MAKRO WAREHOUSE PTY LTD and CITY OF MANDURAH
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM :DEVELOPMENT & RESOURCES
ACT: TOWN PLANNING AND DEVELOPMENT ACT 1928 (WA)
CITATION: MAKRO WAREHOUSE PTY LTD and CITY OF MANDURAH [2005] WASAT 7
MEMBER: JUSTICE M L BARKER (PRESIDENT)
MR P McNAB (MEMBER)
MS M CONNOR (MEMBER)
HEARD: 3 FEBRUARY 2005
DELIVERED : 14 FEBRUARY 2005
FILE NO/S: RD 285 of 2004
BETWEEN: MAKRO WAREHOUSE PTY LTD
Applicant
AND
CITY OF MANDURAH
Respondent
Catchwords:
Town Planning - Cessation direction by local government authority - Showroom development in contravention of scheme - "Showroom" - Incidental use
Legislation:
Town Planning and Development Act 1928 (WA), s 10(2), s 10AA, s 62
Result:
Application dismissed.
Category: B
Representation:
Counsel:
Applicant: Mr MJ Hardy
Respondent: Mr DW McLeod and Mr CA Slarke
Interested Party : Mr BD Luscombe for Woolworths Ltd
Solicitors:
Applicant: Hardy Bowen
Respondent: McLeods
Interested Party : Mallesons Stephen Jacques
Case(s) referred to in decision(s):
Penrith City Council v Waste Management Authority (1990) 71 LGRA 376
R v Busselton Shire Council; Ex parte Busselton Home Entertainment Pty Ltd (1993) 83 LGERA 188
Case(s) also cited:
Broken Hill Pty Co Ltd v Trade Practices Tribunal (1980) 31 ALR 401
Enoka v Shire of Northampton (1996) 15 WAR 483
Foodbarn Pty Ltd v Solicitor - General (1975) 32 LGRA 157
Lizzio v Ryde Municipal Council (1983) 155 CLR 211
Myaree City Pty Ltd v City of Melville [2004] WATPAT 50
Warehouse Group (Australia) Pty Ltd v Woolworths Ltd [2003] NSWCA 270
JUSTICE M L BARKER (PRESIDENT),
MR P McNAB (MEMBER), MS M CONNOR (MEMBER):
THE TRIBUNAL
Introduction
1The City of Mandurah (Respondent) at its meeting of 19 March 2002 granted planning consent for a showroom development on Lot 2, No. 23 – 25 Gordon Road (corner Fremantle Road), Greenfields (subject land). The showroom development comprised 16 showroom units, associated car parking, landscaping and a servicing area.
2Over a twelve month period, both Makro Warehouse Pty Ltd's consultant and planning officers of the Respondent corresponded regarding a prospective tenancy for the development. According to the evidence, sometime in 2003 Makro Warehouse Pty Ltd (Applicant) commenced operations on the subject land.
3After receiving a number of complaints concerning the operations of the Applicant's business, the Respondent investigated and determined that the Makro Warehouse operation was inconsistent with the approval to use the subject land for showroom purposes. Consequently, on 27 September 2004 the Respondent issued a direction under s 10(2) of the Town Planning and Development Act 1928 (WA) (the Act) to the Applicant in the following terms:
"Please take note:
a) Makro Warehouse Pty Limited carries on a business under the name 'Makro Warehouse' at 23 Gordon Road, Greenfields ('the Land').
b) The Land is within the Scheme area of the City of Mandurah District Town Planning Scheme No. 3 ('TPS 3').
c) The City of Mandurah is the responsible authority for TPS 3.
d) The development of the Land for a 'Showroom' use has been approved under TPS 3 ('the approved use').
e) The use carried on under the business name 'Makro Warehouse' on the Land includes aspects which do not fall within the approved use.
f) The use of the Land otherwise than in accordance with the approved use is a development undertaken in contravention of TPS 3.
You are HEREBY DIRECTED pursuant to Section 10(2) of the Town Planning and Development Act 1928 ('the Act') to stop and not recommence the use of any part of the Land other than for the purpose of displaying or offering for wholesale or retail sale:
a) automotive spare parts;
b) carpets;
c) large electrical appliances;
d) furniture;
e) hardware; or
f) goods of a bulky nature."
4The issue before the Tribunal is whether the Applicant has undertaken development in contravention of TPS 3. If it has, it is common ground that the decision to issue a direction under s 10(2) of the Act should be affirmed by the Tribunal.
The zoning of the land
5The subject land is zoned "Industry" under TPS 3 with the intent, as Table 6 of the accompanying policy statement states, "[t]o encourage the development of light, service and general industries in the zone …".
6The term "Showroom", which is found in Table 6, is defined in Appendix 1 to TPS 3 as meaning (emphasis added):
"any building or part of a building used or intended for use for the purpose of displaying or offering for wholesale or retail sale, automotive spare parts, carpets, large electrical appliances, furniture, hardware or goods of a bulky nature but does not include the retail sale of foodstuffs, liquor or beverages, items of clothing or apparel, magazines, newspapers, books or paper products, china, glassware or domestic hardware, or items of personal adornment."
7It is convenient at this point to also note two other related definitions found in Appendix 1 to TPS 3. First, "retail" is defined to mean:
"the sale or hire of products, goods or services to the public generally in small quantities and from a shop, showroom or fast food outlet."
8Secondly, a "shop" is defined to mean:
"any building wherein goods are kept, exposed or offered for retail sale, or within which services of a personal nature are provided (including a hairdresser, beauty therapist or manicurist) but does not include a showroom, fast food outlet or any other premises specifically defined elsewhere in this part."
9Table 6 expressly contemplates certain incidental or subsidiary uses by designating use classes such as "Office" and "Lunch Bar" as permissible uses in the industry zone if "incidental to predominant use". However, shops and showrooms are not similarly treated.
10As will appear from the uncontradicted evidence discussed below, the Applicant in fact sells for retail, as a significant part of its operations, certain foodstuffs as well as items of clothing or apparel, paper products, china, glassware and domestic hardware, and "items of personal adornment".
Planning approval
11Under Table 6 in TPS 3 (the "Industry Zone" table), a "Showroom" is shown as a permitted use of the land in that it "may be developed after Council has granted planning approval". A "shop" per se is not referred to in Table 6 at all. Applying cl 3.2.2 of TPS 3, a use that does not appear in Table 6, but is listed in another "Zoning Table" is deemed to be not permitted in the industry zone and, therefore, is not permitted on the subject land.
12Planning approval was given to the owner of the land in March 2002 for a "showroom development" in accordance with the submitted plans, and subject to a number of conditions that are presently immaterial to the issues to be decided. The submitted plan (SK-2) shows 16 units of proposed showrooms, with the largest unit established with a "gross floor area" of 1000m² and an accompanying warehouse for that unit.
Expansion of the showroom concept
13In April 2002, the owner of the land sought from the Respondent some acknowledgement or clarification from it as regards the nature of the uses available under the approval. On 4 April 2002 the Applicant's agent, a development consultant (and a witness for the Applicant in these proceedings) Mr Peter Cann wrote to the Respondent as follows:
"As discussed, we have received strong interest from a national tenant for a 1,000m² showroom. This tenant specialises in bulk retailing of a variety of items; the majority of which are identified by Council's land use definition of "Showroom" (ie) electrical, furniture, automotive, hardware.
Approximately 18 ‑ 20% (180 – 200m²) of the goods offered do not fall within the Showroom classification. The goods include approximately 80m² of confectionary/consumables, 60m² of clothing, 35m² of household items and 25m² of books. These goods are predominantly large quantities of the same item, and as a result, are offered for sale at discounted prices on the basis of bulk purchases. In this way, the tenant's retail offer does not compete with other retailers specialising in sale of those goods.
The retail concept is similar in nature to Bunnings, WA Salvage and Spotlight stores (among others) that predominantly retail goods identified by Council's Showroom definition. These establishments also retail some items of clothes, food and/or household goods as incidental offers to their predominant showroom focus. This type of retailing is common in showroom localities across Metropolitan Perth.
The tenant of Lot 2 Gordon Road proposes a similar incidental offer equating to 3% of the 6,200m² approved maximum NLA of the subject site.
Conclusion of negotiations with this tenant will enable immediate commencement of development works.
We confirm our understanding of our recent discussions with Mr Free, that the current approval issued to Easyflow Investments Pty Ltd [the owner] allows the incidental retail sale of some items not included within the definition of Showroom. We further confirm, that 'incidental' in this instance refers to a maximum of 200m2 (3%) of goods within the entire development site.
Correspondence from Council confirming this understanding would be most appreciated. In the interim, should any further clarification of this matter be required, please contact the undersigned."
14The Respondent relevantly replied, on 23 April 2002, that:
"The City wishes to confirm the understanding that incidental retail sales of goods are permitted to be sold from the subject property.
I trust that the above comments adequately clarify the City's position in respect to the matter…".
15There was subsequent correspondence foreshadowing the expansion of the proposed operation to 3200m², with Mr Cann providing greater particularity of the retailing operations of the proposed store.
16By letter dated 27 March 2003, an officer of the Respondent advised, consistent with the tenor of the earlier reply, that:
"I refer to your correspondence dated 20 March 2003 with regard to the proposal for the establishment of a Crazy Clarks Makro outlet to occupy the development approved for the subject property.
Please be advised that the City of Mandurah is satisfied that the incidental retail sales of goods being sold from the premises as outlined in your correspondence is acceptable.
Given the floor area of the type of premises and the range of bulky goods to be offered for sale, the proposed use is appropriate for a Service Commercial/Showroom development, as distinct from a Commercial/Retail development."
17Modified plans reducing the number of showroom units from 16 to 6 plus one large unit marked on the plan as "Makro Warehouse" (4930m² net showroom area) with an accompanying (storage area) warehouse and small mezzanine area were received by the Respondent. These plans were approved on 14 May 2003 and the approval was described as "made under the terms of the original Planning Approval granted by the City of Mandurah on 25 March 2002 and revised on 24 October 2002".
18It is unnecessary, as regards this correspondence, to go into further detail or to pass any comment on it as Mr Hardy, counsel for the Applicant, expressly declined to make the legal or equitable effect (if any) of such documents (and associated discussions between the parties) an issue for this Tribunal in the review of the Respondent's decision. Mr Hardy was content for the review to be determined on the issue of whether there had been a contravention of TPS 3.
The evidence regarding Makro's present operations
19Mr Braithwaite, who is the Development Services Compliance Officer with the City of Mandurah, gave evidence that he had visited the Makro premises on the subject land on 24 January 2004 and found a large self-service store "much like a supermarket", with 10 checkouts and 25 aisles of shelving. Mr Braithwaite said that within the aisles "practically all of the products displayed were small items, such as food and beverages, clothing, footwear, towels, glassware, crockery, games, boys and girls toys, greeting cards and such like". This area comprised approximately 1410m².
20He also found a separate section in the Makro Warehouse called "Millers", which displays clothing and apparel and had its own entrance through the main store and its own check-out (424m²). Two further separate areas – although not walled off – existed, one for "bulky goods" such as chairs and tables, luggage, cabinets and bookshelves (252m²) and the other for home audio-visual equipment (225m²).
21Mr Braithwaite took a number of photographs which generally confirm his observations, except as to the area reserved for home audio-visual equipment where no photographs were taken.
22Mr Braithwaite's evidence was not challenged.
23Mr Free, who is the Director of Planning and Sustainability with the City of Mandurah, also visited the Makro premises recently and gave evidence of what he had observed. His evidence was generally similar to that of Mr Braithwaite's and was not relevantly challenged.
24Mr Cann has already been referred to. Besides his evidence as to the genesis of the Makro proposal which is demonstrated in the correspondence already referred to, he produced a table showing a percentage breakdown of the various "departments", 33 in all, ranging from fashion accessories to promotional goods, that could be found at the Makro premises.
25Accordingly, there is no doubt as to the conclusion to be drawn from the evidence: Makro has significant retail operations which include "the retail sale of foodstuffs, … items of clothing or apparel, … books or paper products, china, glassware or domestic hardware, or items of personal adornment". As Mr Hardy accepted on behalf of the Applicant, the factual issues between the parties are clear, the real issue that remains is the application of TPS 3 in the circumstances of the case.
26It is also appropriate to note that the Tribunal does not consider that the separate section in the Makro premises called Millers, can be regarded as a separate entity. In reality, Millers is a fully integrated commercial component of Makro's business operations. The only thing that separates Millers from Makro's other departments is a partition wall and separate commercial badging of the clothing section.
Submissions of the parties
27Mr Hardy, for the Applicant, argues that the definition of showroom is not intended to prohibit the sale of certain goods "but, rather, to provide a genus of goods which in and of themselves may not be the predominant use made of a showroom" and that it is not intended that these products be "excluded absolutely". Counsel for the Applicant further submits that there is nothing in the definition of showroom which prohibits the sale of the goods on an incidental basis, as was in fact allowed by the Respondent. It is contended that only incidental uses which are "separate uses" are disallowed.
28Mr Hardy's final argument is premised on the separate existence of Millers, namely "that there are two separate outlets contained within the Applicant's premises". By reason of the contrary finding in relation to Millers made by the Tribunal above, this argument need not be addressed.
29Counsel for the Respondent submits that the significant number of "use areas" as demonstrated on the evidence which clearly fall outside the showroom use class effectively precludes the treatment of those areas as being incidental to any other predominant use which is permissible for the subject land. Further, he suggested that the authorities show "that two or more uses could exist in close juxtaposition to one another, but could nevertheless operate, and should properly be regarded as separate and distinct uses if none of them is in any real sense subservient or subordinate to the other".
Conclusions
30While a number of authorities were cited to us by both parties as the premise for the arguments summarised above, none of them was directly concerned with the point of construction we have to consider in the context of TPS 3, which is the meaning of "showroom" as relevantly defined. It is worth recalling the admonishment of the Full Court of the Supreme Court of Western Australia, in one of the cases cited to us, on the need to "pay [s]ufficient attention to the terms of the scheme": see R v Busselton Shire Council; Ex parte Busselton Home Entertainment Pty Ltd (1993) 83 LGERA 188 at 192 per Kennedy J, with Franklyn J concurring at 193. Kennedy J cited with approval, at 192, the cautionary observations made the Court of Appeal in New South Wales in Penrith City Council v Waste Management Authority (1990) 71 LGRA 376 at 384:
"The very fact that questions of degree are inescapably involved in cases such as the present also provides a reason for exercising great care in the use of other cases, said to be analogous, where a task of characterising different facts has fallen for judicial consideration and analysis."
31With respect to Mr Hardy, his argument appears to pay insufficient attention to the actual words of TPS 3 under consideration. In the Tribunal's view, the definition of "showroom" and its presence in Table 6 of TPS 3 is tolerably clear: it was intended by the Respondent – and manifested with sufficient clarity – that showrooms which retail goods in any of the classes specified in the showroom definition were to be prevented from establishing themselves in the Industry zone.
32The material before the Tribunal, which is not contested, shows that on the subject land goods are sold by retail in most of the prohibited categories, whatever may be the precise scope or characterisation of the Applicant's other commercial activities on the subject land. Questions of "incidental" use, agitated by both parties, do not relevantly arise.
33In particular, the Tribunal does not accept the argument made on behalf of the Applicant that there can be identified an approved use of the subject land which has a "genus" to which these retail activities are merely incidental.
34It follows that the Applicant has undertaken a development in contravention of a town planning scheme within the meaning of s 10(2) of the Act.
35We should also mention in passing that a commercial competitor of the Applicant, namely Woolworths Ltd, was given leave under s 62 of the Act to make a short written submission on the issues before the Tribunal. No party opposed this course; neither did they consent to it. In light of the conclusions that the Tribunal has reached on the substantive issue it is unnecessary to consider these submissions further.
Order
36For these reasons, the decision under review should be affirmed and the application for review made by the Applicant under s 10AA of the Town Planning and Development Act 1928 (WA) should be dismissed.
I certify that this and the preceding 10 pages comprise the reasons for decision of the State Administrative Tribunal.
____________________________
Justice M L Barker, President; Mr P McNab, Member;
Ms M Connor, Member
Makro Warehouse Pty Ltd and City Of Mandurah [2005] WASAT 7
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