Hydrox Nominees Pty Ltd v Sunshine Coast Regional Council
[2014] QPEC 18
•30 April 2014
PLANNING & ENVIRONMENT COURT
OF QUEENSLAND
CITATION:
Hydrox Nominees Pty Ltd v Noosa Shire Council [2014] QPEC 18
PARTIES:
HYDROX NOMINEES PTY LTD
(appellant)
v
NOOSA SHIRE COUNCIL
(respondent)
FILE NO/S:
1505 of 2013
DIVISION:
Planning and Environment Court
PROCEEDING:
Appeal
ORIGINATING COURT:
Brisbane
DELIVERED ON:
30 April 2014
DELIVERED AT:
Brisbane
HEARING DATE:
28-31 January 2014
JUDGE:
Rackemann DCJ
ORDER:
The Appeal will be allowed. Further hearing adjourned to allow conditions of approval to be formulated.
CATCHWORDS:
PLANNING AND ENVIRONMENT – appeal against refusal of development application for establishment of a Masters Home Improvement Centre and a showroom at Noosaville – where showroom uncontroversial – where proposed Masters consistent with the regional plan – where proposal not a “consistent use” or an “inconsistent use” pursuant to the planning scheme – whether conflict – community, economic and planning need – economic impact – sufficiency of grounds to justify approval notwithstanding conflict
COUNSEL:
DR Gore QC and BD Job for the appellant
CL Hughes QC and NJ Kefford for the respondent
SOLICITORS:
Connor O’Meara for the appellant
Wakefield Sykes for the respondent
Introduction
This appeal is against the respondent’s refusal of the appellant’s development application to facilitate the establishment of a Masters Home Improvement Centre (“Masters”) of 9,822m2 (which includes an outdoor garden centre component), as stage 1, and a separate showroom of about 1,737m2, as stage 2, on land at Hoffman Drive, Noosaville. The matters of controversy pursued at trial concern only the Masters component of the application.[1]
[1]T4-14. Also, the economists agreed that there is a need for the showroom component. It would not have any impact upon surrounding facilities, but would add to the choice and variety of showroom facilities in the area, strengthening the ability of Noosa to be more self-contained with respect to showroom needs (Exhibit 3, paragraph 118).
The subject site occupies about 3.51 hectares of vacant and largely cleared land within, but at the periphery of, the Noosa Shire Business Centre (“NSBC”). The NSBC is the principal retail and business centre for the recently de-amalgamated (from Sunshine Coast Regional Council) Shire of Noosa. It is home to the “Noosa Civic” shopping centre which features nearly 26,000m2 of retail floor space including a Big W discount department store, a Woolworths supermarket and approximately 100 specialty stores. The site is physically suitable for the intended use.
Access to the site is from its Hoffman Drive frontage. The site also has frontage (but no direct access) to Eenie Creek Road. The Noosaville Industrial Estate lies to the west.
Parts of the site had two previous approvals, each of which lapsed in 2012. One was for offices[2] in four buildings and one[3] was for showrooms (GFA 7,633m2) and offices (GFA 5,256m2).
[2]over Lot 4.
[3]over Lot 1.
Existing Home Improvement Facilities
The Noosa area is presently served by a mid-sized Bunnings which is outside of, but proximate to, the NSBC. That store occupies some 7,756m2 (of which 1,800m2 is an outdoor garden centre). Interestingly, that was developed with Council’s approval, following the Council’s successful opposition, in this court, to a proposal for a larger (10,430m2) Bunnings on the same site. That opposition was based, in part, on the prejudicial effect which such development near (but outside of) the NSBC would have on the NSBC.[4] In this case the Council asserts that locating a Masters in the NSBC will have a prejudicial effect on achieving the intent for the NSBC.
[4]See PMM Group Pty Ltd v Noosa Shire Council [2006] QPELR 144 at 147 paragraph 13 and at 162 paragraphs 93-98.
Other Bunnings stores exist, or are in the process of being developed, on the Sunshine Coast. There are currently no directly comparable competitors to Bunnings on the Sunshine Coast. In particular, there is no Masters store within Noosa, or the broader Sunshine Coast area, with the closest one more than 100 kilometres away.[5]
[5]Exhibit paragraph 108(m).
Masters as a Competitor to Bunnings
Masters is controlled by Woolworths and is a competitor to Bunnings, which is controlled by Wesfarmers (which also operates Coles Supermarkets). Accordingly, both Masters and Bunnings are controlled by well resourced and sophisticated operators.
Whilst competitive with Bunnings, Masters is not simply a copy of that operation under a different name. As the economic experts agreed in their joint report: [6]
[6]Exhibit 3.
“24. Although there are some similarities between the Bunnings Warehouse and Masters Home Improvement stores, including the retail warehouse format, concrete flooring, range of departments and large format boxes, there are also some differences including:
(a)Masters Home Improvement has a greater product mix and emphasis on the interior of a home as compared with the more exterior, outdoors and general hardware focus at Bunnings Warehouse.
(b)This results in a greater range of products particularly in whitegoods (fridges, washing machines and ovens) as well as other indoor categories such as lighting but less selection in some other categories.
(c)The overall feel and ambience of a Masters Home Improvement store is more sophisticated and provides an enhanced customer experience for certain target markets, particularly for the female homewares customer.
(d)Across certain departments, although the two chains sell similar products, they are often from different suppliers. …
(e)Masters Home Improvement and Bunnings Hardware offer project advice for example across an entire kitchen or bathroom renovation including the ability to supply or contract tradesman to complete the work, however this is a feature that Masters Home Improvement appears to emphasise or focus more upon.”
Indeed, in the course of giving evidence in another case in this court, Mr Norling (who was called by the Respondent in this case) indicated his disagreement with a proposition by another economist, Mr Coghlin, that the most notable difference between the two operations was the name of the store. The court rejected Mr Coghlin’s view as follows:[7]
“[85] Mr Coghlin’s assessment lacks a degree of objectivity in my respectful opinion. The evidence was that subtle differences in design, layout, products, and product brands do make a real difference to shoppers’ habits thus the so called ‘brand loyalty’ that, by way of example, Woolworths and Coles attract. Mr Coghlin acknowledged that such brand loyalty exists, but said that it ranked a poor second to convenience. In this regard, I am not saying that at this stage Masters has a recognisable level of brand loyalty. The point is that differences, even if subtle and to some largely inconsequential, do affect shopper preference for one retailer over another.
[86] It may be true that Bunnings offers a number of similar if not identical products. But Masters offers different brands of some products and some (albeit relatively limited in number) products that Bunnings does not. Also, it provides a different (again subtle) shopping experience. The evidence in this context is that Masters has deliberately set out to attract more female customers by providing a brighter, air conditioned and more ‘sophisticated’ shopping environment, including in layout and product display. There was some evidence that in response to Masters, Bunnings has started retro-fitting stores with air conditioning and stocking stores with products to match those provided by Masters. It must be accepted that the subject proposal was not of itself responsible for this, but such a reaction does tend to highlight the benefits to the community that often results from competition.”
[7]YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors [2013] QPEC 59.
Council’s Decision and Issues
The development application attracted only eight submissions. No submission was made by Bunnings. The Sunshine Coast Regional Council refused the development application on 28 March 2013. That decision was contrary to the “Delegated Report”[8] of its planning officer, who considered that there were sufficient grounds to overcome conflict with the Planning Scheme. In the course of assessing the application, the Council also retained and received advice from an independent and experienced economist Mr Michael McCracken, who concluded:[9]
“… on balance, the net community benefits likely to accrue to the Noosa region from the development of the proposed Masters within the Noosa Business Centre, are likely to outweigh any conflicts that may exist with the Planning Scheme.”
[8]Exhibit 2 volume 2 page 284.
[9]Exhibit 2 page 283.
The Council’s reasons for refusal, notwithstanding that advice, were that:[10]
[10]Exhibit 2 page 382.
“1.The development is not sufficiently consistent with The Noosa Plan and there are insufficient grounds to justify approval of the development despite the conflict, and
2. the proposed development has the potential to adversely impact on the economic viability of numerous existing businesses, particularly in the Noosaville Locality, and
3.the specific outcomes of The Noosa Plan do not envisage any additional retail showrooms for the Noosa Business Centre, with an upper cap on gross floor area for Retail Business Type 4 – Showroom being ‘up to 7,000m2’ an amount that has already been developed in the Noosa Business Centre.”
The Council engaged a different economist (Mr Norling) and a consultant town planner (Mr Adamson) for the appeal.
The respondent particularised and, to an extent, reformulated its issues for the purpose of the appeal. Those issues are set out in a 4 page consolidated reasons for refusal. The second ground of refusal was abandoned, but replaced by one which alleged potential “unplanned and unacceptable economic impacts.” The issues, as litigated, can broadly be described as relating to:
1. conflict with the planning scheme
2. need and benefit
3. economic impact
4. sufficiency of grounds to warrant approval notwithstanding any conflict.
Decision Framework
The Application was made under the Sustainable Planning Act 2009 (“SPA”). The Application was impact assessable and it is to be assessed by the court, standing in the shoes of the assessment manager,[11] by reference to section 314 of SPA.
[11]See section 495(1) of SPA.
The Application must be decided in accordance with sections 324 and 326 of SPA. In particular, the court’s decision must not conflict with a “relevant instrument”, unless, relevantly, there are sufficient grounds to justify the decision, despite the conflict.[12]
[12]Section 326 of SPA.
“Grounds” are defined in Schedule 3 of SPA as meaning a matter of public interest. They do not include the personal circumstances of the applicant, owner or interested party. Where a decision is justified on the basis of grounds, the grounds must be considered sufficient having regard to both the nature and extent of the conflict.[13]
[13]Weightman v Gold Coast City Council [2003] 2 Qd R 441, 453 (Atkinson J with whom de Jersey CJ and McMurdo P agreed) and Woolworths Limited v Maryborough City Council & Anor [2006] 1 Qd R 273, [23] & [25] (Fryberg J with whom McMurdo P and Holmes J agreed); Lockyer Valley Regional Council v Westlink Pty Ltd as Trustee for Westlink Industrial Trust & Ors; Keep Lockyer Rural Inc v Westlink Pty Ltd as Trustee for Westlink Industrial Trust & Ors [2012] QCA 370.
It is for the appellant to establish that the appeal should be allowed.[14]
[14]Section 493(1) of SPA.
South East Queensland Regional Plan
The site falls within the Urban Fabric under the South East Queensland Regional Plan (SEQRP). The NSBC is identified as a Major Regional Activity Centre. Such centres are intended to complement the Principal Regional Activity Centres, by serving catchments of sub-regional significance and accommodating key employment concentrations.[15] Out-of-centre development is inconsistent with the SEQRP’s strategic intent.[16] The SEQRP encourages large format retail premises to be located on a centre’s periphery.[17] The proposal is consistent with the SEQRP.
[15]Section 8.6 page 97.
[16]Section 8.6 page 96.
[17]Section 8.6 page 97.
Planning Scheme Provisions
The applicable planning scheme is the Noosa Plan. The Desired Environmental Outcomes (DEO’s) for Noosa include the following in relation to commercial and retail uses:[18]
[18]DEO 3.1.3(b).
“A hierarchy of centres with a range of Commercial and Retail business uses provide suitable levels of amenity, service and access to the community, consistent with the community’s location and needs and is based on-
i a proportion of Noosa’s higher order needs fulfilled by centres in other areas, particularly the key regional centre of Maroochydore;
ii the Shire Business Centre, a Major Activity Centre for the purposes of the SEQ Regional Plan and the highest order centre within the former Noosa Shire, developed in stages consistent with the needs of the population of former Noosa Shire and areas to the immediate south;
iii protecting the long term viability of the Shire Business Centre as the principal business, retail and administrative centre;
…
viii Uses that comprise a large component of Commercial and Retail business uses or other non-industrial uses are not located on land that is otherwise intended for Industrial business uses”
The sub-paragraphs to the DEO are discussed below, but it should be noted that they not exist for their own sake, but explain the basis for the hierarchy of centres. In this case, as the as the economic experts agreed, the proposal, far from adversely impacting on the hierarchy of centres, would:[19]
[19]Exhibit 3, page 58 paragraph 112.
“positively contribute to the centre hierarchy rather than negatively impacting upon it for the following reasons:
(a) The subject site is located within an existing centre.
(b) It would contribute to the Shire Business Centre being the business and employment focus of Noosa.
(c) It would cement the Shire Business Centre as the highest order centre in Noosa.
(d) It would ensure the long term viability of the Shire Business Centre as the principal business and retail centre in Noosa.
(e) It would diversify the breadth of business activities in the Shire Business Centre by adding a large home improvement store.
(f) Very few impacts would be directed to other centres, with the majority of impacts directed to individual traders located within industrial zoned lands.
(g) Centres beyond the trade area would not be impacted to any significant degree, particularly given population growth within close proximity to the majority of those stores.”
Insofar as the sub-paragraphs of the DEO are concerned (using the same numbering as the DEO):
(i) a proportion of Noosa’s higher order needs will be fulfilled by centres in other areas, particularly at Maroochydore, but that is not to say that if Masters wants to locate a store in competition with an existing Bunnings, that it needs to go to Maroochydore, rather than to Noosa. While large format home improvement stores are to be found as part of higher order destinations, they are also located in other centres.[20] The scheme intends Noosaville to be developed for significant retail and commercial uses.
[20]Exhibit 5 paragraph 2.4.
(ii) It has already been noted that, as the economists agreed, the proposal would “cement” the NSBC’s role as the highest order centre in Noosa. There was a debate as to whether the proposal is consistent with the needs of the population of Noosa and areas to the immediate south.[21] For the reasons stated later, I am satisfied that the proposal is consistent with the needs of that population.[22]
[21]The Noosa Shire extends to Peregian Beach. The suburbs to the immediate south include Coolum Beach and Coolum.
[22]Mr Duane identified a tertiary trade sector to the west. It was ultimately not suggested that conflict arises from the prospect of some custom coming from that area – T4-27.
(iii) The evidence of the economists suggests that the proposal would not only protect the long term viability of the NSBC, but would “ensure” it. I accept that evidence. The submissions on behalf of the respondent focussed on the mix of business, retail and administrative uses proposed in the NSBC. Attention was drawn to the text box following the DEO which states, in part, that protecting the long term viability of the NSBC may mean setting aside short term needs to ensure the medium-long term implementation of the centre. It was submitted that conflict arises because the proposal departs from the mix contemplated in the more detailed provisions concerning development in various precincts within the NSBC. Those provisions are discussed later. They apply a range of business (10.6ha in total), employment (19.2ha in total), open space, residential and recreation/mixed use precincts across the NSBC. I accept that there is a degree of conflict between the proposal and the particular precinct designations which apply to the subject site, but the NSBC has sufficient land available to develop a mix of functions notwithstanding. A comparison of the aerial photography[23] with the Shire Business Centre map from the planning scheme[24] illustrates that there is much of the NSBC which has yet to be developed. Development to date has focussed on business precincts (B1, B2 and B3). Whilst the subject site includes the only land in one particular employment precinct (E5), there are a range of employment precincts otherwise which remain available for development,[25] including those which have preferred themes to take advantage of new employment opportunities,[26] while another employment precinct (E4) is the subject of recent development for industrial lots. I am satisfied that the departure from the mix contemplated in the more detailed provisions, by reason of the subject proposal, would not undermine the positive contribution of the proposal to the long term viability of the NSBC as the principal business, retail and administrative centre in Noosa.
[23]Exhibit 1, page 2, although it does not show work on the industrial subdivision to the immediate south of the subject site.
[24]Exhibit 1 page 18, see also exhibit 1 page 19.
[25]as well as the residential precinct and the recreation/mixed use precincts.
[26]E1, E2 and E3.
(viii) This sub-paragraph reflects the familiar planning principle of preserving valuable industrial land from being eroded by conversion to (generally more profitable) commercial or retail development. Unsurprisingly, for the Noosaville locality, the principle is perhaps most directly reflected in the provisions concerning industry zoned land as follows:
“For the Industry Zone– land in this zone–
i. consists of the Noosaville Industrial Estate, being Noosa’s principal industrial centre;
ii. is protected for industrial functions including Industrial business Type 2 to the exclusion of incompatible uses including Residential Uses, Community Uses, Commercial business and most sport and recreation uses and Retail business uses;”
The subject site is within the NSBC, rather than the industrially zoned land, although the precinct provisions (discussed later) envisage the site being developed as an extension to the Noosaville industrial estate. It was submitted that the proposal would constitute a large retail business use on land otherwise planned for industrial business uses contrary to this sub-paragraph of the DEO and run counter to the strategy of the NSBC being intended as a major activity centre, rather than merely a retail centre.
As already observed however, I am satisfied that the proposal would not, in the circumstances, prejudice the relevant hierarchy. That is so even if it were accepted that there is a degree of conflict on this account. Further, the evidence (discussed later) establishes that the extent of loss of potential industrial land is insignificant, given current supply.
The Noosa Plan divides the area into 9 geographic localities. The subject land falls within the area covered by the Noosaville Locality Plan. The locality is divided into zones, which reflect, more precisely, the preferred use patterns. The subject site is, unsurprisingly, in the Shire Business Centre Zone. There is an assessment table for the Shire Business Centre Zone.
The planning scheme speaks of primary uses, which are split into use classes which, in turn, are split into particular types of use. The relevant primary use, in this case, is “Business Uses” and the relevant use class for the proposal is “Retail Business”, although the case was conducted on the basis that it does not fall within any of the specified use types.
The table of development, after making provision for specific use types, provides that, save for a road, uses not otherwise defined are impact assessable. As Gore QC pointed out, on behalf of the appellant, the table of development does not necessarily set its face against undefined uses.[27] They are not given the status of inconsistent uses which are described as “strongly inappropriate in the relevant zones.”[28]
[27]cf Lockyer Valley Regional Council v Westlink Pty Ltd & Ors (2011) 185 LGERA 63.
[28]See definition of administrative terms – exhibit 2 page 37.
The Noosa Plan contains a Noosaville Locality Code which is composed of:
(a) general provisions;
(b) overall outcomes for the locality;
(c) specific outcomes and probable solutions for the locality;
(d) specific outcomes and probable solutions for each zone in the locality.
The overall outcomes for the locality include the following:[29]
[29]S 11.8.2
“h) Significant retail and commercial uses provide residents and visitors with a range of low to high order goods and services;
i) Business centres are significant employment nodes and are serviced by public transport;
…
v) For the Shire Business Zone–the Shire Business Centre–
i is a Major Activity Centre for the purposes of the SEQ Regional Plan, and the principal business centre for Noosa, servicing Noosa-wide business and employment needs by providing for a range of Business Uses as well as administrative, community, and open space functions;
ii is a multi-function employment node forming the major focus of employment growth in the coastal area of Noosa;
iii follows a logical sequencing of development consistent with the needs of the community that is dependent on the–
A) timing and construction of the external and internal road systems, including Walter Hay Drive;
B) dedication of a substantial area of open space; and
C) development of a substantive amount of non-retailing development for employment opportunities beyond Retail business;
…
x retains development capacity within the Shire Business Centre in the longer term to take advantage of potential new employment opportunities;
xi is developed into precincts, as depicted on Schedule 4 - Shire Business Centre Map, which include a dynamic mix of development with an appropriate integration of uses within each, including–
A) Business Precincts (B1-B2), which provide for the highest order of retail development in Noosa and comprises the retail core of the Shire Business Centre site, with associated car parking generally located with Precinct B2;
B) Precinct B3, which provides for showroom and office development;
C) Employment Precincts (E1-E7) for future employment growth, which include 3 precincts (E1, E2, E3) with preferred themes to allow these precincts to take advantage of new employment opportunities;
D) a civic area located within Precinct E1, which provides for a range of civic uses and functions;
E) an inter-regional transit facility in Precinct E6;”
It was contended, for the respondent, that development of the proposal would conflict with those provisions because it would not be consistent with the needs of the community (a submission I reject), would be in conflict with what is intended within the relevant precincts and would, by allowing too much retail, thereby consume land otherwise available for non-retail and fail to retain development capacity, in the longer term, to take advantage of potential new employment opportunities.
The Shire Business Centre Map divides the land within the Shire Business Centre into a series of precincts, with different preferred uses. Various parts of the subject site fall within the following precincts:
E5 Employment (industry and business), which occupies the larger portion of the site
B3 Business (showroom, office and business)
OS3 Open space (preservation of visual amenity)
OS6 Open space (environmental).
By contrast, the existing shopping centre is focussed on the B1 precinct, which is designated for business (retail centre and business) and B2 (car parking and offices). As the overall outcomes for the Shire Business Zone state,[30] it is precincts B1 and B2 (not E5, B3, OS3 or OS6) which provide for the highest order of retail development in Noosa.
[30]Section 11.8.2(v)(xi)(A).
There was no issue, in this case, in relation to environmental or visual amenity matters. Insofar as the precinct provisions are concerned, attention was directed to the E5 and B3 precincts. The respondent’s case focussed on the alleged departure of the proposal from the form of development contemplated in this part of the NSBC, by the precinct provisions and on the consequence that may have for achieving the mix sought to be achieved across the NSBC.
There are a number of specific outcomes and probable solutions for the Shire Business Centre zone. Overall outcome O88 lists uses and use classes which are consistent uses and which are to be located in the Shire Business Centre zone. For precinct E5 that is:
(i) commercial business type 1 (offices), type 2 (medical) or type 3 (veterinary);
(ii) industrial business types 1 (warehouse) or type 2 (production, alteration, repackaging and repairing);
(iii) retail business type 6 (hardware store);
(iv) education type 3 (adult) or type 4 (information);
(v) wellbeing type 2 (social).
For precinct B3 that is:
(i) commercial business type 1 (offices);
(ii) retail business type 4 (showroom) or type 6 (hardware store) or type 7 (garden centre).
Insofar as commercial business opportunities are concerned, the demand for office floor space (commercial business type 1) within the area is low and such development is a consistent use in precincts E1-E7 and B1-B2. The economists agreed[31] (and I accept) that the subject proposal would not impact on the capacity of the NSBC to accommodate any future demand from the “white collar” sector that may develop over time.
[31]Exhibit 3 paragraph 124.
Insofar as industry is concerned, precinct E5 does not contemplate exclusively industrial development nor, indeed, exclusively non-retail uses. Precinct B3 does not include industrial uses as consistent uses, but does contemplate certain retail business uses. A hardware store is a retail business contemplated within each of the precincts.
Overall outcome O89, on the other hand, lists uses which are inconsistent uses and which are not to be located in various parts of the NSBC. They include, for the subject precincts, the specific retail use types other than those which are listed as consistent uses in overall outcome 88.
The subject Masters proposal does not neatly fit into either of those provisions. It does not have the status of a consistent use or an inconsistent one.
It has been observed that a hardware store is a form of retail business which is a consistent use in both precincts B3 and E5 and a garden centre is a consistent use in B3. To many, a Masters (or indeed a Bunnings), may be regarded as just a large hardware store with a garden centre. The proposed Masters certainly has significant components of what would otherwise be consistent uses in one or other of the relevant precincts. It might be noted, that, in recommending approval of the Bunnings development, which consumes nearby land in the Industry zone, the report to the Council stated:
“Hardware stores are also identified as consistent with the site’s industrial zoning by The Noosa Plan. Whilst the Bunnings Warehouse does not strictly fit The Noosa Plan’s definition of a hardware store, the proposed development is predominantly a hardware store. The retailing component and nursery are associated with the Bunnings Warehouse and would be expected with a mega hardware store.”
I accept however, that the proposed Masters store does not fit completely within the consistent use definitions, chiefly because it would sell other household goods in addition to hardware. In particular, it does not fit the following definition of a hardware store for the purposes of the scheme, because they offer products which include some or all of those described in part of the definition (underlining added):
“Premises for the display for sale (including hire) of hardware and trade supplies including household fixtures, timber, tools, paint, wallpaper, plumbing supplies and the like, but the term does not include the sale of kitchen or dining wares, picnic ware, camping goods, garden products, furniture or other household products or home wares.”
It was submitted for the appellant, that there is no conflict with the precinct provisions because, being an undefined use, the proposal is neither encouraged (by O88) nor discouraged (by O89). It is simply left to be assessed on its merits. Mr Buckley (the town planner called by the appellant) saw reliance on a “use by use/precinct by precinct approach” as “unhelpful” in the circumstances.[32]
[32]Exhibit 6 paragraphs 22, 23.
As was pointed out, on behalf of the respondent however, the Noosaville Locality Code envisages compliance by the development of consistent uses. It provides (underlining added):
“11.7Compliance with the Noosaville Locality Code
Development complies with the Noosaville Locality Code if it–
11.7.1 fulfils the specific outcomes for the locality in Division 17; and
11.7.2 is a consistent use and fulfils the specific outcomes for the relevant zones (Divisions 18 to 28).”
The subject proposal does not meet s 11.7.2, since it is not a “consistent use”
Of relevance to the consumption of industrial land issue are certain overall outcomes relating to the E4 and E5 precincts (but not B3) as follows:
“O145 Development provides for the expansion of the Noosaville Industrial Estate and
O150 Development complies with the specific outcomes for the industrial zone within this locality”.
Development as proposed would not achieve an expansion of the Noosaville Industrial Estate for the E5 precinct land, although the E4 precinct land, which is to the immediate south of the subject site, is being developed for an industrial estate following a 2012 reconfiguration of a lot approval for seven industrial allotments in two stages, some of which have already been sold.[33]
[33]Exhibit 4 paragraph 7.
The specific outcomes for the industrial zone in the Noosaville locality include the following:
| column 1 Specific Outcomes | column 2 Probable Solutions |
| 11.51 Consistent uses | |
| O186 The following defined uses and use classes are consistent uses and are located in the Industry Zone– a) Industrial business Types 1 or 2; b) Retail business Types 3, 5 or 6; c) Retail business Type 4 if a vehicle sales premises and located with frontage to Lionel Donovan Drive; d) Education Type 3 if trade related vocational training e) Emergency Service Type 2; f) Service and utility; g) Transport Types 1, 2 or 3; and h) Ancillary dwelling unit. | No solution provided |
| 11.52 Inconsistent uses | |
| O187 The following defined uses and use classes are inconsistent uses and are not located in the Industry Zone– a) All Agricultural Uses; b) Commercial business; c) Entertainment and dining business; d) Home-based business; e) Industrial business Type 3 f) Retail business Types 1, 2 or 7; g) Retail business Type 4 if not a vehicle sales premises with frontage to Lionel Donovan Drive h) Education if not Type 3 and trade related vocational training; i) Emergency Service Type 1; j) Open Space; k) Wellbeing; l) Transport Type 4; m) Detached house; n) Community residence; o) Multiple housing; and p) Visitor accommodation | No solution provided |
There is tension between O150, read with O186 and O187 on the one hand and O88 on the other, because some uses which are inconsistent uses in O187 are consistent uses in O88. That is the case for commercial business types 1, 2 and 3, education type 4 and wellbeing type 2.
Specific outcome O188 for the industry zone in this locality provides that “uses are predominantly of an industrial nature ordinarily expected in an industrial estate with ancillary uses compatible with industrial businesses.” The proposal does not answer that description. The appellant pointed out that the heading to that provision is “amenity” and it falls within the “effects of use” part of the table. In this case there is no suggestion that the proposal, whilst not meeting the description, would have any untoward amenity effects.
I accept however, that industrial uses are contemplated in precinct E5 and that, in light of overall outcomes O145 and O150, one would expect precinct E5 to include (although not necessarily be limited to) industrial uses, as an expansion of the Noosaville Industrial Estate. The proposal is at odds with that. There is some conflict with the planning scheme.
Insofar as precinct B3 is concerned specific outcomes O117, O118 and O119 provide as follows:
| Business Precinct B3 O117 Precinct B3 provides primarily for Retail business Type 4 Showroom and Commercial business Type 1 Office uses; AND O118 Development within Precinct B3 comprises a gross floor areas of – a) For Retail business Type 4 Showroom – up to 7,000m2 ; b) For Commercial business – up to 11,000m2; AND O119 Where development is staged, Commercial business Type 1 Offices and other non-Retail business uses are developed as part of the first stage; | No solution provided |
O117 refers to what is “primarily” provided for in the B3 Precinct as a whole. That precinct is mainly located in other parts of the NSBC. Only a small proportion of the precinct exists on the subject land. The subject proposal does not provide office space. It does provide a showroom as stage 2 of the proposal, although that is not the major part of the proposal and is not on the part of the site which falls within the B3 precinct. The proposed Masters does not sit comfortably with O117.
The GFA “limit” for retail showrooms in O118 is already exceeded in the NSBC. The respondent points to that limit as well as limits on retail business and commercial business in the specific outcomes (O106 and O107) applying to precincts B1 and B2 as evidencing the intent to limit retail so that the NSBC becomes more than just a retail centre.
Whilst the proposal might not be classified as an inconsistent use, I accept that there is some conflict between the proposal and the planning scheme, as a consequence of the departure of the proposal from what is intended within the relevant precincts of the NSBC. The proposal would provide a substantial amount of retail development which would displace opportunity otherwise for potential future development for specified consistent uses, including non-retail uses, in the applicable precincts on the subject site.
Noosa Business Centre Review
On 29 January 2009, the Sunshine Coast Regional Council endorsed an amended report into the direction of future planning of the NSBC. The then council resolved to have regard to the report’s findings in assessing development applications and in preparing future assessments. The report recommended some changes to the precinct provisions[34] to which Mr Buckley referred as evidencing an intent to make it easier for proposals such as Masters and some showrooms to locate on the precincts which apply to the land.[35] It is unnecessary however, to pause on them. As was pointed out on behalf of the respondent, no amendments have been made in the ensuing period of about five years and what, if any, amendments are made in the future will be a matter for newly de-amalgamated council. I am, in the circumstances, unpersuaded to place significant weight on the review.
[34]that in Precinct E5 a Showroom be changed from an inconsistent use, to a consistent use where the showrooms are “trade related; a hardware store remain consistent development, but the level of assessment be changed from impact to code; and a garden centre be changed from an inconsistent use to a consistent, code assessable, use; and in Precinct B3 hardware store and garden centre be changed from impact assessable consistent development to code assessable consistent development.
[35]Exhibit 6 paragraph 29.
Need, Benefit and Impact
It has already been noted that the only large format home improvement stores on the Sunshine Coast are operated by Bunnings. This proposal would bring its most direct competitor, Masters, “to town.” It was agreed by the economic experts, Mr Duane (called by the appellant) and Mr Norling (called by the respondent) that (underlining added):
“(i)The proposed Masters Home Improvement store would compete within two spending markets, namely the hardware and other household goods markets.
(ii)Stores such as proposed serve two separate customer segments, namely the trade market and the retail customer.
(iii)Masters stores attract the majority of their business from the retail customer base, with trade sale typically accounting for around 15% of sales. The proposal would introduce competition in the home improvement market.
(iv)A competitive home improvement sector is vitally important for consumers, given their house is their largest capital outlay and is a large ongoing cost if they are making mortgage payments.
(v)The ultimate beneficiary of competition in the home improvement is the community.”
In the course of cross-examination, Mr Norling also indicated[36] his agreement with the view that Mr McCracken had earlier expressed to the Council concerning whether a Masters store is needed in Noosa, given the size of the trade area, state of the economy and presence of Bunnings as follows:[37]
[36]T3-10 – T3-12.
[37]T3-10.
“Masters is a ‘new’ retail format, albeit one that is not very different to Bunnings. It will add to the choice and variety available to consumers, which is generally considered an important community benefit. It may also increase price and service competition amongst similar retailers, such as Bunnings, which is also generally beneficial to consumers.”
He also agreed with the following statement of Mr McCracken in relation to impacts:[38]
[38]T3-11.
“As noted in our June report, the proposed Masters store may well impact some other stores to the point of failure, despite DLIQ’s conclusion to the contrary. However, we also noted that the introduction of a Masters store should not negatively impact upon the overall centre network or functional role of any individual centre in the Noosa region, and nor should it have significant adverse impact implications with respect to planning and community need.”
He also agreed with the following statements of Mr McCracken concerning “public interests and conflicts with planning scheme”:[39]
[39]T3-11.
“Although the proposed Masters development does not sit comfortably within Council’s envisaged uses for the site, which straddles an E5 Employment (Business and Industry) precinct and a B3 Business (Showroom, Office & Business) precinct, it is still within the designated Noosa Business Centre area. In this context, the addition of a Masters, notwithstanding any conflicts with the Planning Scheme or its envisaged retail limits, would add to the overall attraction of the Noosa Business Centre as a retail and business destination.”
He also agreed[40] with earlier statements of Mr McCracken that:
[40]T3-12.
“…The location within the Shire Business Centre adjacent to the Noosa Civic shopping centre will further strengthen Noosa as a destination (mainly within its primary area) for hardware and home improvements. It should not negatively impact upon the overall centre network or functional role of any individual centre.
The introduction of a Masters store will provide direct competition to Bunnings, to the benefit of consumers.”
The Masters store would be a convenient “one-stop” shop for home improvement items (including whitegoods) and services. This is a matter which Mr Norling has previously acknowledged[41] in the context of a proposed Masters store elsewhere.
[41]Exhibit 24 pages 5-11/38-42.
Families, including retirees, that own or are purchasing their homes would benefit from the provision of a competitive large format home improvement store in close proximity.[42] The tourist market and spending on tourist property and facilities also contribute to demand for the facility.[43] There is a substantial level of spending on dwellings, both residential and non-residential, within the trade area. Continued residential growth in the trade area will result in further spending in this sector.[44]
[42]Exhibit 3 paragraph 55.
[43]Exhibit 5 paragraph 4.4.
[44]Exhibit 3 paragraph 65.
There are, of course, those who would not look forward to the proposed Masters store. In particular, those who currently serve the market would naturally prefer not to have a significant new competitor. Bunnings is the most direct competitor, but the economists do not expect it to fail. Rather, concern was expressed for smaller existing retailers. Indeed, Mr Norling frankly revealed that, on his instructions, the Council had refused the application out of concern for such retailers.
It is well settled that town planning is not generally concerned with the protection of existing operators from competition per se. So much is reflected in the well known passage from the High Court’s decision in Kentucky Fried Chicken Pty Ltd v Gantidis (underlining added):[45]
“If the shopping facilities presently enjoyed by a community or planned for it in the future are put in jeopardy by some proposed development, whether that jeopardy be due to physical or financial causes, and if the resultant community detriment will not be made good by the proposed development itself, that appears to me to be a consideration proper to be taken into account as a matter of town planning. It does not cease to be so because the profitability of individual existing businesses are at one and the same time also threatened by the new competition afforded by that new development. However the mere threat of competition to existing businesses, if not accompanied by a prospect of a resultant overall adverse effect upon the extent and adequacy of facilities available to the local community if the development be proceeded with, will not be a relevant town planning consideration.”
[45](1979) 140 CLR 657 at 687.
The evidence does not justify a conclusion that the proposal is likely to result in an overall adverse effect on the extent and adequacy of facilities available to, or planned for, the local community. Both economists saw the proposal as providing a net benefit,[46] albeit that Mr Norling saw the benefit as being of a lesser level than did Mr Duane (a matter discussed later). In their joint report the economists said:[47]
“The experts agree that any possible closures of other facilities would be made good by the development of the Masters Hardware Store providing a greater range and choice within the market.”
[46]See e.g. Norling T2-83 L45.
[47]Exhibit 3 paragraph 117.
The court has always been keen to ensure that a new facility at an unplanned location not prejudice facilities offered or potentially to be offered in a planned centre. That was relevant to this court’s rejection of the initial Bunnings proposal.[48] This is not however, a case of “out-of-centre” development which might impact upon existing or proposed in-centre development. The subject site is an “in centre” location which is proposed for a facility which would compete mainly with existing out-of-centre retailers.
[48]See PMM Group Pty Ltd v Noosa Shire Council (supra).
It has already been observed that the Council amended its issues so as not to allege that the impact of the proposal would, in any event, result in the demise of any particular existing facility. It continued to contend however, that:[49]
“There is no doubt that the proposal will have very significant impacts on existing traders… While it cannot be proved that any store will close, the impacts anticipated by the economic experts … are very significant, and will at least lead to a loss of levels of service to the public.”
The “loss of levels of service to the public” submission however, should be viewed in the context of what I am satisfied will be a net increase in the extent and adequacy of the services available to the community.
[49]Written submissions page 25.
The likely economic impact of the proposal on existing facilities as at 2016 was assessed by the economists. The diminution in the home improvement market captured by existing operators generally would not greatly diminish (Mr Duane calculated an impact of 8.5%), but that impact would fall disproportionately on some.
The economists agreed that there would be some impact on “traditional retail facilities” such as discount department stores and supermarkets, but also agreed that the impact would be “minor” for the discount department stores and “negligible” for traditional facilities generally.[50]
[50]Exhibit 3 paragraph 99.
The joint economic report looked at “specialist traders” in the area including paint, garden, outdoor, tool and plumbing specialists. They were described as follows:[51]
“As indicated, there are a variety of traders, however, they are almost all exclusively within industrial areas and not particularly well suited for a female customer in terms of their presentation and offer. Most of these stores are targeted directly at trade related retailing being stand alone stores, often with limited car parking and not integrated with other facilities.”
Mr Norling expects the majority of those traders to continue to operate, but, given the large number of them, he also considered that a “small number” of specialist trailers might be tipped “over the edge of profitability.” He saw that potential loss as being made good by the proposal (which I accept) and also observed that their loss would free up industrial space for other operators.[52]
[51]Exhibit 3 paragraph 72.
[52]Exhibit 3 paragraphs 105(d).
As for hardware facilities, neither economist expects the Mitre 10 at Cooroy or the Home Hardware at Peregian to close as a result of the proposal.[53]
[53]For Mr Norling see Ex 3 paragraph 105(c).
Mr Norling’s assessment of impact on existing facilities within the primary trade sector identified two that he thought are likely to suffer an impact of greater than 10%.[54] An impact of up to 10% is generally regarded, in economics, as within a normal competitive range.
[54]Exhibit 3 table 11.
The highest individual impact would be on the nearby Bunnings store, but the economists did not see that as likely to fail.[55] It has already been noted that Bunnings was not a submitter in relation to the subject proposal.
[55]Exhibit 3 paragraphs 97 and 105(a).
The other existing operator which Mr Norling saw as likely to suffer a significant impact, in percentage terms, is the Mitre 10 at Noosaville (although Mr Duane saw the likely level of impact as less than Mr Norling). That has already withstood a significant impact from Bunnings.
The Mitre 10 group is supplied by the wholesaler Metcash (which also supplies the IGA chain of supermarkets). The economists’ joint report notes the positive response of both Mitre 10 and Bunnings to the announcement, in 2010, that Masters stores would be introduced.[56] Bunnings, Mitre 10 and Masters are all expanding their number of stores. Recently Metcash reported that, for the last half year Mitre 10 sale had grown by close to 6.7% nationally despite competition from Bunnings and Masters.[57]
[56]Exhibit 3 paragraphs 29 to 31.
[57]Exhibit 5 paragraph 3.11.
The Noosaville Mitre 10 is operated by Sunshine Hardware Pty Ltd, which is the product of a merger between Melco and Lanhams in 2008. Mitre 10 Australia has recently become the majority owner of the group.[58] It has a number of stores, including on the Sunshine Coast. As Mr Duane pointed out,[59] it would have some marketing and buying power and is an experienced operator. It is the largest supplier of timber on the Sunshine Coast.[60]
[58]Exhibit 15 paragraph 1.
[59]Exhibit 5 paragraph 3.8.
[60]Exhibit 5 paragraphs 3.7 and 3.8.
Mr Lovell, the chief financial officer for Sunshine Hardware gave evidence. He is naturally concerned about the potential impacts from the proposed Masters store, but was cautiously optimistic that the Mitre 10 at Noosaville would continue.[61]
[61]T2-65/28-35.
While Bunnings had a substantially negative impact upon the retail operation of the Mitre 10 at Noosaville, the operator has responded by concentrating on its service to the trade sector. Mr Lovell maintained that the Noosaville Mitre 10 is able to provide a level of service to the trade sector which neither Bunnings nor Masters can match. This is consistent with Mr Duane’s opinion that the Noosaville Mitre 10 can continue, if well operated. While it will obviously suffer an economic impact from the proposal, the Noosaville Mitre 10 has reasonable prospects of being able to continue, given its particular focus. Even if it does not however, its loss will not result in a net overall adverse effect on the extent and adequacy of facilities available to the public, given the new Masters store. Similarly, I am satisfied that the proposed Masters will, on balance, lead to a significant improvement in the extent and adequacy of services, even if it results in some store closures and some diminution in the level of service offered by some others.
The focus on the likely negative economic impact on competing business should not distract from recognition that the proposal would provide modern and complementary retail facilities to those which are presently available in the NSBC and would strengthen the Noosaville locality, and in particular the NSBC, as a destination for home improvement shopping. It will assist to provide an economic stimulus.
There was debate between Mr Duane and Mr Norling regarding the extent of the need for the proposal. Mr Duane saw a “clear and strong” level of need for the proposal,[62] while Mr Norling acknowledged only “minor to modest levels of community need.”[63] I am satisfied that the level of public or community need is significant.
[62]Exhibit 3 paragraph 108.
[63]Exhibit 3 paragraph 110.
I am well satisfied that, to the extent there is a significant public or community need for such a proposal within the Noosa Shire, there is a corresponding planning need to grant an approval to accommodate it on the subject site, which is within, but in the periphery of, the designated centre. There was no suggestion of any other suitably zoned or designated land on which the subject proposal could otherwise be located within the locality. When it was suggested to Mr Norling, in cross-examination, that, if the proposal is refused, “there is no realistic prospect of a Masters store in your lifetime ever being developed in Noosa Shire. There is no other site that could do better than this site” Mr Norling responded “Based upon my understanding of the current planning instruments, I agree”.[64] Similarly Mr Adamson (the town planner called by the respondent) conceded[65] that the subject site is probably the only land upon which the proposal could be located if there was a need for it.
[64]T2-75.
[65]T3-76.
In their joint report, the economists said: [66]
“In summary, in terms of showroom and bulky goods facilities, Noosaville and the Noosa Shire Business Centre are currently the major destinations for these types of goods within the defined trade area. It is logical that another large home improvement store as well as another showroom facility (if needed) is provided within the highest order centre of the former Noosa Shire (Noosa Shire Business Centre) to allow a convenient comparison shopping trip for trade area shoppers.”
[66]Exhibit 3 paragraph 74.
Mr Adamson saw the subject site as ideal on a first principles planning basis.[67]
[67]T3-74.
Mr Norling accepted that the positive contribution which the proposal would make to the centre hierarchy was relevant and, in view of the positive features which he agreed to in paragraph 112 of the joint report, that this element of planning need was strong.[68] However, Mr Norling considered that the community and planning need for the proposal is undermined by what he sees as and insufficient population to support a second format home improvement store in the locality.
[68]T2-75.
Mr Norling fairly acknowledged that the proposal would bring some benefit and he confirmed he would be supportive of it had he concluded that there was a sufficient population base to support it from an economic perspective.[69] In the absence of what he considers a sufficient population base however, he does not consider that it is reasonable for the community to expect the provision of a second large format home improvement store, such as a Masters.[70]
[69]T2-74-76.
[70]T2-83-85
Mr Norling’s concern, in this regard, should be kept in perspective. He does not believe that the provision of a second facility without a sufficient population base will lead either to fail. His concern, from an economic perspective, is that the facilities will not trade well, with possible consequences for the levels of service offered by each. The result could be that while the community will be better off, it would not be as well off as if there were two vibrant and vital stores.[71] Mr Duane’s view, on the other hand, is that there is sufficient economic support for a proposed Masters in addition to the existing Bunnings.
[71]T2-85.
In analysing the population base upon which the proposal could draw Mr Duane and Mr Norling differed, both with respect to population projections and the extent of the trade area. Mr Duane identified primary, secondary and tertiary trade sectors. For the primary sector, Mr Duane forecast a 2016 population of 67,480, while Mr Norling forecast 64,880. The difference lies in different assumptions about growth rates from the common 2011 population of 61,480. In that regard Mr Duane relied on official forecasts for the Noosa Region, based on the Queensland Office of Economic and Statistical Research, whereas Mr Norling relied on his own opinion that population growth will track lower. While I prefer the approach of Mr Duane in this regard, the difference between them is not critical.
Mr Duane identified a secondary south trade sector, which includes Coolum. On his projections, that area would have a 2016 population of 24,980. He treated it as a secondary sector because he recognised that some potential customers from that area will find greater attraction in the Principal Regional Activity Centre at Maroochydore instead. Mr Norling conceded that customers would be attracted from that area, but he did not see Noosaville as being as attractive for residents of that area as Mr Duane did. He did not treat it as part of the defined trade area (primary or secondary) for the proposal, preferring to make some allowance for trade from that area in his assessment of likely “rogue” expenditure.
To some extent their different opinions about the so called secondary south trade sector result from a difference of opinion as to the extent to which that market would be drawn to Maroochydore. I prefer Mr Duane’s assessment of that. Large format home improvement stores typically serve relatively broad catchments and with roughly equal distance to the NSBC on one hand and Maroochydore the other, the secondary sector would inevitably direct some spending to Noosa particularly if as is likely, Masters establishes some loyalty or preference from some customers, given its differences from the Bunnings offering.[72]
[72]T2-23, T2-34.
To some extent the difference in this respect was also affected by Mr Norling’s assumption that a further hardware store will be developed at Coolum on land owned by Bunnings and which is the subject of an existing development application. That development application however, has not progressed very far. The information request in respect of it includes “preliminary advice” that, while open-minded, Council officers “could not see how a large hardware store would satisfy the requirements of the planning scheme” and that “Council considers the most appropriate outcome for the site to be a relatively small scale showroom development.”[73] In the circumstances I would not be inclined to place much weight upon the prospect of a Bunnings at Coolum.
[73]Exhibit 25.
There was also debate about Mr Duane’s tertiary trade sector, which includes Gympie, where a Bunnings is being established. As Mr Duane said:[74]
In relation to the tertiary sector, I note that the proposed Masters will be the closest such store of this brand for residents of these areas. Given the tertiary sector residents would frequent Noosa for a range of leisure purposes, this would provide an opportunity for these residents to shop at the Masters store. Although relevant, the inclusion or exclusion of this sector, however, is not critical to economic need.
[74]Exhibit 5 page 3 paragraph 1.5
While, on balance, I prefer Mr Duane’s opinions in relation to the trade areas, it is unnecessary to deal with it in any greater detail. As Mr Norling acknowledged, the difference between him and Mr Duane in relation to the sufficiency of the population base relates not so much to a difference in their assessment of the total population within the catchment as to a difference of opinion as to how many people are required to support two such facilities.[75]
[75]T2-70.
Mr Duane referenced a “benchmark” of around 40,000 to 50,000 persons per store for large stores of over 10,000m2, to conclude that a smaller population, per store, was required to support the more modestly sized Bunnings and the proposed Masters at Noosaville. He considers the second facility to be justifiable either on his population estimate or that of Mr Norling for the primary trade sector, recognising, as well, that the proposal would achieve some trade from beyond the primary trade sector.[76]
[76]Exhibit 5 paragraph 4.3, T2-38.
Mr Norling, on the other hand, saw the benchmark for large stores as being 70,000 – 75,000 persons[77] and was looking for a population base of 110,000 to 120,000, or (on average, 55,000 to 60,000 persons per store) for stores of this size.[78] He saw the existing Bunnings as taking up the supportable need and did not consider that there is a sufficient population base to support the proposed Masters as well.
[77]T2-70.
[78]T2-71.
In coming to his view about the population needed to support facilities of this kind, Mr Norling looked at the number of large hardware stores within a larger urban area, such as Brisbane, the Gold Coast or the Sunshine Coast and at the populations which currently support those stores. He also had regard to the turnover ranges that he would expect that the operators would wish to achieve, in order to derive the population necessary to generate the required revenue.[79]
[79]T2-70.
Mr Duane, on the other hand, placed greater weight on what the large and sophisticated operators of these facilities are actually doing in terms of the current “roll out” of new stores. As he pointed out,[80] there has, until quite recent times, been only one operator of these types of facilities, namely Bunnings. There is now a new entrant in the form of Masters, and both chains are establishing new stores within their networks. In the circumstances the historical rate of provision in unlikely to be a reliable guide as to the future.
[80]T2-19.
Mr Duane pointed to the establishment of new stores which rely upon population bases which support his benchmark. Bunnings has opened a number of smaller format stores of 6,000-7,000m2 in catchment areas of around 25,000-30,000 persons, such as Cannonvale in the Whitsundays. As for larger format stores of over 10,000m2, Bunnings has opened stores at locations such as Victoria Point, where the population level is around 40,000-50,000 persons. A 14,000m2 Bunnings has been approved at Gympie, with a catchment population of around 40,000 in competition with a 5,000m2 Mitre 10. Bunnings is attempting to locate a store in Coolum. The economic impact assessment in support of it asserts that a population of 38,000 is sufficient for a 9,768m2 store (with potential expansion by another 2,000m2).
Mr Norling’s opinion does not sit comfortably with the reality of the basis upon which such facilities are now being provided.[81] Accordingly, I prefer Mr Duane’s evidence in relation to the required population.
[81]T3-2.
In support of his views that the catchment is too small to serve the existing Bunnings as well as the proposed Masters, Mr Norling pointed to turnover projections. Mr Duane forecast a 2016 turnover for the proposed Masters of $21.4m ($2,179 per m2) increasing to $25.8m ($2,627 per m2) by 2026. Those projections are reduced from those postulated by Mr Duane at the application stage and reflect an adjustment to the size of the proposal, the approval if a Bunnings at Gympie and new information that Masters stores are, at this stage, not achieving the same turnover as Bunnings stores.[82] Mr Norling, on the other hand, initially projected a 2016 turnover of $14.8m ($1,510 per m2) increasing to $18.1m ($1,841 per m2) by 2026, although in cross-examination conceded that the 2016 turnover, on his approach should have been $15.6m.[83]
[82]T2-21, 2-47.
[83]T3-7.
Based upon the Bunnings operations, large format home improvement stores are expected to have a turnover in the range of approximately $2,500-$3,000 per m2,[84] although Masters, which is the new entrant in the market, is typically trading in the range of about $2,000-$2,500 per m2 [85] Mr Duane expects that Masters will be trying to improve its performance. These are, of course, estimated averages and there will be stores which trade above and below those levels.[86]
[84]Exhibit 2 volume 1 page 428.
[85]T2-47.
[86]T2-49,50.
On Mr Duane’s predictions, the proposed Masters would, in 2016, trade within the average range currently achieved by Masters stores and would improve, over time, to fall within the average range for a Bunnings operation. Mr Duane was not concerned about those projections since, as he explained, it is not unusual for a new store to trade below average at first and over time “grow into itself.”[87] Further, in this case, the proposal is also part of a new chain, which is establishing itself. On Mr Norling’s projections however, the turnover will be significantly below the average range even in 2026.
[87]T2-49, 50.
In arriving at their projections Mr Duane assumed that Masters would achieve an 8.5% share of resident spending from what he termed the main trade area (i.e. both primary and secondary sectors, but not the tertiary sector). That would comprise 75% of its turnover with the balance coming from beyond the main trade area (10%) and from trade customers (15%).[88] Mr Norling, on the other hand, estimated that the share of resident spending from the primary trade sector alone would be 10%, which would comprise 65% of turnover, with the balance coming from residents beyond the primary trade sector (20%) and from trade customers (15%).
[88]Exhibit 3 paragraph 79.
Mr Norling’s projected turnovers for the Masters are about 30% lower than those of Mr Duane. Two-thirds of the difference is attributed to the adoption of a lower household expenditure base.[89]
[89]Exhibit 3 paragraph 83.
In determining the household expenditure base Mr Duane relied on the estimates provided by the MarketInfo Service, which is an available service used by major developers and operators in Australia. Mr Norling does not use it, but over the last dozen or so occasions he has revised its estimates, in the context of joint expert meetings, he has found them to be within what he considers to be an appropriate range. Mr Norling sees the current case as an exception. In particular he regards the MarketInfo estimate of household home improvement expenditure in the Noosa area to be an overestimate in comparison with estimates in the case of YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors (supra) involving Everton Park.
Mr Norling pointed to demographic information which suggests that the residents of Noosa have a below average income (Everton Park is higher than average) and are older. These factors should, he contended, produce lower spending on home improvement items. He referred to the ABS Household Expenditure Survey in that regard.
As Mr Duane pointed out however:
(a) Much of the socio-economic Census data 2011 in relation to Noosa is not provided in relation to accumulated wealth and capital savings. “Capital rich” retirees have the wherewithal to invest in their homes.
(b) A review of median house price data for the Noosa trade area as compared with the Everton Park trade area shows that Noosa median house prices have been higher or equal to the Everton Park trade area house prices for all but the 2012/2013 year. On this basis, there is no reason why residents, who are spending a high amount on their house, will not spend a higher or equal amount on home improvement spending. [90]
In light of those matters, I am not persuaded that the MarketInfo data for Noosa is seriously undermined by the matters to which Mr Norling referred and I prefer Mr Duane’s view that it is appropriate to use the spending levels derived from the MarketInfo service.[91]
[90]Exhibit 5 paragraph 4.4.
[91]Exhibit 5 page 11 paragraph 1.15.
While the catchment population might not be generous for two large format home improvement stores, I generally prefer the evidence of Mr Duane, for the reasons I have given, and am satisfied that there is a sufficient economic demand to support the proposal, in addition to the existing Bunnings. As has already been noted however, neither economist believes that either the Bunnings or the proposed Masters is likely to fail, even if performance is as modest as Mr Norling projects.
I therefore am satisfied that there is a significant public or community and planning need and a sufficient economic need for the proposal.
It was also pointed out by Mr Duane, that the proposal would provide a community benefit in terms of employment, both during the construction and operational phases. Mr Duane noted that additional jobs created by the proposal would be adding to the vibrancy of the whole area.[92] It was pointed out, on behalf of the respondent that an alternative development, such as office development would also create jobs and, indeed, jobs at a higher rate per m2, than a large format home improvement centre.[93] However, with limited further growth in office workforce numbers as indicated in the joint economic report, further jobs will be required in other sectors than office workers within the NSBC.[94]
[92]Exhibit 5 paragraph 6.4.
[93]T2-73.
[94]Exhibit 5 paragraph 6.4.
Accordingly, I am satisfied that there is a need for the proposal and that its provision would prove beneficial for the community.
Sufficiency of grounds to justify approval notwithstanding conflict
The relevant planning scheme provisions have been discussed earlier. I accept that there is a degree of conflict. As has also been observed however, the proposal, in material ways, respects the planned centre hierarchy and supports the role of the NSBC in that hierarchy. In particular, the proposal would serve to:
· Positively contribute to the centre hierarchy, rather than negatively impact upon it;
· Contribute to the NSBC being the business and employment focus of Noosa;
· Cement the NSBC’s role as the highest order centre in the Shire;
· Constitute development of the NSBC consistent with the needs of the population of Noosa Shire and areas to the immediate south;
· Ensure the long term viability of the NSBC.
Mr Buckley (the town planner called by the appellant) pointed out that inconsistencies can be found between the precinct provisions and existing development within the NSBC, indicating what he referred to as the “flexible approach which has been applied to the SBC generally.”[95] I have not however, approached the matter on the basis that past departures justify a departure in this case. Similarly, I have not given weight, as something favouring a departure from the precinct provisions to provide for the proposed Masters, to the previous approval (not acted upon) for development including nearly 8,000m2 of trade related showrooms together with further space for offices within precinct E5, where showroom development is an inconsistent use.
[95]Exhibit 4 paragraph 70.
The conflict which arises by reason of a departure from what is intended in the relevant precincts is more than merely technical or minor, but nor do I consider that it is so serious as to fundamentally undermine the planned hierarchy or the function of the NSBC overall.
The grounds to justify approval notwithstanding conflict lie in the significant public or community need, sufficient economic need and significant planning need for the proposal, and the benefits which it would bring to the community, viewed in the context of the suitability of the site.
The location of the subject site within, but on the periphery of, the designated centre is consistent with the provisions of the SEQRP and with the status of the NSBC as the highest order centre in the locality. The NSBC itself is strategically situated on the arterial road network and the subject site’s location, at the periphery of the NSBC, offers convenient accessibility. The site is suitable for accommodating the proposed development without unacceptable impacts. It is, in reality, the only apparent opportunity to accommodate the proposal in the locality. It is a logical place to site the proposal. As Mr Buckley said:[96]
[96]Exhibit 6 paragraph 32.
“In my experience, having something like a Bunnings or a Masters, and showrooms, on the periphery of a town centre is sound planning. The benefits economically and in terms of critical mass, containment of impacts, and making best use of infrastructure are well understood and acknowledged throughout planning instruments, state and local government, and the professional fraternity.”
It has already been observed that the joint report of the economists states:[97]
“It is logical that another large home improvement store as well as another showroom facility (if needed) is provided within the highest order centre of the former Noosa Shire (Noosa Shire Business Centre) to allow a convenient comparison shopping trip for trade area shoppers.”
and that Mr Adamson attested,[98] that the subject site is an ideal location on a first principles basis.
[97]Exhibit 3 paragraph 74.
[98]T3-74.
While the home improvement store contains at least components (“hardware store” and “a garden centre”) which are, if considered in isolation, consistent uses within one or another of the precincts which apply to the subject site it is not, considered as a whole, a specified consistent use. Whilst the proposed Masters would diversify the breadth of business activities in the NSBC, it would stymie the potential for the site to be developed for nominated consistent uses, including industrial businesses (which are consistent uses in E5) and offices (which are consistent uses in precincts E5 and B3). The need for land to be preserved for industry and for offices however, is not strong.
As Mr Duane demonstrated[99] the potential loss of industrial land is “inconsequential” given the supply of land available to service the relatively low demand for industrial land in the Noosa Shire. Mr Norling did not quibble with the substance of Mr Duane’s assessment.[100] With the recent development of E4 (to the south of the subject site) there will be an industrial component in the NSBC.
[99]Exhibit 5, pages 24-25.
[100]T3-19/45 – T3-20/1.
As has already been observed, the economists agreed, in their joint report (and I accept), that the proposal would not impact on the capacity of the NSBC to accommodate any future demand from the “white collar” sector that may develop over time. Further, preservation of the subject site is not necessary in order to ensure that the NSBC develops for a mix of business, retail and administrative uses, as there remains sufficient land available within the NSBC to achieve a mix of functions notwithstanding the departure which the subject proposal represents from the particular mix and location of elements of the mix contemplated by the precinct provisions.
In the circumstances, I am satisfied there are sufficient grounds to approve the proposal notwithstanding conflict with the planning scheme.
Conclusion
The appellant has discharged its onus. The appeal will be allowed. The further hearing will be adjourned to give the parties opportunity to formulate proposed conditions of approval.
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