JOHN NOMINEES PTY LTD and PRESIDING MEMBER OF METRO-EAST JOINT DEVELOPMENT ASSESSMENT PANEL - [2018] WASAT 94

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: PLANNING AND DEVELOPMENT ACT 2005 (WA)
CITATION:   JOHN NOMINEES PTY LTD and PRESIDING MEMBER OF METRO-EAST JOINT DEVELOPMENT ASSESSMENT PANEL [2018] WASAT 94
MEMBER:   SENIOR MEMBER M SPILLANE
MS M CONNOR (MEMBER)

HEARD:   17 AUGUST 2017, 18 AND 19 SEPTEMBER 2017, 20 AND 21 NOVEMBER, 27 AND 28 NOVEMBER 2017, 6 AND 7 MARCH 2018, 22 AND 23 MARCH 2018 AND 2 MAY 2018
DELIVERED          :   12 SEPTEMBER 2018
FILE NO/S:   DR 388 of 2016
BETWEEN:   JOHN NOMINEES PTY LTD
Applicant
AND
PRESIDING MEMBER OF METRO-EAST JOINT DEVELOPMENT ASSESSMENT PANEL
Respondent
ALOI HOLDINGS PTY LTD
Second Intervenor
DESMOND DEARDS
Third Intervenor

Catchwords:

Town planning - Development application - Neighbourhood centre - State Planning Policy 4.2  Retail sustainability assessment - Orderly and proper planning

Legislation:

City of Swan Local Planning Scheme No 17, cl 1.6, cl 4.2.14, cl 4.2, cl 4.3, s 5A.1
Metropolitan Region Scheme
Planning and Development (Local Planning Schemes) Regulations 2015 (WA), reg 68(2), Sch 2, cl 67, Pt 4, cl 27
Planning and Development Act 2005 (WA), Pt 3, s 241(1)(a)
Shire of Mundaring Local Planning Scheme No 4

Result:

Application for review allowed and conditional approval granted

Category: B

Representation:

Counsel:

Applicant	:	Mr P McQueen and Mr A McGlue
Respondent	:	Dr S Willey and Mr I Repper
Second Intervenor	:	Ms B Moharich
Third Intervenor	:	Ms B Moharich

Solicitors:

Applicant	:	Lavan
Respondent	:	State Solicitor's Office
Second Intervenor	:	Moharich & More
Third Intervenor	:	Moharich & More

Case(s) referred to in decision(s):

Kentucky Fried Chicken Pty Ltd v Gantidis (1980) 140 CLR 675
Marshall v Metropolitan Redevelopment Authority [2015] WASC 226
Mitchell and City of Subiaco [2008] WASAT 230; (2008) 59 SR (WA) 198
Puma Energy Australia and City of Cockburn [2016] WASAT 26

REASONS FOR DECISION OF THE TRIBUNAL:

Background

On 10 March 2016, John Nominees Pty Ltd (applicant) submitted a development application proposing a neighbourhood centre on land at Lot 357 (227) Morrison Road, Midvale (Land/Property) which application was considered by the Metro-East Joint Development Assessment Panel (JDAP/respondent) at its meeting of 1 December 2016. The respondent resolved to refuse the development application at that meeting.
Following that refusal the applicant filed an application for review with this Tribunal on 6 December 2016 and following mediation the respondent was invited to reconsider its decision. At its meeting of 8 May 2017 the respondent again resolved to refuse the application.
It is noted however that at its meeting of 8 May 2017, the respondent acting in the place of the Western Australian Planning Commission (WAPC) resolved to grant development approval for the proposal under the Metropolitan Region Scheme (MRS) but refused the application under the City of Swan Local Planning Scheme No. 17 (Scheme/LPS 17) in accordance with reg 68(2) of the Planning and Development (Local Planning Schemes) Regulations 2015 (WA) - Sch 2 (deemed provisions) for the reason that:
1.The proposed Neighbourhood Centre is considered to be inconsistent with both State Planning Policy 4.2 - Activity Centres for Perth and Peel and objective (c) of the Residential Development zone under the Scheme because:
(i)As an 'out-of-centre' development it has not been demonstrated that the impact of diversion of trade from the existing surrounding activity centres in the centre hierarchy, namely Stratton Park Shopping Centre, Swan View Shopping Centre and Darling Ridge Shopping Centre, will not adversely impact on the capacity of those centres to provide services to their local communities, nor undermine the investment in public infrastructure associated with those centres.
The version of the development application to be determined in this matter is the same as was before the respondent at its meeting on 8 May 2017.
Following an application from a number of parties to intervene in the proceedings, by an order of 2 June 2017 the Tribunal ordered that:
Charter Hall Pty Ltd, Aloi Holdings Pty Ltd and Mr Desmond Deards are given leave to intervene in relation to the issue of viability of the existing shopping centres.
…
On the second day of hearing (18 September 2018) following further submissions in respect of the issue of intervention, the Tribunal made the following orders:
1.Charter Hall Pty Ltd's leave to intervene as the 1^st intervenor is revoked and Charter Hall Pty Ltd is no longer an intervenor in the matter; and
2.Aloi Holdings Pty Ltd and Mr Desmond Deards remain as the 2^nd and 3^rd intervenors in relation to the issue of viability of the existing shopping centres.
Charter Hall Pty Ltd is the owner of the Swan View Shopping Centre, Mr Desmond Deards is the owner of the IGA Supermarket at Darling Ridge Shopping Centre and Aloi Holdings Pty Ltd is the owner of Stratton Park Shopping Centre.

The subject land

The Land the subject of this is application is located on Morrison Road in Midvale. It is vacant and has an area of 1.9298 ha.
The Land is zoned, for the most part, 'Residential Development' in LPS 17 and 'Urban' in the MRS. The south-western corner and southern portion of the Land is reserved under the MRS for a Primary Regional Road associated with the upgrade of the Roe Highway and Morrison Road intersection.

The proposed development

The proposed Neighbourhood Centre has a Gross Leasable Area (GLA) of 6365m²which comprises the following components:
1.'Shop' of 5,037m² retail floor space, comprising of 14 specialty retailers and 3,845m² of dedicated supermarket floor space;
2.'Consulting Rooms' (medical) of 447m² on the upper level;
3.'Recreation - Private' (gym) of 467m² on the upper level;
4.'Fast Food Outlet' of 200m² and drive-thru, proposed to operate 24 hours;
5.'Convenience Store' of 120m², including six petrol pumps and associated refuelling bays and fuel canopy, proposed to operate 24 hours;
6.one 9.65m high illuminated tenancy pylon sign;
7.upgrade of Orchard Avenue (north) where abutting property and at Morrison Road intersection to left-out, and construction of new footpath within the abutting verge; and
8.a total of 316 on-site vehicle parking bays, inclusive of six refuelling bays, and associated landscaping and pedestrian access ways.

The locality

The Land is surrounded by the following:
1.To the north, an area known as Peet Movida Estate which it is anticipated will in time accommodate over 1,000 dwellings. It was agreed by the parties that as of 17 April 2018 as set out in Exhibit 47 that in Movida Estate there were:
a)50 homes occupied in the Peet Movida estate;
b)13 homes in the Peet Movida estate are structurally complete but unoccupied;
c)47 homes in the Peet Movida estate are under construction;
d)15 houses form a display village, and four additional lots are in use as a sales office and associated carpark;
e)All other lots in the Peet Movida estate are as yet undeveloped;
2.To the east of the land is a veterinary practice, garden supplies business, convenience store and fast food outlet;
3.To the south is land zoned 'service commercial' and 'light industrial' under the Shire of Mundaring Local Planning Scheme No. 4 (LPS 4) which land includes a service station with a convenience store attached; and
4.To the west are large lots partly reserved for Primary Regional Roads.
Existing shopping centres in the locality include:

Swan View Shopping Centre (located in Shire of Mundaring)

(a)Lot 72 (No 40) Marlboro Road, Swan View on the corner of Gladstone Avenue and Marlboro Road, is zoned 'Local Centre' under the Shire's LPS 4.
(b)The site is 1.4 km south-east of the subject land.
(c)The site has an area of 2.02 ha.
(d)The Retail Sustainability Assessment (RSA) provided by the applicant identifies that the site contains 3,900m² GLA incorporating approximately 3,000m² Coles.

Darling Range Shopping Centre (located in Shire of Mundaring)

(a)Lot 632 (No 309) Morrison Road, Swan View, on the corner of Morrison and Myles Roads, is zoned 'Local Centre' under the Shire's LPS 4.
(b)The site is 0.9 km east of the subject land.
(c)The site has an area of 0.8523 ha.
(d)The RSA provided by the applicant identifies that the site contains 2,400m² gross lettable area (GLA) incorporating 1,200m² IGA.

Stratton Park Shopping Centre

(a)Lot 873 (No 177) O'Connor Road and Lot 872 (No 3) Jecks Place Stratton, on the corner of Farrall Road, O'Connor Road and Jecks Place are zoned 'General Commercial' under the City's LPS 17.
(b)The site is 1.6 km north-east of the subject land.
(c)The sites have a combined area of 1.5303 hectares.
(d)The RSA provided by the applicant identifies that the site contains 2,000m² GLA incorporating 1,000m²IGA.

Midland Strategic Metropolitan Centre

(a)This Centre Incorporates Midland Gate, Midland Central and Centerpoint Midland Centre, and is zoned 'Central City Area' under the City of Swan LPS 17.
(b)The area is 1.5 km west of the subject land.
(c)The RSA provided by the applicant identifies that the sites have a supermarket component as follows:
Midland Gate              56,000m² GLA incorporating a 3,820m² Woolworths and 3,600m² Coles.
Central Midland          3,200m² GLA incorporating a 1,900m² IGA.
Centrepoint Midland    8,500m² GLA incorporating a 4,650m² Woolworths.

Planning framework

State Planning Instruments

The state planning agencies have developed planning instruments and policies that assist in providing a planning framework that offers a context for decision-making on land use and development in Western Australia. In addition to subclause 67(c) of the deemed provisions, the Tribunal pursuant to s 241(1)(a) of the Planning and Development Act 2005 (WA) (PD Act) is also required to have due regard to any State planning policy which may affect the subject matter of an application for review.
The relevant State planning policies and other planning instruments, referred to by the parties, relating to this matter include:

State Planning Policy 4.2 - Activity Centres for Perth and Peel (SPP 4.2)

SPP 4.2, made pursuant to Pt 3 of the PD Act, guides the planning and development of new activity centres and the redevelopment and renewal of existing centres in Perth and Peel. It is mainly concerned with the distribution, function, broad land use and urban design criteria of activity centres, and with coordinating their land use and infrastructure planning (refer respondent's Bundle page 207).
Clause 4 of SPP 4.2 identifies a number of applicable policy objectives of SPP 4.2, including the following:
2.Apply the activity centre hierarchy as part of a long-term and integrated approach by public authorities and private stakeholders to the development of economic and social infrastructure.
…
5.Increase the density and diversity of housing in and around activity centres to improve land efficiency, housing variety and support centre facilities.
…
7.Maximise access to activity centres by walking, cycling and public transport while reducing private car trips.
8.Plan activity centre development around a legible street network and quality public spaces.
9.Concentrate activities, particularly those that generate high numbers of trips, within activity centres.
Clause 5.1 of SPP 4.2 incorporates provisions to assist in meeting these policy objectives, including:
(2)The responsible authority should not support activity centre structure plans or development proposals that are likely to undermine the established and planned activity centre hierarchy. Activity centre structure plans and developments should be consistent with the centre's classification in the hierarchy. The responsible authority should consider the main role/function and typical characteristics for each centre type outlined in Table 3.
(3)The hierarchy provides a strategic planning framework to guide public authorities in the preparation of long-term capital investment programs and to promote more private investment, particularly at strategic metropolitan centres.
With specific regard for the built form surrounding neighbourhood and local centres, cl 5.1.2 states:
(1)Neighbourhood centres are important local community focal points that help to provide for the main daily to weekly household shopping and community needs. They are also a focus for medium density housing. There are also many smaller local centres such as delicatessens and convenience stores that provide for the day-to-day needs of local communities.
(2)Neighbourhood and local centres play an important role in providing walkable access to services and facilities for communities. These centres should be recognised in local planning strategies, and also in structure plans for new urban areas.
Clause 6 of SPP 4.2 'Implementation', identifies key requirements to implement the policy and relevantly states:
(2)The responsible authority should not support activity centre or other structure plans, scheme amendments or development proposals that are likely to:
•undermine the activity centre hierarchy or the policy objectives;
•result in a deterioration in the level of service to the local community or undermine public investments in infrastructure and services; or
•unreasonably affect the amenity of the locality through traffic or other impacts.
(3)Unacceptable impact may include a physical or financial cause that would result in an adverse effect on the extent and adequacy of facilities and services available to the local community that would not be made good by the proposed development itself.
Clause 6.5 of SPP 4.2 'Retail sustainability assessments', are described as:
An RSA assesses the potential economic and related effects of a significant retail expansion on the network of activity centres in a locality. It addresses such effects from a local community access or benefit perspective, and is limited to considering potential loss of services, and any associated detriment caused by a proposed development. Competition between businesses of itself is not considered a relevant planning consideration.
Clause 6.5.1 of SPP 4.2 'Scope and requirements', goes on to identify:
(1)The RSA shall assess potential effects of the sustainable future provision of shopping by existing and planned activity centres in the locality, taking into account:
•the supportable shop-retail floorspace for an appropriate service population, based on the normative primary service (trade) areas in Table 3;
•the Commission's Guidelines for Retail Sustainability Assessments; and
•an assessment of the costs imposed on public authorities by the proposed development, including the implications for and optimal use of public infrastructure and services provided or planned in the locality.
(2)The RSA should consider overall costs and benefits of the proposal taking into account the objectives of this policy and the Commission's Guidelines for Retail Sustainability Assessments. Findings should be expressed in terms of any potential impacts on each affected activity centre.
(3)The methodology, assumptions and data used in such analysis must be specified and be appropriate, transparent and verifiable.
Clause 6.6.2 of SPP 4.2 identifies that local governments will be responsible for development approval, however the following development will be referred to the WAPC for determination, under the region planning scheme:
•Development that may have significant regional implications.
•Major development, considered appropriate to a higher level in the activity centres hierarchy, based on the main role/function and other criteria in Table 3.
•Developments wholly or partly on zoned land in specialised centres; and
•All developments wholly or partly on reserved land in specialised centres (apart from Jandakot and Perth Airports), except for permitted development.

WAPC Liveable Neighbourhoods Policy - January 2009, Update 2 (Liveable Neighbourhoods)

Liveable Neighbourhoods is a State Policy that was prepared to implement the objectives of the State Planning Strategy. It is an operational policy for the design and assessment of structure plans (regional, district and local) and subdivision for new urban (predominantly residential) areas in the metropolitan area and country centres, on greenfield and large urban infill sites.

State Planning Policy 3 - Urban Growth and Settlement (SPP 3)

SPP 3 sets out the principles and considerations which apply to planning for urban growth and settlement in Western Australia. It is a broad sector policy under Statement of Planning Policy No. 1: State Planning Framework.
SPP 3 has the overarching aim 'to facilitate sustainable patterns of urban growth and settlement by setting out the requirements of sustainable settlements and communities and the broad policy in accommodating growth and change' and should be taken into account in preparing regional and local planning strategies, and planning schemes/and amendments, and given weight in statutory decision making in relation to urban growth and settlement.

Development Control Policy 1.2 - Development Control General Principles (DC 1.2)

Development control policies are policies made by the WAPC under the WAPC's State Planning Policy 1: State Planning Framework.
Clause 3.1 of DC 1.2 requires the WAPC to have regard to certain relevant planning considerations when making decisions on development applications, including:
•compatibility with relevant planning policies, strategies and development control criteria;
•integration of development into the site and its surroundings;
•transport and traffic impacts;
•vehicular and non-vehicular access, circulation and car parking;
•relevant environmental, economic and social factors;
•relevant factors of amenity and sustainability.
Clause 4 of DC 1.2 identifies that the WAPC is bound to have regard to the purpose for which the land is reserved under the MRS. The WAPC and local government are to ensure that the use of the reserved land is not prejudiced by the development application.

(Development Control Policy 5.1 - Regional Roads (Vehicular Access) (DC 5.1)

DC 5.1 sets out the principles to be applied when considering proposals for vehicle access to or from developments abutting regional roads.

Local Planning Instruments

City of Swan Local Planning Scheme No. 17 (LPS 17)

LPS 17 reflects the MRS reservation and zones the remaining portion of the subject land as 'Residential Development' zone.
The aims of LPS 17, set out in cl 1.6 include:
…
(b)Provide for safe, convenient, attractive and viable commercial centres, which serve the needs of the community and are accessible to pedestrians, cyclists and public transport users as well as motorists.
(c)Encourage development that will strengthen the economic base of the District and provide convenient and efficiently located employment for the community.
(d)Ensure coordinated and efficient use and development of land within the District, and to avoid ad hoc development that would result in land use conflicts, excessive travel and/or transport demand or adverse impacts on the environment.
…
(f)Promote the health, safety, convenience and the economic and general welfare of the community, and to ensure the use and development of land does not result in significant adverse impacts on the physical and social environment.

Clause 4.2 of LPS 17 sets out the objective of each zone identified in the Scheme. The objectives of the Residential Development zone under cl 4.2.14 of the Scheme are to:
(a)provide for the coordinated development of future residential areas through the application of a comprehensive plan to guide subdivision and development to be known as a 'Structure Plan';
(b)provide for predominantly residential development, but including also a range of compatible services, consistent with the needs of an integrated neighbourhood, and planned so as to minimise adverse impacts on amenity;
(c)avoid the development of land for any purposes or at a time when it is likely to compromise development elsewhere in the district or prejudice the future development of land in the Residential Development zone for more appropriate purposes;
(d)take account of the need to protect the amenity and on-going use of adjacent property owners as well as to provide for the needs of future residents.
Clause 4.3 of the Scheme makes provision for a Zoning Table, which pursuant to cl 4.2.1 indicates, subject to the provision of the Scheme, the uses permitted in the Scheme Area in various zones. In regards to the 'Residential Development' zone, the Zoning Table specifies that '[d]evelopment and use of the land is to be in accordance with an approved structure plan'.
Part 5A of the Scheme outlines detailed provisions regarding structure plans. However, to the extent of any inconsistency between Part 5A of the Scheme and Part 4 Structure Plans (Pt 4) of the deemed provisions, Pt 4 of the deemed provisions prevails, by reason of s 257B of the PD Act.
The Residential Development zone is recognised at cl 5A.1 of the Scheme as being a 'structure planning area'.
The subject land is included in the 'Farrall Road Local Structure Plan No 42' (Farrall Road Structure Plan). The Farrall Road Structure Plan provides a framework for the creation of 1150 - 1250 lots and 1200 1300 dwellings, supporting a range of housing choices; approximately 15.6 ha of open space; the enhancement of Blackadder Creek and Woodbridge Creek as drainage corridors and the provision of an appropriate road network.
The Farrall Road Structre Plan was endorsed by WAPC in September 2016 and identifies the broader structure planning area as 'Residential'. However, the area south of Woodbridge Creek, including the subject land, is identified as 'Subject to Future Planning Investigations'.
Clause 27 of the deemed provisions provides as follows:
(1)A decision-maker for an application for development approval … in an area that is covered by a structure plan that has been approved by the Commission is to have due regard to, but is not bound by, the structure plan when deciding the application.
(2)A decision-maker for an application for development approval … in an area referred to in clause 15 as being an area for which a structure plan may be approved by the Commission, may approve the application if the decision-maker is satisfied that
(a)The proposed development … does not conflict with the principles of orderly and proper planning; and
(b)The proposed development … would not prejudice the overall development potential of the area.
Clause 10.2 of the LPS 17 sets out the matters to be considered in determining an application. However, the Tribunal in Puma Energy Australia and City of Cockburn [2016] WASAT 26, found that, by virtue of s 257B(3) of the PD Act, cl 67 of the deemed provisions has replaced all the equivalent provision in local planning scheme in Western Australia based on cl 10.2 of the former Model Scheme Text. Clause 10.2 of LPS 17 is such a provision.
Clause 67 of the deemed provisions provides that in considering an application for development approval, the local government is to have due regard to a range of specified matters to the extent that, in the opinion of the local government (and the Tribunal on review), those matters are relevant to the development the subject of the application. Of particular relevance are the following:
(a)the aims and provisions of [LPS 17] …;
(b)the requirements of orderly and proper planning …;
(c)any approved State planning policy;
…
(g)any local planning policy for the Scheme area;
(h)any structure plan … that relates to the development;
…
(n)the amenity of the locality including the following -
(i)environmental impacts of the development;
(ii)the character of the locality;
(iii)social impacts of the development;
…
(v)the potential loss of any community service or benefit resulting from the development other than potential loss that may result from economic competition between new and existing businesses;
…
(x)the impact of the development on the community as a whole notwithstanding the impact of the development on particular individuals[.]

City of Swan Local Commercial and Activity Centres Strategy 2016 (adopted 27 September 2017)

In 2011 the City of Swan prepared a City-wide Retail Needs Assessment leading to a draft Local Commercial and Activity Centres Strategy (2016), supported by a draft Best Practice Review Paper (2016) and a draft Background Report (2016).
During the course of the hearing on 27 September 2017, the Council of the City of Swan resolved unanimously to adopt the City of Swan Local Commercial and Activity Centres Strategy 2016 (Local Commercial and Activity Centres Strategy) as a local planning policy, pursuant to Pt 2 Div 2 of the deemed provisions.
The Local Commercial and Activity Centres Strategy identifies the Property as being within an area known as the 'Midvale Neighbourhood Centre Investigation Area' (Investigation Area).
The Local Commercial and Activity Centres Strategy (as adopted) says the following in relation to that Investigation Area:
City of Swan has received interest in the development of neighbourhood shopping facilities, in various formats and locations, in the Midvale area (refer Figure 5). At present, this part of Midvale and the adjoining Swan View Local Planning Area (which includes the suburbs of Stratton Park, Swan View and Jane Brook) are not currently well served by full-line supermarket facilities or attractive, welldesigned neighbourhood centres.
The Stratton Park neighbourhood centre is currently the only centre in the Swan View Local Planning Area (LPA). Stratton Park is currently an under-performing centre that will require re-investment in the future if it is going to continue to serve its intended neighbourhood centre role. Concerns for the future role of Stratton Park in its current format exist.
No reasonably (sic) degree of certainty is apparent that Stratton Park will attract the investment required that would make it a strong performing neighbourhood centre serving the surrounding community.
Residents in Midvale and the Swan View LPA are also served by neighbourhood centres located in the adjoining Shire of Mundaring, including:
•Swan View SC, which includes a relatively strong performing Coles supermarket.
•Darling Ridge SC, which is a small neighbourhood centre comprising a mid-sized IGA.
In addition, Council recently extended the development approval for a small neighbourhood centre of approximately 2,615m2 in Jane Brook.
Therefore, an opportunity exists for the potential development of additional neighbourhood centre facilities in the general location identified in Figures 5 as the 'Midvale Neighbourhood Centre Investigation Area'.
The Local Commercial and Activity Centres Strategy also provides, in the section headed 'Centre- Specific Directions and Actions':
Midvale Neighbourhood Centre Investigation Area: Currently, residents in the Swan View Local Planning Area (which includes Jane Brook, Stratton Park and future residents in the Farrall Road Structure Plan Area) are under-serviced in regard to the provision of quality neighbourhood centres, in particular, the provision of a full-line supermarket. Potential exists for the development of additional neighbourhood centre facilities in the Midvale Neighbourhood Centre Investigation Area in order to improve access to major supermarket facilities for nearby residents. Actions:
- Consider opportunities for neighbourhood centre development in the Midvale Neighbourhood Centre Investigation Area. Any future development should be supported by a Retail Needs and Sustainability Assessment that ensures the City of Swan Activity Centre Hierarchy is not undermined.

Issues for determination

Both the applicant and the respondent each framed the issues for determination in a slightly different manner in their closing submissions.
On a close examination of both sets of issues and having sat and listened to many days of hearing, the Tribunal is of the view that the issues outlined by the parties can be encapsulated in two issues which need to be decided and which will frame the Tribunal's decision.
Those issues are:
•Issue 1 - whether the proposed Neighbourhood Centre will adversely impact the viability of the existing centres within the locality and the capacity to provide access and services to the local communities; and
•Issue 2 - whether, having regard to Issue 1 and the applicable planning framework, the proposed Neighbourhood Centre conflicts with the principles of orderly and proper planning and prejudices the overall development potential of the area.

Evidence

Over the course of approximately 11 days of hearing, the Tribunal heard from a total of eight witnesses. They were:
•two experienced town planners, Steven Allerding and Christopher O'Neil;
•two accountants, Kenneth Thomas and Martin Langridge;
•Mr Morgan O'Shea, the property director for Aldi Stores in Western Australia; and
•Mr Brian Haratsis, Mr Justin Ganly and Mr Mark Wallace, all of whom could be described as retail economists.
In what is essentially a planning matter, the retail economists and the accountants took up nearly six days of the total hearing time dealing with Issue 1 while the planners took only a day and a half addressing Issue 2.
At the start of the hearing on 18 September 2017 the Tribunal undertook a site visit in the company of the parties' counsel and their planners.

Issue 1 - whether the proposed Neighbourhood Centre will adversely impact the viability of the existing centres within the locality and the capacity to provide access and services to the local communities.

The need for this issue to be considered arises out of two planning documents.
The first, as outlined earlier, is cl 6 of SPP 4.2 which states:
…
(2)The responsible authority should not support an activity centre or other structure plans, scheme amendments or development proposals that are likely to:
•undermine the activity centre hierarchy or the policy objectives;
•result in a deterioration in the level of service to the local community or undermine public investments in infrastructure and services; or
•unreasonably affect the amenity of the locality through traffic or other impacts.
(3)Unacceptable impact may include a physical or financial cause that would result in an adverse effect on the extent and adequacy of facilities and services available to the local community that would not be made good by the proposed development itself.
Clause 6.5 of SPP 4.2 explains that to properly consider that issue, an RSA, the purpose of which was described earlier, must be carried out.
The second planning document is the City of Swan's recently adopted Local Commercial and Activity Centres Strategy which specifies that any future decision regarding the development of a neighbourhood centre in the Midvale area where the proposed development is planned needs to be supported by an RSA. It states:
The development of any new neighbourhood centre in the 'Midvale Neighbourhood Centre Investigation Area' needs to be supported by a valid Retail Needs and Sustainability Assessment, ensuring any development does not undermine the City of Swan Activity Centre Hierarchy.
In the expert planners' joint statement dated 8 September 2017 at para 14, they agreed that in respect of SPP 4.2 the substantive issue of disagreement related primarily to the proposed developments impact on other centres.
A number of RSAs were before the Tribunal. The applicant had one prepared by Mr Haratsis of which there was more than one iteration and another came from Mr Justin Ganly who appeared on behalf of the second and third intervenors.
Mr Wallace, the third economic expert to give evidence and called by the respondent did not himself prepare an RSA but critiqued the other RSAs.
It is noted that a Mr Greg Davis was initially engaged by the second and third intervenors and in fact took part in the joint conferral of experts on 30 August 2017. However, on 20 November 2017 counsel for the second and third intervenors informed the Tribunal that Mr Davis would no longer be involved and Mr Ganly would be giving the required evidence on behalf of the second and third intervenors.
The three retail economists gave concurrent evidence which, as explained earlier, stretched over six days and the interaction between the experts themselves and the cross-examination by various counsel, could only be described as extensive and robust.
Although described in slightly different terms by each of the parties, there were four main headings under which the Tribunal will deal with the RSAs and the experts evidence.
They are:
•methodology;
•trade area;
•population; and
•trade impact.

Methodology

The three retail economists had undertaken two expert conferrals following which they filed joint statements with the Tribunal. The first, dated 6 September 2017 (Exhibit 16) and the second dated 2 November 2017 (Exhibit 29).
In each of the joint statements, all three experts were in what was described as 'broad agreement' as to the methodology used in the RSAs under consideration.
Although there was criticism of Mr Haratsis' methodology during the hearing, the agreement contained in the joint statement was not resiled from or withdrawn and the Tribunal is not therefore going to look beyond the agreement of the three expert's in the joint statement and accepts that the methodology used by Mr Haratsis was acceptable.

Trade area

As stated earlier, of the experts appearing before the Tribunal, only Mr Ganly and Mr Haratsis had undertaken RSAs and both had chosen and based their RSAs on the same trade area.
Mr Ganly explained that he believed the trade area was reasonable and he had adopted the same trade area as previous RSAs.
It is noted that Mr Davis, the retail expert engaged by the second and third intervenors who had taken part in the initial conferral of experts on 30 August 2017, also believed the trade area was reasonable particularly for the purposes of comparison.
Further, the second and third intervenors confirmed at para 14 of their closing submissions that they did not take issue with the trade catchment size chosen by both Mr Ganly and Mr Haratsis.
Only the respondent's expert Mr Wallace, who himself had not carried out an RSA, was critical of the trade catchment area chosen by both Mr Haratsis and Mr Ganly describing it as too extensive for a centre of this size.
However, the Tribunal is satisfied based on the reasons given by Mr Haratsis, Mr Ganly and indeed Mr Davis that in the particular circumstances of this case, including the fact that the catchment area to the north contained no neighbourhood centre other than the Stratton Park Centre and the approved but as yet undeveloped Jane Brook proposal that the trade catchment area chosen Mr Haratsis and Mr Ganly for their RSAs is appropriate.

Population

This issue was a significant point of difference between the experts with the principal area of difference relating specifically to the rate of growth in the area and in particular in Movida Estate located directly to the north of the proposed development and directly south of the second intervenors' premises at Stratton Park.
It was common ground between the experts that upon completion, Movida Estate will deliver over 1,000 new residential dwellings causing a substantial increase in the population of the immediate trade area.
It was also agreed that the Movida Estate development had commenced and a number of properties had already been sold and homes occupied.
The key point of difference between the experts was how long it will take for Movida Estate to be fully developed and occupied.
Apart from the experts predictions, the actual facts before the Tribunal in respect of this matter were as follows:
•Peet Limited's first half results for the 2016 financial year dated February 2016 (Exhibit 36). On page 19 under the heading 'Financial Year 16/Financial Year 18 Project Release Schedule for the Movida Estate' it described the Midvale project's first sales being in the second half of 2016 with total lot sales for the estate of 1,050 over a project life of seven years.
•Peet Limited's full year results for the 2017 financial year (Exhibit 37) which showed on page 34, that 928 lots remain in Movida Estate as of 30 June 2017.
•Following a site inspection of Movida Estate on 17 April 2017 the parties filed a statement of agreed facts which confirmed that as of that date, there were in Movida Estate:
•50 occupied dwellings;
•13 completed, but unoccupied dwellings;
•a further 47 dwellings currently under construction; and
•15 display homes.
Further, at para 15 of the second and third intervenors' closing submissions under the heading 'Movida Estate', the following table was included outlining the lot uptake in Movida Estate.

Date	Lots Remaining (Peet Data in Ex. 37 and 38)	Lots sold in period (Peet Data in Ex. 37 and 38)	Lots sold in period (Landgate Data in Ex. 44)
31/12/15	1050	nil	nil
30/06/16	1072	nil
			77 (23/03/1623/03/17)
31/12/16	1017	55
30/06/17	928	89
			51 (23/03/1723/09/17)
31/12/17	888	40
			7 23/09/17-23/03/18)
-
TOTAL	-	184	135

The following note came after that table and stated:
There is a discrepancy between the number of lots purported to be sold by Peet, and the number of sales shown in the Landgate data base. This may be because 'lots remaining' for Peet are lots subject to signed contract, rather than settlement.
Nobody from Peet Limited was called to give evidence, however the Tribunal notes that Peet Limited is a publically listed company which is obliged to furnish accurate information to the market. In the circumstances the Tribunal accepts as generally reliable and accurate what is contained in Peet Limited's half and full year results as described above.
The areas of disagreement between the expert witnesses in respect of the projected population of Movida Estate related particularly to the assumptions made flowing out of the available data. The Tribunal did not take from the expert's evidence that there was no growth in the area but rather the growth proposed or anticipated by Mr Haratsis was criticised as being overly optimistic while the growth proposed or anticipated by Mr Ganly was criticised as being overly pessimistic.
In its background report for its Local Commercial and Activity Centres Strategy, the City of Swan had stated that 'The rate of population growth in the City of Swan has exceeded the expectations of the current Strategy, and a range of new development pressures are providing challenges for the existing policy framework'. The City of Swan estimated in its newly adopted Strategy that the Swan View area will grow by an average of 1.8 per cent by 2021.
It is the Tribunal's view based on all of the evidence before it that the criticism of Mr Haratsis as being overly optimistic in respect of population growth and Mr Ganly as being overly pessimistic is correct with the truth lying somewhere in the middle.

Towards the end of the hearing when Mr Ganly was taken to his assessment of the uptake in Movida Estate to clarify what he had stated earlier he stated:
… Now, the evidence that I gave to the tribunal pre-Christmas was that my expectation is that approximately 10 dwellings would be occupied by June '18, a further 30 by June '19, a further 50 by June '20, and then 100 per year after that, which would see the last dwelling within Movida Estate being occupied by the end of 2026.
The question is, do I resile from those fears or do I believe that they are a forecast that should be changed? The answer is generally no. I suspect that come June '18, there will be a few more than 10 occupied.
Come June '19,1 consider there would be a few more than 40 occupied.
Come June '20, probably a few more than 90. Come June '21, will it be 190?
I suspect it will be around about that number ...
(ts 8, 23 March 2018)
In light of the evidence outlined above and particularly that as at 17 April 2018, 50 homes were already occupied, 13 homes structurally complete but unoccupied, 47 other homes under construction and 15 display homes were operational, the Tribunal is satisfied that Mr Ganly's projections are not correct.
On the other hand, Mr Haratsis' evidence in his RSA, which was heavily criticised as being overly optimistic was that approximately 570 people would move to Movida Estate each year. When it was put to him that that was unrealistic, he explained that the 570 per year for five years was an average.
However, the Tribunal did hear from another expert in respect of the projected population growth in Movida Estate and that was Mr Wallace. Although he had not carried out an RSA, he had the benefit of being able to consider all of the evidence given by all of the other experts and was in attendance throughout the concurrent evidence with both Mr Haratsis and Mr Ganly.
On 28 November 2017 counsel for the applicant had the following exchange with Mr Wallace and briefly with Mr Haratsis in respect of the years up to 2021, which counsel for the applicant described as a key date being that was a possible date for completion of the proposed development if approval was granted. That exchange was as follows:
COUNSEL FOR THE APPLICANT: The next thing I would like to do is to look at the number of blocks that we think are going to be created in those various years in the Movida Estate. Now, we know what Peet says. Peet says seven and a half years to sell it out, between 2016. Sorry, I'm just looking at you, Mr Wallace, and if you add seven years to that, that takes you to 2023.
WITNESS, WALLACE: That's correct, yes.
COUNSEL FOR THE APPLICANT: Okay. With an average block take-up of roughly - I think we've figured it out - 12 per month, Mr Wallace?
WITNESS, WALLACE: That was my understanding. I didn't do that calculation, but that's what I believe we had calculated, yes.
COUNSEL FOR THE APPLICANT: Yes, 12 per month, and then by 12 months is 144 per year. All right. That's sort of the Peek annual report analysis. Now, Mr Haratsis - - -
WITNESS, HARATSIS: Yes.
COUNSEL FOR THE APPLICANT: - - - what do you say the number of blocks per year is, because you said 90 per cent roughly comes from Movida?
WITNESS, HARATSIS: So - so what I've said is that I would forecast it at 220, but my analysis only includes 160.
COUNSEL FOR THE APPLICANT: 160. All right. 160 blocks per year. Mr Wallace, what do you think we should be using in the table for the number of blocks per year?
WITNESS, WALLACE: For Movida?
COUNSEL FOR THE APPLICANT: For Movida.
WITNESS, WALLACE: 144.
COUNSEL FOR THE APPLICANT: 144.
WITNESS, WALLACE: On average.
COUNSEL FOR THE APPLICANT: On average.
WITNESS, WALLACE: Yes.
COUNSEL FOR THE APPLICANT: Do you accept that, as Mr Haratsis says, it could be higher than that in an improving market, or not?
WITNESS, WALLACE: In an improving market, yes, it absolutely could be higher than that.
(ts 127-128, 28 November 2017)
In respect of the average occupants per dwelling, the figure of 2.5 persons had been discussed early in the hearing, however when Mr Wallace was questioned on the matter on 23 March 2018 by counsel for the applicant, the following exchange took place referring to Movida Estate in particular:
COUNSEL FOR THE APPLICANT: … I thought that all three witnesses land at around 3.2 persons per dwelling, or was it less than that in the end?
WALLACE, WITNESS: No, the current prevailing average household size is 2.8 in the catchment. For new developments, considering that there's the first home buyers with - who have then subsequently children, the - I view three as my household size.
COUNSEL FOR THE APPLICANT: Three?
WALLACE, WITNESS: Yes.
(ts 62, 23 March 2018)
The Tribunal notes that the experts generally agreed that growth in the development might not be linier and often a 'ramp up effect' is experienced where the growth might be rather modest initially but accelerate in future years as the estate matures.
The Tribunal acknowledges that the projections the experts proffered is not an exact science but the Tribunal must have some way of accepting one set of figures over another, that is, Mr Haratsis' over Mr Ganly's or vice versa.
The Tribunal is also cognisant of the fact that growth may begin earlier or finish later than anticipated. As stated earlier, Mr Haratsis was criticised for projecting a figure of approximately 570 persons per year into Movida Estate and in fact admitted that his projections might be overly optimistic particularly in the very early stages.
However, if one looks at the evidence as set out above by Mr Wallace, who comes to a figure of approximately 144 blocks per year as against Mr Haratsis' 160. Using the agreed figure of three persons per household, that would equate to approximately 430 additional people in Movida Estate per annum as against Mr Haratsis' 480. Mr Wallace's figure therefore is far closer to Mr Haratsis' number than to Mr Ganly's who, as set out above stated:
I suspect that come June '18, there will be a few more than 10 occupied. Come June '19, I consider there would be a few more than 40 occupied. Come June '20, probably a few more than 90. Come June '21, will it be 190?
The Tribunal acknowledges that the number of blocks sold does not relate directly to the number of blocks occupied due to settlement times, construction times and other such issues. However, in general terms from the prospective of projections, the Tribunal is satisfied from all of the evidence before it that the number as stated by Mr Wallace is likely to be the most accurate which number is significantly closer to Mr Haratsis' figure than to Mr Ganly's.
In the circumstances therefore the Tribunal prefers the evidence to Mr Haratsis in respect of projected population growth, albeit recognising that it may be slightly optimistic.

Trade impact

The reason the population figure just discussed is important, is because as explained by the experts, it informs the retail expenditure pool from which all the centres including the proposed centre can draw, which in turn feeds into the impact the proposed centre may or may not have on other centres.
However, when looking at the trade impact the proposed centre may or may not have, it is also critical to identify what particular type of impact the Tribunal needs to be concerned with.
Clause 6.5 of SPP 4.2 clearly states that the impact:
…
is limited to considering potential loss of services, and any associated detriment caused by a proposed development. Competition between businesses of itself is not considered a relevant planning consideration.
Further, cl 6(3) of SPP 4.2 explains that for the purposes of a RSA:
Unacceptable impact may include a physical or financial cause that would result in an adverse effect on the extent and adequacy of facilities and services available to the local community that would not be made good by the proposed development itself.
The recently adopted Local Commercial and Activity Centres Strategy also required an RSA to ensure that the City of Swan Activity Centre Hierarchy is not undermined.
From an economic perspective therefore, the critical question under SPP 4.2 is whether in the present case the trading impact that might be caused by the proposed development would result in a loss of facilities and services to the local community which loss would not be made good by the proposed development itself.
However, although there was an extensive amount of detailed evidence about the levels of trade and the anticipated impact of the proposed development on the IGA supermarkets in both Stratton Park and Darling Ridge, there was a paucity of evidence in respect of what 'facilities and services' might be lost to the local community by the introduction of the proposed development which would not be made good by the proposed development itself.
As stated by Stephen J in the High Court decision Kentucky Fried Chicken Pty Ltd v Gantidis (1980) 140 CLR 675 at 687:
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.
That principle is also made clear in cl 6.5 of SPP 4.2 which states 'competition between businesses of itself is not considered a relevant planning consideration'.
In that respect, a real difficulty for the Tribunal in comparing the applicant's RSA prepared by Mr Haratsis with the second and third intervenors' RSA prepared by Mr Ganly is that Mr Haratsis focuses on the impact of the proposed centre as a whole on the other centres, while Mr Ganly focused on the impact of the supermarket only on the other supermarkets.
That issue was first acknowledged by the first and second intervenors in their statement of issues, facts and contentions of 26 July 2017 when they stated:
While the Applicant's RSA has focussed on overall impacts on the existing centres, the real concern to the Second and Third Intervenors is the impact on the anchor tenants of the existing centres caused by the proposal.
The matter was again identified in a letter of instruction dated 6 November 2017 from the second and third intervenors to Mr Thomas, the accountant who gave evidence for the second and third intervenors, when it stated at paragraph 11:
I have asked Mr Ganly how one would compare the data from Haratsis, given that Haratsis focuses on the impact of the centre as a whole while he [Ganly] had focused on the impact on the supermarket offer. He has advised that the impact on specialities is about one-quarter of the impact on the supermarket and has provided me with a figure and a table for you to work with.
In his responsive statement of 10 November 2017 Mr Thomas then addressed that issue and stated and paras 8 and 9:
I also note that Mr Haratsis assess the impact based on a whole of centre scenario, rather than focusing on the impact on the supermarket.
Mr Haratsis' percentage impact is based upon both the supermarket and speciality tenancies. In my opinion and from my experience, the impact on supermarkets is likely to be greater than for the speciality tenancies.
While what Mr Thomas asserts may be correct the difficulty remains for the Tribunal, that when assessing the trade impacts for the purposes outlined in SPP 4.2, the Tribunal must look at the impact across all of the facilities and services in the centres and not just the impact on the supermarkets only.
The Tribunal notes the comment under item 15 on page 5 of the Joint Statement of Expert Witnesses dated 2 November 2017 attributed to Mr Ganly under the initials JG (Justin Ganly) that Mr Ganly 'believes that the success or otherwise of a neighbourhood centre relies on the presence of a trading supermarket'. This contention was also pressed by Counsel for the second and third intervenors in opening when they described the supermarkets 'as the canaries down a coalmine'.
However, such assertions on their own cannot rectify the lack of evidence in respect of the particular services and facilities that it is contended may be lost and not replaced without evidence identifying those facilities and services.
At para 30 of Mr Ganly's responsive witness statement dated 27 October 2017, Mr Ganly set out a table which summarised the possible impacts on the Swan View Darling Ridge and Stratton Park Centres in each of Mr Haratsis' RSAs as follows:

Centre

Original RSA

Original Haratsis statement

Revised Haratsis statement

Swan View

-13.5%

-9.8%

-12.3%

Darling Ridge

-11.4%

-9.1%

-6.6%

Stratton SC

-15.8%

-9.6%

-5.1%

Mr Wallace at para 62 of his original witnesses statement of 11 August 2017 and again at para 56 of his responsive statement of 27 October 2017, helpfully set out the criteria used to measure trading impacts and risks stating:
The criteria below have been adopted across Australia by local and state approval decisionmakers as a guide to assessing new centre and centre development proposals. Within Western Australia, key metropolitan local councils have formulised an internal review process in line with the criteria (e.g. City of Wanneroo).
Those criteria are:

Impact Percentage

Risk Level

Description

0-5%

Low Risk

The risk is low. Any impacts are likely to be temporary in nature and have no lasting effects on the viability of individual Centres.

5-10%

Moderate Risk

The risks are moderate. Impacts are likely to more significant for individual Centres but overall network sustainability is unlikely to be undermined in the long-term.

10-15%

High Risk

The risks are high. Impacts are likely to be very significant for individual Centre and take many years to recover, raising some questions regarding long-term network sustainability.

15%+

Extreme Risk

The risks are extreme. Impacts are likely to be very large for individual Centres, and potentially structurally impact the viability of the Centre in the long-term. Network sustainability is unlikely to be maintained.

As can be seen from that table, all of the risks are measured against the viability of individual centres, not individual supermarkets.
As with the population figures the views of Mr Haratsis and Mr Ganly varied substantially as to the trading impacts and risks, with Mr Haratsis categorising the risk as moderate while Mr Ganly categorised it as extreme but noting that Mr Ganly was looking at supermarkets only.
It must also be noted that the likely impact suggested by both Mr Haratsis and Mr Ganly was also based on their respective projections of the population growth they believed would occur and in all the circumstances for the reasons outlined earlier the Tribunal prefers the evidence of Mr Haratsis and his RSA in that regard.
Looking then at each of the relevant centres that might be affected.

Swan View Shopping Centre

Although this Centre was originally given leave to intervene as the first intervenor and it was that intervenor that originally engaged Mr Ganly, once the supermarket tenant in that Centre renewed its lease, the first intervenor ceased participating and withdrew from the proceedings.
In light of that, the evidence concentrated on by both the respondent and the second and third intervenors related only to Darling Ridge and Stratton Park. The contention that there was a risk of a loss of services and/or facilities at the Swan View Shopping Centre was, in the Tribunal's view, not pressed once the first intervenor withdrew.

Darling Ridge Shopping Centre

Mr Deards, the owner of the IGA supermarket at Darling Ridge which is actually located in the Shire of Mundaring, was the third intervenor in the matter but he himself did not give evidence. The evidence in respect of Darling Ridge came from Mr Ganly and Mr Kenneth Thomas, a chartered accountant who was the accountant for the third intervenor.
The difficulty for the Tribunal is that although both Mr Ganly's and Mr Thomas' view was that due to the current trading conditions of the third intervenor's supermarket, even a minimal impact might make that supermarket business unviable, there was little or no evidence of what impact that may have on other services and facilities in that centre, apart from the supermarket.
While Mr Haratsis' RSA puts the risk to Darling Ridge Centre in the moderate category and although the risk to the supermarket itself, as explained by Mr Thomas may be significant, protection of one supermarket from the competition of another is not a relevant planning consideration for the purposes of SPP 4.2.
Furthermore, due to its location being nearly equidistant between the proposed development and Swan View Shopping Centre it is difficult to see how the loss of supermarket services at Darling Ridge on their own could not be made good by either the proposed development which would be approximately 900 metres away and/or the Swan View Shopping Centre which is also within walking distance of the Darling Ridge Centre.
Although the Tribunal recognises that the loss of a large tenant to a centre could cause the viability of the centre itself to be called into question, due to the lack of evidence in respect of what facilities and services may be lost and not replaced, any findings the Tribunal might make would be based mainly on conjecture which the Tribunal is not prepared to do.

Stratton Park

Although the second intervenor was the owner of the Stratton Park Shopping Centre, as with the Darling Ridge Shopping Centre the only evidence put before the Tribunal in respect of Stratton Park also only related to the IGA Supermarket located there.
Mr Langridge, a Chartered Accountant called on behalf of the applicant concluded that the evidence before the Tribunal in respect of Stratton Park (and indeed Darling Ridge) made available to him, which was in effect the financial statements of the IGA supermarket, did not enable him to properly determine the viability of the existing centres which had a number of tenancies of which no evidence was presented. Unfortunately the Tribunal is in exactly the same position only having before it the financial position of the supermarket tenant at Stratton Park and nothing in respect of the many other tenants within that Centre.
Unlike Darling Ridge, Stratton Park is located in the local authority area of the City of Swan and covered by its Local Commercial and Activity Centres Strategy, which acknowledged as set out earlier that:
The Stratton Park neighbourhood centre is currently the only centre in the Swan View Local Planning Area (LPA). Stratton Park is currently an under-performing centre that will require re-investment in the future if it is going to continue to serve its intended neighbourhood centre role. Concerns for the future role of Stratton Park in its current format exist.
No reasonably (sic) degree of certainty is apparent that Stratton Park will attract the investment required that would make it a strong performing neighbourhood centre serving the surrounding community.
One of the matters listed as a key consideration in the newly adopted Local Commercial and Activity Centres Strategy for any future decision-making regarding the development of a Neighbourhood Centre in the location of the proposed development stated:
The development of additional neighbourhood centre facilities in this location has the potential to impact the level of retail sales at Stratton Park. Without significant re-investment, the future opportunities for Stratton Park to provide a full-range of neighbourhood shopping facilities, including a large full-line supermarket are considered to be limited. Potential exists for an improved provision of retail facilities for the Midvale/Swan View community, notwithstanding any negative trading impacts on Stratton Park.

Reinvestment therefore, has for some time been identified by the local planning authority as necessary in Stratton Park and although there was every opportunity to do so, no evidence was put before the Tribunal of any planned investment there. Indeed, in their closing submissions counsel for the second and third intervenors in respect of the ability to invest stated:
Finally it should be noted that much of the money earmarked for reinvestment by the Second and Third Intervenors, has been expended over the past several years in defending proposals for out-of-centre retail development like this one.
Mr Thomas gave evidence on this point at TS 131 21/11/17
WITNESS, THOMAS: We've talked about capital reserves and one of the capital reserves you need is to replace equipment. And somebody asked the question. I mean, the legal fees that I don't know what Stratton had spent but I'm aware of Stratton in excess of 100,000-odd they've spent each. And that just doesn’t come from anything, so you need to have capital reserves behind you to be able to meet those needs.
MOHARICH, MS: Are you able to explain in greater detail what the legal fees were for?
WITNESS, THOMAS: The legal fees actually, I think they were about four or five years ago in terms of fighting a similar competitive store wanting to open alongside them, which they, at that stage, were successful in achieving a positive outcome on.
The Second and Third Intervenors were the Plaintiffs in Aloi v Shire of Mundaring [2013] WASC 101 and Aloi v Bertola [No 2] [2013] WASC 214, both of which related to a proposed shopping centre similar to the proposed centre in this case, on Morison Road in the Shire of Mundaring.
In the circumstances therefore, the Tribunal is left with a situation that if the present development application is refused, it is likely that the local community will be left with what the local authority described as:
an underperforming centre that will require reinvestment in the future if it is going to continue to service its intended neighbourhood centre role.
without it appearing there is any real hope and/or intention that such investment will be made and the local community will continue to be, again in the words of the City of Swan:
… not currently well-served by full-line supermarket facilities or attractive, well designed neighbourhood centres.

Other centres

In respect of other existing centres namely Midland Gate, Midland Central, Midland Centerpoint and the new recently approved Aldi store, there was no contention of any negative trade impact in respect of those centres that would offend SPP 4.2.

Conclusions in respect of Issue 1

It was agreed by all the parties that economic analysis and RSAs are a complex field and it is often difficult to predict a precise outcome. However, although the Tribunal is of the view that Mr Haratsis' population numbers were at times optimistic, they were in all the circumstances as explained earlier, in the Tribunal's view, closer to the mark than Mr Ganly's.
In respect of the issue of trade impact, the Tribunal is satisfied based on the evidence, that although the impact on both Stratton Park and Darling Ridge may be measured as moderate according to Mr Haratsis' RSA, there is little or no evidence, (other than Mr Haratsis'), that allows the Tribunal to quantify the risk to either Darling Ridge or Stratton Park centres as a whole.
Furthermore, while the Tribunal recognises that the proposed development is likely to impact the level of retail service at Stratton Park, without significant re-investment, which based on the evidence outlined above currently seems unlikely, Stratton Park appears unable to provide the level of service recognised by the City of Swan as required by the local community.
Clearly, the proposed development having a new full-line supermarket will be able to make good any supermarket services that might be lost in a worst case scenario for the supermarket at either Stratton Park or Darling Ridge. However, the lack of evidence in respect of the other facilities and services that may or may not be at risk leaves the Tribunal unable to make any conclusive findings that the trade impacts will be such so as to result in deterioration in the level of service to the community that would not be made good by the proposed development itself.
In all the circumstances therefore, the Tribunal is not satisfied in respect of Issue 1 that the proposed Neighbourhood Centre will adversely impact the viability of the existing centres within the locality and their capacity to provide access and services to the local communities.

Issue 2 - whether, having regard to Issue 1 and the applicable planning framework, the proposed Neighbourhood Centre conflicts with the principles of orderly and proper planning and prejudices the overall development potential of the area.

As referred to earlier, although this matter is a planning application, a significant proportion of the hearing time and the evidence provided was directed towards the impact the proposed development may have on Stratton Park and Darling Ridge.
The relevance of that impact was to be measured against the requirements of SPP 4.2 which the Tribunal has done. However, as outlined earlier it also had to be looked at under the City of Swan Activity Centre Strategy and whether the City of Swan Activity Centre Hierarchy was not undermined.
In relation to the application of policy in planning matters, the Tribunal in Mitchell and City of Subiaco [2008] WASAT 230; (2008) 59 SR (WA) 198, stated at [34]:
… an adopted policy is expected to guide the exercise of discretion not replace discretion. Policy is not to be inflexibly applied. The relevant consideration is why the policy should not be applied: Clive Elliott Jennings and Co Pty Ltd v Western Australian Planning Commission (2002) 122 LGERA 433 at [24][.]
In addition as stated by Pritchard J in Marshall v Metropolitan Redevelopment Authority [2015] WASC 226 at [182]:
… If the exercise of discretion is to be an orderly one, the planning principles identified as relevant to an application should not be lightly departed from without the demonstration of a sound basis for doing so, which basis is itself grounded in planning law or principle[.]
In the circumstances therefore, even if the Tribunal was satisfied (which is it not) that a loss of services and/or facilities may occur which would not be made good by the proposed development, the Tribunal must decide, having regard to the applicable planning framework whether the approval of the proposed neighbourhood centre is consistent with orderly and proper planning.
The two planning experts called by the parties, Mr Allerding and Mr O'Neill in a joint statement dated 8 September 2017 at paras 5 to 7 stated:
Agree that Review Site is referred to in LSP42 but that structure plan details have not been provided over the review site other than reference that the area is 'subject to future planning' and that 'a separate local structure plan is to be prepared over the land designated 'subject to future planning''.
Agree that LSP42 has structure planned the majority of land in the Midvale (West Stratton) area with the exception of only 5 properties (including the Review Site) that are all located south of Woodbridge Creek to Morrison Road.
Agree that within the 5 properties there are already established commercial activities comprising:
•McDonalds Restaurant and drive through;
•7-Eleven Convenience Store and Petrol Station;
•Veterinary Hospital;
•Landscaping Supplies.
Later, under the heading 'Local Commercial and Activity Centres Strategy', Mr Allerding and Mr O'Neill stated at paras 23 to 25:
Agreed with the LCACS Background report, that the area of Midvale within the immediate catchment of the proposed centre, including the adjacent areas of Stratton and Swan View, are not currently well served by neighbourhood centre facilities, and with no full line supermarket and that there is a need to improve the current level of such services. However, there is some disagreement as to how this deficiency might be addressed.
Agreed that the proposed new neighbourhood centre being situated on Morrison Road and adjacent to the entry to the Movida Estate has relatively high exposure, and could be expected to attract a significant level of trade.
Agreed it would also provide more accessible neighbourhood facilities to the southern part of the Farrall Road structure planning area[.]
The Farrall Road Structure Plan covers the subject land and noted it as being 'an area subject to future planning investigation'.
The respondent contended that a new structure plan should be carried out before any development approval such as the one proposed was granted whereas the applicant argued that considerable planning had already taken place and a structure plan was therefore not necessary.
In the Joint Statement of the Planning Experts Mr O'Neill and Mr Allerding dated 8 September 2017 they stated at paragraphs 9, 11 and 12:
The experts disagree as to whether or not a structure plan is required as a pre-requisite to approval of the proposed neighbourhood centre.
…
Mr O'Neill is of the view, that irrespective of any presumption that might be implicit in the discretionary provisions of LPS-17 which enable approval of development in the absence of an approved Structure Plan, the development currently proposed does not satisfy the criteria for waiving or bypassing the structure planning requirements[.]
…
Mr Allerding considers that approval to the proposed centre would not be prejudicial planning outcome or be inconsistent with orderly and proper planning also noting:
…
•Structure planning for the area has already been significantly completed under LSP42 also noting[.]
It was clear that the respondent believed that the preparation of a structure plan was preferable but not mandatory, with counsel for the respondent stating:
.. it is zoned residential development under the relevant City of Swan planning scheme, and that zone is one of those odd zones where you need to do a structure plan before you can do anything, basically. Although we accept there is a discretion afforded to allow development ahead of a structure plan[.]
(ts 28-29, 18 September 2017)
Later in the hearing counsel for the respondent confirmed that discretion was available stating:
we accept that there is a discretion in the [T]ribunal to approve the proposed development. We're not making a submission that it's not legally capable of approval.
(ts 67, 20 November 2017)
What is before the Tribunal therefore is an application in respect of an area of land over which development approval may be granted. The question is should it be granted?
If no other planning for the area had taken place since the Farrall Road Structure Plan then attempting to determine the matter in the absence of a structure plan might prove challenging.
However, one of the more unusual aspects of the current matter is, as outlined earlier, that during the course of the hearing before the Tribunal, the City of Swan, the local authority responsible for planning in the area of the subject site, had at its meeting on 27 September 2017, adopted the new Local Commercial and Activity Centres Strategy which deals in some detail with the area of land where the development is proposed.
In presenting the matter to council under the heading 'Background Report' the reasons for and the outcome of the Local Commercial and Activity Centres Strategy were briefly explained stating:
Since 2004, the strategic policy context with respect to urban development, including activity centres, has changed significantly. State Planning Policy No. 4.2 Activity Centres for Perth and Peel, along with Direction 2031 and associated Sub-regional Strategies guide the planning and development of new activity centres, and the redevelopment and renewal of existing centres, across Perth and Peel.
The economic and commercial context for activity centres policy in the City of Swan is also substantially different to that which applied in 2004 when the current Commercial Centres Strategy was prepared. The rate of population growth in the City of Swan has exceeded the expectations of the current Strategy, and a range of new development pressures are providing challenges for the existing policy framework.
For these reasons, the new Local Commercial Activity Centres Strategy:
•Ensures that activity centres policy complies with the up-to-date strategic land use policy context which applies to Perth and the City of Swan
•Reflects the latest trends and challenges for activity centre planning and development
•Includes up-to-date economic analysis which reflects current expectations of planning and development
•Provides a robust framework for the application of activity centres policy in the City of Swan
•Incorporates the latest feedback and input from the community on the future of activity centres in the City.
When preparing the new Local Commercial and Activity Centres Strategy, the City had also carried out its own RSA (described in its documents as a Retail Needs Assessment) in respect of which they stated:
A Retail Needs Assessment is required under SPP4.2 when the City prepares its Local Planning Strategy (requiring a commercial centre strategic component), Activity Centre Structure Plans and other major commercial development. Accordingly, the City, in 2011, commissioned a city-wide Retail Needs Assessment, also undertaken by Essential Economics. The Retail Needs Assessment uses population projections as the basis to determine future retail needs in the City. This document is seen as a keystone for the creation of a robust policy for activity centres and a vital supporting document to the City's Local Planning Strategy, Activity Centre Structure Plans, and other major commercial developments.
That Retail Needs Assessment (or RSA) dated August 2011 had under the heading 'Future Directions for Swan View' at page 73 stated:
Consider the opportunity for the Stratton Park shopping centre to be redeveloped to incorporate and enhance supermarket and speciality retail presence. This outcome would be justified on the basis of the forecast development at Stratton West and the non-development of a previously identified small neighbourhood activity centre at Jane Brook.
The August 2016 background report to the Local Commercial and Activity Centres Strategy under the heading 'Swan View Local Planning Area' had stated at page 57:
The Stratton Park neighbourhood centre is currently the only centre in the Swan View Local Planning Area, although residents are also partly served by other neighbourhood centres in the adjoining Shire of Mundaring.
Stratton Park is an under-performing centre that will require reinvestment in the future if it is going to continue to serve its intended neighbourhood centre role.
A development application for a small neighbourhood centre in Jane Brook consisting of 2,615m²of retail floorspace is due to expire by mid-2016; however, Council are considering an application to extend the time for construction.
At present, residents in the Swan View Local Planning Area are provided with a limited range and low quality of retailing facilities relative to the expectations of activity centres policy.
As stated above, there was no evidence before the Tribunal of any proposed investment or re-development undertaken or planned at Stratton Park although the approval granted for the new neighbourhood centre at Jane Brook referred to had recently been extended but no other evidence of any intention to proceed with that development was before the Tribunal.
What was confirmed during the course of the hearing however, was that Aldi had obtained planning approval from the City of Swan for a new Aldi store in the Midvale area at the Midland side of Roe Highway. But it was not argued that that approval impacted on any of the neighbourhood centres such as Stratton Park, Swan View or Darling Ridge.
Coming then to the particular area of land for which development approval is sought and the specific comments and recommendations contained in the City of Swan's newly adopted Local Commercial and Activity Centres Strategy relating to that land. It states:
City of Swan has received interest in the development of neighbourhood shopping facilities, in various formats and locations, in the Midvale area (refer Figure 5). At present, this part of Midvale and the adjoining Swan View Local Planning Area (which includes the suburbs of Stratton Park, Swan View and Jane Brook) are not currently well served by full-line supermarket facilities or attractive, welldesigned neighbourhood centres.
The Stratton Park neighbourhood centre is currently the only centre in the Swan View Local Planning Area (LPA). Stratton Park is currently an under-performing centre that will require re-investment in the future if it is going to continue to serve its intended neighbourhood centre role. Concerns for the future role of Stratton Park in its current format exist. No reasonably (sic) degree of certainty is apparent that Stratton Park will attract the investment required that would make it a strong performing neighbourhood centre serving the surrounding community.
Residents in Midvale and the Swan View LP A are also served by neighbourhood centres located in the adjoining Shire of Mundaring, including:
•Swan View SC, which includes a relatively strong performing Coles supermarket.
•Darling Ridge SC, which is a small neighbourhood centre comprising a mid-sized IGA.
In addition, Council recently extended the development approval for a small neighbourhood centre of approximately 2,615m² in Jane Brook.
Therefore, an opportunity exists for the potential development of additional neighbourhood centre facilities in the general location identified in Figures 5 as the 'Midvale Neighbourhood Centre Investigation Area'.
For context and ease of reference, the Tribunal attaches Figure 5 as Annexure A to these reasons and it is noted that in respect of the notations on Figure 5 the Local Commercial and Activity Centres Strategy stated:
The context and recommendations for the future provision of neighbourhood activity centres in Midvale and Swan View LPA are provided in Figure 5.
In that regard, in examining Figure 5 which is headed 'Midvale Neighbourhood Centre Investigation Area Context' it shows the following:
•Towards the centre of the page, a small shaded elliptical area which straddles Roe Highway is identified as 'Midvale Neighbourhood Centre Investigation Area' and underneath it the statement 'consider additional neighbourhood centre facilities'. This is the area where the development the subject of these proceedings is proposed to be located.
•At Stratton Park it notes 'IGA (limited range)' and 'support new investment and/or redevelopment of Stratton Park. This may involve the inclusion of residential uses'.
•At Darling Ridge which is just outside the City of Swan local area in the Shire of Mundaring, states 'IGA (limited range)'.
What the Tribunal is left with therefore is an application for a neighbourhood centre which will include a full-line supermarket in a location where the City of Swan has specifically identified that:
an opportunity exists for the potential development of additional neighbourhood centre facilities in the general location identified in Figure 5 as the Midvale Neighbourhood Centre Investigation Area.
and that:
this part of Midvale and the adjoining Swan View local planning area (which includes the suburbs of Stratton Park, Swan View and Jane Brook) are not currently well served by full-line supermarket facilities or attractive, well designed neighbourhood centres.
Importantly, the Local Commercial and Activity Centres Strategy also helpfully sets out key considerations for any future decision-making regarding the development of a neighbourhood centre in the proposed location stating:
The following provides an overview of the key considerations for any future decision-making regarding the development of a neighbourhood centre in this location.

The first key consideration was:
1The development of additional neighbourhood centre facilities in this location has the potential to impact the level of retail sales at Stratton Park. Without significant re-investment, the future opportunities for Stratton Park to provide a full-range of neighbourhood shopping facilities, including a large full-line supermarket are considered to be limited. Potential exists for an improved provision of retail facilities for the Midvale/Swan View community, notwithstanding any negative trading impacts on Stratton Park.
The Tribunal earlier set out its views in respect of the likely impact on Stratton Park and the lack of evidence of any proposed investment in Stratton Park. This first key consideration has therefore been taken into account by the Tribunal in coming to its decision in this matter.
The second key consideration was:
2Should the development of additional neighbourhood centre facilities in Midvale proceed, an opportunity may exist for the redevelopment of Stratton Park to include residential uses, and potentially a reduction in retail floorspace. This would be effectively a 'down-sizing' in the retail role of the centre but could result in a more sustainable role and function.
Again, the Tribunal in making its decision recognises the possibility of the downsizing of Stratton Park and is of the view that it is not in itself an unacceptable planning outcome.
The third key consideration is stated as being:
3Consideration of the level of access to existing and future residents in Midvale and the Swan View LPA needs to be a key consideration in the future location of a neighbourhood centre in Midvale.
In respect of the accessibility of the proposed development, the planners at para 24 of their Joint Statement dated 8 September 2017 stated:
Agreed that the proposed new neighbourhood centre being situated on Morrison Road and adjacent to the entry to the Movida Estate has relatively high exposure, and could be expected to attract a significant level of trade.
Furthermore, Mr Allerding when commenting on the liveable neighbourhoods policy stated:
However with respect to principles of accessibility, Mr Allerding noted the centres position was highly accessible and ideally placed to take advantage of its position adjacent to the Movida estate which is the most significant residential growth area identified in the Midvale area noting:
•It is equidistant between the Stratton Park Centre to residential development within LSP42[.]
The fourth and final key consideration outlined in the Local Commercial and Activity Centres Strategy for the proposed land was:
4The development of any new neighbourhood centre in the 'Midvale Neighbourhood Centre Investigation Area' needs to be supported by a valid Retail Needs and Sustainability Assessment, ensuring any development does not undermine the City of Swan Activity Centre Hierarchy.
The Tribunal notes that both the respondent and the second and third intervenors submitted that the activity centre hierarchy referred to, did not just mean a linier approach in respect of, for example a neighbourhood centre becoming so big as to challenge a district centre, they argued that the network of neighbourhood centres themselves was something that needed to be considered.
However, the City of Swan itself, in its newly adopted Local Commercial and Activity Centres Strategy under the heading 'CentreSpecific Directions and Actions' had specifically stated in respect of the Midvale Neighbourhood Centre Investigation Area where the proposed centre is to be located:
Midvale Neighbourhood Centre Investigation Area: Currently, residents in the Swan View Local Planning Area (which includes Jane Brook, Stratton Park and future residents in the Farrall Road Structure Plan Area) are under-serviced in regard to the provision of quality neighbourhood centres, in particular, the provision of a full-line supermarket. Potential exists for the development of additional neighbourhood centre facilities in the Midvale Neighbourhood Centre Investigation Area in order to improve access to major supermarket facilities for nearby residents. Actions:
- Consider opportunities for neighbourhood centre development in the Midvale Neighbourhood Centre Investigation Area. Any future development should be supported by a Retail Needs and Sustainability Assessment that ensures the City of Swan Activity Centre Hierarchy is not undermined.
In the present case, an RSA as required by the fourth key consideration and the 'action' just outlined, has been undertaken which does not in the Tribunal's view, support a contention that the City of Swan Activity Centre Hierarchy would be undermined.

Conclusions in respect of Issue 2

Therefore, in light of the specific commentary in respect of the Midvale Neighbourhood Centre Investigation Area and the Stratton Park and Jane Brook areas, contained in the City of Swan's newly adopted Local Commercial and Activity Centres Strategy, the Tribunal is not of the view that a further structure plan is required prior to development approval and is satisfied that:
(a)the proposed development does not conflict with the principles of ordinary and proper planning; and
(b)the proposed development would not prejudice the overall development potential of the area.
In the circumstances, based on the Tribunal's findings in respect of Issue 1 and Issue 2 above and all of the evidence before it, the Tribunal is of the view, having regard to all of the relevant planning framework and the facts of the present case, that approval of the proposed development is the correct and preferable decision.
The Tribunal will therefore set aside the decision of the respondent dated 8 May 2017 and approve the proposed development subject to conditions.

Conditions

In the Tribunal, in order to deal with matters at the one hearing, parties normally file with the Tribunal (which they did in this case) draft conditions that might be imposed if the development is approved. The Tribunal then decides which conditions are appropriate to be imposed if approval is granted.
However, in the circumstances of the current case, due to the time involved in hearing the matter and the amount of evidence before the Tribunal, the parties submitted and the Tribunal agreed that should the Tribunal grant approval for the development, the parties should be allowed time to concur in respect of appropriate conditions and put forward a new set of draft conditions.
If those conditions can be agreed between the parties and the Tribunal is satisfied based on what will be filed, there may be no need for any further hearing in the matter.
However, if the parties cannot agree and wish to have a short oral hearing, an application may be made.

Orders

1.The decision of the respondent dated 8 May 2017 is set aside.
2.The development application for a proposed neighbourhood centre on land at Lot 357 (227) Morrison Road, Midvale which was before the respondent at its meeting of 8 May 2017 is approved subject to conditions to be agreed or determined by this Tribunal.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR M SPILLANE, SENIOR MEMBER
12 SEPTEMBER 2018

Annexure A

Centre	Original RSA	Original Haratsis statement	Revised Haratsis statement
Swan View	-13.5%	-9.8%	-12.3%
Darling Ridge	-11.4%	-9.1%	-6.6%
Stratton SC	-15.8%	-9.6%	-5.1%

Impact Percentage	Risk Level	Description
0-5%	Low Risk	The risk is low. Any impacts are likely to be temporary in nature and have no lasting effects on the viability of individual Centres.
5-10%	Moderate Risk	The risks are moderate. Impacts are likely to more significant for individual Centres but overall network sustainability is unlikely to be undermined in the long-term.
10-15%	High Risk	The risks are high. Impacts are likely to be very significant for individual Centre and take many years to recover, raising some questions regarding long-term network sustainability.
15%+	Extreme Risk	The risks are extreme. Impacts are likely to be very large for individual Centres, and potentially structurally impact the viability of the Centre in the long-term. Network sustainability is unlikely to be maintained.