Hobart City Council v Rich Tapestry Pty Ltd (ACN 667 999 055)

[2024] TASSC 54

[2024] TASSC 54

COURT:	SUPREME COURT OF TASMANIA
CITATION:	Hobart City Council v Rich Tapestry Pty Ltd (ACN 667 999 055) [2024] TASSC 54
PARTIES:	HOBART CITY COUNCIL
v
RICH TAPESTRY PTY LTD (ACN 667 999 055)
FILE NO:	3049/2023
DELIVERED ON:	23 October 2024
DELIVERED AT:	Hobart
HEARING DATE:	14 October 2024
JUDGMENT OF:	Marshall AJ
CATCHWORDS:

Environment and planning – Environmental planning – Planning schemes and instruments – Tasmania – Other matters – Whether erosion of capacity to form neighbourly bonds causes unreasonable loss of amenity to remaining occupants - Residential function of scheme adequately considered by tribunal - Granting visitor accommodation use would not cause unreasonable loss of amenity to remaining occupants.

Aust Dig Environment and Planning [52]

Cases:
Bay Summer Investment Pty Ltd v New South Wales (2017) 222 LGERA 286
Boland v Clarence City Council [2021] TASFC 5
Kumar v Minister for Immigration and Border Protection [2020] FCAFC 16

Morilla Estate Pty Ltd v Lau [2024] TASSC 49

Legislation:
Hobart Interim Planning Scheme
Strata Titles Act 1998

Tasmanian Civil and Administrative Tribunal Act 2020

REPRESENTATION:

Counsel:

Appellant:	C Scott
Amicus Curae:	J O'Farrell

Solicitors:

Appellant:	Conmoto Group Pty Ltd
Amicus Curae:	State Litigation Office

The respondent filed a Notice of Submission, other than as to costs.

Judgment Number:	[2024] TASSC 54
Number of paragraphs:	40

Serial No 54/2024 File No 3049/2023

HOBART CITY COUNCIL v RICH TAPESTRY PTY LTD (ACN 667 999 055)

REASONS FOR JUDGMENT MARSHALL AJ 23 October 2024

1             This matter is an appeal from a decision of the Tasmanian Civil and Administrative Tribunal ("the Tribunal") concerning its decision to overturn a planning decision by the appellant, the Hobart City Council.

2             The respondent, Rich Tapestry Pty Ltd, at all material times was the registered proprietor of Unit 2 – 563 Sandy Bay Road, Sandy Bay, an inner southern suburb of Hobart in the State of Tasmania. It is within the Hobart City Council area. Consequently, the appellant is the relevant planning authority.

3             Unit 2 is one of four units on a strata property scheme under the purview of the Strata Titles Act 1998. On 6 June 2023, the respondent applied for planning permission from the appellant to alter the use of unit 2 to enable it to be used as visitor accommodation. At the time of the application two other units in the strata complex were subject to permission to be used as visitor accommodation. They were units 1 and 4.

4             The property was covered for planning purposes by the Hobart Interim Planning Scheme. Under that scheme the relevant directive by which applications of the kind made by the respondent are considered is the "Planning Directive 6 Exemption and Standards for Visitor Accommodation in Planning Schemes" (herein after referred to as "PD6"). That directive was issued by the Minister for Planning under s 13(1) of the former provisions of the Land Use Planning Approvals Act 1993. PD6 sets out the requirements which must be satisfied for the grant of a planning permit to enable a property to be the subject of the grant of a permit for visitor accommodation.

5             Visitor accommodation is defined in PD6 as "the use of land for short or medium term accommodation, for persons away from their normal place of residence …". Various requirements under PD6 were required to be satisfied for a successful application. For current purposes, the issue between the appellant and the respondent is whether certain performance criteria set out in PD6 were satisfied.

6             The relevant portion of PD6 which was the subject of dispute between the parties is known as Performance Criteria P2. Performance Criteria P2 states as follows:

"Visitor Accommodation within a strata scheme must not cause an unreasonable loss of residential amenity to long term residence occupying otherwise within the strata scheme having regard to (a) the privacy of residence; (b) any likely increase in noise; (c) the residential function of the strata scheme; (d) the location and the layout of the lots; (e) the extent and nature of any other non-residential uses; and (f) and impact on shared access and common property."

7             The contention of the appellant on this appeal focused on whether the Tribunal, in making its decision, properly took into account criteria (c), that is the residential function of the strata scheme. The P2 Performance Criteria must be read as a whole so the essential question for determination is whether granting a visitor accommodation permit for a unit within a strata complex causes "an unreasonable loss of residential amenity" to long term residents. In this case the only remaining long term resident was the resident who was in unit 3 at the material time. In determining whether or not there has been an unreasonable loss of amenity to a long term resident or long term residents, the Planning Authority is required to have regard to the matters set out in (a) to (f) inclusive. It may be that having regard to all

2   No 50/2024

of those matters, that the majority of them may be considered to support a particular view and a minority
of factors, less important in context, may indicate an opposite view.

8             The appellant rejected the respondent's planning application. The respondent then appealed from the decision of the appellant to the Tribunal. The Tribunal allowed the respondent's appeal. It set aside the appellant's decision to refuse a permit to use unit 2 as visitor accommodation and directed the appellant to issue a permit with conditions agreed between the parties.

9 The appellant's appeal from the decision of the Tribunal is under s 136 of the Tasmanian Civil and Administrative Tribunal Act 2020. After hearing an appeal from a decision of the Tribunal, the Court may, under s 138 of that Act, affirm the decision appealed against, vary the decision, or set it aside and, if considered fit, return the matter to the Tribunal for reconsideration according to law.

10          The appeal is conducted by way of a rehearing in reliance on evidence that was before the Tribunal. See Morilla Estate Pty Ltd v Lau [2024] TASSC 49 at [8].

11           The evidence before the Tribunal consisted of witness statements from expert witnesses. Ms Irene Duckett, a planning consultant, gave evidence on behalf of the respondent. Mr Dan Burke, the development appraisal planner employed by the appellant, gave evidence on behalf of the appellant. Each of those experts additionally gave oral evidence and were cross-examined.

12           Each of the main witnesses for the respective parties gave evidence on what they considered to be an "amenity" for the purposes of P2 and what was understood by "residential function of the strata scheme". It is unnecessary to go into detail as to that evidence. It is sufficiently referred to in the decision of the Tribunal as discussed below. However, it is noteworthy that Ms Duckett referred to the amenity of unit 3 as including "northern sun living areas and balcony, relatively unimpeded views of the River Derwent, private (as in not shared) carport and front entry". Ms Duckett also noted the existence of a solid brick wall separating units 2 and 3. Ms Duckett also observed that each unit had its own private car park and ground level entrance and that there is no shared lift, stairwells, or corridors. Specifically in relation to unit 2 she said, "it has the best design for minimising the impact on residential amenity of the remaining units". She said this was so, whether or not it was occupied by long term or short term occupants.

13           Mr Burke gave evidence that the residential amenity in the Planning Scheme was referable to the pleasantness of the location. He opined that having three out of four units being used for non- residential use would undermine the residential function of the strata scheme. He said that loss of residential function would lead to a loss of amenity in that the opportunity to form neighbourly bonds with fellow residents would be diminished and that would impact on a sense of community amongst the units. Mr Burke said that having two lots out of the four already with visitor accommodation is "considered to be the maximum number of visitor accommodation uses within a strata scheme that is appropriate to ensure the amenity of long term residence is reasonably protected". There does not appear to be any justification for such a way to judge whether Performance Criteria P2 has been satisfied within the text of the criteria itself. That view expressed by Mr Burke puts an unnecessary gloss on the construction of the Performance Criteria P2 based on his experience in practice. That experience does not dictate the correct construction of the words in P2 when they are clear on their face.

14           Under cross-examination, Mr Burke conceded that the units had been designed to afford significant levels of privacy to each unit and that someone who is visiting unit 2 could come and go without people in unit 3 knowing. He acknowledged that each unit had a private carport and the occupants of units 2 and 3 did not necessarily have to interact with each other. He also acknowledged the existence of a double brick wall between the units at the end of the decking which would provide adequate segregation. He further admitted that the residential feature of the complex had already been diminished by two units being allowed to be used for non-residential purposes.

3   No 50/2024

15           The Tribunal at [37] noted that harmonious relations are not guaranteed even between permanent neighbours. The Tribunal at [40] observed that the planning scheme contemplated some loss of residential amenity for long term residents when short term visitors’ stay applications are granted but considered that the loss in accordance with the terms of Performance Criteria P2 had to be unreasonable in all of the circumstances for the proposed change of use to be rejected. The Tribunal at [41] considered that unit 3 would not lose privacy as a result of unit 2 being used for visitor accommodation. This is consistent with the evidence of Mr Burke at transcript page 39 that "privacy is not really in dispute". That effectively means that the provision in (a) of P2 was met in this case, in that it was not a reason for refusing visitor accommodation. Similarly, there appeared to be no evidence before the Tribunal that there was likely to be any noise increase by unit 2 becoming subject to visitor accommodation. No issue was raised in respect of (d) regarding the location and layout of the lots and no issue was raised in respect of the extent and nature of any other non-residential uses in (e) or (f) regarding any impact on shared access and common property as there was little shared access and common property. The argument of the appellant before the Tribunal centred on (c) "the residential function of the strata scheme" as if that was not just one matter for the Planning Authority to have regard to in determining what was an unreasonable loss of residential amenity. The appellant submitted before the Tribunal, and further in this Court, that unless the residential function of the strata scheme is safeguarded, there would necessarily be an unreasonable loss of residential amenity. This is not an appropriate way to read P2. The critical question is whether granting visitor accommodation use to the respondent for unit 2 would cause an unreasonable loss of residential amenity to the occupant to unit 3. In considering whether that is so, the matters (a) to (f) are to be considered by the planning authority. If one or more of them is not satisfied it does not necessarily follow that there is an unreasonable loss of residential amenity. For reasons which will become apparent, in any event, the Court is satisfied that the Tribunal was correct in finding that there would be no unreasonable loss of residential amenity to the resident or residents of unit 3 as a result of unit 2 being subject to visitor accommodation permission even having regard to "the residential function of the strata scheme". It was also appropriate for the Tribunal to consider criteria (a) to (f) together and it was entitled to conclude that criteria (c) is less likely to be relevant as to whether there has been an unreasonable loss of residential amenity having regard to the other criteria in P2.

16           At [43] and following, the Tribunal discussed criteria P2(c). It held that "residential function" looks to the function of the body corporate. At [44] the Tribunal said "regard will be had to the extent of the common property and the potential extent to which communal interests of the body corporate could change or influence how that common property is used or maintained".

17           At [46] the Tribunal agreed with the submission of the respondent on the issue of residential amenity. In that regard, it held that the Planning Scheme could not force individuals to have positive interactions with other fellow residents. However, the Tribunal recognised the possibility that some short term users would make the remaining long term users feel like they were on an island surrounded by short term visitors. However, the Tribunal at [47], said that such a factor was less important in this strata development than others which contain lots that were not designed in such a way as to be largely self-contained, as the current units were.

18          At [48] the Tribunal concluded that it was "not satisfied that there is an unreasonable loss of residential amenity having regard to the residential function of the strata scheme under P2(c)".

19           On appeal to this Court, the appellant submitted that the Tribunal "effectively rejected that residential function was an aspect of residential amenity at all". On the contrary, it is apparent that the Tribunal considered at [47] whether P2(c) was a factor that should lessen its confidence in taking the view that there was no unreasonable loss of amenity to the remaining residents who are long term residents, meaning the residents in unit 3. The focus in P2 is whether the visitor accommodation within the strata scheme would cause an unreasonable loss of residential amenity to long term residents. The focus is not solely on whether the residential function of the strata scheme would support the grant of a permit to allow visitor accommodation at one of the two remaining units where there is no permission

4   No 50/2024

for visitor accommodation. The Tribunal did consider residential function in the context of unreasonable loss of amenity but did not find that that criterion, taken with other criteria which it was bound to have regard to, would lead to an unreasonable loss of residential amenity.

20   Ground 1 of the appeal states as follows:

"The Tribunal erred at law at [43]-[44] by misconstruing the meaning of the phrase
residential function of the strata scheme in clause 2 of ….[PD6]".

21           The first point to make about this ground of appeal is that in considering whether there has been an unreasonable loss of residential amenity, the residential function of the strata scheme is something that is appropriate to have regard to. In order to properly have regard to a matter, it is critical to understand what the matter means. There is nothing in the decision of the Tribunal, being a decision- maker dealing with planning matters on a regular basis, to indicate that it failed to understand what the residential function of the strata scheme meant.

22           As counsel for the Attorney-General, appearing as amicus curiae, observed, the Tribunal's approach to the residential function of the strata scheme was not confined to its decision at paras [43] and [44]. Counsel observed that further discussion about the matter occurred at [45] to [46]. At paras [45] and [46] the Tribunal discussed matters that were relevant to what it called "residential function" criterion. That included the submission by the respondent that the Planning Scheme could not force individuals to have neighbourly bonds or positive interactions with fellow residents. The Tribunal also had regard, in considering residential function, to matters such as whether the number of short term visitors will make existing long term visitors feel like they are living on an island and whether short term visitors would discourage the use of common areas by long term residents. The Tribunal noted that those factors are less significant where the privacy of long term residents is high, which is the situation with this strata property. It was not inappropriate for the Tribunal to consider other matters in other paragraphs of P2 in conjunction with its consideration of P2(c) in determining whether there was or was not an unreasonable loss of residential amenity having regard to the residential function of the strata scheme.

23           Counsel for the Attorney-General referred to the decision of Boland v Clarence City Council [2021] TASFC 5 where the expression "residential amenity on adjoining lots", was referred to in the relevant performance criteria. There at [21], Brett J, with whom Wood and Pearce JJ agreed, said that in that context:

"… the relevant criteria requires the decision-maker to make an evaluative judgment as to the extent to which the height and bulk of the proposed building, when viewed from the adjoining building, will adversely affect to an unreasonable extent, the harmonious, pleasant or enjoyable use of that building as a residence."

Counsel placed emphasis on the words "the harmonious, pleasant or enjoyable use of that
building as a residence".

24           Counsel for the Attorney-General contended that the purpose of criteria P2 in PD6 was for the planning authority to consider whether there will be an unreasonable loss of residential amenity. In accordance with Boland (above) this was said to be referrable to whether the grant of the application would lead to a loss to an unreasonable extent of "harmonious, pleasant or enjoyable use of" the remaining unit as a residence. Counsel noted that in so doing, the decision-maker is required to have regard to the matters set out in (a) to (f).

25           Counsel observed that residential amenity is not the same concept as residential function. Counsel submitted that given the definition of "amenity" as "including quality condition or factor", in the planning scheme, residential amenity in P2 must be understood as something which is a quality, condition or factor that makes the residence harmonious, pleasant, or enjoyable.

5   No 50/2024

26           Counsel for the Attorney-General submitted, in that regard, that the Tribunal did not err in focusing on the role of the body corporate in relation to P2(c) because all other aspects to which the planning authority is to have regard, that is (a), (b), (d), (e) and (f), were considered by the Tribunal in deciding whether a permit for visitor accommodation in Unit 2 should be granted. It was contended that this would not lead to an unreasonable loss of residential amenity to the remaining long-term residents in Unit 3. Counsel for the Attorney-General noted the ability of permanent residents to freely form bonds with other permanent residents was not a guaranteed aspect in any strata development.

27          There is much force in each of the above contentions made by counsel for the Attorney-General and the Court considers them to be cogent and persuasive.

28           The Court considers that the proper approach to the interpretation of P2(c) is to treat it as part of a suite of matters to which the planning authority is to have regard when determining whether visitor accommodation within a strata scheme would cause an unreasonable loss of residential amenity. In that context it is pertinent to note that there was no evidence that the current existence of half of the units being subject to visitor accommodation use had caused an unreasonable loss of residential amenity to the remaining two units.

29          "Amenity" is defined in the planning scheme as "(a) quality, condition or factor that makes or contributes" to the residents being "harmonious, pleasant or enjoyable".

30           In considering whether there would be unreasonable loss of residential amenity as just expressed, regard must be had, amongst other matters, to the residential function of the strata scheme. The residential function of the scheme means the function of providing a place for residents such as where the residents live and sleep as well as the quality of life there.

31           The appellant did not identify before the Tribunal any unreasonable loss of amenity which would have followed from the grant of a permit. There was no identification of loss that would flow to the occupant of Unit 3 if Unit 2 was subject to the right to be used for visitor accommodation. The only possible basis for an argument that there would be such loss, which was put forward in the evidence of the appellant, was the erosion of the capacity to form neighbourly bonds with people in adjoining properties, and the social implications of that loss. As mentioned above, there was no evidence of any existing neighbourly bond between the occupants of Units 2 and 3. Even if the loss of opportunity to form such a bond is taken away, it is not an unreasonable loss because one can never know whether bonds will be developed between any sets of occupants in a strata development.

32           Although the above reasoning does not coincide entirely with the reasoning of the Tribunal in allowing the appeal before it and, to a large extent, borrows from the cogent submissions of counsel for the Attorney-General as amicus curiae, the same result flows. That is, this Court is of the same view as the Tribunal that there is nothing in the provisions of P2 which militates against the grant of a permit to the respondent to use Unit 2 as visitor accommodation. The Court is of the view that the grant of such a right would not cause a loss of residential amenity to the remaining long-term resident or residents in Unit 3, when one has regard to paragraphs (a) to (f), including paragraph (e) in P2. A further critical question is whether if there was any loss of residential amenity, whether such loss was unreasonable. There is no evidence in this case that any loss of residential amenity, for example, the loss of the opportunity to have neighbourly relations and a sense of community with another person in an adjoining unit who is also a long-term resident, was an unreasonable loss as distinct from a merely unfortunate, but not significant, loss.

33   Having regard to the foregoing, it is the Court's view that ground 1 of the Ground of Appeal

should be rejected.

6   No 50/2024

Ground 2

34           Ground 2 of the appeal states that the Tribunal erred in law by failing to have regard to the residential function of the scheme. In the Court's view, that ground is untenable. The Tribunal's decision at [45]-[48] shows that it did have regard to the residential function of the scheme. The real complaint of the appellant is that the Tribunal did not have regard to the residential function of the scheme in the way that the appellant wished it to, nor did it consider the matters that the appellant raised as going to that factor as critical. The fact is that whether or not the appellant agreed with the approach of the Tribunal in respect of par (c) of performance condition P2, it cannot be said that the Tribunal did not have regard to that factor. It specifically said that it did and gave examples of what it considered were relevant when considering that factor. As is apparent from the discussion regarding Ground 3 below, there is overlap between the issues raised in Grounds 2 and 3.

Ground 3

35           Ground 3 alleges that the Tribunal failed to adequately take into consideration the residential function of the scheme. This ground is also rejected. Consideration was given to the criteria in 2(c) of P2. The real complaint of the appellant was that it was not the appropriate consideration that it submitted should have been given. That does not disclose an error of law for the reasons set out below.

36           The obligation of the Tribunal to have regard to criterion 2(c) meant that it was required to take it into account as a fundamental element of its decision-making; see Kumar v Minister for Immigration and Border Protection [2020] FCAFC 16 at [82]. The Tribunal, as is apparent from its decision, did have regard to criterion 2(c). In taking into consideration 2(c) its reasons were not cursory or dismissive; see Bay Summer Investment Pty Ltd v New South Wales (2017) 222 LGERA 286 at [56]. The Tribunal commenced its discussion of 2(c) at [43] and concluded at [48]. At [46] it referred to aspects of 2(c) which would tend against the grant of the permit but, for the importance of other considerations, is relevant to 2(a) and 2(d).

Conclusion

37           The Court's approach to the resolution of the issue before the Tribunal differs, in part, from the Tribunal's approach. However, as explained above, the end result is the same. The Court, in considering any decision of the Tribunal, considers whether the result before the Tribunal was affected by an alleged error of law and, if not, whether it was otherwise the correct result. There is no error of law in this case. The correct result was achieved, albeit for different reasons than expressed by the Tribunal. The Court had considerable assistance from counsel for the Attorney-General, which was assistance the tribunal did not have.

38           Before dealing with the orders the Court would make, there is one issue to raise. By the time the matter came on for hearing in the Court, the respondent had informed the Court that it did not wish to be represented on the appeal but would abide by any order of the Court except as to costs. It informed the Court that it had contracted to sell Unit 2 and did not wish to "pursue the permit which is the subject of the appeal." This immediately raised the question as to whether the appeal is moot. However, as counsel for the appellant submitted, the right to use the permit continues with the ownership of the property. The appeal is therefore not moot.

39          The Court also records that there was an issue between the parties regarding whether a document containing the views of the owner of unit 3 was before the tribunal and therefore before the Court. It is unnecessary to determine that dispute because it is not determinative of any of the issues requiring determination on the appeal.

40   Having regard to the foregoing reasons for judgment, the Court will order as follows:

7   No 50/2024

1            The decision of the Tribunal is affirmed.

2            The appellant pay the respondent's costs of the appeal, and incidental to the appeal prior to 11 June 2024, when it filed its notice of submission.