Kipa Freeholds & Anor v Dev Assess Comm & Anor No. Scgrg-98-1429 Judgment No. S53
[1999] SASC 53
•19 February 1999
KIPA FREEHOLDS PTY LTD & NORMANDY PTY LTD v DEVELOPMENT ASSESSMENT COMMISSION AND McKENZIE CONSTRUCTIONS PTY LTD
[1999] SASC 53
Land and Valuation Division
DEBELLE J. Application for judicial review.
On 8 September 1998 the Development Assessment Commission (“the Commission”) granted provisional Development Plan consent to the defendant McKenzie Constructions Pty Ltd (“McKenzie Constructions”) to construct a large entertainment complex on Montague Road, Modbury. McKenzie Constructions intend that the complex will form part of a regional centre at Modbury. The plaintiffs allege that there has been a failure to comply with procedures prescribed by the Development Act 1993 (‘the Act”) so that the consent is invalid. They therefore bring this application for judicial review seeking a declaration and other orders to set aside the grant of development consent. They also seek an injunction restraining McKenzie Constructions from proceeding to construct the development. As yet no building work has commenced. The application for an injunction has not been prosecuted so far.
The protagonists in this application were the plaintiffs and McKenzie Constructions. The Commission had stated that it would abide the order of the Court.
The plaintiff, Kipa Freeholds Pty Ltd, is one of the registered proprietors of the land at Modbury on which the Modbury Hotel is erected. The plaintiff Normandy Pty Ltd is a lessee of the hotel and it holds a hotel licence under the Liquor Licensing Act, 1997. The Modbury Hotel is very close to the regional centre and to all intents and purposes forms part of it. It is about two hundred metres from the proposed entertainment complex.
The land on which this development is to be constructed forms part of the regional centre at Modbury and as such forms part of the Regional Centre Zone as prescribed by the Development Plan for the area of the City of Tea Tree Gully. The regional centre includes the Tea Tree Gully Civic Centre, the Tea Tree Plaza development and the Tea Tree Plus Shopping Centre.
When McKenzie Constructions first lodged its application, the intended development was not limited to an entertainment complex. It then included an office complex to be constructed as an extension to existing offices. The application described the development as “proposed entertainment complex and office extension”. The application is dated 16 August 1997 but it seems was not lodged until 17 April 1998. Nothing turns on these dates.
The proposed office area was an extension of the existing offices of Tea Tree Gully Council Civic Centre. Its area was to be 983 square metres. The proposed entertainment complex is a large multi-purpose facility. It comprises a basement for storage, two floors and a mezzanine area. The ground floor will contain a facility with bars, dining area, a liquor store and drive-through bottle department. An application has been made to the Liquor Licensing Court for a hotel licence for this facility. The first floor will comprise a night club, cocktail bar and pool hall. It is intended to develop the mezzanine as a kind of club, which will form part of the hotel premises and provide admission to members only. The total floor area of the whole of the entertainment complex will be 2177 square metres.
The subject land is owned by the Corporation of the City of Tea Tree Gully (“the Council”). The Council has contracted to sell the land to McKenzie Constructions. Because the development included the construction of an office, the Council was precluded from determining the application and the Commission was the relevant planning authority: see s34(1)(b)(1) of the Development Act 1993 and reg38(1a) of the Development Regulations 1993.
The Commission classified the proposal as a Category 2 development and gave notice of the application pursuant to s38 of the Development Act. The plaintiffs were given notice of the application. They and others lodged representations opposing the proposed development.
At some unspecified date after the Commission had given notice pursuant to s38 and before the Commission had first met to consider the application on 14 July 1998, McKenzie Constructions amended the proposal by deleting the proposed office extension. Some reasons have been suggested for this amendment but it is unnecessary to examine them. It is sufficient to note that the amendment was made. Notice of the amendment was not given to the plaintiffs or to others who had lodged representations.
The application was first considered by the Commission at its meeting on 14 July 1998. At that meeting the Commission heard the plaintiffs and others who had lodged representations opposing the proposed development. Consideration of the application was adjourned to the Commission’s meeting on 11 August 1998 when it was again adjourned to 8 September 1998. At the meeting on 8 September the Commission granted development consent.
On 2 September 1998 the Commission received from McKenzie Constructions another set of amended plans of the proposal. The Commission did not inform the plaintiffs of these amended plans. These amendments concern traffic circulation around the drive-through bottle shop and the car park. There were no alterations to the proposed building. Nothing turns on these last amendments.
The plaintiffs challenge the grant of development consent on seven grounds. It is convenient to deal with each in turn.
A Non-Complying Development
The first ground is that the provisions of the Development Plan for this area have the effect that this development application was for a non-complying development. The question whether this development is a non-complying development affects, among other things, the process of public notice and consultation. It is necessary to have regard to Principle 46 of the Principles of Development Control for the Regional Centre Zone which provides that on land adjoining Civic Park an “office with a total floor area greater than 1000 square metres in any one development” is a non-complying development. The subject land adjoins Civic Park. The development as originally proposed included an office containing 983 square metres. It was to be added to the existing offices in the Civic Centre which are occupied by the Council and contain some 2150 square metres. The plaintiffs submit that the office area proposed by McKenzie Constructions should be added to the existing office area with a consequence that the development will be for an area in excess of 1000 square metres and, as such, contrary to Principle 46.
The issue turns on what is meant by the expression “any one development” in Principle 46. The word “development” is defined in s4 of the Act and includes several matters pertaining to the use of land and construction of buildings. For present purposes, it is sufficient to note that it includes building work or a change in the use of land. Unless any contrary intention appears, that definition applies to expressions used in the Development Plan: s5(1) of the Act.
Paragraph (b) of Principle 46 lists four kinds of development on land adjoining Civic Park which are non-complying developments. They are expressed in these terms:
“(i) development on a site less than 2000 square metres in area
(ii) consulting rooms
(iii).. office with a total floor area greater than 1000 square metres in any one development
(iv)... shop with a total floor area greater than 1000 square metres in any one development.”
It is apparent that the word “development” is used in more than one sense in paragraph (b). In sub-para (i) it means building work and, perhaps, other definitions of “development” in s4 of the Act. But, for the reasons which follow, it is not used in the same way in sub-paras (iii) and (iv). The word “development” means that which is being developed. It is commonly used to refer to a complex which is being constructed: see Macquarie Dictionary. So, a person pointing to a new building might describe it as “a new development”. In my view, that is the manner in which “development” is being used in sub-paras (iii) and (iv) of Principle 46(b). The intention is to limit the amount of the floor area of an office or a shop in any one development or complex to 1000 square metres so that, if it is proposed to construct or develop an office or shop with a larger area, the proposal would have to undergo the process of public notice and consultation prescribed by the Development Act. The word is used in a manner which is different from its statutory definition. If the position were otherwise, a developer seeking to avoid the constraints of Principle 46 could develop an office complex or a shopping complex in stages and thereby avoid the process of public notice and consultation.
The Tea Tree Gully Council Civic Centre contains a large office complex. The proposed office extension involves the addition of 983 square metres of office space to the existing Civic Centre, that is to say, to the existing development. It would result in an office development containing more than 1000 square metres. The proposed office extension is, therefore, a non-complying development within the meaning of Principle 46. In these circumstances, it was not possible for the Commission to grant development consent unless both the Minister and the Council concurred in the granting of the consent. The Commission failed to obtain the concurrence of either. The consent is, therefore, invalid.
Which Category of Development?
The second ground relied on by the plaintiffs is that the Commission erred in determining that this was a Category 2 development. The plaintiffs say that it is a Category 3 development. This ground is very much related to the previous ground. It is common ground that, if the development was a non-complying development, it is a Category 3 development, but if it is not a non-complying development, it is a Category 2 development. As this is a non-complying development, the Commission ought to have determined that this was a Category 3 development.
A Variation of the Application?
The next ground on which the plaintiffs rely is that the amendment to delete the intended office area changed the essential nature of the development with the consequence that the Commission should not have permitted the amendment and should not have proceeded to determine whether consent should be granted to the amended application. Section 39(4)(a) of the Development Act authorises a planning authority to permit an applicant to vary the application or to vary the plans accompanying the application. It provides:
“A relevant authority may -
(a) permit an applicant -
(i) to vary an application;
......... (ii) to vary any plans, drawings, specifications or other
documents that accompanied an application,
(provided that the essential nature of the proposed development is not changed).”
Regulation 20(3) of the Development Regulations authorises a planning authority to consider the application without further public notice if it considers the variations are not substantial. It provides:
“(3) If an application is varied following referral under Part 5 or giving of notice under Part 6, the relevant authority may, if it is of the opinion that the variations are not substantial, consider the application without the need to repeat an action otherwise required under Part 5 or 6.”
The wording in the Regulation cannot alter or dilute the proper interpretation of s39(4). If the word “substantial” means something different from the expression “the essential nature of the proposed development” in s39(4), Regulation 20 may be ultra vires. But there is no need in this case to stay with that issue.
This application was for a development comprising “an entertainment complex and office extension”. That is how it is described in the application and that is what was depicted in the plans which accompanied the application. The office extension was quite substantial. It comprised 983 square metres.
The epithet “essential” refers to that which constitutes the essence of a thing: see Macquarie Dictionary and Oxford English Dictionary. Given that the proposed office development was so substantial, the amendment to delete it altered the essence of the proposal from an entertainment complex and office extension to an entertainment complex. It was, in short, an application for a different kind of development. Another criterion by which the matter might be tested is whether the amended development is substantially the same proposal. In no sense could it be so described. It was no longer an entertainment complex with a substantial component of 983 square metres of office space attached to it but simply an entertainment complex. One indication of the substantial effect of the deletion of the proposed office extension was that the development was no longer a non-complying development.
Mr Costello, who appeared for McKenzie Constructions, submitted that the deletion of the office extension did not materially alter the visual impact of the proposal so that the amendment did not change the essential nature of the proposed development. The argument misconceives the effect of s39(4)(a). The essential nature of the proposal is not necessarily to be determined by what might be its visual effect. In most cases, it will be determined by inspection of the plans of the proposal, consideration of the nature of the development, and consideration of the magnitude and nature of the amendment. In that way, it will be possible to determine whether it is essentially the same proposal or some tertium quid.
For these reasons, the Commission erred in permitting McKenzie Developments to vary the application. The Commission should have asked McKenzie Developments whether it wished either to proceed with the application as lodged or to withdraw it and start afresh. The Commission had no authority to consider the amended application. It, therefore, acted in excess of jurisdiction and its decision must be set aside.
Did the Commission have Jurisdiction?
The next ground on which the plaintiffs rely is very much in the nature of an alternative submission to the previous ground. The plaintiffs assert that, if the Commission could lawfully permit McKenzie Developments to amend its application, it had no authority to continue to consider and determine the application. They submit that, once the proposed office extension was deleted, the Council became the relevant planning authority. Given the conclusion reached in respect of the previous ground, it is perhaps unnecessary to deal with the issue. But out of deference to the arguments, I briefly deal with it.
The relevant provisions are s34(1)(b)(ii) of the Development Act and Regulation 38(1a)(a) of the Development Regulations. The effect of those provisions is that, where a council is undertaking a development that involves the construction of or change in use to a shop or office, the Commission is the relevant planning authority. The Council was undertaking this development because, as vendor of the land, it was permitting the development to be commenced and to proceed: see s4(1) of the Development Act. When the Commission permitted McKenzie Developments to delete the office extension, the question arose whether it had authority to determine the application. The Commission considered the question and considered that it had authority on the ground that the proposal involved the construction of a shop, that shop being the bottle shop in the proposed hotel. For the reasons which follow, the Commission erred in reaching that conclusion.
The First Schedule of the Development Regulations defines words and expressions used in the Regulations. A shop is defined in terms which exclude an hotel. An hotel is defined to mean “premises licensed, or proposed to be licensed, as an hotel under the Liquor Licensing Act1985 but does not include a motel”. The Liquor Licensing Act1985 has been replaced by the Liquor Licensing Act1997, and the 1997 Act is substituted for the 1985 Act in the definition by s14b of the Acts Interpretation Act 1915. It is a notorious fact that, generally speaking, hotels licensed under relevant liquor licensing legislation include a retail bottle shop of some kind, be it a shop in a conventional sense or a drive-through bottle shop or both. It is, therefore, incorrect to classify a bottle shop forming part of an hotel as a shop for the purposes of the Development Regulations. That conclusion is reinforced by the fact that this bottle shop is to be included in the licensed premises.
When the office extension was deleted, the application was no longer an application for a prescribed kind. It was, therefore, lawful for the Council to consider the application and determine whether development consent should be granted. The plaintiffs fasten on that conclusion and submit that the Commission should have referred the application back to the Council for its determination. The submission is interesting, if not curious, in that it seeks to refer the application back to a body which has a manifest interest in the outcome.
The structure of s34 of the Development Act is that the relevant authority to determine an application for development consent is the council within whose area the proposed development will be undertaken except in those instances listed in s34(1)(b) of the Act and Regulation 38. However, I think that the Act intends that, once the Commission is properly seized of a planning application, it has the authority to continue to consider and determine the application notwithstanding that circumstances might occur which would otherwise entitle the relevant council to determine the application. There are at least three reasons for that conclusion. There may be others. First, there is no mechanism provided in the Act or Regulations which enables the Commission to remit the application to the relevant council for determination. That is in contradistinction to provisions such as Regulation 38(2) which prescribe how applications are to be remitted by a council to the Commission. Secondly, it is in the public interest that the same planning authority should determine the application it properly commenced to consider. Delay and expense will result if the application is remitted from one planning authority to another. Thirdly, there is no public mischief in proceeding in this way. In the particular circumstances of this case there is perhaps a fourth reason. The Council has supported this proposed development. It has sold the land to the developer. In the public interest it is preferable for a planning authority without any interest in the outcome to consider and determine the application.
For these reasons, the plaintiffs fail on this ground.
The Validity of Condition 2
The development consent was subject to a number of conditions. Condition 2 was in these terms:
“The maximum number of people in the “proposed entertainment hospitality complex” shown on the amended plan drawing number 97/543/S8 Revision AB shall not exceed:
740 people between 6.00pm on any night and 4.00am on the following day
380 people between 7.00am and 6.00pm on any day.”
The plaintiffs contend that the Commission has exceeded its power to impose conditions or, alternatively, has mis-directed itself in that it has asked itself the wrong question and so has taken an irrelevant factor into account.
The proposed hotel is very large. As already mentioned, it is a multi-purpose facility providing bars, a restaurant, a nightclub, and a members’ only section. The Commission was aware that the Liquor Licensing Commission had calculated that the maximum capacity of the hotel was 1542 persons excluding staff. The Liquor Licensing Commission had also informed the Commission that “there are reasonably effective policing and crowd control systems to ensure that the number of people is not exceeded. This advice appears to be somewhat sanguine, if not unrealistic. It was not a view shared by Ratio Consultants, a firm of planning consultants engaged by the Commission. But whether the Licensing Commission is correct or not is of no consequence for present purposes.
The question whether the proposal provided sufficient car parking was plainly an important issue bearing on the question whether development consent should be granted and it was treated as such by the Commission. The agenda papers of the Commission and the minutes of its meetings on 14 July 1998, 11 August 1998 and 8 September 1998, when it considered the application, show that the Commission treated it as an issue of major concern. Given what was described by officers of the Commission in their report to the meeting on 11 August 1998 as “the wide divergence of opinion by traffic consultants on traffic and parking” in the proposal, the Commission itself instructed an expert from Melbourne.
The Commission had before it reports from traffic engineers prepared on behalf of McKenzie Constructions, the Council, and the plaintiffs. Mr Siow had been retained by McKenzie Constructions. He estimated that the likely peak patronage of the hotel was 870 persons. He later refined and reduced that estimate. Mr Foley had been retained by the Council. McKenzie Constructions had proposed that car parking for the hotel be shared with car parking already provided for offices in the centre. As the peaks for the entertainment complex were at a time when there would be little, if any, demand for car parking for the offices, there would be an advantage in sharing the parking. Mr Foley, therefore, proposed different limits for daytime and evening use. He was prepared to accept a peak of 870 persons at night but qualified his view by stating that the methodology used by Mr Siow required a number of assumptions. He, therefore, suggested that during the day the number of patrons be limited to 405 and the number at night be limited to 870.
Mr Murray Young, who was retained by the plaintiffs, questioned Mr Siow’s assumptions and estimated a higher demand for car parking. In his view, there was demand for 422 spaces for cars on Saturday nights, which was considerably higher than the 290 spaces available. Some support for Mr Young’s approach is to be found in the fact that the hotel has the capacity to accommodate 1542 persons. While it must be acknowledged that the hotel will not always be filled to capacity, the Liquor Licensing Commission’s estimate suggests that the numbers at this hotel, with relative frequency, be higher than 870 persons and, in all likelihood, a good deal higher. On occasions when the hotel provides a special event to attract custom it is reasonable to expect that numbers will be closer to 1542 than to 870 persons. The Commission retained a Mr Symons of Ratio Consultants, a firm of town planning experts in Victoria. He also believed that the proposal did not contain a sufficient amount of car parking. In his view, the proposed development should either be rejected or accepted with a limit upon numbers. He proposed that there should be no more than 725 persons in the entertainment complex at any one time with a lower limit to apply when functions were being held at night in the adjacent Civic Centre.
The planning staff employed by the Commission also believed that there was inadequate car parking at the hotel. In a report to the Commission’s meeting on 8 September 1998, it was recommended that the question could be resolved by limiting the number of patrons at the hotel. The relevant part of the conclusion of that report reads:
“The proposal is very marginal in terms of providing adequate parking and in achieving adequate traffic circulation. The proposal is tight on the site. The proposal has some design shortcomings, but the analysis since DAC last considered the proposal has provided sufficient technical advice that the proposal can be accommodated on the site satisfactorily.
The proposal is considered to be reasonably consistent with the Development Plan provisions, with some variations from the Plan. On balance, the proposal should be considered for approval, with conditions.
The most important conditions, it is suggested, would be to address:
1...... Parking control - a ceiling on patron numbers of 380 during the day and 820 at night is considered to be the most effective way to achieve this...”
The Commission obviously decided to adopt the recommendation to fix a ceiling on the number of patrons of the hotel although it departed from the numbers recommended to it. The Commission resolved “to limit the number of patrons to the complex using the figures from the independent traffic consultants”, that is to say, to use the figures of its own independent consultant, Mr Symons. It did not precisely adhere to the number of patrons in Mr Symons’ recommendation.
Thus, instead of examining the numbers which this hotel would attract, calculating the required amount of car parking, and then determining whether it was adequate and whether it should grant development consent, the Commission has purported to solve the problem of car parking by limiting the numbers who might be permitted in the hotel. The plaintiffs submit that the Commission has mis-directed itself in this way.
The power vested in planning authorities by s42 of the Development Act to impose conditions is expressed in wide terms. It is a power to impose such conditions as the relevant planning authority thinks fit and examples of the subject matter of such conditions are provided in s42(3). However, notwithstanding the wide terms in which that power is expressed, there are a number of constraints upon the use of that power. Thus, it is well settled that the power must be exercised for a planning purpose which fairly relates to the proposed development so that the power cannot be used for an ulterior purpose, however desirable that purpose may be: see Twenty Seven Properties Pty Ltd v Noarlunga Corporation (1975) 11 SASR 188; Parramatta City Council v Peterson (1987) 61 LGRA 286 and Newbury District Council v Secretary of State for the Environment [1981] AC 578.
However, it is a different kind of constraint which is relevant in this case. The power to impose conditions must not obscure the first question to be determined by the planning authority, namely, whether the proposed development is a suitable and appropriate use of the land. It is only after that question has been answered affirmatively that the planning authority should turn its attention to appropriate conditions. This court has repeatedly reminded planning authorities that this is the correct approach: see, for example, Beer v South Australian Planning Commission (1988) 142 LSJS 20 at 25 and, on appeal, Beer v South Australian Planning Commission (1988) 145 LSJS 284 at 289 to 290; Remove-All-Rubbish Pty Ltd v City of Salisbury (1989) 51 SASR 26 at 34; and South Australian Housing Trust v Lee (1993) 81 LGERA 378 at 390. As Jacobs J said in Beer v South Australian Planning Commission (supra) (at 25):
“The primary question with which planning authorities are concerned is the question of land use, whether a proposed development, including a change of use, is compatible with the relevant provisions in the Development Plan and the orderly and proper planning of the locality. It is only when that question has been answered in the affirmative that the authority should concern itself with questions of management, and indeed there has been an alarming trend on the part of some planning authorities to use planning conditions to bring the management of the land, once planning approval has been given, under planning control and in some cases thereby to usurp the functions of other government or semi-government authorities.”
He made observations to like effect in Remove-All-Rubbish Pty Ltd v City of Salisbury (supra) (at 34):
The primary concern of a planning authority is to control land use and the first question to be addressed should always be whether in the circumstances the proposed development is at least prima facie a suitable and appropriate use of the subject land having regard to the provisions of the Development Plan. To approach a planning decision by framing conditions designed to make a proposal suitable and appropriate is to bypass the primary question.”
This reasoning was followed in South Australia Housing Trust v Lee (supra).
The power to impose conditions is vested in a planning authority for the purpose of enabling it to regulate incidental aspects of the development so that it does not have an adverse effect upon the amenity of the neighbourhood of the development, either in the course of construction or when the development is completed. And so it is that conditions frequently deal with such matters as landscaping, stormwater drainage, advertising and other signs, and fencing. Not infrequently, conditions will impose a constraint upon the use to be made of the proposed development in the form of a restriction upon hours of use or a limit as to the level of noise. But there is an important difference between conditions of that nature, which deal with incidental aspects of the proposed development and the intended use of the land, and conditions which restrain the very nature and essence of the development in a way which requires the development or the land to be used in a way significantly different from the use or uses intended. The power to impose conditions is not provided to enable a planning authority to alter the nature of the proposal and hedge it about with conditions which are unworkable, unenforceable, and seek to confine the development in a kind of strait jacket which will constrain the development from being used in the ordinary way. Resort to the use of such conditions is tantamount to an acknowledgment that the proposed development is inappropriate for the subject land. If a planning authority imposes this latter kind of condition, it is using the power to impose conditions for a purpose which was not intended because it goes beyond incidental aspects of the intended land use and strikes directly at the intended land use.
There are policy reasons which reinforce this conclusion. First, there may be difficulties in enforcing the conditions. It is hardly necessary to point to the obvious difficulties in attempting to enforce the conditions imposed in this case limiting the numbers at this proposed hotel. The hotel is a large multi-purpose facility and people will be able to move readily from one section to another. On those occasions when some attraction is provided, the numbers may be so large that is extremely difficult, if not impossible, to count how many are present. Next, if a condition of this kind is to be useful, it will require regular and frequent policing which also leads to obvious difficulties and cost. Thirdly, those who may be affected by the proposal are entitled to expect the planning authority to consider the proposal on its merits and first determine whether it is suitable and appropriate for the area. If the authority imposes conditions which go beyond incidental aspects of the intended use and create difficulties of enforcement, those persons will, in all likelihood, be adversely affected because of the very difficulties of enforcement. The circumstances of this case point to a further policy reason. It is always open to the proprietor of this hotel at some later stage to seek to increase the numbers to be accommodated at the hotel, perhaps relying on some ad misericordeam plea that an increase in numbers is necessary to enable the hotel to trade profitably. If higher numbers are permitted, it might not be matched by a corresponding increase in car parking. All of these reasons also reinforce the views expressed by this Court that planning authorities should first consider whether the proposed development is suitable for the intended site before turning its attention to what conditions are desirable.
It is apparent that the Commission had real concerns as to the adequacy of the car parking provided in this proposal. However, it has discharged its function in the wrong way. The proper discharge of its functions required the Commission to consider first whether the proposal with the amount of car parking was an appropriate development for the site and then to consider appropriate conditions. The task for the Commission was to determine the numbers likely to attend the hotel, the amount of car parking required, and then decide whether there was sufficient car parking to accommodate that number of cars. The fact that this was a large hotel with a capacity to attract large numbers of people only served to emphasise the need for the Commission to approach the matter in this way. Instead, the Commission has decided that there were 290 car parking spaces available and to limit the numbers who might attend the hotel so as to ensure that the car parking provided was adequate. The approach is to put the cart before the horse. The Commission has addressed the wrong question. Instead of asking itself whether this large hotel with its deficiencies in car parking was suitable, and determining that question first, it has determined that the hotel is suitable and then sought to limit its size so that the deficiencies in car parking are avoided. It is as if the Commission was considering a proposal for a supermarket development which appeared to have inadequate car parking and then sought to limit the number of shoppers who might patronise the supermarket in order that the car parking would be adequate. Further, the effect of the conditions as to the numbers to be permitted in the hotel goes further than merely limiting numbers. The conditions strike at the essence of the use of the hotel. It is obviously intended that the hotel should trade profitably. In order to achieve that goal, the proprietors will seek to attract to the hotel as many patrons as possible. The condition will prevent them from achieving that objective.
The Commission has, therefore, mis-directed itself as to the proper question to examine and so has had regard to an irrelevant factor. The question for the court to consider is not whether the condition is valid but whether the Commission has properly directed itself so that it has had regard to an irrelevant factor or has failed to have regard to a relevant factor. It might be said that, in mis-directing itself, the Commission has made an error of law on the face of the record. This is one of those cases which illustrate that, on occasions, there is an overlap between the two. The Commission has mis-directed itself and so made an error of law which has caused it to use the power to impose conditions in an improper way, that is to say, to have regard to an irrelevant factor. Alternatively, it failed to consider a relevant factor, namely, whether it was appropriate to approve the hotel with car parking which was on its face inadequate. The provision of adequate car parking is manifestly a relevant factor. It is frequently mentioned in the Development Plan. Those who have made representations are entitled to expect that the Commission has considered all relevant factors but not irrelevant factors and that the decision conforms with the requirements of the Development Plan and is in accord with proper planning principle.
There will, of course, be occasions when it is proper to limit the numbers who might attend an hotel. In this case, for example, had the car parking been adequate for the hotel as proposed, a limit on numbers could have been fixed to ensure that the hotel did not seek to attract further numbers and so create a parking problem. But that is quite a different approach from that which was adopted by the Commission.
Seriously at Variance (1)
The plaintiffs rely on two grounds under this heading. The first is that the Commission did not consider whether the proposal was seriously at variance with the Development Plan and so failed to discharge its duty under s35(2) of the Act. Section 35(2) provides:
“Subject to sub-section (1) a development that is assessed by a relevant authority as being seriously at variance with the relevant Development Plan must not be granted consent.”
The provisions of sub-section (1) are irrelevant in this context. In Rhylyn Pty Ltd v Willunga District Council (1994) EDLR 509 it was held that a planning authority has a clear duty imposed on it by s35(2) to determine whether a proposed development is seriously at variance with the Development Plan. In this case, the Commission had a duty to consider in particular the provisions relating to the Regional Centre Zone and to the relevant policy areas.
The minutes of the Commission show that, at its meeting on 8 September 1998, it “considered that the proposed land use was appropriate for this location, however expressed concern at the size of the development in relation to the number of car parking spaces to be provided.” It is not entirely clear whether that statement implies that the Commission has considered whether the proposal is seriously at variance with the Development Plan. All that the Commission has determined is that the proposal is suitable on that site.
Neither the minutes of the previous two meetings of the Commissions at which it considered the application nor the agenda papers for any of the three meetings at which the Commission considered this application indicate whether the Commission considered whether the proposal was seriously at variance with the Development Plan. Reference is made in the agenda papers for the meeting on 11 August 1998 to the fact that the proposal is located in Policy Area 3 of the Regional Centre Zone as prescribed in the Development Plan which is intended for civic, cultural and community facilities but there is no minute which shows whether the Commission had regard to the provisions of the Development Plan relating to that policy area. That same set of agenda papers bears a hand-written note of a planning officer employed by the Commission stating “This is a proposal which is conceptually suited to the Regional Centre, but in its current form may border on over development of the site.” But again there is no minute indicating whether the Commission had regard to the Development Plan and the provisions concerning the policy area.
In the circumstances, it is difficult to determine whether the Commission has considered whether the proposal is seriously at variance with the Development Plan. It is obviously desirable for planning authorities to express in any resolution granting development consent whether they have considered that question. If they do not, there is a serious risk that the grant of development consent might be invalidated. Given that there are other grounds which invalidate this grant of development consent, it is unnecessary to determine whether the Commission did have regard to this question.
Seriously at Variance (2)
The other ground on which the plaintiffs rely is that the proposal is seriously at variance with the Development Plan. As King CJ pointed out in R v City of Munno Para; ex parte Weeks (1987) 46 SASR 400 at 403, when considering this question, the court must ensure that it does not become involved in assessing the planning merits but confines itself to matters properly the subject of judicial review. Thus, the court will only interfere on this ground “if the existence and seriousness of the departure can be discerned plainly by the court from the material before it without the necessity of resolving debatable issues relating to planning merits”.
As to the court’s role in determining whether a planning authority has erred in determining whether a proposal is not seriously at variance with the Development Plan, I adhere to the views I expressed in Hayes v Development Assessment Commission (No 4) (15 May 1997, unreported, Judgment No S6155). I acknowledge that s35(2) of the Development Act is expressed in different terms from those used in s37(9) of the Planning Act 1992. But nothing in s35(2) absolves a planning authority from the obligation to have regard to the relevant Development Plan and the obligation to determine whether the proposal is seriously at variance with it. In other words, a planning authority has no power to grant development consent unless it has determined that the proposal is not seriously at variance with the relevant Development Plan. It cannot be imagined that, if a planning authority abdicated this function and approved a development which, on any view, was substantially at variance with the Development Plan, this court would not set aside the decision. The effect of s35(2) is to reinforce the fact that the court cannot review the decision unless the circumstances identified by King CJ in Weeks exist. If the planning authority reaches the conclusion that the proposed development is not seriously at variance with the Development Plan, this court can interfere in the circumstances identified by King CJ. For these reasons, I respectfully disagree with the views expressed by Matheson J in Mt Gambier Shopping Centre Pty Ltd v Village Fair Shopping Centre (SA) Pty Ltd (25 January 1996, unreported, Judgment No S5441). I do not understand the decision in City of Kensington and Norwood v Development Assessment Commission (12 February 1998, unreported, Judgment No S6545) to require a different conclusion.
The plaintiffs submitted that the proposal is seriously at variance with the Development Plan on two grounds. The first is that the proposed hotel is to be located in an area which will detrimentally affect the zoning of the area. As already mentioned, the proposed hotel is to be located on land which forms part of the Regional Centre Zone. That zone is divided into a number of so-called “policy areas” and there are further divisions of those policy areas. The subject land is in the Civic Park and Environs Policy Area which is itself divided into five sub-areas which on a plan are numbered 1 to 5. Those five areas fall into four policy areas, each of which is the subject of principles of development control. The subject land is an area of land numbered 3. That area of land is designated ‘B’ in the text of the Plan and is subject to Principle of Development Control 2. The eastern boundary of Area 3 adjoins Area 1. Areas 1 and 2 are diagonally opposite one another. They are subject to Principle 1 which designates Areas 1 and 2 as ‘A’. Principles 1 and 2 provide:
“1..... Development adjacent Civic Park within the area designated ‘A’ in the Civic Park and Environs Policy Area shown on Map TTG/38 should comprise tourist or commercial entertainment/ leisure orientated uses such as motel/hotel/convention centre, tavern or restaurant complex, or offices, or mixed use developments combining any of the foregoing.
2...... Development adjacent Civic Park within the area designated ‘B’ in the Civic Park and Environs Policy Area shown on Map TTG/38 should comprise primarily civic, cultural and community facilities together with tourist or convention or commercial facilities. Retail activities that are limited to food and entertainment establishments only and which complement the primary activities within and adjoining the area are appropriate.”
It is unnecessary to examine the other areas in the Civic Park and Environs Policy Areas or the Principles of Development Control which apply to them. The Modbury Hotel is in the Area 2, one of the areas designated ‘A’. The other area designated ‘A’ is Area 1, which is presently developed with a large petrol filling station. The site of the proposed hotel will be adjacent to the Area 1.
The plaintiffs submitted that the proposed hotel should be located in the area designated in the area designated ‘A’ (that is to say, in Areas 1 and 2) because Principal 1 expresses the objective that hotels should be located in either of those two areas, adding that the development of the proposed hotel in the wrong policy area may prejudice the development of an hotel in the correct policy area or impede the intended kinds of development in Policy Area B, and so frustrate the intentions of the Plan. The plaintiffs relied on the decisions in Weeks (supra) and in Woolworths (SA) Ltd v Port Lincoln Corporation (1990) 157 LSJS 276. But each case must be examined on its own facts.
The greater part of the land in the Civic Park and Environs Policy Area has been developed. The site of the proposed hotel lies between offices of the Council and the petrol filling station already mentioned. It is a nice question whether this hotel can properly be classified as a civic, cultural or community facility or a tourist, convention or communal facility as those expressions are used in Principle 2, so that it should not be located in the area designated ‘B’. However, when regard is had to the fact that the site adjoins Area 1 which is one of the areas designated ‘A’, that the present use of Area 1 accords with the uses intended for it, that most of the Civic Park and Environs Area has been developed, and that an hotel already exists in Area 2, it is not clear that a grant of development consent for this hotel is seriously at variance with the Plan. I am not, therefore, prepared to interfere with the Commission’s decision on this ground.
As the decision in Weeks demonstrates, a substantial development which does not conform to the objective of the zone in which it is located may be seriously at variance albeit it is to be located in a site adjoining a zone whose objectives permit the development. But the circumstances of this case differ in that the land has now been substantially developed and there are not competing applications. Similarly, the decision in Woolworths involved different issues.
The other ground on which the plaintiffs submit that the proposal is seriously at variance with the Development Plan is that the area provided for car parking is wholly inadequate. It is implicit in the Commission’s decision that the provision for car parking is inadequate unless there is a limit on the numbers attending the hotel. That is also the effect of the reports of Mr Foley and Mr Symons. Thus, if the proposed hotel is considered on its merits without any condition limiting the numbers who attend, it is apparent there is inadequate car parking. The evidence varies as to the extent of the deficiency. Mr Symons estimated that the patronage of the hotel would be at least 810 persons, creating a demand for spaces for 324 cars, 34 more than are available. Mr Foley’s estimate of the patronage for the hotel was 870 persons. He used a convenient rule that one car parking space is required for every three persons, which would mean that there was sufficient car parking. However, Mr Symons estimated that a car parking space is required for every 2.5 persons. On that footing, 870 persons would create a demand for 348 spaces. It is implicit in the Commission’s decision that it favours the approach of Mr Symons since, if it had accepted Mr Foley, it would not have imposed a condition limiting the numbers. Mr Young estimated that 422 spaces were required to cope with the peak demand. To summarise, the Commission concluded that the car parking was inadequate unless a limit was placed on numbers at the hotel. That view has the support of all of the experts save the expert advising McKenzie Constructions. The amount of the shortfall varies among the experts and ranges from about 10% to 45%. It is a notorious fact that hotels generate a substantial amount of car parking. The Development Plan frequently refers to the need to provide adequate car parking for developments which generate traffic. The Commission was clearly concerned as to the shortfall and sought to deal with it in an inappropriate way. For these reasons, I conclude that the proposal is seriously at variance with the Development Plan in that it fails to provide adequate car parking. The grant of development consent should be quashed on that ground also.
Conclusion
The Commission has failed to act in accordance with the procedures required for the giving of public notice and has permitted McKenzie Constructions to amend its plans in a way unauthorised by the Development Act or the Development Regulations. The departures from the required procedures are so serious that the grant of development consent should be quashed. In addition, the Commission has had regard to an irrelevant factor in a way which requires the grant of development consent to be quashed. Finally, the decision should be quashed on the ground that the proposed development is seriously at variance with the Development Plan.
The question then arises as to whether the matter should be remitted to the Commission for consideration. Present indications are that McKenzie Constructions has decided to abandon that part of the proposal which included the extension of the offices of the Council. If it adheres to that intention, it is necessary for it to lodge a fresh application. That application will be lodged with the Council. As that application will not include either offices or a shop, it is an application which could be determined by the Council. Given the Council’s manifest financial interest in the proposal being approved, it is desirable that the application be determined by the Commission. For reasons which appear below, it is important that there be no perception that the decision-maker was biased in that it had a financial interest in the outcome. It is desirable, therefore, that the Council requests the Minister to declare that the application be determined by the Commission pursuant to s34(1)(b)(iii) of the Development Act. It is desirable also that the Minister accede to that request.
If the office extension is to be included, the matter will have to be remitted to the Commission for determination.
In the circumstances, it is not possible to make any order other than that the grant of development consent be quashed. I will hear the parties as to the terms of the order.
Law Reform
The facts of this case provide a vivid illustration of the desirability that planning applications should not be decided by a council with an interest in the outcome of the application. It is not uncommon for councils to have a real interest, financial or otherwise, in the outcome of a development application. In this case, the council had contracted to sell the land to an intending developer. In such circumstances, it is not unusual for the contract to be conditional on the grant of planning consent. If a council determines the planning application, it has a manifest financial interest in the outcome and there is a real risk that that interest will affect the manner in which the council deals with the application. There is, in short, a real risk of actual bias affecting the decision. Equally importantly, it is desirable to ensure that there is no perception of bias. Those who have objected and those who have lodged the application should be able to have full confidence in the integrity and impartiality of the body which considers the application and the objections. Unless that confidence exists, there is a real risk that public confidence in the administration of planning decisions will be jeopardised: cf the observations in Webb v R 181 CLR per Mason CJ and McHugh J at 50 to 52 and per Deane J at 68. This principle was formerly recognised by s34(1)(b)(ii) of the Development Act and its predecessor s47(2) of the Planning Act 1982 and Regulation 47 and the Seventh Schedule of the Development Control Regulations 1982. The effect of those provisions was that the Commission determined all applications in which a council had an interest in the outcome. In 1996, s34(1)(b)(ii) was amended so that the Commission could determine a development application in which a council had an interest only where the development was of a prescribed kind, that is to say, where the development was for a shop or office or for some kind of industry. This was a regrettable step. There appears to be no justification for limiting the kinds of development which a council is not disqualified from determining where it has an interest in the outcome. It is desirable that s34(1)(b)(ii) is repealed and re-enacted in its pre-1996 terms.
4
0