Haridemos & Ors & Act Planning and Land Authority; (Administrative Review)

Case •

[2012] ACAT 74

•

1 November 2012

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

HARIDEMOS AND ORS & ACT PLANNING AND LAND AUTHORITY

(Administrative Review) [2012] ACAT 74

AT 12/42

Catchwords:             ADMINISTRATIVE REVIEW: Controlled Activity Order – failure of respondent to issue Controlled Activity Order in terms sought by applicants – whether Bonner Shops Pty Ltd is in breach of a clause in its Crown lease – whether Woolworths supermarket exceeds the limit on area of a supermarket specified in clause 3(c) of Crown lease - whether the Woolworths liquor store is part of the supermarket – whether the areas of the plant rooms, office, stairway to first floor and loading area are to be attributed to the supermarket –interpretation of registered Crown leases – distinction between “use” and “purpose” – purpose of ancillary or subordinate uses - discretion available in deciding whether or not to make a Controlled Activity Order –whether Controlled Activity Order would serve any planning  purpose or public interest – whether making Controlled Activity Order would be a proportionate response

List of legislation:     Building Act 2004

Planning and Development Act 2007

, ss.339, 350, 351, 360,
361 & 408, and Part 11.3


List of Regulations: Territory Plan 2008

CZ4 Local Centre Zone Development Table

Parking and Vehicular Access General Code

List of Cases:            Argos Pty Ltd v Minister for the Environment and Sustainable Development [2012] ACTSC 102

Authentic Systems Pty Ltd & Department of Environment and Planning [1993] ACTAAT 47

Bogiatzis & Ors and Minister for Urban Services& Anor [2002] ACTAAT 21
Canberra Cruises & Tours v Minister for Urban Services [1999] ACTAAT 14

Chamwell Pty v Strathfield Council (2007) 151 LGERA 400
Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493
Gakhar and ACTPLA [2003] ACTAAT 55
Jewel Food Stores v Minister for the Environment, Land and Planning (1995) 122 FLR 269
Lunardello & Minister for Urban Services [2001] ACTAAT 27

Nb and Nb Marsh Pty Ltd and Minister for Planning [2003] ACTAAT 11
Peter Kohlsdorf Golf Distributors Pty Ltd v Liangis Investments Pty Ltd & Anor [2003] ACTAAT 29

Shire of Perth v O’Keefe [1964] HCA 37;
Springrange Pty Ltd v ACTPLA [2010] ACTCA 17
Foodbarn Pty Limited v Solicitor General (1975) 32 LGRA 157

Warringah Shire Council v Raffles [1979] 2 NSWLR 299

Young Men’s Christian Association Inc & ACT Planning and Land Authority [2011] ACAT 78

Texts & Papers:        Building Code of Australia 2009
National Capital Plan

Report of the Legislative Assembly Select Committee on ACT Supermarket Competition Policy (24 August 2012)

Tribunal:                  Dr Don McMichael , Presiding Member

Mr Graeme Trickett, Senior Member

Date of Orders:  1 November 2012
Date of Reasons for Decision:         1 November 2012

AUSTRALIAN CAPITAL TERRITORY            )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          AT 12/42

BETWEEN:   CHRISTOPHER HARIDEMOS

First Applicant

ALEX VIZADIS

Second Applicant

AND: ACT PLANNING & LAND AUTHORITY

Respondent

TRIBUNAL:            Dr Don McMichael,  Presiding Member
  Mr Graeme Trickett,  Senior Member

DATE:  1 November 2012

ORDER

1.

The Tribunal orders that the decision under review is confirmed.




………………………………..
Dr Don McMichael Senior Member
For and on behalf of the Tribunal

REASONS FOR DECISION          

Introduction

  1. Mr Christopher Haridemos and Mr Alex Vizadis (“the applicants”) have sought review by the ACT Civil and Administrative Tribunal (“the Tribunal”) of a decision of the ACT Planning and Land Authority (“ACTPLA” or “the respondent”) to make a Controlled Activity Order (“CAO”) to enforce compliance by Bonner Shops Pty Ltd, the lessees of Block 12 Section 1 Bonner (“the subject land”) in terms different from what the applicants sought.

  1. The applicants initially applied for a CAO that would require the lessee to reinstate direct access to the first floor plant room consistent with Development Approval 201018526 (“ the DA”)  and to erect a solid wall between the liquor store and the supermarket to prevent direct access between the shops, consistent with the approved plans, as well as to limit the supermarket to 1500 m2 which was specified as the maximum  gross floor area (“GFA”) for supermarket in sub-clause 3(c) of the Crown lease.  They also sought to have closed a door giving direct access from the liquor store to the stairway to the first floor which was contrary to the approved plans.



  2. The CAO made by the respondent addressed the first two matters but did not include an order requiring the lessee to comply with clause 3(c) of the Crown lease by reducing the GFA of the supermarket to 1,500m2 .

  3. Section 350 (1) of the Planning and Development Act 2007 (ACT) (“the Planning Act”) provides that “a person” may apply for the making of a CAO and there are no qualifications required for standing to do so.  The applicant individuals are associated with the Kaleen and Evatt IGA supermarkets respectively, but they sought the order jointly as individuals.  There was no disagreement that the applicants were entitled to apply for a CAO.

  1. The applicants sought to have the CAO varied by including a requirement that the Crown lease provision that the supermarket be limited to 1,500m2 GFA be complied with.  The issues before the Tribunal were whether or not the “supermarket” exceeded 1500 m2 in area and if so, whether the respondent’s CAO should be varied as sought.



    Background

  2. In January 2010, Woolworths Ltd wrote to Mr D Nikias of Nikias Properties offering to enter into an agreement to lease, for the purposes of a supermarket, portion of commercial premises to be built in Bonner.  The offer included reference to the lease area being based on what was described as “a standard 2000 supermarket and liquor building” of approximately 1900m2 lettable area, conforming to the Woolworths Design Brief.  Lettable area was defined to exclude any licensed area, plant room, switch room, loading dock, loading bay area, truck standing apron or similar area but would include 200m2 for office and amenities. On 29 February 2010, agreement to enter into a lease “for a 1900m2 supermarket” at Bonner shops was sought by Woolworths Regional Manager from Woolworths Property Committee, which was given on 16 March 2010.

  3. An Agreement for Lease was signed soon afterwards, apparently on 19 March 2010 by Woolworths representative Peter J Horton, though the copy available to the Tribunal is not signed by a representative of Bonner Shops Pty Ltd. The Agreement included the following Recitals:

    A.The Landlord may become the Crown lessee of the Land.

    B.Subject to becoming the Crown lessee of the Land, the Landlord proposes to undertake the Landlord’s Works on the Land.

    C.

    The Landlord has agreed to grant and the Tenant has agreed to take the Lease of the Premises, subject to the terms and conditions in this deed.



  4. The Agreement included a Reference Schedule which identified among other things the Approximate Lettable Areas as being

    (a)Supermarket premises: 1,500m2 lettable area

    (b)Liquor premises: 200m2 lettable area

    (c)

    Office premises: 200m2 lettable area



    The Agreement was accompanied by a number of documents described as Lease Annexures including three identified as “Centre Based Lease Conditions Gross Lease” for each of Standard Supermarket, Standard Liquor and Standard Office. In each case the leases are described as an “interdependent lease” of each of the interdependent premises which in turn are identified as particular areas or shops on the subleasing plan for the subject land.

  5. The subject land was acquired by Bonner Shops Pty Ltd. under a Crown lease dated 30 April 2010, which was registered on 9 July 2010.  DA201018526 was lodged on 24 December 2010 and an amended application was lodged on 24 February 2011.  The amended DA was approved with conditions on 11 March 2011 and presumably the shops were built soon thereafter. 

  6. The Bonner shops were to have been constructed in accordance with plans certified by Mr Graham Moss (T441-T446). As will be discussed later, there were some minor differences between the plans certified by Mr Moss and the building as built. The shops comprise a rectangular mainly one storey building but with a small second floor at its southern end, oriented north-south between Mabo Boulevard and Bill Ferguson Circuit, Bonner.  There is a covered loading area (generally identified in the plans as a Loading Dock) at its southern end.



  7. There are some discrepancies between the floor areas shown on different plans, so the Tribunal has relied on those shown on T267 and on the certified pans at T441-446 for the GFA provisions set out below. The certified plans for the ground floor of the building include 382.1m2 of space at its north-east corner for speciality shops, which has been built to allow up to four smaller shops with toilet and storage areas, as well as an ATM, and a separate 190.8m2 specialty shop space at its south-eastern corner.  The balance of the ground floor is identified as 1,500m2 for a supermarket, including some 1210m2 devoted to display and sales and a further 290 m2 on the south-western corner for “back-of-house” activities such as reception of goods, food preparation, and storage.  From the latter area an adjustable height delivery dock opens via a roller door to the loading area.  There is also an accessible unisex sanitary compartment in the back-of-house area for use of staff, delivery drivers and the public as required.

  1. The first (upper) floor is much smaller and comprises some 158.2m2 office space and 123.9m2 of mechanical and electrical plant rooms, all of which were to be accessed by a stair occupying 10.7m2  (or possibly 13.5m2 if the corridor to the plant rooms is included) on the inside of the southern wall of the building. The stair was to be accessible via a door from the slightly elevated pedestrian colonnade that runs along the whole of the eastern side of the building.  In fact as built, the stairs access only the office area. At present, the mechanical/electrical plant rooms are accessible only from an internal stair located in the back-of-house area of the supermarket.



  2. An area of roof-top plant is accessed via a walkway from the plant rooms but roof-top plant is excluded from the definition of GFA and hence it played no part in estimation of the GFA used by the supermarket.



  3. At the time of hearing, only one of the speciality shops at the north eastern end of the building was sub-leased as a chicken takeaway.  The neighbouring speciality shops and the ATM space have been completed to “base-build” standard and await tenants before final fitting out. An issue in the case was whether these specialty shops would or could be serviced from the mechanical/electrical plant rooms.



  4. The supermarket area (including the back-of-house space) is subleased to Woolworths Ltd and is operated as a normal supermarket.  The specialty shop in the south-eastern corner of the building is operated by Woolworths Liquor (but the liquor license is held by Woolworths Ltd) and while the space was approved for a separate tenancy with its entrance to the pedestrian colonnade, it was built with direct access to the supermarket space via a double doorway with a large Woolworths Liquor sign above (as well as by a separate door to the colonnade).  A door giving direct access from the liquor store to the first floor stairway was also constructed contrary to the approved plans.

  5. When seeking the CAO, the applicants contended inter alia that, by there being direct access from the liquor store to the supermarket, the GFA limit of 1,500m2 for supermarket prescribed in the lease has been exceeded. 



  6. The respondent agreed that this was so.  The CAO made by the respondent required this access from the supermarket to be prevented  by erecting a solid wall between the liquor store and the supermarket, but at the date of the hearing only a temporary closure had been made consisting of two MDF (medium density fibreboard) sheeting panels on a stud frame.  In response to concern expressed at the site inspection that these panels were only temporary and could be removed without much effort, the Tribunal was assured that it was the intention of the lessee to complete the construction of the “solid wall” that would be “flush and continuous with the existing wall” as required by the CAO.



  7. There was also a doorway opening from the liquor store to the stairway leading to the first floor office which was not shown in the approved DA plans and which the applicants sought to have closed.  It too has since been closed with panelling.  However, the respondent concluded that, if the access between the supermarket and the liquor store was closed as required by the CAO, then the doorway between the liquor store and the stairway did not require development approval, provided the first floor offices and plant room had their own direct external access.  Consequently, the CAO made required that Bonner Shops Pty Ltd seek and obtain any required building approvals and undertake the required alterations allowing direct external access to the first floor electrical plant room consistent with DA 201018526 but did not refer to the door from the liquor store.

  8. 200 m2 of the first floor office space is also subleased by Woolworths Ltd and used to provide a manager’s, a cashier’s and a general office as a well as staff toilets, lockers and a staff dining area.  It was not disputed that at least some of the staff employed by Woolworths worked in both the supermarket and the liquor store and that all such staff had access by means of swipe cards to the first floor office and staff facilities.  The applicants contended that, as there were no offices or staff facilities within the supermarket back-of-house area, nor were there any separate offices or staff facilities for the liquor store, it followed that the use of the office space was undoubtedly for the purposes of the supermarket (of which they contended the liquor store was still part).



  9. The applicants also contended that as the mechanical/electrical plant rooms and covered loading dock were effectively used only to service Woolworths supermarket and liquor store, they too should be considered to form part of the GFA occupied by the supermarket.



  10. The respondent did not agree that any of the offices, the plant room or the loading dock could be considered as part of the supermarket and concluded that provided the matters referred to in the CAO were dealt with, it would be satisfied that the supermarket was not exceeding the 1,500m2 GFA permissible under the lease.   The respondent therefore decided not to include in the CAO the requested order that Bonner Shops Pty Ltd “comply with clause (c) of the Crown lease by reducing the gross floor area of the supermarket to 1500 square metres”. 



    The Hearing

  11. The matter was heard on 11, 12 and 13 September and at a resumed hearing on 26 September 2012.  The Tribunal inspected the Bonner shops building on Tuesday 11 September in the presence of the parties and their representatives and witnesses. The Tribunal had before it the documents prepared by the respondent on which the decision under review was based (“the T Documents”) and the Statements of Facts and Contentions of the parties.



  12. Mr A Galasso SC represented the applicants and Mr R Clynes of counsel represented the respondent.  Neither Bonner Shops Pty Ltd nor Woolworths Ltd sought to be joined as parties.



  13. Oral and written evidence for the applicants was given by Mr Robert Brozic, General Manager of BEMS Pty Ltd, a mechanical services provider in the ACT specialising in the design, construction, commissioning, maintenance and service of heating, ventilating, air-conditioning and refrigeration systems and by Mr Glenn Jones , a workplace investigator employed by Williams Love and Nicol, solicitors for the applicants.  



  14. Witness statements from Ms Jasmine Still, a paralegal employed by Williams Love and Nicol; Mr Christopher Haridemos, one of the applicants and operator of the Kaleen EXPRESS supermarket and liquor store; Ms Rachel Pascall, an employee of Williams Love and Nicol; and Ms Amy Watson, an employee of Condos Investments Pty Ltd were tendered in evidence but none of these witnesses were required for cross examination by the respondent. A witness statement from Mr Anthony Adams, a Director of A T Adams Consulting Pty Ltd and an experienced professional town planner, was also tendered in evidence on the last day of the hearing but Mr Adams was not required to give oral evidence or to be cross examined.



  15. The applicants also lodged two bundles of documents, one relating to the sub-leasing of various areas of the Bonner shops by Woolworths Ltd (Exhibit 1) and the other to Woolworths Ltd policies and plans for its supermarkets, identified as Woolworths Briefing Kit Plans, Standard Details, and Specifications (Exhibit 2).



  16. Oral evidence  for the respondent was given by Mr Dimitri Stramarcos, a Construction Manager employed by Nikias Diamond Construction Logistics Pty Ltd, who had been site supervisor responsible for overseeing the procuring and installation of mechanical and electrical services at the Bonner shops; Mr George Cilliers, Technical Coordinator in the Planning and Delivery Branch of the respondent; and Mr Brian Connors, a senior building inspector with the Investigations Unit of the Environment and Sustainable Development Directorate (within which ACTPLA is now located).  Mr Connors is appointed as a Building Inspector under the Building Act 2004, as Compliance Auditor under the Construction Occupations (Licensing) Act 2004 and an Inspector under the Planning Act.

Applicable Law

  1. A Controlled Activity is defined in section 339 of the Planning Act and includes “failing to comply with a provision of a lease”. A CAO may be made pursuant to Part 11.3 of the Planning Act, and section 350 sets out the circumstances in which a CAO may be applied for by “a person”, the matters which need to be included in the application and the steps which ACTPLA must take in response.



  2. Section 351 provides that ACTPLA “may decide” to make a CAO of the kind sought or to make a CAO (or an order of a different kind) that is not more burdensome than the order sought, or not to make a CAO. Section 360 provides that a CAO is binding on a person to whom it is directed while section 361 provides that it is a strict liability offence to contravene a CAO.



  3. The making of a CAO other than the order applied for is a reviewable decision under the Planning Act by virtue of section 408, and by Schedule 1 Item 40 Column 2. Under Schedule 1 Item 40 Column 4, the applicants are eligible entities to seek review by the Tribunal.



  4. The construction of the  Bonner shops would have been subject to the Building Act 2004 (ACT)(“the Building Act”) and the building would have been required to comply with the standards set out in the Building Code of Australia (“the BCA”). Whether, as constructed, it does so is a matter that will be discussed below.

    The Evidence

  5. For convenience, the Tribunal will use the term “supermarket” for the business that is allowed to occupy 1,500m2 GFA in the Bonner Shops. We will refer to the areas in question as “the supermarket shop” (including its back-of-house area), “the offices”, “the liquor store”, “the stairway”, “the plant rooms” and “the loading area “without implying that the supermarket does not include some or all of the other areas. 



    (a)         The supermarket shop

  6. There was no evidence to suggest, nor was it contended, that the space occupied by the supermarket shop (including its back-of-housed area) exceeded 1500m2 GFA, once the opening between the supermarket space and the liquor store space was closed as required by the CAO.



    (b)         The Offices

  7. The applicants contended that the use of the offices was ancillary to the supermarket and liquor store or used for the purposes of the supermarket and liquor store and even if the supermarket and the liquor store were found to be separate and independent uses, the offices’ area should be apportioned between the liquor store and the supermarket in proportion to the lettable floor space occupied by them, ie in the ratio of 200:1500 which would add 139.5m2 to the GFA of the supermarket.

  1. They drew a distinction between the nature of a use and its purpose, asserting for example, that if the office is used for the purposes of the supermarket and for other purposes, it is nonetheless still being used for the purposes of the supermarket. The purpose, they contended, is the end to which land is seen to serve, citing as authority Shire of Perth v O’Keefe [1964] HCA 37(“Shire of Perth”).



  2. Mr Cilliers observed that the Crown lease permitted the subject land to be used for “shop” and inter alia “non-retail commercial use”.  The latter term as defined in the Crown lease “means business agency, financial establishment, office and public agency”. Office as defined “means the use of land for the purpose of administration, clerical, technical, professional or like business activities, including a government office, which does not include dealing with members of the public on a direct and regular basis except where this is ancillary to the main purpose of the office.”

  3. The 2008 Territory Plan (“the Territory Plan”) CZ4 Local Centre Zone Development Table also permits Ancillary Use within a Local Centre Zone. Mr Cilliers considered whether the office was an “ancillary use” to the supermarket.  The Territory Plan  defines “ancillary use” as


    the use of land for a purpose that is ancillary to the primary use of the land

    while the word “ancillary” is defined as

    associated with and directly related to, but incidental and subordinate to the predominant use.

He observed that neither term is defined in the Crown lease.



  1. Mr Cilliers concluded that any particular use must either be a primary use or an ancillary use but could not be both at the same time.  He formed the view that the first floor offices, as currently used, are used for the purpose of “administration” “clerical” and “like business activities” and this should therefore be regarded as a primary use in itself, rather than an ancillary use to the supermarket shop. He contended that there was no limitation in the Crown lease that prohibited one primary use from providing a service or function in support of another primary use on the same premises and that such co-located uses did not mean that the provision of that service or function necessarily became an ancillary use.



  2. In response to questions from the Tribunal, Mr Cilliers agreed that if the offices were not used by the staff of Woolworths, facilities for staff amenities and offices would have to be provided within the back-of-house space of the supermarket shop, but he reiterated his view that the upstairs space was used as “office” which was an allowable and primary use under the Crown lease.  He acknowledged that the offices were tenanted and used by Woolworths but stated that to his knowledge, there was no limitation in the Crown lease to control the number of tenancies sub-leased to any particular tenant.



    (c)         The liquor store

  3. The liquor store, as stated above, has now been closed off from the supermarket shop by panels and the Tribunal was assured that the closure would be completed to comply with the CAO.  The consequence is that the liquor store is now accessible only from the pedestrian colonnade.  The larger part of the liquor store is devoted to the display and sale of liquor, with two smaller rooms at the back of the sub-leased area, one of which is a cool-room.



  4. The applicants contended that despite the closure of the double doorway into the supermarket shop, the liquor store was still effectively part of the supermarket because its liquor supplies were delivered to it via the loading dock in the Woolworths back-of-house area and then moved to the liquor store through the supermarket aisles.  The evidence also indicated that some bulk liquor was, at times, stored in the back-of-house area (T140 and T146).  Mr Glenn Jones’ initial  evidence was that there appeared to be only a small storage space for liquor at the back of the liquor store and no cold storage, but under cross examination he agreed that he had not seen the separate cold storage room shown in photographs in Exhibit 13, Annexure C. 



  5. Mr Jones’ evidence also was that, if the double doorway remained closed, there was no separate practical means of moving bulk palleted goods from delivery vehicles into the liquor store unless the Woolworth’s loading dock was used and internal access was gained to the liquor store by way of the supermarket, exiting through the main front door, moving along the concrete walkway and entering the liquor store through its front door.  However, under cross examination, he agreed that it could be feasible to deliver bulk liquor supplies to the front door of the liquor store from a truck unloading in front of the store out of trading hours or via fork-lifts from trucks parked in the loading area, but in each case he considered that it would be necessary to break up the pallets at the front door and to move the Woolworths trolley stack located in the area.



  6. Further, the applicants contended that as at least some of the staff were at times rostered to work in both the supermarket and the liquor store, they remained operated in an integrated way.



  7. They also contended that the liquor store was branded Woolworths Liquor, rather than for example “Dan Murphy’s” or “BWS”, which further indicated that it was operated in an integrated way.



    (d)   The Stairway

  8. Mr Clynes informed the Tribunal that the stairway was not subject to any sub-lease.  However, the applicants contended that the stairway presently served only the office and facilities area sub-leased by Woolworths and was therefore part of the supermarket/liquor store operation and that the area it occupied, 10.7m2, should be added to the GFA of the supermarket.  Alternatively, if the Tribunal were to find that the supermarket and the liquor store were separate and independent uses, then areas jointly used by them should be apportioned between the two uses in the same proportion as they had proposed for the office space (see paragraph 34 above) which would add 9.4m2 to the supermarket GFA.

  9. As indicated above, the approved plans showed the stairway as giving access to both the first floor offices and the plant rooms, but as built, it allows access only to the offices.  The CAO made by the respondent required alterations to be undertaken allowing direct external access to the first floor electrical plant room consistent with the DA. The Tribunal notes that access to the electrical portions of the plant rooms will necessitate access to the mechanical portion as well, since the latter is closer to the top of the stairway.  At the date of the Tribunal’s inspection, the access had not been altered.  However, revised sketch plans had been submitted (Exhibit 12 Attachment B) which if implemented would achieve the required access and Mr Cilliers’ evidence was that this solution could be implemented as internal alterations and, pursuant to Part 1.3 of Schedule 1 of the Panning and Development Regulation 2008, would be exempt from requiring development approval.


    (e)         The Plant Rooms

  10. The plant rooms comprise a mechanical plant area, an electrical plant room and a Main Switch Board (MSB) room (seeT448).



  11. The only access to the plant rooms at present is via a steel stairway that runs from the supermarket shop back-of-house area.  Consequently, access to the room is effectively controlled by Woolworths.  If the revised plans for the stairway referred to above are implemented as required by the CAO, then access could be available to any authorised person.



  12. At present, access to the stairway leading to the offices is controlled by a security “swipe card” system controlled by Woolworths.  Mr Connors’ evidence was that if the new access to the plant room was provided, then they would require the lessee to ensure that any tenants needing access to the plant rooms were supplied with a swipe card.



  13. The applicants contended that the plant rooms served only Woolworths supermarket shop and the liquor store, and should be regarded as part of the supermarket.  In support of this view, they relied on the evidence of Mr Broznic who had inspected the plant rooms on the morning of his giving evidence. He said that his firm had done the plant room and electrical layout for Woolworths store at Majura Park and he was therefore familiar with Woolworths usual requirements.   He stated that in his opinion all the equipment in the rooms was related to Woolworths operations and that the adjacent rooftop plant served only to provide air conditioning to the supermarket shop and the liquor store.

  14. Mr Broznic said that the building had been constructed to a base-build standard, which he described as generally including the supply of plumbing, drainage, main cable trays, power and lighting supply to each tenancy, but explained that anything required by a tenant over and above that would be at the tenant’s cost. When cross examined, Mr Broznic agreed that the plant rooms had the capacity to accommodate equipment servicing additional tenants but considered that this was unlikely to happen as the remaining unlet tenancies were a considerable distance from the plant rooms.

  15. By contrast, Mr Stramarcos , who had been site supervisor during construction of the Bonner shops, stated that there were cable trays installed that would enable various services (such as power supply and data/communications) to be provided from the electrical plant room to the unlet tenancies if required. He agreed that the cable trays shown in Exhibit 11 and in the attachment to Exhibit 8 had the capability of doing so. He also confirmed that there was space within the plant rooms to install equipment for other tenants if required.

    (f)     The loading area

  16. The Crown lease clause 3(g) required the lessee to “provide and maintain an area for the loading and unloading of vehicles on the land” and this requirement has been met by the construction of a covered loading/unloading area attached to the south of the building.  It has been designed so that vehicles up to semi-trailer size can drive through it from Bill Ferguson Circuit to Mabo Boulevarde, and with the capacity for a truck to back up to the Woolworths back-of-house loading dock on its northern side. A waste collection zone is located on its southern side, as is a small vehicle loading space.



  17. When viewed by the Tribunal, the small vehicle loading space had not been marked as such and was occupied by waste bins belonging to the chicken takeaway shop.



  18. The loading/unloading area has not been sub-leased, but Woolworths has been granted a license to allow it to use those parts of the “Truck Unloading Area” for the purpose of gaining access to its loading dock (Exhibit 1).



  19. The applicants contended that the 212m2 of the loading area (which they referred to as a Loading Dock) should be considered as part of the supermarket operation and included as part of its GFA. They further contended that if the Tribunal found that the supermarket shop and the liquor store were separate and independent uses, then the GFA of the loading area should be apportioned between the two uses in the same proportion as they had proposed for the office space and the stair (see paragraph 34 above) which would add 186.0m2 to the supermarket GFA.



  20. Mr Cilliers observed that the small vehicle parking area should be designated by signage and its proper use would need to be enforced.  He agreed that smaller delivery vehicles could park in front of the unlet tenancies to unload, but not three tonne trucks which would have to be accommodated within the loading area during peak parking hours.



  21. Mr Cilliers disagreed with the suggestion that the loading area primarily served Woolworths, observing that it also served for waste storage and collection from all tenancies and that Woolworths did not have exclusive use of the area that can accommodate an articulated vehicle.



    Submissions of the parties

  22. Mr Galasso submitted that it was a basic principle of planning law that where different activities are carried on under one roof, the activities must be characterised according to the purpose for which they are carried on.  He said that the relevant principles were restated by Preston CJ in Chamwell Pty v Strathfield Council (2007) 151 LGERA 400 at [27] to [46](“Chamwell”) a case which co-incidentally also dealt with a supermarket.  Mr Galasso summarised these principles as follows:



    (a)In planning law, use must be for a purpose (Shire of Perth).

    (b)The purpose is the end to which land is seen to serve and describes the character which is imparted to the land at which the use is pursued (Shire of Perth).

    (c)In determining whether land is used for a particular purpose, an enquiry into how that purpose can be achieved is necessary (Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493 at 499-599).

    (d)In the case of use of land for the purpose of retail development such as a supermarket, the purpose can only be achieved by the physical acts of constructing not only space in which the retailing takes place but also the spaces for the associated activities as well (Chamwell at [29]).

    (e)The associated activities (plant rooms, loading docks, offices etc) are the means by which the land is made to serve the retail purpose of the supermarket.  The supermarket could not function without those associated activities (Chamwell at [31]).

    (f)The nature of the use needs to be distinguished from the purpose of the use.  Uses of different natures can still be seen to serve the same purpose (Shire of Perth at 534 and 535; Warringah Shire Council v Raffles [1979] 2 NSWLR 299 at 301).

    (g)

    The fact that the nature of uses of different components or parts of the development may vary is not necessarily of importance.  While the retail area may be the only part of the development used specifically as a supermarket, the other uses, while different in nature, are each designed to serve the end of enabling the supermarket to be carried on.  That is their purpose and imparts to the land on which they are pursued the character of a supermarket (Chamwell at [35]).



  23. Mr Galasso submitted that this approach had consistently been applied to the interpretation of purposes clauses in ACT Crown leases, citing a number of cases as authority including Peter Kohlsdorf Golf Distributors Pty Ltd v Liangis Investments Pty Ltd & Anor [2003] ACTAAT 29 (“Kohlsdorf”); Authentic Systems Pty Ltd & Anor and Department of Environment and Planning [1993] ACTAAT 47; Lunardello, Rene and Minister for Urban Services [2001] ACTAAT 27; Gakhar and ACTPLA [2003] ACTAAT 55 (“Gakhar”); and Young Men’s Christian Association Inc & ACT Planning and Land Authority [2011] ACAT 78.



  24. In relation to the present case, Mr Galasso submitted that the evidence showed that Woolworths supermarket, liquor store and office at Bonner were always intended to be operationally integrated, including by the letter of offer from Woolworths dated 23 January 2010 to enter into a lease of the shops when built  which refers to a standard 2000 supermarket and liquor building with 1900m2 of lettable area including a mezzanine area of 200m2 for office and amenities (Exhibit 1); the submission to  the Woolworths Property Committee which referred to a Store Area  - Building of 1,900m2 and a Store Area – Trading of 1,500m2 (Exhibit 1); and the Woolworths Property Asset Schedule which describes the supermarket as having a trading area of 1,500m2 (Exhibit 1) .

  25. This integration was reinforced by the fact that the staff rosters, employment contracts and position descriptions (Exhibits 3 and 6) showed that the staff employed by Woolworths worked in both the supermarket shop and the liquor store and that the manager of each section (including the liquor store) reported to the supermarket.  Furthermore, although there were three separate sub-leases for the supermarket, liquor store and offices, they were described as “interdependent leases” of the “interdependent premises”.



  26. Mr Galasso submitted that when all these factors are taken into account the only possible conclusion is that the liquor store is fully integrated with and used for the purposes of the supermarket and that there would be no Woolworths liquor store at Bonner but for the existence of the Woolworths supermarket.  So much, he observed was accepted by the respondent when it required closure of the direct access between the supermarket and the liquor store but in his submission, the closure of that access was a change of form but not of substance.



  27. The use of the office was also undoubtedly for the purposes of the supermarket.  He observed that the supermarket “floor” contains no uses replicated in the “office”, uses which are directly related to the day to day operations of the supermarket.  As such, the use of the office is not an independent use divorced from the supermarket but rather is a use for the purposes of the supermarket and its area must therefore, in his submission, be added to the area of the supermarket floor to determining the true area of the supermarket.



  28. Mr Galasso further submitted that the loading dock and loading area was only used by Woolworths and is one of “the means by which the land is made to serve the retail purposes of the supermarket.  The supermarket could not function without it” (Chamwell), and the requirement in clause 3(g) of the Crown lease that the Lessee provide and maintain an area for the loading and unloading of vehicles did not change the fact that the loading dock/area was being used for the purposes of the supermarket.



  29. Similarly, the plant room was currently accessible only via stairs from the supermarket loading area and it was a reasonable inference that the only plant in the plant room was that used by the supermarket and was being used to run all of the Woolworths tenancies.  Again, in his submission, the plant room is one of “the means by which the land is made to serve the retail purposes of the supermarket.  The supermarket could not function without it” (Chamwell).



  30. He concluded that on any view, the areas being used for the purposes of the supermarket have exceeded the 1,500m2 limit in clause 3 (c) of the Crown lease and he submitted that the CAO should be made in the terms applied for by the applicants.



  31. Mr Clynes, for the respondent submitted that the applicants’ case was without merit, for the reasons given in evidence by Mr Cilliers and said that the applicants’ analysis of the facts could not be supported in relation to the plant room and the loading dock, or had been overtaken by events in relation to the stairs to the first floor office spaces and plant room.  There was no evidence that the loading dock and the plant room were for the use of Woolworths to the exclusion of all other tenants, while access to the plant room would change as a result of the CAO and the remedial steps that Bonner Shops is obliged to undertake.



  32. Mr Clynes submitted that Chamwell provided no assistance to the Tribunal because it involved the proper construction of a planning instrument, the Strathfield Planning Scheme Ordinance, whereas here the Tribunal was dealing primarily with the construction of a Crown lease registered under the Torrens system and the resolution of this matter must turn upon the proper construction of that Crown lease in its factual context.



  33. Mr Clynes said that the ACT Court of Appeal decision in Springrange Pty Ltd v ACTPLA [2010] ACTCA 17 (“Springrange”) would militate against the Tribunal seeking to read down the plain meaning of the relevant portion of clause 3(c) of the Crown lease by reference to “principles of planning law”.  In his submission, Springrange makes clear that since the Crown lease is registered under the Torrens system, the document needs to be construed “without the aid of extrinsic materials” (see Springrange at [12]) in other words, without resort to the “principles of planning” which the applicants seek to call in aid.



  34. Mr Clynes also relied on Argos Pty Ltd & Ors v Minister for the Environment and Sustainable Development  [2012] ACTSC 102 (“Argos”) in which Burns J addressed an argument about whether additional areas ought to be included in the calculation of GFA of a supermarket.  In that case the plaintiffs contended that the calculation of the GFA ought to have included uses associated with the supermarket such as “plant/dock”, “loading dock” and “local storage centre”  in relation to the application of the Parking and Vehicular Access General Code (“the PVAGC”) but His Honour wrote at [65] that



    In my opinion, there is nothing in the Territory Plan, or the relevant codes, that require the areas referred to by the plaintiffs to be included in the area of the supermarket or the development generally for the purposes of application of the PVAGC.


  1. In Mr Clynes’ submission, when resort is had to the plain meaning of the provisions of the Crown lease, there is no ambiguity that arises in its application to the facts and on any reasonable interpretation, the Crown lessee, Bonner Shops, is not in breach of clause 3(c) to the extent that there is any need to go any further than the respondent has contended for by way of a CAO.

  2. In closing his oral submissions, Mr Clynes noted that the Tribunal had a discretion under section 351 of the Planning Act either to make or not to make an order and referred to the comments of Peedom P in Kohlsdorf at [72] which indicated that should be “a clear planning objective” in making such an order, and that a public interest test might be used in exercising the discretion whether or not to do so. As this matter had not previously been raised, the Tribunal adjourned the hearing and, after consideration, ordered that it be resumed on 26 September 2010 to allow further evidence and submissions on this point. We will return to it later after considering whether there has in fact been non-compliance with the Crown lease.

Consideration of the Issues

  1. The Tribunal has to decide whether any or all of the five areas identified as liquor store, offices, stairway, plant room and loading area should be considered as part of the GFA of Woolworths Bonner supermarket business.  If some or all of these areas do contribute to the supermarket GFA, the Tribunal also has to decide whether the CAO should be varied as requested by the applicants, or in some other way, or not at all. 



  2. Mr Galasso referred the Tribunal to a number of cases, both from other jurisdictions and from ACT courts and tribunals, but these were all concerned with issues relating to whether particular uses of land were permissible under the relevant zoning provisions or the purpose clauses of Crown leases, for example, in Chamwell whether uses of land for access to a supermarket car park was compatible with residential zoning, and in Shire of Perth whether land whose purpose was for pottery making could be considered to allow other forms of light industrial use, while in Kohlsdorf the issue was whether the purpose clause of a Crown lease which limited the use to “an outdoor recreational activity restricted to a facility for the playing of golf related activities” allowed the development of a professional gold shop as an ancillary activity. 



  3. In the present case, it has not been suggested that the uses of the premises as supermarket, liquor store and offices are not permitted by the Crown lease.  On the contrary, each of them is specifically or generically identified as being within the purposes for which the land may be used.  The only question that the Tribunal must address is whether the uses of parts of the premises as liquor store, offices, plant rooms and stairway are uses for the purposes of the supermarket and therefore to be included within the 1,500m2 limit imposed on any supermarket by the Crown lease.



  4. The starting point must be consideration of the meaning of the terms in the Crown lease, at T35-T47.  The decision of the ACT Court of Appeal in Springrange is binding on this Tribunal and makes it clear that in interpreting the meaning of the wording of the Crown lease, reliance must not be placed on any extrinsic materials (save to the limited extent allowed by the Court in Springrange at [15]).



  5. The Tribunal notes that the Court of Appeal was critical of the use of “template” leases and the drafting of some of the provisions in the lease in question in that case and we have similar concerns in this one.  The Tribunal’s main concern is the lack of clarity that arises from the specification in clause 3(c) of what is termed the “maximum gross floor area” allowable for “any supermarket”.  The use of the term “gross floor area” is itself unfortunate since that is a defined term in the lease and applies to the total floor area of the building on the land, measured in a particular way and should not be used for areas within the building that are allowed for any particular use. There are alternatives that could have been used such as “maximum floor area” or “net lettable area”.



  6. Be that as it may, we must continue to use the term in the way in which it was used in the lease. The main difficulty arises from the definition of “supermarket” at sub-clause 1 (rr) which reads

    “Supermarket” means a large shop selling food and other household items where the selection of goods is organised on a self-service basis

    There is no mention of just what elements comprise the “large shop” for example, whether it includes areas for the reception and storage of goods, the preparation of food items for sale, administration of the shop, amenities for staff, or any other use that is “ancillary” to the operations of a supermarket?



  7. In Kohlsdorf, at [61] Peedom P wrote:

    The fact that the use of land for a particular purpose is not expressly permitted by the purpose clause of a lease will not necessarily exclude that use as a lawful activity if it is a use which is ancillary to one which is expressly permitted.  An ancillary use, when identified is, in planning terms, not a separate use (see Gascone v Whittlesea Council {1993] 80 LGERA 367 at 371).  Whether a use is ancillary to a permitted use is a question of fact and degree (see Lizzio v Ryde Municipal Council [1983] 155 CLR 211 at 217).

  8. Some ACT Crown leases do specify some such matters, for example that in Argos, which provides that a permissible purpose was “shop provided always that the maximum gross floor area for a supermarket shall not exceed 1500 square metres AND ancillary thereto storage and a loading dock”.  Similarly, in Gakhar, the permissible purpose was amended to “To use the premises for the purpose of a centre for the promotion of Hindu culture and subsidiary thereto a Hindu temple… and ancillary thereto a single residential dwelling for a Hindu priest or teacher of Hindu culture”.



  9. The concept of ancillary use was addressed in the evidence of Mr Cilliers, who observed that “Ancillary use” was a permissible use in the Development Table for a CZ4 Local Centre Zone in the Territory Plan, but that the term was not defined in the Crown lease nor were Ancillary uses mentioned.  Mr Cilliers contended that the use of the first floor office was a primary use and not ancillary to the supermarket because “non-retail commercial use” is a permissible use under the Crown lease and is defined to include “Office”.  However, there is an abundance of case law to indicate that uses that are ancillary or subordinate to a specified use are to be regarded as being used for the dominant purpose.  An oft cited reference is to the judgement of Glass J.A in Foodbarn Pty Limited v Solicitor General (1975) 32 LGRA 157 where he wrote:



    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 used.  Doubtless the same principle would apply where the dominant and servient purposes both relate to the whole and not to separate parts.

  10. The respondent seems to have accepted without question that use of some part of the 1,500m2 allowable for a supermarket could be used for the purposes of reception and storage and preparation of goods for sale, as they raised no concerns about the back-of-house area of the supermarket.  Consequently, the Tribunal accepts that the size limit of the supermarket was intended to include at least those ancillary uses.  But does it follow that the size limit was also intended to cover all ancillary uses, in particular the offices and staff amenities?  We will return to this question below.



  11. The Tribunal has carefully considered the evidence and submissions of the parties and has arrived at the following findings of fact:



    (a)

    While the liquor store as originally built was clearly part of the supermarket, once the requirements of the CAO have been fully complied with, it will constitute a use of the land for a separate purpose from the supermarket business, that purpose being a “shop” for the sale of liquor, albeit also run by Woolworths Ltd (Woolworths Liquor is one of several Registered Business Names for Woolworths Ltd shops selling liquor but does not seem to have a separate corporate identity).  Nothing in the Crown lease prohibits the one organisation from holding more than one sub-lease within the building.  We agree with Mr Cilliers, that the fact that the liquor store may have an arrangement with the supermarket shop to make use of the supermarket shop’s loading dock for the delivery of its trading stock and to move that stock to the liquor store via the supermarket shop aisles is an operational matter and is not precluded by any provision of the Crown lease. Should that arrangement not be in place, it would be possible to unload delivery vehicles in the loading area or at the front of the shop and move the liquor supplies directly into the liquor store without traversing the supermarket shop. The Tribunal concludes that the liquor store does not any longer form part of the supermarket business and its GFA is not part of the GFA of the supermarket business.



    (b)

    The plant rooms are part of the Bonner Shops development currently providing services only to the supermarket shop and the liquor store.  That is not surprising considering that apart from a small chicken takeaway, they are the only tenants in the complex. The evidence is clear that, once the access stair is correctly installed to comply with the DA approval as required by the CAO, the plant rooms will have the capacity to provide a number of services and be accessible to other tenants as required.  The GFA they occupy therefore cannot be considered to form part of the GFA of the supermarket business.



    (c)

    The loading area is part of the Bonner Shops development, required to be provided by the Crown lease, and is available to serve the needs of any tenant requiring the use of it for loading/unloading and for the storage and collection of waste.  It is not leased to Woolworths and although its use to provide access to Woolworths loading dock is licensed, that license does not provide an exclusive use.  Its GFA therefore does not form part of the GFA of the supermarket business. In reaching this conclusion we do not rely on the views of Burns J in Argos, which was concerned with quite a different issue - that is, the provision of parking to meet the likely needs of particular uses (see paragraph 71 above).



    (d)The stairway, when altered to comply with the revised plans, will give access to both the offices and the plant rooms and will be made accessible by appropriate means to any tenant requiring access to the plant rooms, as well as to Woolworths staff using the offices.  It is not held under any lease or license to Woolworths.  It is part of the infrastructure of the building and therefore its GFA therefore does not form part of the GFA of the supermarket business.

    (e)

    The offices however are leased by Woolworths for the purposes of management of both the supermarket shop and the liquor store and of meeting its obligations to provide amenities for it staff.  While some of the space is certainly used as “office” as defined in the Territory Plan, ie the use of land for administration, clerical, technical, professional or like business activities, we do not accept Mr Cilliers’ contention that this makes it a primary use.  The three “offices” are not independent business activities but are wholly related and subordinate or ancillary to the supermarket and liquor store businesses. The space is also partly used to provided staff facilities such as toilets, lockers and a lunch room which uses do not fall within the definition of “office” (other than to the extent that they would be ancillary to any independent office use).  These facilities serve the staff of the supermarket shop and the liquor store and to that extent they are an essential element of the operations of those two enterprises.  If they were not there, the toilets at least would have to be provided somewhere within the GFA available to the supermarket under the  BCA[1]. Consequently, we consider that a part of the GFA of the offices is attributable to each of the liquor store and the supermarket business and must be counted as part of their GFA. There is no GFA limit in the Crown lease on the size of a shop other than a supermarket, hence the additional GFA for the liquor store is of no consequence.



    [1]   The BCA provides that a shop, which is a Class 6 building, must have separate male and female toilets where the staff numbers 10 or more as well as a disabled toilet.  The evidence indicates that the supermarket has more than 10 staff.  However, the BCA does not specify where the required toilets are to be located. The BCA does not require a Class 6 building to have other staff facilities such as lockers, though these may be required under industrial agreements.

  12. We are unable to be precise about the amount of GFA in the offices which we consider to be ancillary to the supermarket business, given that some of it is related to the liquor store shop purpose and the balance to the supermarket business purpose.  The actual GFA of the offices area of the building is shown on T76 and T442 as 158.2 m2. Using the ratio of the areas shown in the approved plans for supermarket (1,500m2) and office (190.8m2), we estimate that about 140m2 of the GFA of offices space is used for the purposes of the supermarket business and therefore the supermarket business exceeds the allowable area of 1.500m2 by that amount.



  13. Consequently, the Tribunal finds that there has been a contravention of the provisions of the Crown lease limiting the GFA of the supermarket to 1,500m2.

The issue of discretion and public interest

  1. At paragraph 73, we indicated that we would return to the issue of the discretion available to the Tribunal as to whether or not to make an order where a controlled activity has been found not to have been complied with and whether a public interest test should be used in deciding whether or not to exercise the discretion.  Submissions from both parties on these matters were invited.



  2. Mr Galasso submitted that there was a clear planning objective and public interest in upholding the integrity of the planning system and in particular the centres’ hierarchy established by the National Capital Plan and the Territory Plan.  He relied on the evidence of Mr Anthony Adams who referred the Tribunal to the statement in the National Capital Plan (pp 84-85) that

    One of the key principles of Canberra’s urban structure has been that a hierarchy of centres has been developed, with each town having a centre acting as a focal point for higher order retail functions, commercial services, offices and community facilities…Centres at each level in the hierarchy form the focus of a range of retail, commercial and community facilities and services in which specialisation increases at successively higher levels.  The integrity of the hierarchy of centres has been broadly maintained with the levels of (sic) fulfilling distinct but complementary functions…Each town should have a town centre.  The Territory Plan will provide for a range of lower order centres to meet the varying needs of residents.

  3. Mr Adams contended that the Territory Plan reflected this principle through inter alia, a system of land use “zones” and a hierarchy of centres including Civic as the pre-eminent centre, town centres at Tuggeranong, Woden, Belconnen and Gungahlin, and below these group centres and at the lowest level local centres, typically one per suburb, intended to serve the people of that suburb only.  He said that the fundamental characteristic of elements in a hierarchy is that they differ in size and if for some reason the size differentiation disappears because either smaller centres grow in size or larger centres shrink, then the hierarchy will no longer exist.



  4. He further contended that retailing was the “engine room” of a centre and that a supermarket was usually the driving force - when a supermarket at a centre fails then other smaller retail outlets will also fail.  In order to retain smaller supermarkets at local centres some measure of protection is necessary and so the planning system regulates their size. He opined that the existence of a supermarket at Bonner which is oversized relative to the status of Bonner as a local centre would impact on the nearby local centre at Forde and might lead to its demise.  A supermarket of similar scale to that at Forde would be appropriate at Bonner, but what has occurred  is that a substantially larger supermarket has been installed which is easily accessible to much of the Forde suburban area.



  5. Mr Adams drew attention to the January 2010 ACT Supermarket Competition Policy Implementation Plan which arose from the recommendations of the Martin Review of ACT Supermarket Competition Policy and, in particular, to the Background information on page 9 of the Plan, which stated that “A large format or full line supermarket is generally over 2,500m2 and carries around 30,000 items.  A convenience/local supermarket in the ACT is under 1,500m2. ALDI stores are generally 1,300-1,600m2.” He said it was a reasonable supposition that the Bonner Crown lease, prepared by the respondent in April 2010, would have had regard to the supermarket policy released by the Government four months previously and opined that the 1,500m2 limitation in the Crown lease followed directly from the policy prescription of 1,500m2 for a convenience/local supermarket.



  6. Mr Galasso submitted that current government policy limits local centre supermarkets to 1,500m2 but noted that the Minister had recently announced (24 August 2012) that this limit would be reduced to 1,000m2.  This reinforced the need for a local supermarket such as Bonner to be constrained within, at most, the 1500m2 limit contained in the Crown lease to retain the integrity of the centres hierarchy.

  7. Mr Galasso submitted that the making of a CAO is not, in its nature, the enforcement of a private right but rather the enforcement of a public duty imposed by the Planning Act to comply with a Crown lease. The fact that “any person” (not just a person with a special interest or who suffers “material detriment”) may seek the issue of a CAO is a clear expression of the public interest which exists in maintaining the integrity of the planning system.



  8. Mr Galasso further submitted that the breach of the Crown lease in the present matter was neither a technical nor trivial one.  It has enabled the supermarket to operate from, a significantly larger trading area than other operators who are complying with the terms of their Crown leases, and failure to enforce compliance would give the Bonner supermarket lessee an unfair advantage over those who do comply.  In his submission, if a substantial breach of the provisions of a Crown lease is condoned by the exercise of the Tribunal’s discretion, the equal and orderly enforcement of the Act would be undermined.



  9. Mr Galasso stressed that it was not any part of the applicants’ case that either of them is seeking a CAO as a means of preventing business competition.  The Tribunal might reasonably infer that, given the distance of the two applicants’ supermarkets at Kaleen and Evatt from the Bonner shops, neither is likely to be impacted upon to any significant degree by the by the breach of the Crown lease at Bonner (in contrast to that at Forde).  However, he recognised that in other cases the former ACT Administrative Appeals Tribunal (“the AAT”) had observed that issues of “business competition” should be treated carefully in the light of the special facts in those matters.



  10. In the case of Nb and Nb Marsh Pty Ltd and Minister for Planning [2002] ACTAAT 11 (“Marsh”) (where the discretion was exercised not to make an order), the appeal was made by the person affected by the proposed CAO who was able to show not only that there was widespread public support for the unlawful business to be allowed to continue, but that a recommendation had been made to vary the Territory Plan to allow the use to be regularised.



  1. In the Kohlsdorf case, the appeal was made by the person against whom the CAO had been made and the AAT found that the use complained of was authorised by the Crown lease, so that the grounds for making a CAO did not exist. Mr Galasso observed that in its decision the AAT had referred to the original complaint having been made by “an apparent business competitor” but it was unclear from the decision whether the AAT, had it been satisfied that the grounds for making a CAO had in fact been made out, would have declined to make an order in the exercise of its discretion.



  2. Mr Galasso said that the evidence suggested that Woolworths never intended to comply with the 1,500m2 GFA limit, citing as proof the standard Woolworths 2000 supermarket layout, the Woolworths letter to Mr Nikias offering to enter into a lease, the Woolworths Property Committee submission and the agreement for lease, as well as an email from Sarah Treble of ACTPLA to the developer (Exhibit 4) pointing out that the construction of the internal stairs to the plant rooms was in clear contravention of the approved plans.  This he said was a factor that the Tribunal should take into account in the exercise of its discretion in favour of making the CAO.



  3. Finally, he said that it was the respondent who had the duty to establish the grounds if the Tribunal were to consider exercising its discretionary not to make the CAO requested.



  4. Mr Clynes submitted that, at the hearing, the applicants had not identified or produced any evidence or arguments that would point to any relevant public interest factor that might persuade the Tribunal to go any further than the respondent had done in the decision under review. He rejected the proposition that the respondent had a duty to establish any public interest.



  5. He submitted that the proper way to work out the way to exercise the discretion had been set out in by President Peedom in the decision in Marsh where at [28] he had said “Each case of alleged breach is, however, required to be considered on its merits and any decision made to have regard to relevant planning considerations and the public interest in maintaining the integrity of relevant planning policies.” Also in Bogiatzis & Ors and Minister for Urban Services& Anor [2002] ACTAAT 21, the question of “proportionality” had been raised, that is, what is the extent of the breach and when that is determined, act in proportion to it.

  6. Mr Clynes challenged the value of Mr Adams’ evidence regarding the sizes of supermarkets in the Implementation Plan and of the recent Ministerial Media Release. While he accepted that there was a hierarchy of centres he submitted that that need not translate into particular supermarket sizes.  Further, the Media Release referred to the intention to prepare a Draft Variation to the Territory Plan, but until that was done, it was not a planning matter.  He distinguished this position from that in Canberra Cruises  & Tours v Minister for Urban Services [1999] ACTAAT 14, in which announced government policy in relation to the Kingston Foreshore was accepted as a relevant consideration, but in that case there was a long history of policy development and action for the Kingston Foreshore redevelopment and the evidence was that formal amendment of the Territory Plan was imminent.



  7. He also submitted that Mr Adams’ evidence showed that the applicants were relying on economic considerations, but that the protection of some economic interest was expressly rejected as a discretionary public interest factor in Kohlsdorf and Marsh, and by the ACT Supreme Court in Jewel Food Stores v Minister for the Environment, Land and Planning (1995) 122 FLR 269 and in Argos.



Consideration of the Discretion and Public Interest issues

  1. Having established that there has been a breach of the Crown lease purpose clause in that the supermarket business exceeds the permissible 1,500m2 by about 140m2, the Tribunal must decide whether to make the CAO sought, or some other CAO, or not to make the order sought.  No one has suggested any other order that could usefully be made, so it is a question of whether, on planning grounds and in the public interest, we should order Bonner Shops Pty Ltd to comply with the provisions of the Crown lease or accept that there would be no planning purpose or public benefit in doing so.



  2. A decision to make the order sought would mean that Bonner Shops Pty Ltd would have to require Woolworths to relocate the staff and facilities serving the supermarket business to within the 1,500m2 ground floor area presently available to them and would no doubt result in considerable disruption to the supermarket business while this was done.  Whether the contractual arrangements between Bonner Shops and Woolworths would stand in the way of such an arrangement is a matter of conjecture.



  3. One planning purpose that could be served by such a decision would be to uphold the integrity of the leasehold system through requiring strict compliance with the purpose clauses in Crown leases.  We accept Mr Galasso’s submission that breaching the purpose clause of a Crown lease is not a trivial matter.  However, as President Peedom said in relation to Bogiatzis, “any order should, if made, involve a response which is proportionate to the particular type of conduct which the Land Act makes a controlled activity and which is sought to be addressed by the order.” The question is, would requiring the relocation of the offices and staff amenities servicing Woolworths supermarket be proportionate to the breach involved?



  4. The Tribunal is not persuaded that it would.  It seems clear to us that the primary cause of the breach is the lack of clarity in clause 3(c) of the Crown lease, which does not specify the aspects of the supermarket business that are to be contained within the specified limit of 1,500m2.  Woolworths could be forgiven for assuming that the 1,500m2 applied to the shopping area, given that the definition of “supermarket” in the Crown lease refers to it being a large shop and to the fact that the goods are self-selected, while the definition of “shop” says nothing about whether or not it includes ancillary uses. 



  5. We note that this difficulty has been recognised in the recent Report of the Legislative Assembly Select Committee on ACT Supermarket Competition Policy (24 August 2012) (”The Select Committee Report”) which, at Recommendation 10 reads:

    The Committee recommends that the current provisions of the Territory Plan and the Local Centres Development Code be reviewed to determine an exact definition of Gross Floor Area as currently applied to both supermarkets and other grocery and convenience stores in the ACT;

    and at Recommendation 11

    The Committee recommends that supermarket Gross Floor Area be calculated according to the whole area of a business accessible by the consumer but not include areas inaccessible by consumers such as loading docks, administrative areas and food preparation, packing and storage areas.

  6. The evidence shows that throughout its negotiations with, first Mr Nikias, and then with Bonner Shops Pty Ltd, Woolworths Ltd was seeking 1,900m2 of floor space, comprising 1,500 m2 for the supermarket, 200m2 for the liquor store and 200m2 for offices and at no stage does there appear to have been any indication from the respondent that the intention of the Crown lease was to require all of these requirements to fit into the 1,500m2 limit imposed on “supermarket” use. 



  7. The Tribunal would find it difficult to believe that the respondent was not aware of the proposed arrangements between Woolworths and Bonner shops at the date the Crown lease was issued.  The email exchange between Ms Treble and Ms Borrett (Exhibit 4) makes it clear that the respondent considered that the plant rooms would have to be counted as part of the supermarket GFA if they could only be accessed via internal stairs from the back-of-house area of the supermarket, but the emails contain no suggestion that the office and amenities (or the liquor store) should also be counted.



  8. Another possible planning purpose could be maintaining the integrity of the hierarchy of centres as identified in the National Capital Plan and reflected in the zoning system of the Territory Plan. However, the Tribunal is not persuaded that the hierarchy of centres would be undone by a supermarket in a local centre being slightly larger than 1,500m2.  Apart from the footnote to Figure 1 in the Implementation Plan which referred to a convenience/local supermarket as “being under 1,500m2”, we were given no information about the sizes of other local supermarkets in Canberra (apart from Mr Adams’ untested assertion that the Forde supermarket was “very modestly sized”).



  9. Nor are we persuaded that having a supermarket of the size of Bonner,  Woolworths would have an adverse effect on the economic viability of supermarkets in adjacent suburbs such a Forde, or the proposed supermarket at the Amaroo Group Centre as Mr Adams suggested.  No empirical evidence was presented to the Tribunal about the economic effect of one supermarket on another in a nearby suburb, but we are aware from the current Yellow Pages that in some parts of Canberra there are a number of supermarkets of varying size in relatively close proximity to each other which are currently trading, for example at Deakin (IGA), Yarralumla (IGA), Red Hill (Foodtown), Narrabundah (Advance) and Kingston (IGA), despite the presence of a large Coles supermarket at Manuka (Griffith). Each of these businesses is within a range of 1-2 km of another as the crow flies.  Appendix G of the Select Committee Report (which is a map of the locations of supermarkets in Canberra) indicates that this is not an uncommon situation.



  10. The Tribunal does not accept that it should have regard to the recent Ministerial Media Release suggesting that supermarkets in local centres would be limited to 1,000m2.  Indeed, such a policy would be contrary to a key element of the Implementation Plan, that is “Elimination of artificial constraints on supermarkets in appropriate Local Centres expanding in ways that are consistent with public amenity and enables those stores to provide a more competitive offer against full line stores in large centres” – a recommendation that was endorsed by the Government when the Implementation Plan was released in 2010.



  11. The Tribunal also notes that the Select Committee Report recommended that “the supermarket Gross Floor Area limit prescribed for a local centre should be individually specified, given the differing size of local centres as they were originally developed”.   As the ultimate policy that the Government will adopt remains unclear the Tribunal is not able to rely on “government policy” to guide it in its decision.



  12. Whether there is any public interest that needs to be considered in relation to the exercise of our discretion is another matter.  The Tribunal was not presented with any evidence of public concern about the Bonner supermarket (such as was available to the Tribunal in Marsh where there was local support for the maintenance of the activity that was in breach of the Crown lease purpose clause).  Mr Adams contended that there was “a very strong public interest in ensuring that local centres remain viable as local centres serving their local communities” and that this was true with respect to the Forde centre when considering excessive competition from Bonner, but he provided the Tribunal with no evidence as to whether there was any public concern, either from the residents of Forde or those of Bonner about the matter under review.

  1. Mr Galasso submitted that the fact that anyone, not just a person whose interests were affected, could seek a CAO was evidence that enforcement of the purpose clause in a Crown lease was a matter of public interest and we do not disagree with that. He also assured the Tribunal that the applicants, who are associated with the Evatt and Kaleen supermarkets, were not trying to protect their own economic interests in seeking to have the CAO made and the Tribunal accepts that. Nevertheless, we are not persuaded that any over-riding public interest would be served by requiring the reconfiguration of the Bonner Woolworths to reduce its size by 140m2 (less than 10% of its area) and indeed, the public interest of Bonner residents might best be served by leaving the supermarket to operate as it is.

    Conclusion

  1. The Tribunal concludes that given the present state of flux and uncertainty about the policy that will ultimately be adopted by Government in relation to supermarket size in the ACT, there is no significant planning purpose that would be served by making the order sought by the applicants, nor is there any over-riding public interest that would be served by doing so.  We also consider that despite finding that there has been a relatively small breach of a lease condition, to make such an order would be a disproportionate response, given the lack of clarity in the lease condition in question.

    Decision

  2. The decision under review is confirmed.

………………………………..
Dr Don McMichael Senior Member
For and on behalf of the Tribunal

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A  FILE NO:      

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COUNSEL APPEARING:       APPLICANT:          

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DATE/S OF HEARING:  PLACE: CANBERRA

DATE/S OF DECISION:  PLACE: CANBERRA

PART B

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FULL REPORT ( )        CASE NOTE ( )        UNREPORTED DECISION ( )

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Cases Cited

6

Statutory Material Cited

0

Shire of Perth v O'Keefe [1964] HCA 37
Council of the City of Newcastle v Royal Newcastle Hospital [1957] HCA 15
Council of the City of Newcastle v Royal Newcastle Hospital [1957] HCA 15