Eliza Jane Investments Pty Ltd v City of Playford - [2009] SASC 260

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
ELIZA JANE INVESTMENTS PTY LTD v CITY OF PLAYFORD
[2009] SASC 260
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Bleby and The Honourable Justice Kelly)
1 September 2009
ENVIRONMENT AND PLANNING - ENVIRONMENTAL PLANNING - DEVELOPMENT CONTROL - CONSENTS, APPROVALS AND PERMITS
Appeal from dismissal by Environment, Resources and Development Court of appeal against Council's refusal to grant development approval - appellant applied to vary existing development approval for a retail plant nursery to incorporate fruit and vegetable sales area - whether application involves a change in use of appellant's land - whether sale of fruit and vegetables incidental or ancillary to activities of retail plant nursery - whether proposed use constitutes a non-complying development.
Appeal dismissed - application involves change of use which would constitute non-complying development.
Development Act 1993 (SA) s 4, s 6, s 33, s35, s 39, referred to.
City of Mitcham v Fusco (2002) 124 LGERA 196, applied.
Chappel Investment Company Pty Ltd v City of Mitcham (2009) 103 SASR 184; Prestige Car Sales Pty Ltd v Corporation of the Town of Walkerville and Shuttleworth (1979) 20 SASR 514; Baulkham Hills Shire Council v O’Donnell (1990) 69 LGRA 404; Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157; Macquarie International Health Clinic Pty Ltd v University of Sydney (1998) 98 LGERA 218; Eliza Jane Investments P/L v City of Playford (No 3) [2008] SAERDC 77, discussed.
Eliza Jane Investments Pty Ltd v City of Playford [2007] SAERDC 72; Eliza Jane Investments Pty Ltd v City of Playford [2008] SAERDC 38; Lizzio v Ryde Municipal Council (1984) 155 CLR 211; Southern Cross Homes Inc v Enfield City Corporation (1992) 76 LGRA 94, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"non-complying"
"change in use"

ELIZA JANE INVESTMENTS PTY LTD v CITY OF PLAYFORD
[2009] SASC 260
Full Court: Doyle CJ, Bleby and Kelly JJ

DOYLE CJ: I would dismiss the appeal. I agree with the reasons of Bleby J, and there is nothing that I wish to add.
BLEBY J.
Introduction
The questions arising in this appeal are whether the development proposed by the appellant constitutes a change in the use of its land and if so, whether it is a non-complying development for the purposes of s 35 of the Development Act 1993 (SA).
The appellant is the registered proprietor of two allotments of land, each having an area in excess of four hectares, with frontages to Gawler Road, Virginia.
The whole of one allotment and most of the other (Allotment 415) in area is devoted to vegetable seedling production for sale to local vegetable growers. The evidence showed that 85-90 per cent of the greenhouses are used for vegetable seedling production for that purpose, which constitutes 25 per cent of the appellant’s business. The remaining greenhouses are for the growth of plants for sale in a retail nursery located on Allotment 415, which business constitutes approximately 75 per cent of the overall business conducted on the land. Those percentages could vary according to the season.
Besides extensive greenhouses built on the land, Allotment 415 also contains a propagation shed, plant storage area and a collection dam.
At an earlier time development approval had been granted for a use described as “shop (retail plant nursery)” in respect of portion of Allotment 415. The approval was subject to a condition that the retail area not exceed 4,700m². The plans for the shop area showed, within the area designated for retail sales, areas identified for the retail sale of garden supplies and garden accessories, as well as covered walkway areas and an area shown as being under shade sails. In addition, a pots area, a water feature and areas for plant storage and other storage and check-out area were shown. The evidence showed that some of the plants sold in the retail shop were seedlings that had been grown on the appellant’s land. Plants had also been bought in from other sources and “progressed” or partly grown on the appellant’s land. Other plants were bought in for resale on the appellant’s land.
In September 2006 development approval was granted for some alterations and additions to what was still then described as the existing shop (retail plant nursery).
In October 2006 a further application was made for approval to incorporate a cafeteria/coffee shop within the area of the existing shop (retail plant nursery) in an area formerly identified for the retail sale of garden supplies. That application involved two appeals to the Environment Resources and Development Court (“the Environment Court”). In the first one the Court decided that the application was not for a non-complying development.[1] In the second one the Environment Court allowed an appeal from a decision of the respondent (“the Council”) which had refused development consent to the application. Consent was granted, subject to certain conditions, “to incorporate an ancillary use in the nature of a cafeteria/coffee shop” on the subject land. [2]
[1] Eliza Jane Investments Pty Ltd v City of Playford [2007] SAERDC 72.
[2] Eliza Jane Investments Pty Ltd v City of Playford [2008] SAERDC 38.
The application the subject of this appeal was described as an application:
To vary development application 292/596/2005 in the form of internal alterations including the conversion of an area identified on the approved plans as a ‘garden accessories sales area’ and ‘storage annex’ to an area for the sale of fruit and vegetables.
The Council determined that the development was non-complying and refused to grant development approval. The refusal notification described the proposed development as “Change of use to sale of fruit and vegetables”.
The appellant appealed to the Environment Court against that decision of the Council. The Environment Court agreed that the proposed development was a non-complying development and dismissed the appeal. The appellant now appeals to this Court against that decision.
The nature of the proposed development
The plans accompanying the application showed some adjustments to the existing garden supplies and garden accessories section of the retail shop to provide for the proposed fruit and vegetable sales area to be accommodated within the overall retail area of 4,700m². The area proposed for fruit and vegetable sales, excluding a storage area, was 165m². Access to the fruit and vegetable sales area was only through the general retail area. Nevertheless, it was shown as a separately partitioned retail area with substantial display units on three of its four sides and in the centre of the area. It was sufficiently significant to require the installation of four checkouts to service only the fruit and vegetable sales area.
The relevant provisions of the Development Act and the Development Plan
Section 35 of the Development Act prescribes what is to happen to various types of applications for development authorisation. If the development is described as a complying development under the Development Regulations or the relevant Development Plan, the development, subject to certain exceptions, must be granted Development Plan consent.[3] If the development is of a kind described as a non-complying development under the relevant Development Plan and the relevant authority is a council, the council cannot grant consent without the concurrence of the Development Assessment Commission.[4] However, there is nothing to prevent the Council from refusing at any time to grant a development authorisation with respect to a non-complying development.[5] The section also provides that if a development is of a kind described as a non-complying development, subject to certain irrelevant exceptions, no appeal lies against a refusal of consent to such a development.[6] Finally, if a proposed development is neither a complying development nor a non-complying development, it will be a merit development and must be assessed on its merit taking into account the provisions of the relevant Development Plan.[7]
[3]    Development Act 1993 s 35(1).
[4]    Development Act 1993 s 35(3).
[5]    Development Act 1993 s 35(4a).
[6]    Development Act 1993 s 35(4).
[7]    Development Act1993 s 35(5).
Under the relevant Development Plan, the appellant’s land is located within the Horticulture Zone of the area administered by the Council. Principle of Development Control No. 48 for the Horticulture Zone describes as one of the types of development included as a non-complying development within the Zone:
Shop, other than a shop involving the retail sale of products grown on the same site as the shop.
The questions for determination
The appellant sought to have its application determined as a variation to an existing development. Section 39(6) of the Development Act provides:
(6)Subject to this section, a person may seek the variation of a development authorisation previously given under this Act (including by seeking the variation of a condition imposed with respect to the development authorisation).
Subsection (7) relevantly provides that an application to which subsection (6) applies –
(b)will, for the purposes of this Part, but subject to any exclusion or modification prescribed by the regulations, to the extent of the proposed variation (and not so as to provide for the consideration of other elements or aspects of the development or the authorisation), be treated as a new application for development authorisation;
…
Not all variations to an existing development authorisation will constitute “development” as defined in s 4 of the Act. For example, the application for variation may only apply to the variation to a condition of an existing development authorisation. It may only involve a change of a particular material to be used in construction or the change in position of a partition yet to be erected.
However, if the variation involves “development” as defined in the Act, s 39(7)(b) ensures that it cannot avoid the scrutiny required by s 33(1) of the Act, namely that the proposed development is assessed against, among other things, the provisions of the appropriate Development Plan. That process cannot be avoided merely by designating the application as a variation to an existing development authorisation. It is the substance of the application, not its mere form, that is important.[8] In considering an application such as the present, two questions arise. The first is whether the subject of the application constitutes “development” requiring the application s 33 of the Act. The definition of “development” in s (4) includes “a change in the use of land”. The first question therefore becomes (in this case) whether the subject of the application involves a change in use of the appellant’s land.
[8] Chappel Investment Company Pty Ltd v City of Mitcham [2009] SASC 23, [27], (2009) 103 SASR 184, 192.
The second question is then whether the proposed new use constitutes a non-complying development under the relevant Development Plan. For this purpose s 35 of the Act –
… requires nothing more nor less than a comparison of the proposed development to the kinds of development described as non-complying by the Development Plan. If the proposed development fits the description of one or more of the non-complying developments, the Environment Court has no jurisdiction to hear an appeal from the decision of a planning authority which has refused consent. Conversely, if the proposed development fits one of the kinds of development listed as complying, then s 35(1) of the Act will apply and the planning authority must grant its consent even though the development may also be described in another way. If the development “does not fall” into either category, it must be subjected to a merit assessment in accordance with s 35(5).[9]
Not only, as in that case, is there no appeal to the Environment Court, but the Council, on its own, is unable to approve the application,[10] and may refuse it.[11]
[9] Ibid [17], 189.
[10] Development Act 1993 s 35(3).
[11] Development Act 1993 s 35(4a).
Whether the development involves a change in use of land
I return to the first question, namely whether the application involves a change in use of the appellant’s land. The concept of changing use of land is developed in s 6 of the Development Act. For present purposes subsection (1) relevantly provides:
(1)For the purpose of determining whether a change in the use of land has occurred, the commencement or revival of a particular use of the land will … be regarded as a change in the use of the land if—
…
…
(c) the use is additional to a previously established use of the land which continues despite the commencement of the new use.
In City of Mitcham v Fusco[12] the respondents applied for provisional Development Plan Consent to plant 300 olive trees on their land. The total area of the land was between 14.5 and 15 hectares. When the applicants bought the land it was being used as an apple and pear orchard, for the growing of strawberries, as a nursery for young citrus trees, the growing of carnations for cut flower production, the grazing of sheep, cattle and horses, the keeping of poultry and the growing of a few walnut and olive trees. The applicants had planted a large number of new trees, including fruit and nut trees and native trees. They continued to run sheep and cattle and kept chickens. The new olives were to be planted in a paddock that had previously been used for grazing purposes. This Court held that it was open to the Environment Court to conclude that the planting of the olives on the scale proposed and for the purposes intended formed part of the same genus as the existing use, which included a variety of horticultural activities.
[12] [2002] SASC 423, (2002) 124 LGERA 196.
In my reasons for judgment in Fusco I adopted a passage from the judgment of Wells J in Prestige Car Sales Pty Ltd v Corporation of the Town of Walkerville and Shuttleworth[13] which included the following:[14]
The object of the survey [of the circumstances before and after the execution of the proposal] should be to decide whether, having regard to the purpose of the former use of the subject building, and to the purpose of the use that would be made of it after execution of the proposals, there would, as a matter of fact and degree, be a change in the essential nature of the existing use if consent were granted. It should be borne in mind that labels are not principles. No one factor is necessarily decisive. There should be no resort to convenient, but undiscriminating and over-simplified, formulae.
I referred to a number of other cases and concluded:[15]
None of these cases suggest that the ascertainment of an existing use, and therefore of any change in that use, can only be in terms defined by the planning legislation or planning scheme against the implementation of which the relevant existing use is protected. Nor do they suggest that the categorisation of that use by a planning authority necessarily imports a statutory definition. As was pointed out in Frankham,[16] those definitions have a purpose, namely the classification of particular activities which constitute development for the purposes of the legislative scheme. The definitions will determine whether consent may be given to a particular development. However, what is a change of use does not depend on that type of categorisation. It depends on the proper analysis of the facts relating to an existing use and an assessment of whether the use proposed can be said to be within the same genus, in accordance with the application of the principles explained in the cases to which I have referred.
[13] (1979) 20 SASR 514.
[14] Ibid 522.
[15] [2002] SASC 423, [33], (2002) 124 LGERA 196, 204.
[16] Adelaide City Council v Frankham [2002] SASC 162.
In some cases it is quite easy to distinguish two quite separate uses. For example, in Baulkham Hills Shire Council v O’Donnell[17] a landowner had been granted development consent for the conduct of a riding school on some land. It had also been used for some years pursuant to a renewed annual consent for the commercial extraction of sand and soil. An interim development order came into force which required interim development consent for the extraction of sand and soil, but that was subject to existing (non-conforming) use provisions of the Local Government Act 1919 (NSW). It was held that the respondent had the benefit of existing use rights to continue using the land for the commercial extraction of sand and soil. That was held to be a distinct and separate use, protected by the Act, from the approved use of the conduct of a riding school. It was held to be a separate non-ancillary use.
[17] (1990) 69 LGRA 404.
As to what constitutes an ancillary use, there is a helpful discussion by Glass JA, with whom Hutley JA and Samuels JA agreed, in Foodbarn Pty Ltd v Solicitor-General:[18]
It may be deduced that where a part of the premises is used for a purpose which is subordinate to the purpose which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used. Doubtless the same principle would apply where the dominant and servient purposes both relate to the whole and not to separate parts. But the trial judge specifically found that sales by retail were not ancillary to other purposes of the defendants and no attempt has been made to subvert that conclusion. Where the whole of the premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged. The ordinance is nonetheless being disobeyed.
That analysis was cited with approval by Gibbs CJ in Lizzio v Ryde Municipal Council[19] and by the NSW Court of Appeal in Baulkham Hills Shire Council v O’Donnell.[20] It would appear that the earlier approval of the cafeteria/coffee shop on the appellant’s land was justified on the basis that it was ancillary, in the sense discussed, to the previously approved use of a shop (retail plant nursery).
[18] (1975) 32 LGRA 157, 160.
[19] (1984) 155 CLR 211, 216-217.
[20] (1990) 69 LGRA 404, 408-409.
However, where land is used for two identified independent purposes, neither of which subserves the other, it does not follow that that which is not dominant is, for planning purposes, to be disregarded.[21]
[21] Southern Cross Homes Inc v Enfield City Corporation (1992) 76 LGRA 94, 99.
In other cases a separation into dominant and servient uses is not possible. The development may constitute, at the same time, two identified but integrated uses. Such was the case in Macquarie International Health Clinic Pty Ltd v University of Sydney[22] where the respondent sought development approval for the construction of a private teaching hospital partly on land zoned “Education” and partly on land zoned “Hospital”. The relevant council refused the application on the basis that it had no power to approve a proposal which straddled two zones, in one of which the alternative or secondary or ancillary uses were prohibited. It was held in that case that the proposal involved two purposes which were inextricably bound up so as to be properly categorised as a teaching hospital. They were not two independent uses of an educational institution and a hospital. Stein JA, with whom Mason P and Meagher JA agreed, said:[23]
The purpose of the use in question is a teaching hospital. That one purpose may be education does not mean that it must be the only purpose. There can be other purposes, such as here. The nature of imparting practical medical education means that real patients are needed in a hospital setting. As Sheahan J found, the use involved two purposes which were inextricably bound up so as to be properly categorised as a teaching hospital, and not as two independent uses - a hospital and education. While one could, and often does, have a hospital without education, one cannot have medical education without the hospital in a teaching setting. A teaching hospital is necessarily a mixed purpose which cannot be severed. The two purposes are inextricably linked and cannot be severed. Although this finding of his Honour is challenged, it was clearly one open on the evidence. In my opinion, there is but one use as a teaching hospital, with two purposes as its end. These, by their very nature, cannot be severed into two independent uses.
[Original emphasis]
[22] (1998) 98 LGERA 218.
[23] Ibid 222.

In the present case the finding of the Environment Court as to the nature of the existing use was as follows:[24]
The use approved is described as a “shop (retail plant nursery)”. Although the evidence was not specific, it would appear that a variety of plants including seedlings, are sold on the site in addition to garden accessories and supplies. As indicated earlier, a cafeteria or coffee shop is ancillary to the retail plant nursery but I do not understand that to have yet been developed. I have already referred to the incidental uses of the site namely the activities carried on in the greenhouses, the packing shed and in relation to the storage of plants. It appears that the existing approved use of the subject land can be characterised as that of a retail plant nursery including incidental and ancillary uses.
[24] Eliza Jane Investments P/L v City of Playford (No. 3) [2008] SAERDC 77, [22].
I agree generally with those reasons, but to be consistent with previous approvals I would describe the existing use as:
Shop (retail plant nursery) including certain incidental and ancillary uses.
The incidental and ancillary uses, given the history of the development, would include the greenhouse activities, the packing shed, the storage of plants and the cafeteria/coffee shop.
In order not to be classified as a change in the existing use, the activity of fruit and vegetable selling would need to be brought within that genus. In my opinion, the Environment Court was correct in concluding that it could not.
The relevant existing genus is a particular type of shop which it had to be in order to be approved in the Horticulture Zone. There was no suggestion that the fruit and vegetables to be sold would be grown on the appellant’s land. The selling of fruit and vegetables cannot be described as being incidental to the activities of a shop which is a retail plant nursery. It is no more incidental to that than a supermarket would be. If the proposed development were to proceed, the nature of the then completed development would be:
Shop (retail plant nursery) and retail fruit and vegetable shop, including certain incidental or ancillary uses.
In my opinion that would constitute a change of use. Just because the sale of fruit and vegetables is subordinate to the sale of plants and incidental or ancillary activities does not mean that it is subservient or incidental to the sale of plants. For present purposes, it is not necessary to enquire whether the existing use is non-complying. The only question is whether the proposed use is non-complying by virtue of its amounting to a change of use.
Mr Henry, counsel for the appellant, criticised that part of the Environment Court Judge’s reasoning which relied on lack of financial and management integration with the rest of the retail premises. The Judge said:
What is clear is that the retail fruit and vegetable sales area would operate as an independent profit centre within the overall business. Thus while it would not be independently operated, it would neither be integrated financially into the overall business, but it would be a component of the overall business conducted on the subject land.
While I have concluded that the retail fruit and vegetable sales area would be operated as part of the overall business on the subject land, I reiterate that it would not be inextricably bound into the overall business. While it would be managed as part of the whole business, it would not be an essential part of the whole business, in the same way that garden accessories and garden supplies could be said to be a necessary part of a retail plant nursery business.
The retail fruit and vegetable sales area would be clearly identifiable as a separate shop within the overall retail nursery complex. It would have its own identity, even though access to it is only possible through the retail nursery area and during the times at which that facility is open for business, in the same way as access to any particular shop in a shopping centre is only possible when the shopping centre is open for business, and by traversing the shopping centre.[25]
[Emphasis added]
[25] Ibid [27]-[29].
In particular, Mr Henry criticised that part of the reasons which I have emphasised as being an irrelevant test. I agree, but that does not help Mr Henry’s case. In my opinion, it does not matter how the selling of fruit of vegetables is managed or whether it is a separate profit centre of the business. It is the discrete activity on or use of the land which would change. It is that which must be assessed against the provisions of the Development Plan.
Whether the proposed new use constitutes a non-complying development
Having established that the proposed development would constitute a change in use of the land, the answer to the second question, namely whether that would constitute a non-complying development, is relatively simple.
The description of the relevant non-complying development within the Horticulture Zone described in the Development Plan is relatively clear. If it fits that description the Council and the Environment Court were justified in the conclusion that it would be a non-complying development.
If the proposed development proceeded the appellant’s premises would still be used as a shop. However, the premises would no longer be used as a shop “involving the retail sale of products grown on the same site as the shop”. The use of the land would change to include a discrete use as a shop for the selling of fruit and vegetables which, in the Horticultural Zone, would constitute a non-complying development.
For these reasons I would dismiss the appeal.
KELLY J: I would dismiss the appeal. I agree with the reasons of Bleby J.