Kennedy Holdings WA Pty Ltd and City Of Subiaco

[2015] WASAT 34

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: PLANNING AND DEVELOPMENT ACT 2005 (WA)

CITATION:   KENNEDY HOLDINGS WA PTY LTD and CITY OF SUBIACO [2015] WASAT 34

MEMBER:   MS L EDDY (MEMBER)

HEARD:   16 DECEMBER 2014

DELIVERED          :   30 MARCH 2015

FILE NO/S:   DR 243 of 2014

BETWEEN:   KENNEDY HOLDINGS WA PTY LTD

First Applicant

JCO INVESTMENTS PTY LTD
Second Applicant

AND

CITY OF SUBIACO
Respondent

Catchwords:

Town Planning ­ Development Application ­ Change of use ­ Existing non­conforming use ­ Preliminary issue ­ Whether proposed development is capable of approval under town planning scheme ­ Existing non­conforming use in part of building ­ Whether scheme allows approval of same use in remainder of building ­ Meaning of cl 15(2) of City of Subiaco Town Planning Scheme No 4

Legislation:

City of Subiaco Town Planning Scheme No 1
City of Subiaco Town Planning Scheme No 3
City of Subiaco Town Planning Scheme No 4, cl 12, cl 12(2), cl 14(2), cl 14(6), cl 15, cl 15(1), cl 15(2), Pt 2
Environmental Planning and Assessment Act 1979 (NSW), s 107, s 107(1), s 107(2)
Environmental Planning and Assessment Regulation 2000 (NSW), cl 42
Interpretation Act 1984 (WA), s 18
Planning and Development Act 2005 (WA), s 252(2)

Result:

Preliminary question of whether proposed development is capable of approval under City of Subiaco Town Planning Scheme No 4 answered 'Yes'

Summary of Tribunal's decision:

This was a matter in which the Tribunal determined that the issue of whether the proposed development is capable of approval under the City of Subiaco Town Planning Scheme No 4 should be determined as a preliminary issue.  The development application concerned a request to extend a non­conforming use that existed on the ground floor of a two storey building to the upper floor of the building.  There was no dispute that the existing non­conforming use right was limited to the ground floor of the building.  The relevant Scheme provision provided that 'no further development of the relevant land or building is to be carried out without development approval'.  The Tribunal found that the 'relevant land or building' in this case was the ground floor of the building located on the site.  It also determined that there was nothing in the Scheme that necessarily prevented approval of 'further development' that involved an extension or enlargement of the non­conforming use to other parts of the building or the site.  Therefore, the applicants' request for development approval must be determined on its merits, applying all the relevant factors identified under the Scheme and any other relevant legislative instrument or policy.

Category:    B

Representation:

Counsel:

First Applicant             :     Mr M Hardy

Second Applicant         :     Mr M Hardy

Respondent:     Mr C Slarke

Solicitors:

First Applicant             :     Hardy Bowen

Second Applicant         :     Hardy Bowen

Respondent:     McLeods

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

Lemworth Pty Limited v Liverpool City Council (2001) NSWLR 371

REASONS FOR DECISION OF THE TRIBUNAL: 

Introduction

1. On 16 July 2014, Kennedy Holdings WA Pty Ltd and JCO Investments Pty Ltd (applicants) requested planning approval from the City of Subiaco (respondent or City) to use the upper level of a two storey building located at No 34 Bagot Road, Subiaco (site) as an office. On 9 September 2014, the respondent refused to grant approval for the proposed change of use of the upper level of the building. On 7 October 2014, the applicants lodged an application with the Tribunal pursuant to s 252(2) of the Planning and Development Act 2005 (WA) (PD Act) seeking review of the respondent's decision to refuse planning approval.

2. At the first directions hearing in the Tribunal, the Tribunal ordered that the issue of whether the proposed development is capable of approval under the City of Subiaco Town Planning Scheme No 4 (TPS 4 or Scheme) was to be determined as a preliminary issue.  The hearing of the preliminary issue occurred on 16 December 2014 and, after hearing from representatives of the parties, the decision on the preliminary issue was reserved.  These are the reasons for decision on the preliminary issue.

Facts relevant to the preliminary issue

1. For the purposes of determination of the preliminary issue, the parties filed a document described as 'Agreed Statement of Facts' and a further bundle of documents described as 'Agreed Bundle of Documents in relation to the Preliminary Issue'.  The following recitation of the relevant facts has been compiled from those documents and also incorporates relevant provisions of TPS 4.

2. Pursuant to TPS 4, the site is zoned Residential.  Under the zoning table contained in Pt 2 of TPS 4, premises for an office on land within a residential zone is a 'X(4)' use.  'X' in the zoning table means 'a use that is not permitted by the Scheme': cl 14(2) of TPS 4.  Clause 14(6) of TPS 4 further indicates that 'X(4)' means:

   Council may consider the above as a 'SA' use only in respect of land and buildings registered on the City's register of Places of Cultural Heritage Significance as per Clause 58 of the Scheme.  'X' use in respect of all other land and buildings.

3. There is no suggestion that the site or the building on the site is a 'Place of Cultural Heritage Significance' under TPS 4.   Therefore, use of the site, or the building on the site, as an office is not permitted under the current Scheme.  However, the ground floor of the building on the site has existing non‑conforming use rights for use as an office.  The history of the building that led to this result is as follows.

4. In 1970, approval was granted by what was then the 'Municipality of the City of Subiaco' to construct a two storey building on the site.  That building was approved for use as a dental surgery on the ground floor and for residential use on the upper floor.  In January 1976, the City of Subiaco Town Planning Scheme No 1 (TPS 1) was gazetted.  The site was zoned Residential R30 under TPS 1, and under this zoning, the use of the ground floor as a dental surgery was not a use permitted by TPS 1, except with special consent of the City.  The non‑conforming use provisions of TPS 1, however, provided that the existing use of the ground floor of the building on the site was, nonetheless, lawful.

5. At the time of the gazettal of the City of Subiaco Town Planning Scheme No 3 (TPS 3) in March 1984, the ground floor of the building on the site was still being used as a dental surgery.  In April 1987, an application for development approval to change the use of the existing two storey building on the site from 'a dental surgery/residence' to an office was submitted to the City.  The City refused this application.  In July 1987, an amended development application was submitted to the City requesting approval to use the ground floor for office purposes, with the upper floor being retained for use for residential purposes.  On 28 July 1987, the City approved the application for a change of use of the building from 'residential/dental surgery' to 'residential/office'.  A further application for approval to change the use of the building from 'office/residence' to 'office' made in 1997 was refused by the City.

6. The ground floor of the building on the site has continued to be lawfully used as an office, and its non‑conforming use rights were maintained when TPS 4 was gazetted in March 2001.  The parties agree that the existing non‑conforming use right relates only to the use of the ground floor of the building on the site as an office.  The applicants therefore sought approval, pursuant to cl 15(2) of TPS 4, to extend the non‑conforming office use to the upper floor of the building.

Does TPS 4 provide discretion to approve extension of the existing non‑conforming office use?

1. The provisions of TPS 4 relating to non‑conforming uses are found in cl 15, which provides:

   (1)Nothing in this Scheme is to prevent:

   (a)the continued use of any land or building for a non‑conforming use; or

   (b) the carrying out of any development for which development approval was obtained before the gazettal date.

   (2)Where a non‑conforming use exists, no further development of the relevant land or building is to be carried out without development approval.

   (3)The Council may terminate a non‑conforming use by purchasing or compulsorily acquiring the relevant land in accordance with the Act.

   (4)If any land or building is, at the gazettal date, being used for a non‑conforming use and:

   (a)the non‑conforming use ceases for at least six consecutive months; or

   (b)the building is destroyed or damaged to the extent of at least 75% of its value;

   then the land or building shall not thereafter be used otherwise than in conformity with the Scheme.

   (5)Notwithstanding any other provision of this Scheme, the Council may grant development approval to the change of use of land from a non‑conforming use to any other use, including a use which is not otherwise permitted by this Scheme, if the Council is satisfied that the proposed use:

   (a)is less detrimental to the amenity of the locality than the non-conforming use; and

   (b)is closer in nature to the preferred uses of the zone or reserve in which the land is situated.

   NOTE:  1.        A 'non‑conforming use' and 'gazettal date' are defined in Schedule 1.

   2.The reference to the 'Act' is to the Town Planning and Development Act 1928, section 13 of which enables a council to purchase or, with the consent of the Governor, take compulsorily, subject to the Land Acquisition and Public Works Act 1902, any land within a town planning scheme.

   3.The Council under Part 4 grants development approval.

   It is also relevant to note that cl 12(2) of TPS 4 provides:

   In this Scheme, unless the contrary intention appears, a reference to:

   (a) land, includes part of the land;

   (b) premises, includes part of the premises; and

   (c)a building, includes part of the building.

The respondent's argument

1. The respondent submits that cl 15(2) of TPS 4 permits the possibility of extending a non‑conforming use only within that part of the land or building that could be regarded as already being used or held for the purpose of the existing non‑conforming use.  In support of this submission, the respondent refers to the reasoning of Stein and Hodgson JJA in Lemworth Pty Limited v Liverpool City Council (2001) NSWLR 371 (Lemworth) at [24] ‑ [44] and [71] respectively, which, it says, should be strongly persuasive. In that case, the applicant had obtained, in 1997, approval to use the first floor of a two storey commercial building as a brothel. Some months later, a local environmental plan came into effect, and under that plan, a brothel was a prohibited use. However, the existing approval to use the first floor of the building as a brothel was preserved. In 2000, the applicant lodged a request for approval to use the ground floor of the premises as a brothel and a shop.

2. The relevant provision under consideration in Lemworth (cl 42 of the Environmental Planning and Assessment Regulation 2000 (NSW) (EPA Regulation) required consent to be obtained for any enlargement, expansion or intensification of an existing use (it is noted that the term 'existing use' has, in the relevant NSW legislation, a meaning similar to what in this jurisdiction is referred to as a 'non‑conforming use'). However, the enlargement, expansion or intensifications possible were limited in that they 'must be carried out only on the land on which the existing use was carried out immediately before the relevant date' (see Lemworth at [10]). The issue to be determined in that case was, therefore, what was the 'land' on which the existing use was carried out. The majority concluded that the 'land', or planning unit, in question was the first floor of the building, subject to any future determination that the ground floor, or part of it, was being held in reserve for the existing use of a brothel (Lemworth at [45] ‑ [51] per Stein JA, [68] ‑ [74] per Hodgson JA). It is the reasoning that leads to identification of the relevant planning unit in determining the 'land' on which expansion or enlargement may take place that is relied upon by the respondent.

3. The respondent submits that the applicants' development proposal contemplates extension of the non‑conforming use to a part of the building that does not have any existing non‑conforming use rights.  It says that the ground floor is a separate planning unit from the first floor.  It is submitted that, to read cl 15(2) of TPS 4 as allowing such an outcome, is inconsistent with the intent of the relevant provisions of the Scheme.  The respondent submits that regard has to be had to the apparent purpose here because cl 15(2) is ambiguous as to its correct meaning (relying on s 18 of the Interpretation Act 1984 (WA) (Interpretation Act)).

4. The respondent accepts that a liberal approach is generally taken to the characterisation of existing use rights, but says that provisions which allow for the possibility of extending those rights do not allow the untrammelled right to develop land so as to expand the non‑conforming use.  The respondent asserts that cl 15(2) of the Scheme needs to be read having regard to the notion that non‑conforming uses do not represent the goals of the planning framework, and the overarching planning intention is to remove such uses over time, rather than entrench them.  This submission was further developed as follows.

5. There are two underlying principles involved when considering non‑conforming uses in the planning context.  The first principle is that of fairness to the landowner.  Applying this principle, provisions designed to preserve rights should be construed liberally.  That principle, it was submitted, applies to clause 15(1) of TPS 4.   The second, competing, principle is that non‑conforming uses no longer represent the desired use of land and, over time, the use should be shepherded towards compliance.  The respondent submits that this principle underpins the remaining parts of cl 15 of TPS 4.

6. Having regard to that principle, the respondent submits that cl 15(2) of TPS 4 does not provide any power to extend a non‑conforming use.  The respondent submits that, literally read, it is a prohibiting provision which does not allow further development except if approved.  The respondent accepts that this clause does incorporate an implicit power to approve some development.  The respondent says, however, that the provision allows further development only in relation to the land, or, relevantly for this case, the part of land that has existing non‑conforming use rights.

7. Given that the parties agree that the current non‑conforming use extends only to the ground floor of the building at the site, the respondent asserts that the Scheme does not provide any discretion for the applicants' development proposal to be approved because that proposal relates to a different part of the land than the part that has the non‑conforming use right.

The applicants' argument

1. The applicants submit that for the proper determination of the preliminary issue, it is necessary to focus on the language of the relevant parts of cl 15 of TPS 4.  They say that there is no uncertainty or ambiguity in that language that brings forth the need to ascertain the apparent purpose of the provisions pursuant to s 18 of the Interpretation Act.  The applicants further submit that, on its terms, cl 15(2) of TPS 4 contemplates approval of 'further development'.  This is a term of plain and potentially wide meaning, and nothing in the terms of cl 15(1) or cl 15(2) of TPS 4 (or, indeed, elsewhere in TPS 4) prevents 'further development' from including enlargement or extension of a non‑conforming use.

2. In cl 15(2) of TPS 4, the reference to further development is linked to the 'relevant land or building'.  The applicants submit that the question of what is meant by the 'relevant land or building' is what led the respondent to its planning unit argument and the reliance on the dicta in the Lemworth case.  The applicants submit that the respondent is wrong in relying on this argument, as the concept of the planning unit finds no place in the determination of this matter.  They say that cl 15 of TPS 4 must be read having regard to cl 12 of TPS 4, which provides for identification of the relevant land or building, or part thereof, without need to refer to any concept of the planning unit.

3. The applicants submit that reading cl 15 and cl 12 of TPS 4 together, further development of the 'relevant land', in this case, refers to further development of the ground floor of the building located on the site.  They say that there is nothing in the language of any of the relevant provisions that leads to the conclusion that 'further development' of the ground floor of the building cannot include extension or enlargement of the non‑conforming use into the upper floor of the building or over other parts of the land.

4. The applicants submit that the dicta in Lemworth relied on by the respondent is of no assistance to the Tribunal in determining this matter because the relevant statutory provisions being considered in that case are substantially different to the provisions of TPS 4. The question of whether cl 42 of the EPA Regulation would permit expansion or intensification of the existing use was significantly affected by the terms of s 107 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). Sections 107(1) and 107(2) of the EPA Act provide:

   (1)Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use.

   (2)Nothing in subsection (1) authorises:

   …

   (b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned[.]

   The applicants say that there is no similar expression of prohibition on the extension or enlargement of a non‑conforming use in TPS 4 and it is not appropriate to imply any such restriction.

5. The applicants do not take issue with the respondent's statement of the competing principles that apply in relation to non‑conforming uses.  However, they do take issue with the respondent's interpretation with how the balance of those principles affects the interpretation of cl 15(2) of TPS 4.  The applicants submit that any limitation or reduction in the ability to further develop land or a building where a non‑conforming use right exists should not be found unless there are clear words to that effect, and there are no such words in TPS 4.

6. The applicants submit that cl 15(2) of TPS 4 is analogous to the relevant model scheme text provision, being simply a shortened or condensed version of it.  Clause 4.9.1 of the model scheme text provides that:

   A person must not ‑

   (a)alter or extend a non‑conforming use;

   (b)erect, alter or extend a building used in conjunction with or in furtherance of a non-conforming use; or

   (c)change the use of land from a non-conforming use to another non‑conforming use,

   without first having applied for and obtained planning approval under the Scheme.

   The applicant submits that both the model scheme text provision and cl 15(2) of TPS 4 simply provide that any development of land with a non‑conforming use right, whether that be to alter, extend, or change the non‑conforming use or a building used in conjunction with such a use, requires planning approval.

Determination

1. I accept the applicants' submission that some care must be taken in relying on the reasoning in Lemworth when considering cl 15 of TPS 4. The express prohibition on extending or enlarging an existing use found in s 107 of the EPA Act is the prism through which the terms of cl 42 of the EPA Regulation must be understood. The 'land' in question in that clause had to be understood in a restricted sense ‑ that is, including only the planning unit that was being used for the existing use ‑ in order for the regulation to come within the express restriction imposed by the Act.

1. I am not persuaded by the applicants' argument that the concept of the 'planning unit' as used in Lemworth has no relevance to cl 15 of TPS 4.   In order to understand what is the 'relevant land or building' being referred to in cl 15(2) of TPS 4, it may be necessary, in some cases, to have regard to that concept in order to ascertain, on the facts, what is the planning unit concerned.  While cl 12 of TPS 4 makes it clear that land or building can include part of either of those things, this will not necessarily always be sufficient to determine what is, in the particular case, the 'relevant land or building' for the purposes of cl 15(2) of TPS 4.  However, in this case, there is no dispute as to what is the 'relevant land or building', or the planning unit, under consideration.  Both parties agree that the 'relevant land or building' on which the non‑conforming use exists is the ground floor of the building on the site.

2. As there is no dispute on this point, the central issue in determining the preliminary question is whether further development can occur outside of the physical limitations of what is identified as the 'relevant land or building' or any further area that, on the facts, may be established or have been held in reserve for that use.  The respondent says that the answer to this is found in the balance of the competing objectives in relation to non‑conforming uses.  There is a certain attraction to the respondent's argument; however, ultimately, I am not persuaded it is correct. 

3. The plain words of cl 15(2) of TPS 4 allow 'further development'.  There is no provision in TPS 4 limiting 'further development' to exclude expansion or enlargement of the non‑conforming use.  Rather, TPS 4 defines the term 'development' by reference to the definition in the PD Act, which is a very broad provision.  Ordinarily, the term 'development' includes these notions.  The respondent's interpretation of cl 15(2) of TPS 4 would have the effect of preventing, in any case except where there is, on the facts, some additional area of the land or building that is being held in reserve for the non‑conforming use, any enlargement of expansion of a non‑conforming use.  As I have said already, there is an attraction to the idea that TPS 4 does, in fact, restrict 'further development' of a non‑conforming use in this way so as to shepherd the use of the land towards future compliance with TPS 4.  However, it is going too far to find, because of that attraction, that it was intended for cl 15(2) of TPS 4 to exclude any expansion or enlargement of a non‑conforming use when the words used in TPS 4 simply do not indicate any such intention.

4. It may be that, in the majority of cases, it will be very difficult to persuade the decision‑maker that an expansion or enlargement of a non‑conforming use is, on the merits of the application, development that should be approved, but that is a matter for consideration on the merits of each case.

Conclusion

1. The answer to the preliminary question of whether the proposed development is capable of approval under TPS 4 is 'Yes'.

Orders

1. The Tribunal therefore orders that:

   1.The application is listed for a further directions hearing to commence at 12 pm on 24 April 2015 in order to make orders necessary to progress the matter.

I certify that this and the preceding [29] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MS L EDDY, MEMBER