale and Sydney Zoo websites. Retail rates may also be included in rate cards distributed to international tour operators.

2018 Rate Card (Version 1)

82. The 2018 Rate Card (Version 1) was prepared for the purpose of the 2018 ATE, and was valid until 31 March 2020. The 2018 Rate Card (Version 1) depicted photographic images of koalas and kangaroos and referred to the “Bungarribee Wildlife Park at Sydney Zoo”. It stated that “all displays will allow visitors to get up close to koalas” and a variety of other Australian animals. The adult retail rate was $34.00 and the adult nett rate $12.00. The targeted markets were “Daytours and Western markets”, “Asian markets”, and the “China market”.

2019 Rate Card (Version 1)

83. A copy of Sydney Zoo’s finalised 2019 rate sheet was attached to the further amended summons and marked A1 (“2019 Rate Card (Version 1)”). The 2019 Rate Card (Version 1) was prepared by AA on behalf of Sydney Zoo for the purpose of the 2018 ATE and for distribution by AA to other international tour operators, to encourage those operators to incorporate Sydney Zoo into their tours commencing on 1 April 2019.

84. The 2019 Rate Card (Version 1) advertised a nett rate of $12.00 per adult. At that time, the cheapest adult nett rate offered by Featherdale was $16.50, and that offer was limited to Featherdale’s two most commercially important day tour operators, namely, AAT Kings and Gray Line.

85. On 29 March 2018 Mr Kenneth Corbett emailed Ms Lisa Christie at Sydney Zoo requesting that another rate sheet be prepared which comprised the 2019 Rate Card (Version 1) with retail rates only (and nett rates deleted). AA wanted to distribute the retail only version to travel companies who purchased tickets through international tour operators, as well as to day tour operators that on-sold tickets to individuals on their tours at the retail price.

86. On 4 April 2018 Mr Nathan Hou, AA’s Director, China Market, emailed Ms Christie with a retail only version of the 2019 Rate Card (Version 1). This was approved by Ms Christie (“2019 Retail Rate Card (Version 1)”). The 2019 Retail Rate Card (Version 1) advertised retail rates of $34.00 per adult, $19.00 per child, and $29.00 per student. At that time, Featherdale advertised retail rates of $34.00 per adult, $19.00 per child, and $29.00 per student.

87. The 2019 Retail Rate Card (Version 1) was distributed by AA on behalf of Sydney Zoo to the international tour operators on AA’s database.

88. On 13 June 2018 Mr Chiefari, Ms Ang, Mr Rivett and Mr Burgess met to discuss Sydney Zoo’s proposal to facilitate regional tourism in Western Sydney. During the meeting, the attendees discussed why the words “Bungarribee Wildlife Park” had been used in the 2019 Rate Card (Version 1). Mr Burgess advised Mr Chiefari and Ms Ang that the words were chosen based on advice from AA that the international market did not like visiting a “zoo”.

89. Also in 2018 AA, on behalf of Sydney Zoo, established a marketing stall at the Hana Tour International Travel Show. The marketing stall images were approved by Mr Burgess on 29 May 2018. A copy of a photograph taken of the marketing stall images was attached to the further amended summons and marked A2.

90. In addition, during that year a Hong Kong Marketing Brochure was produced advertising Sydney Zoo. A copy of the marketing brochure was attached to the further amended summons and marked A3 (“Hong Kong marketing brochure”). It was, however, Mr Burgess’s evidence that this was not produced by or on behalf of Sydney Zoo. The Hong Kong marketing brochure was written in Chinese and stated that:

At the end of 2018, you can enjoy a close-up “live-fed” wildlife experience in Sydney West. The Sydney Zoo, built at $36 million, raises 30 species of animals, and visitors can see Australian and other special animals on the boardwalk. The zoo also features a well-known Australian non-cage safari area that allows visitors to get close to nature in the wild.

2019 Rate Card (Version 2) and the 2019 Marketing Letter

91. In April 2019 AA established a marketing stall at the 2019 ATE. AA attended the event on behalf of Sydney Zoo. A copy of two photographs taken of the 2019 ATE stall were attached to the further amended summons and marked B1.

92. AA also created a new rate card for Sydney Zoo (“2019 Rate Card (Version 2)”), and a pro-forma covering email newsletter enclosing that rate card (“2019 Marketing Letter”). A copy of the 2019 Marketing Letter and the associated 2019 Rate Card (Version 2) were attached to the further amended summons and marked B2 and B3, respectively.

93. The 2019 Marketing Letter and the 2019 Rate Card (Version 2) was emailed to Mr Rivett on 4 April 2019 by Ms Louize Godlonton, who approved it that same day.

94. The 2019 Marketing Letter was in the following terms:

Dear

We are very excited to introduce the new Sydney Zoo featuring the Bungarribee Wildlife Experience. Opening in the second half of 2019!

Embracing technology and innovation, Sydney Zoo will be exhibiting a wide range of animals in a safari-like experience. With clever designs hiding barriers combined with the latest technology it will provide an experience that is more immersive and engaging than traditional zoos.

One of the key features of Sydney Zoo will be the Bungarribee Wildlife Experience. . [sic] Bungarribee (pronounced ‘Bun-Garri-bee’) is the Aboriginal name for the Sydney Zoo area. Bung meaning ‘creek’ and Garribee meaning ‘cockatoo’.

Ideally located on the Great Western Highway/M7 junction, Sydney Zoo is the perfect midway stop on a trip to the Blue Mountains and will offer options for a short visit to the Bungarribee Wildlife Experience which will highlight Australia’s unique species including Koalas, Echidnas, Wombats, Tasmanian Devils, Dingos to name a few. Handfeeding friendly kangaroos, wallabies and emus is a must do experience for visitors who will take away that all important ‘selfie’. Bungarribee Wildlife Experience will include an underground nocturnal and reptile house with a large variety of Lizards, Snakes, Bilbies, Quolls and Gliders.

The Parramatta River themed Bull Shark aquarium will delight guests with its underwater shark viewing, Platypus habitat, cute Little Penguins and an enormous Saltwater Crocodile…

95. The 2019 Rate Card (Version 2) and the 2019 Marketing Letter were distributed by AA on behalf of Sydney Zoo to international tour operators attending the 2019 ATE and the operators on AA’s database. It advertised a nett rate of $15.00 per adult, which was less than Featherdale’s cheapest adult nett rate of $16.50 offered to AAT Kings and Gray Line.

96. AA then prepared another version of the 2019 Rate Card (Version 2) limited to Sydney Zoo’s retail rates (“2019 Retail Rate Card (Version 2)”). The 2019 Retail Rate Card (Version 2) advertised retail rates of $39.99 per adult, $19.99 per child, and $29.99 per student. At that time, Featherdale advertised retail rates of $34.00 per adult, $19.00 per child, and $29.00 per student.

97. A further version of the 2019 Rate Card was prepared by AA and distributed to the international tour operators on AA’s database at the same time that the operators were notified of the proposed opening date of Sydney Zoo (“2019 Rate Card (Version 3)”). The 2019 Rate Card (Version 3) offered the original nett and retail rates as advertised in the 2019 Rate Card (Version 1) and 2019 Retail Rate Card (Version 1).

98. Sydney Zoo’s 2019 Rate Card (Version 2) was similar to the 2018 Rate Card. It depicted a koala and a kangaroo and referred to the “Bungarribee Wildlife Experience” that allowed visitors to get “up close” to Australian animals. It marketed the experience as “one of Australia’s best displays of native Australian Flora and Fauna”. The retail rate was stated to be $39.99 and the nett rate was $15.00 for adults. The target markets were the same as those for the 2018 Rate Card.

2020 Rate Card

99. Since opening on 6 December 2019, Sydney Zoo has continued marketing and a 2020 rate card has been prepared, which is Sydney Zoo’s current rate card (“2020 Rate Card”). Sydney Zoo’s 2020 Rate Card was relevantly identical to the 2019 Rate Card. The retail rate is $46.00 for adults and the nett rate is $15.00. The 2020 Rate Card has been distributed by AA on behalf of Sydney Zoo to the international tour operators on AA’s database.

Attempts by Sydney Zoo to Secure Agreements with International Tour Operators

100. In addition to the examples of marketing activity conducted by AA on behalf of Sydney Zoo, Elanor contended that Sydney Zoo had also sought to secure agreements with international tour operators, in particular, that there had been approaches to Gray Line and AAT Kings. In FY 2017/18 Gray Line and AAT Kings provided approximately 55,000 visitors to Featherdale. These approaches occurred between 7 June 2018 to 18 July 2019.

101. In the result, AAT Kings decided to move its afternoon tour to Sydney Zoo effective 1 April 2020. Featherdale estimates this will result in it losing about 75% of AAT Kings’ business which currently services Featherdale. This will equate to a loss of about $300,000 per annum in gate fees.

102. AA also sought to secure an agreement with DOA to move its business from Featherdale to Sydney Zoo, including making DOA a written offer of $15.00 nett rates per adult on 16 August 2018. DOA is the major Japanese day tour operator and is a key international tour operator providing visitors to Featherdale.

103. It was further alleged that Sydney Zoo has made other offers of nett rates to various international tour operators at rates lower than those offered by Featherdale.

Issues for Determination

104. The following issues for determination in the proceedings were identified by the parties:

1. on the proper construction of the consent, does condition B2 impose the following obligations or further conditions on Sydney Zoo, namely, to:

1. offer a different type of facility to that offered by Featherdale;

2. price its offering at rates that are more expensive than Featherdale and comparative with Taronga Zoo; and

3. adopt a market position that would allow Featherdale to continue to occupy the marketing niche of getting close to the animals;

2. is the distribution of marketing material “carry[ing] out development on the land” for the purposes of s 4.2(1)(b) of the EPAA, noting the definition of “development” in s 1.5 of that Act;

3. if the answer to both 1 and 2 is “yes”, has Sydney Zoo’s conduct, in causing or permitting the distribution of the advertising and marketing material, given rise to a breach, or threatened breach, of the conditions in paragraphs [104(a)] above; and

4. if so, should the Court exercise its discretion to grant the relief sought in the further amended summons?

The Distribution of Marketing Material is Not “Development” under the EPAA

105. A threshold issue is whether the distribution by Sydney Zoo of the impugned marketing material referred to above is “development” under the EPAA. If not, s 4.2(1)(b) of the EPAA is not engaged.

106. In my opinion, the distribution of marketing material by Sydney Zoo is not an activity that can reasonably be described as a “use of the land”, “the erection of a building”, or “the carrying out of a work”, however broadly those terms are construed. Unsurprisingly, Elanor cannot identify any environmental planning instrument that controls the distribution of marketing material (s 1.5(1)(f) of the EPAA). This conclusion is consistent with the evidence demonstrating that some of the marketing activity relied upon by Elanor to ground relief was undertaken overseas.

107. If the construction contented for by Elanor was accepted – that is, because the material distributed was marketing a use of the land upon which Sydney Zoo operated, it therefore constituted “development” for the purposes of the EPAA – it would permit almost any activity to fall within the scope of the EPAA because most activity is in some way connected to the use of land. To expand the scope of the EPAA in the manner contended by Elanor, and with it the jurisdiction of this Court, is not consistent with the objective intention of Parliament in enacting the statute.

108. Because the activity complained of by Elanor does not constitute “development” under the EPAA, s 4.2(1)(b) of the Act is not engaged. As a consequence, by reason of the manner in which the claim was pleaded by Elanor, and by reason of an absence of the jurisdiction of this Court to grant relief in the absence of the EPAA (or any other applicable enactment) having any application to the claim (see generally s 16 of the Land and Environment Court Act 1979), there is no basis to grant the declaratory or other consequential relief sought by Elanor and the further amended summons must be dismissed.

109. In light of this finding, I decline to deal with the alternative submission of Sydney Zoo that the alleged conditions would fail the test in Newbury District Council v Secretary of State for the Environment [1981] AC 578 and their operation is invalid. The argument did not find expression in Sydney Zoo’s amended points of defence and was all but resiled from by Sydney Zoo in oral argument.

The Proper Construction of the Consent

110. At the heart of this dispute is the proper construction of the consent.

111. The legal principles applicable to the construction of planning instruments are well known. They have been summarised in Secretary, Department of Planning and Environment v Leda Manorstead Pty Ltd (No 4) [2019] NSWLEC 58 at [92]-[94], Sutherland Shire Council v Benedict Industries Pty Ltd (No 8) [2017] NSWLEC 4 at [357]-[358], Bunderra Holdings Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd [2017] NSWCA 263; (2017) 96 NSWLR 434 at [63]-[72], and most recently in Omaya Investments Pty Ltd v Dean Street Holdings Pty Ltd (No 5) [2020] NSWLEC 9 (at [29]-[33]). They are as follows:

202. Elanor submitted that the Court ought to grant the relief it seeks because of the detrimental financial impact on Featherdale occasioned by the breaches of the consent. Its arguments were four-fold:

1. first, its concern was the same as expressed by the PAC, namely, to ensure a continued variety of facilities in Western Sydney. It relied on the written evidence of Mr Staples who identified a number of socially useful and valuable programs and functions performed by Featherdale which he claimed may be at risk due to the non-compliant behaviour by Sydney Zoo;

2. second, the oral evidence of both Elanor and Featherdale executives about the actual or forecast financial harm likely as a result of consent being granted to Sydney Zoo was modelled on assumed compliance by Sydney Zoo with, among other things, the alleged pricing condition (T123:01-09). Featherdale considered all of the alleged conditions to be key obligations, non-compliance with which presented potential harm to the business;

3. third, specific harm did not need to be proved. In any event, the public importance of complying with development consents should retain primacy (citing Sedevcic); and

4. fourth, any actual harm is likely to occur in the future given that Sydney Zoo only opened in December 2019.

205. The evidence relied upon by Elanor included the fact that the majority of visitors to Featherdale are international visitors – the key commercial market of Featherdale’s business (see the description of the marketing strategy and operation of Featherdale and Sydney Zoo above, especially at [69]-[77]). According to Elanor, Sydney Zoo intended to target significant numbers of international tourists as evidenced by:

1. a June 2019 Board Report that identified an objective of 400,000 international visitors by operational year 3. Mr Burgess conceded in cross-examination that there was no dissent from the board to Mr Rivett pursuing that opportunity. Mr Burgess stated in cross-examination that he understood after the board meeting that Mr Rivett was going to pursue this market (T179:29-181:35);

2. Mr Rivett’s email to Mr Corbett on 13 July 2019, stating that Sydney Zoo had set a conservative target of 150,000 international tourists in operational year 1, and would shift focus to groups and internationals once it was up and running and the target would likely be 400,000 in operational year 2;

3. Mr Burgess’s concession in cross-examination that Sydney Zoo’s plan last year and this year was to pursue significant growth in visitor numbers and revenue from international visitors, and moreover, that the international visitor market was a substantial part of Sydney Zoo’s business which Sydney Zoo modelled at about 15% to 20% of its business (T181:28-42);

4. Sydney Zoo’s active targeting of Featherdale’s business, including its key international tour operators, namely, AAT Kings, Gray Line and DOA; and

5. Mr Burgess’s concession in cross-examination that the rate cards which use the expressions “Bungarribee Wildlife Park” and “Bungarribee Wildlife Experience” were an important part of the marketing strategy to the international tour operator segment (T169:04-170:07).

206. Mr Chiefari stated in cross-examination that as a consequence, Featherdale had already been required to reduce nett trade rates to 44 international tour operators because otherwise Featherdale risked losing business as a result of Sydney Zoo’s lower trade rates (T96:07-27 and 99:13-20).

207. This evidence was consistent with a report by Deloitte dated 9 June 2016 entitled Featherdale Wildlife Park Financial impact analysis (“Deloitte report”), which concluded that even with a reduction in admissions of only 25% (approximately 148,000 international tourists), management at Featherdale would be highly likely to restructure the business to attempt to mitigate the impact of the reduction in revenue and to restore profitability.

208. Therefore, Elanor submitted, the breaches of the consent caused harm to Featherdale’s operations and would continue to do so if Sydney Zoo was not restrained from distributing the marketing material in the manner described in the further amended summons.

209. Elanor’s contentions may be swiftly rejected. The proposition that increased competition caused by the opening of Sydney Zoo would cause a diminution in the revenue otherwise generated by Featherdale is hardly novel. It may also be accepted that environmental harm relevantly includes the potential loss of local amenity or detriment to the local community as a result of increased competition causing services or facilities to be withdrawn.

210. However, the evidence of the potential loss of local amenity or detriment to the local community relied upon by Elanor ought more correctly to be characterised as a loss or detriment to Featherdale. What the evidence overwhelmingly demonstrates is a threat of competition to its existing business, which is not, as the authorities referred to above make plain (see the reference above at [112] to Kentucky Fried Chicken) a relevant town planning consideration. Conduct that does not engage a proper planning purpose and only results in increased competition tells against curial restraint under ss 9.45 or 9.46 of the EPAA or the granting of declaratory relief.

211. In addition, the evidence does not demonstrate in any convincing manner that Featherdale’s socially and environmentally beneficial programs have been or will be harmed if the alleged conditions are not complied with. On the contrary, the evidence establishes that even if the purported conditions are or have been breached, Featherdale is likely to continue to be profitable and continue to conduct its conservation, educational and other programs.

212. The reasons for these conclusions are as follows. First, there are the profit and loss forecasts that were prepared by Featherdale’s senior management and Elanor’s “funds team” for the purpose of its $25 million note issue to private equity wholesale investors in 2019. Those forecasts, and the assumptions upon which they are based, are set out in the FIIG transaction summary dated 28 October 2019 (“FIIG transaction summary”) and a management report dated August 2019 (“August 2019 Management Report”). As a director of Elanor and the Chief Executive Officer of Elanor Investors Group, Mr Willis has considerable experience in funds management and investment banking. He was a former Vice President at the investment bank Lehman Brothers (T133:19-26). He has participated in a large number of capital raisings over his career (T135:41-43). Mr Willis was asked about the two documents and his evidence was as follows:

1. the FIIG transaction summary was one of the primary documents informing investors of the notes that they were being invited to purchase (T135:45-48). The document “would have gone through [Elanor’s] review process of senior people”, which was overseen by the Chief Operating Officer and Chief Financial Officer, and he expected them to ensure that it fully described all relevant matters relating to the impact that Sydney Zoo might have on Featherdale’s business, including “the planning conditions that…seek to differentiate Sydney Zoo from Featherdale” (T136:12-47). The FIIG transaction summary recorded that “reduced earnings due to the new zoo have been incorporated into management forecasts” and that assumptions used in the forecasting had been “stressed [sic] tested with both Featherdale management and Elanor Senior Executives”;

2. the August 2019 Management Report was “most likely” either created by Elanor’s “funds management team” or by Featherdale’s operational management (T141:35-50), although Mr Willis later said that it was “the responsibility” of the funds management team (T143:49-144:05). The August 2019 Management Report contained forecasts based on assumptions that Mr Willis said would normally have been prepared collaboratively by Elanor’s funds management team and Featherdale’s operational management which were passed on to FIIG for use in the transaction summary (T141:46-142:04); and

3. the profit and lost forecast in the FIIG transaction summary contained the same figures as those in the August 2019 Management Report. It could therefore be inferred that the August 2019 Management Report informed the FIIG transaction summary. Given the “careful process of preparation” involved in preparing both documents, the financial forecasts in them “reflect the best view available as to the likely impact of the zoo on Featherdale” (T144:12-16).

213. The forecasts in the August 2019 Management Report and FIIG transaction summary, which I accept, are compelling evidence of the likely impact of Sydney Zoo on Featherdale’s business. This is important because the financial forecasts in those documents anticipate that Featherdale will make a profit of $4.69 million in FY 2020, $4.61 million in FY 2021, $5.85 million in FY 2022 and $6.42 million in FY 2023. This is against an actual profit figure for FY 2019 (the last full financial year prior to Sydney Zoo opening) of $5.51 million. The FIIG transaction summary stated the position as follows:

The imminent opening of the nearby (Western) Sydney Zoo is expected to lead to a decline in admissions over the short/medium term with EBITDA forecast to reduce to $4.7m in FY20/21, however, further growth is forecast from FY22 onwards.

214. The same profit and loss actual and forecast figures were contained in the August 2019 Management Report. That report indicated that the reduction in visitor numbers associated with the above profit forecasts was from 593,597 in FY 2019 to 522,307 in FY 2021, but increasing to 627,271 total visitors in FY 2023. This is a short term reduction of approximately 12% in visitor numbers.

215. Tellingly, both the FIIG transaction summary and the August 2019 Management Report contain detailed accounts of the “differentiation conditions” imposed by the PAC on Sydney Zoo. Mr Willis accepted that he would expect those accounts to have been put together carefully after discussion between Featherdale operational management and Elanor’s funds management team (T143:41-144:05) and would have expected all “key conditions” to be tabled (T143:32-39).

216. In this context, Sydney Zoo relied upon a document prepared by Elanor Investors Group, namely, Featherdale Wildlife Park Fund Summary of Key Assets, Fund Strategy and Fund Forecasts, dated August 2019 (“Fund Summary”). That document stated that:

The proposed zoo has had significant conditions imposed on their development approval by the NSW State Government independent Planning Assessment Commission…More importantly, the new zoo is required to collaborate with other attractions located nearby, including Featherdale, and is required to prepare a plan detailing how it would be different from existing recreational facilities and businesses, particularly Featherdale…Elanor…is pleased with the outcome of the conditions and arrangements with which the new zoo must abide.

217. Significantly, while there was reference to conditions B6 to B9, there was no reference whatsoever to any of the purported conditions in the August 2019 Management Report, the FIIG transaction summary or the Fund Summary. Nor was there any reference to the present proceedings or to the fact that Sydney Zoo contested the existence of the alleged conditions. Contrary to the submission of Elanor (see further below), the forecasts contained in these documents did not assume the existence of the alleged conditions or Sydney Zoo’s compliance with them (this is hardly surprising given the confusion expressed by Mr Chiefari concerning their scope and operation). Rather, they assumed compliance with the “differentiation conditions” as set out in those reports, namely, conditions B6 to B9 and C9.

218. I agree with Sydney Zoo that the forecasts in those documents provide reliable evidence to the Court of what impact Sydney Zoo will have on Featherdale’s business (assuming that Sydney Zoo complies with conditions B6 to B9 and C9, in respect of which there is no alleged breach). They reveal that Featherdale’s existence and the programs and services that it provides will continue. Although its profitability will be affected in the short term, there will be no actual, or even potential, overall adverse effect upon the extent and adequacy of facilities available to the local community.

219. Second, to the extent that Mr Willis and Mr Chiefari stated in their affidavits that they believe that if Sydney Zoo did not comply with the purported conditions, especially the alleged pricing condition, Featherdale’s profitability would prevent it from being able to maintain the socially and environmentally beneficial programs that it conducts, their evidence cannot be accepted because:

1. it is contradicted by the forecasts in the FIIG transaction summary and the August 2019 Management Report;

2. it is only evidence of a belief or concern on the part of Mr Willis and Mr Chiefari. Critically, Elanor has not put forward any reasoning or financial analysis showing that Featherdale will no longer be profitable, or at the very least will no longer be sufficiently profitable to maintain its programs, absent Sydney Zoo’s compliance with the purported conditions. There is neither evidence of what Featherdale’s programs cost nor any comparative forecasts of Featherdale’s profitability with and without adherence to the alleged conditions;

3. Mr Willis’s evidence was that “if the New Zoo does not comply with the differentiation obligations required by the Development Consent…it is likely that this will have a material impact on visitor numbers to Featherdale and on the ability of Featherdale to maintain programs”. However, he accepted that in stating this he did not have a “detailed appreciation” of what “differentiation obligations” had been imposed on Sydney Zoo and that the opinion that he had expressed was put on the basis of the differentiation obligations “whatever they might be” (T145:42-146:02). In these circumstances only very limited weight can be placed on this evidence;

4. Mr Willis’s opinions were based on the Deloitte report which was submitted when Elanor was objecting to the DA (T134:31-34). The Deloitte report stated that in the most “robust” scenario, that is, if Sydney Zoo was granted development consent, Featherdale would suffer an 84% reduction in patronage and a loss of $3.4 million. However, these figures are inconsistent with an estimated reduction in visitation numbers of only 12% and the continued healthy profits shown in the August 2019 Management Report and FIIG transaction summary. On any view, the Deloitte report hugely overstated the likely impact and only limited weight is afforded to it;

5. Ms Ang stated that tour operators had chosen to stay with Featherdale despite Sydney Zoo offering comparable or cheaper prices because Featherdale has features that are attractive to international tourists and tour operators that Sydney Zoo does not have, for example, koala interaction involving touching (T77:16-79:07). This evidence supports a finding that Featherdale will be able to continue to attract business despite any supposed non-compliance with the consent by Sydney Zoo; and

6. Mr Chiefari gave evidence that the forecast profit in the August 2019 Management Report and the FIIG transaction summary “factored in” compliance with the purported conditions as well as conditions B6 to B9 and C9 (T121:42-46). But that evidence cannot be accepted because:

1. as stated above, there was no reference in either the August 2019 Management Report or the FIIG transaction summary to the alleged conditions notwithstanding that both documents described the key “differentiation conditions” that were taken into account; and

2. if Mr Chiefari’s evidence in this respect were to be accepted then a material matter was omitted from the assumptions disclosed to investors, that is, Elanor told investors that the opening of Sydney Zoo would have a relatively minor impact of Featherdale’s existence because of the differentiation conditions. The differentiation conditions it identified to investors were the uncontentious and express conditions identified in the FIIG transaction summary, namely, conditions B6 to B9 and C9. There was no disclosure that the positive forecasts were dependent on Sydney Zoo complying with any further conditions, especially the alleged price condition, which it knew were disputed by Sydney Zoo and were the subject of ongoing proceedings in the Land and Environment Court. Given the careful manner in which the August 2019 Management Report and FIIG transaction summary were prepared (as stated by Mr Willis), it is highly unlikely that such an important assumption was made but not disclosed to investors.

220. In circumstances where the weight of the evidence establishes that Featherdale’s existence and the programs and services that it provides will not be put in jeopardy, that its profitability will not be meaningfully impacted other than in the short term, and that there will be no actual or potential overall adverse effect upon the extent and adequacy of the facilities afforded to the local community, the Court would, even if breach of the conditions could be demonstrated, decline to grant the relief sought in the further amended summons in the exercise of its discretion.

221. Sydney Zoo made two further submissions as to why the Court ought not make the orders sought by Elanor. The first was because the representations from which the purported conditions were derived were made as a response to Elanor’s complaints about the impact that Sydney Zoo would have on its business. Those representations were underpinned by the Deloitte report, which endorsed an estimated 84% reduction in patronage and a $3.5 million loss, which would mean that Featherdale would have to halt or curtail its programs. But as the evidence discloses, the reduction in visitation numbers will be only approximately 12% and Featherdale will continue to make profits going forward. It would therefore be unfair to restrain Sydney Zoo from distributing marketing material to prevent breach of conditions derived from representations made by Sydney Zoo responding to a misapprehension resulting from representations made by Elanor, and that has been overtaken by the express differentiation conditions that Sydney Zoo has complied with, namely, B6 to B9 and C9.

222. The second was that equitable remedies such as declarations and injunctions will generally be withheld as a matter of discretion where they will require the continuing supervision of a court (citing Crouch Developments Pty Ltd v D & M (Australia) Pty Ltd [2008] WASC 151 at [21]-[23]). This is what would be required in the present case if restraining orders in the form sought by Elanor were granted because the alleged conditions are ambiguous and it is not possible for Sydney Zoo to know whether or not it is complying with them at any point in time (especially the purported pricing condition).

223. Because of the myriad of ways in which Elanor’s case has failed, it is not necessary for the Court to decide these further matters.

Conclusions, Costs and Orders

224. The Court has determined that there was no breach of condition B2 insofar as the alleged further conditions said to form part of the consent arising from the application documents expressly referred to in that condition do not exist. Furthermore, even if they did, they have not in any event been breached by Sydney Zoo. Additionally, the Court has held that even if condition B2 had been breached, in the exercise of its discretion it would not be inclined to grant the relief sought by Elanor.

225. As a consequence, the further amended summons must be dismissed, with costs following the event.

226. Sydney Zoo has foreshadowed a possible application for indemnity costs. The costs order crafted by the Court therefore allows for such an application to be made within the time period specified.

227. The orders of the Court are therefore that:

1. the further amended summons is dismissed;

2. the applicant is to pay the respondent’s costs of the proceedings, unless within 14 days from the making of these orders any party seeks, by notice of motion together with supporting evidence, a different costs order; and

3. the exhibits are to be returned.

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Annexure A (1250019, pdf)

Decision last updated: 17 July 2020