Maryland Development Co Pty Ltd v Penrith City Council & Anor

[2001] NSWLEC 135

Land and Environment Court

of New South Wales

CITATION:	Maryland Development Co Pty Ltd v Penrith City Council & Anor [2001] NSWLEC 135
PARTIES:	APPLICANT Maryland Development Co Pty Ltd FIRST RESPONDENT Penrith City Council SECOND RESPONDENT Errol Investments Pty ltd
FILE NUMBER(S):	40190 of 2000
CORAM:	Sheahan J
KEY ISSUES:	Judicial Review :- development consent - characterisation of use - "general store" - jurisdictional fact - conclusion reasonably open - indemnity costs
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 Local Government Act 1919 Penrith Local Environmental Plan 116 Interim Development Order 26 Penrith Planning Scheme Ordinance
CASES CITED:	Bentham & Anor v Kiama Municipal Council & Ors (1986) 59 LGERA 94; Caltex Oil (Australia) Pty Ltd v Holroyd Municipal Council (1983) 49 LGRA 77; Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297; Corporation of the City of Enfield v Development Assessment Commission & Anor (2000) 199 CLR 135; Donnelly v Delta Gold Pty Ltd & Ors [2001] NSWLEC 55; Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373; Gales Holdings Pty Ltd v Tweed Shire Council (1999) 110 LGERA 235; Hofer v Howell Developments Pty Ltd (No.2) [2001] NSWLEC 42; Hope v Council of the City of Bathurst (1980) 144 CLR 1; House of Peace Pty Ltd & Anor v Bankstown City Council (2000) 48 NSWLR 498; Hoyts Cinemas Ltd v Penrith City Council & Anor [1999] NSWLEC 187; Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675; Latoudis v Casey (1990) 170 CLR 534; Londish v Knox Grammar School & Ors (1997) 97 LGERA 1; Mittagong Mushrooms Pty Ltd v Narrambulla Action Group Inc & Anor (1998) 97 LGERA 333; North Sydney Municipal Council v Boyts Radio & Electrical Pty Ltd (1980) 67 LGRA 344; Penrith City Council v Horizon Pacific Ltd (40161 of 1986, Perrignon J, 17 October 1986); Power v Pentill House Pty Ltd & Ors (1993) 80 LGERA 247; Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1991) 25 NSWLR 541 ; Shire of Perth v O'Keefe (1963) 110 CLR 529; Styles v Wollondilly Shire Council (No.3) [2001] NSWLEC 133; Timbarra Protection Coalition Inc v Ross Mining NL & Ors (1999) 102 LGERA 52; Turnbull Group v North Sydney Council (1998) 101 LGERA 354; University of Sydney v South Sydney Council (1998) 97 LGERA 186 ; York Developments Pty Ltd v Liverpool City Council [2000] NSWLEC 174
DATES OF HEARING:	01/03/2001-02/03/2001, 14/03/2001 written submissions
DATE OF JUDGMENT:	06/22/2001
LEGAL REPRESENTATIVES:	APPLICANT Barrister Mr M Craig QC Solicitors Minter Ellison FIRST RESPONDENT Barrister Mr S Austin QC with Mr D Miller Solicitors Phillips Fox SECOND RESPONDENT Barrister Mr M Tobias QC with Mr C Leggat Solicitors Pike Pike & Fenwick

JUDGMENT:

MARYLAND DEVELOPMENT COMPANY PTY LTD

Applicant

v

PENRITH CITY COUNCIL

First Respondent

ERROL INVESTMENTS PTY LTD

Second Respondent

JUDGMENT

Introduction

1. These class 4 proceedings were commenced on 11 December 2000 seeking a declaration that the development consent (“DC”) purportedly granted by the First Respondent (“Council’) to the Second Respondent (“Errol”) is void.

2. The relevant development application (“DA” - DA 99187) was lodged on or about 24 June 1999, and was later supplemented by the lodgment of other documents to assist Council in its assessment.

The approved proposal

3. The DC was granted, pursuant to Part 4 of the Environmental Planning & Assessment Act 1979 (“the EP&A Act”), on or about 7 August 2000, for the subdivision of land at Cambridge Park, being Lot 7, DP 616045, and for the development thereon of a McDonalds restaurant, a general store, and another commercial building intended for future use as a hardware store, real estate office, or “other similar activity permissible in accordance with the planning controls applying to the site” (Exhibit M4, Vol 1, fol 19).

4. The subdivision proposed to put the McDonalds on one lot, to be lot 100, and the residue of the land (in other words the two other proposed buildings) to be lot 101. (See Drawing DA06 in Exhibit M1).

5. An existing Ampol Service Station and Convenience Store appears to be on lot 6 DP 616045, and the subject land is an L-shaped block “surrounding” it (see Exhibit M1, site plan DA01). The site is owned by Monete Pty Ltd (Exhibit M4, Vol 2, fol 438). An open space reserve adjoins it to the north and east. Medium density residential development exists to the north of the site adjoining the reserve, and single detached residential dwellings adjoin the reserve to the east, and Richmond Road to the west. A hotel/motel complex sits on the southern side of Boomerang Place.

6. The plans and elevations (Exhibit M1) show the approximate and relative locations of the proposed McDonalds (260m2), the proposed “store” or commercial space (500m2), and the proposed “general store” (3800m2), parking, loading dock facilities etc, and their proximity to the reserve.

7. Twenty-four hour operation was sought for lots 100 and 101, and the development is expected to employ 200 people, and cost $7M (Exhibit M4, Vol 2 fol 440).

The challenge to the consent

8. Maryland Development Co Pty Ltd (“Maryland”) claims that the grant of consent is in breach of s 76B of the EP&A Act which provides as follows:

76B Development that is prohibited
If:
(a) an environmental planning instrument provides that specified development is prohibited on land to which the provision applies, or
(b) development cannot be carried out on land with or without development consent,
a person must not carry out the development on the land.

9. The particulars of the alleged breach are that, pursuant to Interim Development Order 26 (“the IDO”), made under the Local Government Act 1919 (“the LG Act”), the subject land falls within Zone 3(d) Special Business (Highway Service Area). Development for the purposes of a “general store” is permissible on the land, but development for the purposes of a “shop” (or supermarket?) is prohibited.

10. Maryland says that the DC for a general store constitutes a consent for development, which is actually for the purposes of a shop or supermarket, and could not reasonably be characterised as development for the purposes of a general store. Alternatively, it asserts that the Council erred at law in determining that the development proposed was for the purpose of a general store (POC 7 (iv) and (v)).

11. Errol claims that the question of characterisation of the development is a question of fact, and that the characterisation by the Council was correct, or, at least, reasonably open to it.

12. Council claims to have acted at all times lawfully in the determination of the development application, and that it was reasonably open to it to grant the consent on the basis that the development application was for a permissible purpose.

13. Voluminous affidavit material was filed, but none was relied upon at the hearing, and the respondents seek an order for indemnity costs in respect of that aspect of the matter. Written submissions were made on the costs issue, after judgment on the substantive questions was reserved, and I will return to the question of costs at the end.

The relevant planning regime

14. In the Penrith Planning Scheme Ordinance, which commenced on 18 March 1960, “general store” was defined as meaning a building not exceeding 2000 square feet in floor space used or designed for use for the sale by retail of general merchandise, whether or not it included facilities for a post office.

15. However, cl 3 of the IDO (Exhibit M3), made by the Minister on 27 January 1971, for all relevant purposes adopted the “Model Provisions”, gazetted on 17 July 1970, which relevantly include the following definitions:

“ Commercial premises ” means a building or place used or intended for use as an office or for other business or commercial purposes, but does not include a building or place elsewhere specifically defined in this clause or a building or place used or intended for use for a purpose elsewhere specifically defined in this clause or for a roadside stall.

“ General store ” means a shop used or intended for use for the sale by retail of general merchandise whether or not it includes facilities of a post office.

“ Shop ” means a building or place used or intended for use for the purpose of selling, exposing or offering for sale by retail goods, merchandise or materials, but does not include a building or place elsewhere specifically defined in this clause or a building or place used or intended for use for a purpose elsewhere specifically defined in this clause or for a roadside stall.

16. The IDO relevantly provides, in respect of Zone 3(d) Special Business (Highway Service Area), as follows:

(i) cl 4 provides that no development may be carried out without consent, and that only the following development may be carried out with consent, and with the concurrence of the state planning authority: car-washing stations; clubs; drive-in restaurants; hotels; motels; motor showrooms; open space; refreshment rooms; roads; service stations; subdivision; utility installations. All other development is prohibited.

(ii) Clause 11 provides that “ Notwithstanding the provisions of clause 4 of this order, no development shall be carried out within Zone No. 2 (a) or 3 (d) except in accordance with a development control plan approved by the Authority ”.

(iii) Clause 13 provides:

(1) Within Zone No 3 (d), the ratio of the total floor space of any building to the area of the land on which the building is or is proposed to be erected shall not be greater than 1:1.
(2) For the purposes of this clause:
‘Area of land’ means the net area of the land excluding the area of any adjoining public road or adjoining public place.
‘Floor space’ includes all wall thicknesses, ducts, vents, staircases and lift wells, but does not include -
(a) any car parking space in the building provided to meet the standards required by the Council (but not such space provided in excess of such standards) or any internal access thereto;
(b) space used for the loading or unloading or goods;
(c) lift towers, cooling towers, machinery and plant rooms and any storage space related thereto.

(iv) Clause 18 provides:

(1) This clause applies to land which is within Zone No. 5(a) and which is indicated on the I.D.C. Map as being for Community Uses.
(2) In this clause, ‘gross floor area’ has the same meaning as in clause 4(1) of the Environmental Planning and Assessment Model Provisions 1980.
(3) Notwithstanding clause 4, a person may, with the consent of the Council, carry out development on land to which this clause applies for the purposes of a general store or take-away food shop where the gross floor area of any building or part of any building used or intended to be used for those purposes does not exceed 200 square metres.

17. Penrith Local Environmental Plan No.116 (“the LEP”) was gazetted on 4 April 1985 and applies only to the subject site. The LEP inserted in the IDO a new clause 15A permitting, with consent, development on the subject land for the purposes scheduled, namely: advertising structures; bulk stores; bus depots; car repair stations; child care centres; convenience stores; educational establishments; electrical, plumbing, hardware or timber supply outlets; estate agencies; general stores; hospital and medical centres; places of assembly; places of public worship; practices carried on by health care professionals; professional consulting rooms; public buildings; recreation facilities; retail plant nurseries; taverns; tourist facilities; units for aged persons; warehouses (emphasis added).

18. Some of the documents in evidence refer to some of the site being zoned 6(b) Open Space (proposed recreation), on which land only the following may be carried out with consent: drainage, roads, utility installations other than gas holders or generating works, showgrounds, sportsgrounds, etc. The court assumes that the 6(b) land will be dedicated as reserve or road.

An earlier judgment regarding the subject site

19. After the LEP had been gazetted in April 1985, a DA was submitted for the subject site on 5 May 1986. Council sought a declaration that the/a proposed use was prohibited, the proponent sought a declaration that the proposed uses were permissible and the Minister intervened. Penrith City Council v Horizon Pacific Ltd (“Horizon Pacific”) (40161 of 1986, Perrignon J, 17 October 1986).

20. The plans upon which Horizon relied indicated a single building which comprised a number of facilities - general store 1500m2, hardware store 280m2, real estate agent 80m2, TAB 100m2, chemist 180m2, medicare 80m2, butcher 130m2, delicatessen 80m2, newsagent 80m2, health food 80m2, café 80m2, fruit and vegetables 240m2, post office 80m2, video shop 200m, medical centre 250m2, with two other spare spaces, one of 190m2 and the other of 80m2. 132 car spaces were proposed.

21. The Council conceded that the following proposed uses were permissible with the consent of Council - restaurant, post office, café, medicare, TAB, real estate agency and hardware store. Council would accept that the post office, medicare and TAB facilities were “public buildings”, but took the view that the rest of the proposed uses were prohibited in the zone, and the Minister supported the Council’s attitude as to what was and was not permitted, other than the proposed TAB ,which the Minister submitted was not permitted.

22. Horizon submitted that all the proposed uses were permissible - video, fruit and vegetable, health food, newsagency, delicatessen, butcher shop and chemist shop all came within the term “convenience store”. The Franklins-type operation proposed to be conducted was a “general store”. The proponent considered the proposal could be aptly described as development of the land for the permissible purposes of general store, public buildings, refreshment rooms, and a number of convenience stores. His Honour had evidence from an expert planner (N Ingham) that a convenience store may sell only one range of goods, and those goods need not be food items, so long as they were goods required on a daily or weekly basis to satisfy the daily or weekly needs of the surrounding community. Mr Ingham had opined that a supermarket was one kind of convenience store.

23. The Council’s town planner on the other hand was of the opinion that a convenience store was a “shop”, similar to, but smaller and having a more limited range of brands of goods than, the average supermarket, with facilities for the sale of petrol which kept open for longer hours than the normal shop. The principal purpose of such shops was, he thought, to provide a service to people who had an emergency need for some goods, or who had forgotten to purchase those goods during their weekly or daily shopping excursions (p5).

24. His Honour came to the view that the expression “convenience store” had “come into being in the last 8 or 9 years”, having originated in the practice of “converting little used service stations into shops or stores which not only sell petrol but also cater for the needs of motorists and nearby residents for a variety of consumer items, including food requirements such as milk, bread, butter, eggs and the like, and extending also to a variety of other goods, upon the lines of a mini-supermarket, being much more restricted than a supermarket in the range and brand of goods sold” (p6).

25. His Honour went on to refer to a series of cases which dealt with the evolution of “convenience stores” in NSW, including Caltex Oil (Australia) Pty Ltd v HolroydMunicipal Council (1983) 49 LGRA 77 (to which I will return). He accepted the Council town planner’s attribution of meaning to the term “convenience store” as used in the schedule to the LEP. He rejected Mr Ingham’s far wider meaning as not being accepted in a popular, or even in a technical, sense.

26. His Honour continued (p7):

It follows from what has been said above that stores or shops which sell only one range of products, such as butchers’ shops and greengrocers’ shops, are not in my opinion ‘convenience stores’, and that that expression, when used in clause 15A of the LEP, does not include the following proposed uses in the said development application namely - video shop, fruit and vegetable shop, health food shop, newsagent, delicatessen, butcher and chemist. With the possible exception of the video shop, those uses are, in my opinion, shops within the meaning of the definition of that word in the model provisions and as such are not permissible within the zone in question.

27. His Honour then turned his attention to the 1500m2 proposed “general store”, which was to be a Franklins supermarket, which would sell 60% food items of all sorts, and 40% items such as washing and dishwashing fluids, kitchenware, cigarettes and tobacco, stationery, toys and hardware. His Honour said (p7-8):

The question whether a store which sells these items could be classified as a general store depends upon whether such a store comes within the definition of that term in the model provisions of 1970… such a store would be a ‘shop’ because, again looking at the model provisions a ‘shop’ is, inter alia, a building used for selling by retail goods, merchandise or materials. The question remains whether it could be said to be a shop for the sale of ‘general merchandise’. Whether a particular shop can be said to be one for the sale of general merchandise is a question of fact and degree. It does not matter that the sale is not over a conventional counter but is at a check-out stand. The range and variety of goods proposed to be sold are the determining matters. Having regard principally to the fact that some 60% of the items proposed to be sold are food items and having regard also to the nature of the remainder of such items, I do not think that the proposed use would be for the purpose of a general store within the meaning of that expression in the model provisions. In my opinion such a general store is a shop which is used or intended for use for the sale by retail of a much more wide-ranging supply of merchandise than is proposed. Although it is impossible to define with anything like precision the range of goods which must be offered for sale in a shop in order that it should be regarded as a general store within the meaning of the definition, it is possible to say that particular shops, of which I think this is one, do not come within that definition.

28. After dealing with the question of what was and was not a public building, especially the TAB, and whether cl 15A covered the “medical” space, His Honour concluded that “the only uses which are permissible within the proposed building are the proposed restaurant, post office, medical centre, café, Medicare, TAB, real estate agent and hardware store. The other proposed uses are in my opinion prohibited. His Honour declared that the proposed video shop, fruit and vegetable shop, health food shop, newsagent, delicatessen, butcher’s shop, chemist and general store, were prohibited.

29. Relevantly Perrignon J’s judgment was discussed in papers placed before the Council in its decision-making process for the subject DA in 2000.

Some history of the current proposal

30. The following history of the subject DA and DC has been gleaned from the documentary evidence (Volume 1 of Exhibit M4).

31. Prior to the submission of this DA, Council expressed to the Stevens Group (“Stevens”), acting for Errol, “doubt … as to whether a supermarket within a building of some 3,500m2 gross floor area could be defined as a general store. Should you wish to pursue this use it will be necessary to substantiate its permissibility” (fol 1, 29 January 1999).

32. Errol later lodged its DA (dated 23 June 1999) seeking approval for “proposed fast food restaurant, general store, commercial premise and 2 lot subdivision” at an estimated cost of $4M. The DA was accompanied by a Statement of Environmental Effects (“SEE” - at fols 16-59), prepared by Stevens.

33. Section 4.2 of the SEE (fols 26-28) argued the question of permissibility, as requested by the Council. Many of the same arguments were advanced before me by Mr Tobias QC. They assert that the distinguishing feature between a convenience store and a general store is size, given that both sell “general merchandise”.

34. The SEE argued (fol 26-28):

It was clearly then the intent of the drafter of IDO 26 to permit a shop which is generally larger than a convenience store to be established on the site provided; ‘it is used for the sale by retail of general merchandise’.
…
The proposed 3800m2 building will retail general merchandise and will carry stocklines including but not limited to:

· Gardening items including pots, soils, plants, tools, fertilisers etc
· Electrical equipment including powercords, light globes, adaptors, protector plugs etc
· Grocery lines
· Confectionary
· Hair and beauty products
· Fresh foods including meat, seafood and delicatessen items
· A bakery to provide fresh breads, pies, pastries etc
· Pet car products
· A liquor outlet

The development is consistent with what would previously have been considered a ‘supermarket’ but with a greatly expanded product range. The proposal however no longer falls within the definition of a ‘supermarket’. Like convenience stores ‘supermarkets’ are not defined and one must consider the ordinary meaning of this term as outlined in a dictionary definition. The Macquarie Dictionary defines a ‘supermarket’ as a retail store or market selling food and other domestic products. This definition is clearly too limited to encompass the types of goods and services now proposed to be provided.

Traditionally ‘General Stores’ have provided a similar range of goods and services to those now proposed. The emergence of ‘supermarkets’ as specialist retailers of ‘grocery lines’ over recent years has been a function of the advent of the motor vehicle and changing consumer demands.

More recently a shift has been made from the specialised retailing of grocery items by major players in the supermarket industry. The changes which have taken place have resulted in the re-emergence of the traditional ‘General Store’. There has been a significant increase in the range of goods and services which can now be acquired in a supermarket environment. The dry cleaning facility and café component are examples of this, as are the banking facilities and general product range. All of these ‘new’ services and stocklines however were common place in the traditional General Store which often incorporated a milk bar, dining facilities, and may have offered banking and postal services.
The size of the ‘General Store’ considered appropriate depends upon the size of the population within its catchment and the likely expenditure of the population on the type of products being sold.

35. Colston Budd Hunt & Kafes Pty Ltd (“Colston Budd”) prepared a report for Stevens, describing the project as “a general store in the form of a supermarket, commercial building and fast food outlet on a local centre site …”. The report notes that of the 3800m2, 3,200m2 is leaseable retail floorspace (the balance being loading dock, etc). “The supermarket will retail general merchandise including food and drink and household items, as well as providing a dry cleaning service, coffee shop and banking facilities”.

36. Colston Budd estimated the “future mix of the general store (supermarket)” (fol 71 table 2.1) in floor space terms as follows:

Those figures were translated into the following anticipated sales volumes per year (fol 92):

Food and Drink $17.1M 85.5%
Clothing and footwear $0.5M 2.2%
Other Household Goods $2.1M 10.5%
Personal Services $0.3M 1.2%

(Note: in table4.6 at fol 92, the 79.9% in table 2.1 is correctly varied to 79.7%).

Council’s processing of the DA

37. Economic impacts on “competitors” within a certain range of the site are matters of merit for the Council to consider, Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675 (at 687), 40 LGRA 132 (at 141), and the Colston Budd report dealt with them.

38. The Council sought consideration by the Traffic Committee (fol 134).

39. Exhibit M4 Volume 2 includes other material that came before Council when it made its decision to grant DC, so it is important to describe such material in some detail.

40. All the letters and petitions of objection are gathered (at fols 135-197). Caltex Australia, which operates the Ampol site on the corner, expressed the opinion (fol 144) that “without enough time to get a full legal opinion on what constitutes a general store, a supermarket is not one in common parlance one would imagine as fitting that requirement”.

41. Leyshon Consulting (“Leyshon”), acting for Franklins Limited, prepared a review of the retail development proposal in this matter (fols 198-217), concluding that the Colston Budd report had not demonstrated the need for an additional major supermarket in Cambridge Gardens or adjacent areas, that it did not analyse the implications of the potential impact of the development on the Franklins Supermarket at Kingswood Park, and that the impacts on the Kingswood Park Centre, and the Franklins store in particular, were unacceptably high and could result in a closure of the Franklins store and other retail businesses in the centre.

42. Leyshon commented as follows (at fol 204-205):

We note that general stores are poorly defined in most planning instruments as they are an anachronism in terms of contemporary retailing. The Australian Bureau of Statistics (ABS) for example, no longer includes general stores in its surveys of the retail sector. Following the 1985-86 ABS Retail Census, general stores (of which there were only 85 in New South Wales in 1985-86) were amalgamated with the department store category.

It is instructive to review how the ABS classified general stores in the past. Such stores were defined under what was then known as the Australian Standard Industrial Classification (ASIC). The Category 4815 - General Stores is described in APPENDIX 1 to this Report. In summary, the ASIC classification of general stores was based on the following characteristics:

For example, if more than 75% of the sales in a store were in groceries, smallgoods and tobacco products, fruit and vegetables, confectionary, bread, cake and pastries the store would be classified as a grocery store.
We have further examined the characteristics of general stores from the 1985-86 Retail Census for New South Wales. The three main characteristics of stores so classified in 1985-86 were:

This compares to the proposed store on the subject site which has the following key characteristics:

In our opinion, the proposed store described in the CBHK report is clearly not a general store and in fact has the characteristics of a supermarket. We understand that supermarkets are a prohibited use on the subject site.

43. The Appendix to the Leyshon report defined “General Stores” as follows (fol 217):

This class consists of establishments which have a significant proportion of retail sales in commodities primary to at least four of the following six headings and which employ less than fifty persons.
(i) Groceries, smallgoods and tobacco products, fruit and vegetables, confectionary, bread, cakes and pastries (Classes 4881, 4883, 4885).
(ii) Furniture and floor coverings (Classes 4848, 4849)
(iii) Fabrics and household textiles (Class 4847)
(iv) Clothing (Classes 4843, 4844)
(v) Footwear (Class 4845)
(vi) China, glassware and domestic hardware (Class 4853)
Establishments having commodity sales in excess of 75% of their total retail sales in any of the listed headings are not treated as general stores but are included in the classes appropriate to their major activity.
Source: Australian Standard Industrial Classification
Volume 1: The Classification, 1983 - Category No. 1201.0.

44. On 10 August 1999 the Council wrote to a range of supermarket operators, as well as local nearby residents (see fol 218-222).

45. Council faxed Stevens on 24 August 1999 indicating it was grappling with the question “whether the use of the proposed general store would constitute a ‘shop’ or ‘general store’ under the definitions of the relevant Model Provisions”. The Council officer notes that Stevens responded on the telephone “that the proposed use is a ‘new’ form of marketing including, dry cleaning, delicatessen, coffee shop, bakery, photo developing etc. The 79.9% food & drink item in the retail study includes all the uses associated with food. I explained the need to clarify the proposed ‘general store’ in significantly more detail, both written and plan (proposed layout). Lin advised she will clarify use, discuss retail study with CBH&K and provide internal layout plan” (fol 226).

46. Mullane Planning Consultants (“Mullane”) made a submission on 3 September 1999 (fol 227-240), on behalf of the owner of Kingswood Park Shopping Centre. Mullane referred to Lloyd J’s decision in Fabcot Pty Ltd v Hawkesbury City Council (1997) 93 LGERA 373, and Perrignon J’s decision in Horizon Pacific.

47. In Fabcot, Lloyd J dealt with an appeal against the Council’s refusal to grant consent to a Woolworths supermarket of 3572m2 and carparking for 221 cars at South Windsor on a current timberyard site, and held that (at p378):

…economic competition between individual trade competitors is not an environmental or planning consideration to which the economic effect described in s 90(1)(d) is directed. The Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) are the appropriate vehicles for regulating economic competition. Neither the Council nor this Court is concerned with the mere threat of economic competition between competing businesses. In an economy such as ours that is a matter to be resolved by market forces, subject to the Trade Practices Act and the Fair Trading Act. It is not part of the assessment of a proposal under the Environmental Planning and Assessment Act for a consent authority to examine and determine the economic viability of a particular proposal or the effect of any such proposal on the economic viability of a trade competitor. Moreover, it is at least arguable from the fact that the Trade Practices Act now applies to local government councils, that if a local council were to refuse or to limit a proposal for development on the ground of competition with a trade competitor, it could be guilty of anti-competitive conduct contrary to Pt 4 of that Act.

48. On 14 December 1999, Stevens faxed to the Council a legal opinion by Hemmings QC, which referred to a coloured version of a floor plan (“GSO 1”), dated 15 November 1999, stamped as the plan referred to in Council’s consent of 7 August 2000 (Exhibit M2). It is a floorplan of the proposed “general store”, showing that all sections of it are to be serviced by a familiar looking supermarket-style checkout complex, with which will be associated a banking facility, a dry cleaning service, and a “tobacconist/returns” service.

49. The coloured version of Exhibit M2 illustrates sections for the following: freezer, fresh produce, demo, bakery, chicken and fish, patisserie, a second bakery, butcher, Asian foods, gourmet food, health food, health and beauty, grocery items, kitchen, video, cleaning products, hardware items, clothing, stationery, electrical, garden products and pet care products. “Behind the scenes” there are loading dock, toilets, cool room, cash security, cleaner administration, toilets and offices, staff dining, staff training, and “preparation fresh produce” facilities.

50. Hemmings QC opined (fol 243-4):

A convenience store is not defined. It is an ordinary word and therefore has its ordinary meaning. Such meaning can be derived with the assistance of a dictionary. It is a matter of fact and degree as to whether the functions and purposes of the shop may properly be described as a convenience store. Undoubtedly, a convenience store would sell, inter alia, groceries and general merchandise and its distinguishing feature from a general store is probably size. In my opinion, the proposed development would not be a convenience store.

Whether or not the development as now proposed is for the purpose of a ‘general store’ is also a question of fact and degree. It is defined in the model provisions as -
‘a shop use for the sale by retail of general merchandise and which may include the facilities of a post office’.


The development proposed in GSO1 includes discreet areas for a Bank, butcher, tobacconist, dry cleaner and bakery. The main floor is divided into sections described as freezer, demonstration area, fresh produce, chicken and fish, patisserie, bakery, asian foods, gourmet food, health food, health and beauty, grocery items, kitchen, video, hardware, cleaning, clothing, electrical, stationery, garden products and pet care products. Ingress and egress is via a checkout aisle as is normally found in supermarkets.

‘Supermarket’ is not a defined term and is ordinarily understood to be a shop selling mainly food and grocery items. It is well known that such premises are not always used in the same way and have evolved with market pressure. Supermarkets have consistently increased hours of operation and goods so that they now sell a wide range of merchandise far beyond that of predominantly food.

It might be said that a grocery shop evolved in some cases into a supermarket and some supermarkets have evolved to a general store for the sale of general merchandise.

In my opinion a use would generally be described as a supermarket if it was used as a shop predominantly for food and grocery items. On the other hand a shop which sells such goods but also sells significant quantities of merchandise such as garden products, stationery, electrical, clothing, cleaning, hardware, video, health and beauty and which also includes a tobacconist, dry cleaner, bakery, butcher and a bank is a shop which sells by retail general merchandise.

In this matter resolution of the question can be assisted by determining the intention of the draftsman of the LEP. The zone is a highway service area and shops permitted for that purpose are general stores and convenience stores. The sale of goods proposed in the subject plan is for a wide range of general merchandise, which in my opinion would be expected to be found in a general store in a highway service area. Another appropriate service would be a post office.

For the above reasons, in my opinion, if all of the identified areas in the said plan are used solely for the sale by retail of the merchandise indicated thereon the overall use would be for the purpose of a general store within the meaning of the LEP.

51. In view of the contradictory advice provided by Colston Budd, Mullane and Leyshon, Council engaged Hill PDA to undertake an independent review of the documentation (fol 245-250). Hill PDA advised (at 247):

These trends are polarising the retail hierarchy with the larger regional centres positioning themselves for a more dominant role in the provision of entertainment and customer services matched with increased retail floor space.

Many of the traditional smaller neighbourhood centres were located around railway stations or fronting collector streets in the middle of new suburbs developed during the 1950s to 1970s. The more successful smaller centres have moved towards the concept of convenience centres with greater emphasis on food retailing, just-in-time shopping, fast foods, local services and petrol. Many others have suffered loss of trade to the larger sub-regional centres and new convenience centres resulting in higher vacancies, declining rental levels and the conversion or redevelopment of old strip shops to other uses.
…
The proposed retail centre fits into this category of ‘stand alone supermarket’ offering a convenient ‘one-stop-shop’ with an extended range of food, take-away food, some clothing and household goods. A large proportion of its trade would be derived from commuters during the PM peak period.

52. Stevens on 22 March 2000 (fols 251-2) dealt with the question of carparking. The court notes that Council’s carparking controls vary significantly between supermarkets and general stores. Council responded (fol 253) that it considered “the traffic and parking characteristics of the proposal to be similar to that of a ‘supermarket’ rather than a smaller speciality shop given the nature of the proposed use, the size of the store and the type and range of goods to be provided”.

53. The next document in volume 2 is a revised version of the Colston Budd report, dated April 2000. This document changed the name and nature of the proposal to “general store”, but compared its expected retail sales with those of known “supermarkets”. The report incorporated the findings of some market research, and paid attention to the matters raised by Hill PDA. The Executive Summary comments (at 257):

From advice received from the Stevens’ Group, the proposed store’s layout and merchandise mix is clearly distinguishable from that of a conventional national chain supermarket of 3,200m2, notably by offering far smaller grocery lines, less food and drink, and substantially more household goods and clothing, as well as personal services.

54. Colston Budd revised the commodity mix in the total retail floor space of 3200m2, and the projected annual sales figures, as follows:

Food and Drink 2110m2 66% $16.2M
Clothing and footwear 130m2 4% $0.6M
Other Household Goods 860m2 27% $2.9M
Personal Services 100m2 3%. $0.2M

55. Colston Budd observed (fols 266 and 291):

It should be noted that the intended mix of the proposed general store is clearly distinguishable from typical supermarket operators in having a much wider spread of all commodity types, a much higher proportion of hardware, stationery, gardening, clothing and footwear, electrical, health and beauty and other non-food items, a wider selection of fresh and gourmet foods, and far fewer grocery lines.
…
It is anticipated that the proposed outlet at Cambridge Gardens will capture some $19 million in expenditure at 2002/03 from the study zones and a further c.$1 million from outside the area or from non-home-based spending. The trading position of existing supermarkets presently serving the catchment population following the opening of the new centre, is shown at Table E2 in Annexure E. Their position in 2002/03 relative to their current estimated trading levels (April 2000) is estimated as follows:

Franklins, Kingswood Park -$2m
Jewel, Werrington County -$1.5m
Five Star, Mt Pleasant -$0.6m
Penrith Supermarkets +$0.6m
St Marys Supermarkets $ No Change
Mt Druitt Supermarkets +$0.1m
Blacktown Supermarkets +$0.1m
Other centres -$0.1m

These calculations indicate that only in the first three of the above centres will the impact of the new store more than outweigh the underlying growth in the areas’s retailing potential over the intervening 2 ½ year period.

56. Stevens then reviewed the carparking arrangement to provide 30 for McDonalds, 19 for the smaller building, and 195 for the general store (244 including 3 for disabilities). Stevens’ letter (fol 383-4) is dated 12 April 2000, and said: “The rate of provision for the general store is in accordance with your instructions. In this regard the carparking has been calculated at a rate of 6.1 spaces per 100m2 of GFA”. The additional carparking was achieved by reorientation of the parking aisles on the site, and a minor reconfiguration of the loading dock area. It required the movement of the 500m2 building to attach it to the general store. Amended drawings were submitted.

57. A memo to a Councillor (fol 385), on 26 April 2000, noted that Coles will operate the “general store”, and that Council’s solicitors had indicated that the proposed general store was to all intents and purposes a contemporary supermarket.

58. The Council officer reported the matter to the Ordinary Meeting of Council held on 8 May 2000 (doc 21 volume 2 Exhibit M4). The officer summarised the matter thus (doc 21 p 8):

The issue is therefore whether the proposed use retails a general or more specific range of products and merchandise.

The applicant states the building will be used to retail general merchandise, including but not limited to:

and contends that this is ‘a greatly expanded product range’ that would be offered by a supermarket.

and then commented (p9):

The basis of the applicant’s argument would seem to be that the major players in the supermarket industry have expanded their range of products and services to the point that they are now ‘general store’s, the size of the store depending only on the size of the population catchment.

It is acknowledged that the definition of a ‘general store’ in IDO No. 26 (as amended by LEP No. 116) does not specify a maximum floor space. However, it is of interest to note that a ‘general store’ is defined in the Penrith Planning Scheme as a building not exceeding 2000 square feet (185.8m2) in floor space. Whilst this fact bears no statutory weight in these circumstances, it none the less is indicative of Council’s position/expectation relating to the indicative size of a ‘general store’.

59. The officer went on to quote at length from an advising from Phillips Fox, dated 3 March 2000 (Exhibit E1). Inter alia, that advising said (par 16-22):

The Council cannot say that, as the body responsible for drafting the relevant planning instrument, it interprets relevant provisions thereof to give a meaning intended by the Council. Rather, words contained in the planning instrument will be interpreted according to the rules governing statutory interpretation. Words used will be given their meaning whether technical or ordinary, having regard to the context in which those words appear.

The 1999 development application proposes a modern supermarket. The writer has inspected a Coles supermarket at Bella Vista, in the Baulkham Hills Shire Council area, which is laid out in almost identical fashion to the layout contained in plan GS01 dated 15 November 1999.

The range of goods shown in plan GS01 is extremely broad. There is a good argument that the goods offered for sale would fit the description of ‘general merchandise’. In our opinion it cannot now be a disentitling factor that the plan does not show, for example, a range of rural or farming merchandise.

There must be an argument that the applicant for development consent has reflected the evolution of modern retailing and proposes a range of merchandising that aligns itself more closely to the definition of ‘general store’ but which to all intents and purposes is a contemporary supermarket.

The fact that the latest proposal is to all intents and purposes a supermarket will not exclude it from the definition of general store. The question is whether it sells general merchandise and there must be a very good argument that it does.

Although a supermarket is a shop the definition of shop in IDO 26 excludes a building or place for a purpose elsewhere specifically defined in the relevant clause. That is a shop would not include a general store which is elsewhere specifically defined.

Accordingly there is a very real possibility that a Court would find that the current development application is for a permissible purpose, being a general store.

60. The letter of advice relevantly continued (par 24-25):

Historically the Council has opposed the establishment of supermarket style buildings on the Property and on other similarly zoned land throughout the City area.

As a consequence we have recommended that Council prepare a draft local environmental plan (‘draft LEP’) which will have the effect of limiting general stores on the Property and other similarly zoned land in the City area to those stores that are not greater than 200 square metres in area (emphasis added).

61. In commenting on that letter, the officer said (at p10):

It would seem that the permissibility or otherwise of the proposed ‘general store’ is arguable and on that basis the assessment of the application should move beyond the issue of permissibility (but not dismiss that) and to the merits of the proposal.

Consistent with the legal advice received, a draft LEP proposing a floor area limitation of 200m2 for ‘general store’s in the 3(d) zone has been prepared and exhibited. The draft LEP was made with the objective of clarifying Council’s long adhered to planning policy for development within highway service zones.

To avoid criticism and potential legal challenges that the Draft LEP has not been made for a proper planning purpose, we have deferred reporting the Draft LEP to Council until after this application is determined. Clearly, should Council elect to refuse the application, then it would be appropriate to advance the LEP.

It should be noted that a longstanding practice of the Department of Urban Affairs and Planning has been to not advance LEP’s where they would have the effect of negating a development application which is still in the course of determination, including determination before the Land and Environment Court. Therefore, even if Council were to refer the Draft LEP to the Minister, based on past practice, it would not be acted upon.

62. The officer’s report summarised the Hill PDA findings and noted having provided a copy to Mullane for comment.

63. The Council meeting on 8 May 2000 resolved to “receive and note” the officer’s report, and Council’s review of the material submitted continued.

64. Leyshon commented to Mullane on 12 May 2000, regarding the April Colston Budd report (doc 22 at fol 388):

There is nothing in this data which convinces us that the proposal is anything other than a large supermarket”.

and noted (p2 fol 388):

…the real issue for consent authorities is whether a proposed development will put at risk retail or other facilities currently enjoyed by a community and whether the proposed development will make good the loss of any such facilities.

65. Leyshon concluded that the Colston Budd report did

…not provide Council with an adequate understanding of the likely economic ramifications of the proposed development on existing neighbourhood centres - particularly those at Kingswood Park and Werrington County.

The material contained in the CBHK report focuses only on the impact likely to be experienced by the supermarkets. It is silent on the impact on specialty traders although they are vitally dependent on the drawing power of the supermarkets. Our research indicates that the impact on these centres, particularly Kingswood Park, is likely to be significant and could put existing neighbourhood retail facilities at risk. The standalone supermarket proposed for Star Court is not a neighbourhood retail facility and it would not make good the community services which would be lost by residents of Kingswood Park if the development proceeds.

66. Document 23 (in Vol 2 of Exhibit M4) is a memo from Colston Budd to Hill PDA, dated 24 May 2000, apparently in response to a request for further advice. It records an attempt to compare the current trading position of supermarkets presently drawing trade from the Cambridge Gardens catchment with their anticipated trading position in 2002-2003, following the opening of the proposed new store at Cambridge Gardens. The material Colston Budd assembled was (fol 389-90):

…derived from the figures in the expenditure flow tables … which examine existing and future market shares of supermarket spending - i.e. of that proportion of total spending reasonably expected to be made at supermarkets. The proposed Cambridge Gardens store by virtue of its mix and location, is expected to draw around 80% of its trade from such spending, which explains why you will not find negative $6 million in the impacts (being the $20 million sales projection less the $14 million projected grown in catchment supermarket spending), but on c.80% of $20m minus the $14 million in growth in supermarket spending potential.

67. Colston Budd next commented that the proposed store will draw $3M-$4M p.a. away from existing specialty retailers presently serving the catchment population, and concluded (fol 391):

The proposed general store at Cambridge Gardens is located in an area of strong and continuing catchment growth, in which there has been little additional retailing provided for some years. Growth in existing released areas will continue over the projection period, and significant additional growth will accelerate with the imminent commencement of the ADI lands.

Furthermore, existing supermarket facilities within the main catchment of the proposed store are poor, with Franklins the only national chain operator in the vicinity.

68. Hill PDA reported to Council on 29 May 2000 (doc 24 fols 393-400), commenting (at 394):

The proposed retail centre is a ‘stand alone supermarket’ offering a convenient ‘one-stop-shop’ with an extended range of food, take-away food, some clothing and household goods. A large proportion of its trade would be derived from commuters during the PM peak period.

and concluding (at 400):

Our analysis of the submitted reports would confirm that there is justification for an increase in supermarket floor space in the trade area and that the likely impact of the proposed development will be significant but is unlikely to result in the closure of any of the existing supermarkets.

However we do believe that it will undermine the viability of the establish centres to expand and to attract a greater range of specialty stores. The location of this proposed store outside the established retail centres will set precedence (sic) and contribute to the fragmented nature of retailing in the area. This can be viewed as a social detriment in that it retards any established local centre from gaining a critical mass to attract a greater diversity of stores and services.

69. The Council officer reported again to the Council meeting on 5 June 2000 (doc 25 - fols 401-411).

70. By that stage proposed 24 hour operation, and parking for 244 vehicles, had been clarified.

71. The report referred (at fol 402) to the ABS classification of general store as having an average floorspace of 1458m2 (cf 3800m2), average employment of 30 persons (cf more than 100), and average annual sales of $1.86M (cf at least $20M).

72. The report referred to Perrignon J’s judgment and the range of matters raised by objectors (see fol 402ff), and, in the assessment section, reference is made again to the Hemmings QC’s opinion. The officer’s report went on to note (fol 403A, p5):

The basis of the applicant’s argument would seem to be that the major players in the supermarket industry have expanded their range of products and services to the point that they are now general stores, the size of the store depending only on the size of the population catchment.

Submissions contend that a general store is not dominated by the retailing of a particular category of goods and is not of the size or scale of a supermarket.

In 1986 Council considered a development application to erect a building on this site that comprised, among other things, a building to be occupied by a 1500m2 Franklins type supermarket. Council sought a declaration in the Land and Environment Court that the proposed development was prohibited. In his determination Justice Perrignon noted that 60% of the items sold would be food items and concluded that ‘…I do not think that the proposed use would be for the purpose of a general store within the meaning of that expression in the model provisions’. His Honour concluded that the proposed use was not a general store but a shop and as such was prohibited.

The plans submitted with the application indicate that 65% of the display area within the building will be dedicated to the display and sale of food and drink and 35% will be allocated to other general merchandise. Further, the applicant’s economic consultant indicates that the proposed general store will derive 80% of its trade from ‘supermarket spending’.

73. A further advising from Phillips Fox is then quoted, being the final version of a letter dated 31 May 2000 (see Exhibit C1), which indicates that the report’s quotation from the letter (at fol 404) was incorrectly transposed. Phillips Fox advised Council that it was open to Council to classify the development as a “shop”, but went on to say:

whether or not the proposed development the subject of this advice is a ‘general store’, however, is a question of fact and degree that must be determined by the Council.

In our opinion, it is reasonably open for the Council to conclude that the proposed development includes a ‘shop’ that is not a ‘general store’ and is accordingly prohibited on the subject land.

74. The report went on to note that if the draft LEP is made, a floor area limitation of 200m2 for general stores in the 3(d) zone will take effect and the proposed development would not comply. The officer comments (fol 404 - doc p6):

The making of the draft LEP would not alter the permissibility of the proposed development, however, as it is considered that the proposed use is not a ‘general store’ as that term is currently defined.

75. The report goes on to deal with the Colston Budd, Mullane, Leyshon and Hill PDA reports. Council noted its engagement of Hill PDA to provide an independent assessment of the social and economic aspects of the proposal. The contentions of Colston Budd and Leyshon, and the views of Hill PDA, were then summarised (pp 9-11 of doc 25), and the officer noted (fol 408 or p14):

In 1981/82 Council commissioned Retail Surveys to undertake a retail study to assist Council in the preparation of a strategy for the location of retail centres in the Cambridge Park/Werrington area. As a result of that study Council adopted a strategy that saw the establishment of the existing network of neighbourhood shopping centres and the denial of a request to establish a neighbourhood shopping centre at the Star Court site. In 1985, at the request of the then Department of Planning and Environment, Council commissioned Retail Surveys to review their previous report and examine the likely impact that a supermarket based centre on the Star Court site would have upon the retail strategy for the North Ward. It was concluded that the introduction of a new centre would undermine established centres and as such was considered contrary to encouraging the orderly and economic development of the city.

An independent review of the current proposal has concluded that it will fragment the nature of retailing in the area and undermine the viability of the established centres to expand. As such, approval of the proposal is not considered to promote the orderly and economic development of the city, a primary object of the Environmental Planning and Assessment Act.

76. The officer recommended refusal on the grounds of:

1. Not a “ general store ”, but a supermarket, i.e. “ shop ” as prohibited by 3(d).
2. Inadequate provision for on-site parking of vehicles generated.
3. Will not encourage orderly and economic development of the City.

77. The Council meeting of 5 June 2000 deferred the report, to enable the applicant and its consultants to brief Councillors on the proposal. Mullane and Leyshon were also invited to attend. Hill PDA was to be available to assist in Council’s deliberations. The briefing meeting was set for Monday 26 June (see doc 26 fol 412).

78. Hill PDA provided further advice on 7 July (doc 27 fol 413-416). The conclusion of its advising of 7 July 2000 stated (at fol 415):

Closure of an existing supermarket would have adverse impact on some residents that do not rely on the automobile. However as stated above this scenario is highly unlikely to occur. Even if an existing supermarket were to close the cost to some residents is significantly less than the benefits to the majority of residents in the trade area given that
(i) the proposed centre is on a bus route;
(ii) car ownership rates are high in the area; and
(iii) the location of existing retail centres are in areas of low residential density.

79. The proposal was reported again to Council on 17 July 2000 (doc 28 - fols 417-437). Information additional to that in the earlier report (at fols 432ff) included a commentary on Hill PDA’s later advice, and noted that the layout of parking and the number of vehicle parking spaces had been amended to a satisfactory standard.

80. The officers again recommended refusal, on the grounds of:

1. Not incorporate “ general store ”.
2. Contrary to the object of encouraging the orderly and economic development of the City.
3. Not in the public interest.

81. The officers also recommended that the draft LEP be reported to Council (fol 435).

82. The Minutes of the meeting of 17 July 2000 appear at doc 29 (fols 438-451). The relevant item was referred to the Committee of the Whole. The minutes note that the issue of another location for the proposal had been extensively addressed and exhausted. The officer’s recommendation of refusal was moved and seconded, and an amendment to approve on conditions prepared by the Council officers, was moved and seconded (fols 441-450). (A further amendment was foreshadowed suggesting only an amendment to one of the conditions). The amendment was put and lost, the motion was put and carried, on the casting vote of the Mayor, and a notice of rescission was given.

83. The rescission motion was dealt with at the Council’s meeting on Monday 7 August 2000, the minutes of which (document 30, fols 452-462) indicate that the rescission motion was carried 8 votes to 7 votes, and the development was approved on comprehensive conditions.

84. Notice of determination (doc 31 fols 463-474) was issued on 15 August 2000 to operate from the 7 August 2000. The consent will lapse on 7 August 2002. The grant of consent was then advertised (fols 476-8).

Submissions by the applicant

85. Mr Craig, on behalf of the applicant, submitted that the relevant issues for the court to determine are:

(i) Is the proposal a “ general store ”, permissible under the IDO as amended?
(ii) Is the question a jurisdictional fact?
(iii) Was it open to the Council to reach that conclusion in any event?
(iv) Should the court determine that matter now for itself?

86. If it is not a “general store”, the consent should be set aside. In Mr Craig’s submission, it is a large stand-alone single facility, with a significant turnover, which looks like a supermarket in form, and will compete with other supermarkets. The Model Provisions require “general merchandise”, i.e. a range of goods which will distinguish a general store from other types of shop, including food-oriented supermarkets. Most general stores have a rural character, which establishes their generalist nature.

87. Both the IDO and LEP exclude shops from the site, except two particular species of the genus “shop”, namely, convenience stores and general stores. The rationale for the LEP’s specific amendment of the IDO regarding this site is that there should be only a limited range of retail facilities provided in such a location, and a general store would sell items not normally sold by a convenience store.

88. The court should conclude that it was not open to the Council to conclude that this was a permissible use, i.e. it is not a general store, but a supermarket.

89. Mr Craig submitted that there had been recent significant changes in the law regarding determinations of permissibility, and questions of jurisdictional fact such that the question “can the Council approve this?” was a threshold question to be answered before the Council went on to consider the merits.

The relevant law

90. In Hope v Council of the City of Bathurst (1980) 144 CLR 1, the High Court was considering a decision by Rath J (in the NSWSC), in which His Honour arrived at “the common understanding of the word ‘business’”. Mason J (with whom the majority of the court agreed) said (at 10) that primary regard should be had to the statutory definition of “business”, and that Rath J’s conclusion, being an “error in construction and accordingly of law … cannot reasonably be supported”.

91. In Hoyts Cinemas Ltd v Penrith City Council & Anor [1999] NSWLEC 187, Lloyd J said:

The Council was the body entrusted with the task of determining the development application. If it acted lawfully, bona fide and reasonably its decision cannot be challenged, even if some other body on the same material might legitimately have reached a different view. The other preliminary observation to be noted is that in a challenge to the validity of a development consent, the proof of invalidity rests on the challenger.

92. Questions of characterisation involve subjective views as to matters of fact and degree. Shire of Perth v O’Keefe (1963) 110 CLR 529. I surveyed the authorities on characterisation of DAs in University of Sydney v South Sydney Council (1998) 97 LGERA 186 (at 200-209) and concluded (at 214-215 omitting case references):

What is required is not “precise cataloguing” (Kitto J in O’Keefe), but a “detailed examination of the facts” to construe the purpose “ broadly ” and “ liberally ” without “confining the user to precise activity” in the town planning context. (Kirby P in Boyts Radio).

The Court must examine the “character, extent and other features” of the proposal (O’Donnell) and determine its “appropriate genus ” (Kirby P in Boyts Radio and Steedman) and whether other aspects of the proposal might best and/or fairly be regarded as species of that genus (Pryor Park).

The law does not require me to “force fit” the proposal into any of the models defined in Foodbarn, O’Donnell or Pryor Park. Questions of fact and degree are “inescapably involved” and characterisations will always be “partly impressionistic” (Penrith). Where more than one use is involved in a proposal the primary consideration is the relationship between/among them, beyond their shared use of the subject site (Blakemore).

On the evidence in this matter I characterise the “use” in the University’s proposal as “teaching hospital”.

In so far as that is a species of the genus “hospital”, and/or in so far as the education use may be said to be “ancillary” to the hospital use, the proposal is clearly permissible in that part of the 5(a) zone which is “hospital” (even though par (b) of the definition imported into the LEP does not, in terms, require it to be “ancillary”).

However, this proposal in its entirety cannot simply fit into simplistic definitions of “hospital use” and/or “education use”, nor into the genus/species approach most overtly used in Pryor Park.

Here the twin/dual functions of delivering clinical education to medical students and delivering health care services to patients, public or private, are not relevantly severable, in the way that extraction works are severable from agriculture, orcharding, riding schools, etc. (C B Investments, Steedman, and O’Donnell).

Foodbarn and Steedman make it clear that the Court should not characterise the proposal simply on some comparative analysis of income, space or staffing.
Also like Bignold J in Pryor Park, I want to resist an absurd result, and to take an overly “specific” approach, along the lines urged upon me by Mr Spigelman (despite authority to the contrary), will bring one.

93. The test of whether a Council’s classification or characterisation of a project should not be upset is whether it is one reasonably open to Council as a “reasonable body of persons” to make - Bentham & Anor v Kiama Municipal Council & Ors (1986) 59 LGERA 94, per Stein J, relying on Lord Diplock’s judgment in Bromley London Borough v Greater London Council [1983] 1 AC 768 (at 821): “Looked at objectively” the decision upset by the court must be “so devoid of any possible justification” that no such body could reach it.

94. In Bentham the issue was whether a proposed development should be characterised as a hotel (which was prohibited) or, as the Council found, a conglomeration of motel, tavern and conference centre (which was permissible with consent). Stein J (as he then was) said (at 98-9): “in the circumstances of the difficult factual assessment to be made by Council, the fact that minds might differ and conclude otherwise than did the Council is no reason to vitiate its decision” if it was “reasonably open to Council to make”.

95. Once translated to the Court of Appeal, Stein JA (on 22 December 1997) applied Bentham in delivering the court’s decision (Mason P and Meagher JA concurring) in Londish v Knox Grammar School & Ors (1997) 97 LGERA 1, saying (at 7-9):

The appellants submit that the issue of whether or not the use of the land falls within the characterisation of ‘educational establishment’ is not a matter of discretion, but a jurisdictional fact and a matter which goes to the court’s jurisdiction. Accordingly, the court can review the council’s decision as being in excess of jurisdiction.

In response, the respondents assert that the council’s decision was not one of jurisdictional fact (which would be reviewable by the court) but a finding of primary fact not ordinarily reviewable.

It is a question of law whether the primary facts can necessarily fit the statutory description: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156. However, whether facts fall within the meaning of an ordinary expression, such as ‘educational establishment’ as a matter of common understanding, is a question of fact. Although more than one conclusion might reasonably have been reached by a decisionmaker, an incorrect finding will not involve an error of law: see Hope v Bathurst City Council (1980) 144 CLR 1; 41 LGRA 262. In such cases, it is not for the court to substitute its own opinion for that of the primary decision maker: Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24.

The present case was commenced in class 4 of the Land and Environment Court’s jurisdiction, by way of judicial review. There is a line of authority in the Land and Environment Court commencing in 1986, to the effect that if the opinion formed by the decisionmaker was not vitiated by irrelevant considerations and one which was reasonably open to make, the court will not review the substance of the decision …

96. In Mittagong Mushrooms Pty Ltd v Narrambulla Action Group Inc & Anor (1998) 97 LGERA 333, the leading judgment was given (on 22 April 1998) by Meagher JA, who concluded that Council’s decision that a mushroom composting process was “rural industry” may well be “wrong”, but must be shown to be “devoid of plausible justification”. Sheller JA agreed, quoting at length from Bentham and Londish. Mason P, in a one paragraph judgment (at 334), agreeing with both of his colleagues, said he “would affirm the principles stated in Londish … as to the proper approach to judicial review of a Council’s decision” on such matters.

97. In Timbarra Protection Coalition Inc v Ross Mining NL & Ors (1999) 102 LGERA 52, Mason P and Meagher JA agreed, without additional comment, with the judgment of Spigelman CJ (delivered on 9 February 1999). The local Council had accepted and processed a DA without a species impact statement (“SIS”). Talbot J held that the decision was not reviewable as it was not an error of jurisdictional fact. The Court of Appeal reversed that decision on the basis of the statutory framework dealing with such SIS questions - the need for the SIS had to be adjudicated as an “essential preliminary” to Council’s embarking on the DA assessment process. The learned Chief Justice specifically distinguished Londish, and did not say, or even infer, that it was wrongly decided. His Honour said (at 58 pars 28ff):

The issue in Londish was purely a question of characterisation. The court applied the well-established principle that whether the matter under consideration fell within the meaning of an ordinary English expression was a question of fact. To say that the issue is whether or not a proposal answers a specific statutory description, identifies the issue as one of fact. It says nothing about whether or not a finding of fact by a primary decision-maker can be called into question. It is not the law that the determination of whether or not something answers a statutory description cannot be a jurisdictional fact. (Sometimes called ‘collateral fact’ or ‘condition precedent’). Whether or not a particular finding of fact is jurisdictional in the requisite sense, depends upon the proper construction of the factual reference in the particular statutory formulation in which it appears.

Londish decided that a finding of fact, being the determination of whether primary facts answer a statutory description, in the context there under consideration, was not a finding of jurisdictional fact. The reasoning in that case is not determinative of the construction of other provisions, even in the same legislative scheme.

In my opinion, the statutory scheme in the case of development affecting threatened species is sufficiently different from the scheme under consideration in Londish, to require separate consideration. Indeed, the entire point of the elaborate procedural mechanism that is laid down in the case of threatened species is to distinguish it from the normal case of development applications, under consideration in Londish.

Londish would be more obviously applicable if the issue before the court arose under s 90(1)(c3) where, amongst the considerations required to be taken into account by the consent authority, appears:
‘(c3) whether there is likely to be a significant effect on threatened species, populations or ecological communities, or their habitats’.

In exercising that statutory power, the determination by a consent authority of ‘likely to significantly affect’, is a matter incidental to the exercise of the power to grant consent. The reasoning in Londish, on which the applicant relied, would be more clearly relevant.

However, s 77(3)(d1) does not confer a power on a decision-maker. It imposes a requirement on an applicant. The reasoning in Londish does not apply to such a statutory provision.

The issue on this appeal is whether or not the reference in s 77(3)(d1) to ‘development … that … is likely to significantly affect threatened species, populations or ecological communities, or their habitats …’ is a jurisdictional fact in the sense that if, in truth, that is the situation, no valid development application can be made without an accompanying species impact statement.

98. In Gales Holdings Pty Ltd v Tweed Shire Council (1999) 110 LGERA 235, Lloyd J (on 31 August 1999) referred to Timbarra, and held that a determination of whether something was an “activity” (within the meaning of s 110 of the EP&A Act) was a question of jurisdictional fact and thus a question to be answered at the “threshold” of Council’s processing of an application.

99. On 10 February 2000, the High Court delivered its judgment in Corporation of the City of Enfield v Development Assessment Commission & Anor (2000) 199 CLR 135. In a concurring judgment, Gaudron J said (at pars 59-60):

…with respect to non-jurisdictional facts … there is no legal error involved if an administrative body simply makes a wrong finding of fact. And, again, different considerations apply where what is in issue is not a jurisdictional fact, but the decision-maker’s opinion as to the existence of that fact. In that situation, the question is whether, on the available material, it was reasonably open for the decision-maker to form the opinion in question.
…
Where, as here, the legality of an executive or administrative decision or of action taken pursuant to a decision of that kind depends on the existence of a particular fact or factual situation, it is the function of a court, when its jurisdiction is invoked, to determine, for itself, whether the fact or the factual situation does or does not exist. To do less is to abdicate judicial responsibility. However, there may be situations where the evidence before the court is the same or substantially the same as that before the primary decision-maker and minds might reasonably differ as to the finding properly to be made on that evidence. In that situation a court may, but need not, decline to make a different finding from that made by the primary decision-maker, particularly if the latter possesses expertise in the area concerned.

100. The relevant statute in Enfield required the “relevant authority” to assess a development against various matters, including the provisions of appropriate plans. The Development Assessment Commission was a “relevant authority” for the purpose of that assessment, and, if the proposed development was for “special industry”, it was prohibited. The High Court noted that, before carrying out the assessment, the Commission was required to determine the nature of the development, and proceed to deal with the application according to that determination. Under the Regulation, the Commission made its determination that the proposal was “general industry”. Accordingly, the Commission was not required to refuse consent.

101. The High Court held that a question whether a decision-maker erred as to jurisdictional facts has to be answered by the court in which it has litigated upon the evidence before that court. Where the issue requires the determination of whether the jurisdictional facts existed, the task of the court in determining that question is essentially the same whether equitable relief or judicial review is sought.

102. An argument based on Bentham was apparently rejected by the High Court in Enfield, but Londish was not mentioned.

103. Bignold J has opined, obiter, that “it is unlikely … that the decision in Londish can be taken to have survived the effect of the decision in Enfield” - see Donnelly v Delta Gold Pty Ltd & Ors [2001] NSWLEC 55 (at par 64) - but I am not convinced of that. To the best of my knowledge, Enfield has not yet been considered by the NSW Court of Appeal, but it seems to me to sit quite comfortably with the dichotomy of approach the Court of Appeal has adopted. The two lines of authority in the Court of Appeal are strong, and consistent, and should be followed in this court.

104. In Timbarra, Enfield and Gales, particular statutory contexts applied to the decision-making process of the local authorities concerned. Londish and Mittagong Mushrooms had no such contexts, and the question before the Councils and the courts in those two cases turned on the applicable planning instruments, without the complication of such a statutory context requiring the determination of a jurisdictional fact.

105. The question posed in this case is of like character.

106. Hence, I have concluded that the Court of Appeal decisions in Londish and Mittagong Mushrooms remain good law, are binding on this court, and are “on point” for this case. Their authority is not diminished in any way by the subsequent reformatting of the EP&A Act, as submitted by Mr Craig for the applicant - the relevant provisions for the processing of DAs have not been altered in any substantive way.

107. That being the case, the challenge to the consent must succeed or fail on the basis of the reasonableness of the decisions taken by the Council.

108. In this context, Timbarra and Enfield make clear that in class 4 judicial review cases the court should not need to embark in such detail on the sort of characterisation analysis described in my judgment in University of Sydney, which dealt with a preliminary question of law in a class 1 appeal.

Construction of the instruments and documents

109. Applications and consents are not construed as stringently as statutory instruments. The common meaning and general usage of words changes over the years, and the words of such documents must be interpreted in their context. Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297;; Power v Pentill House Pty Ltd & Ors (1993) 80 LGERA 247 (at 249f).

110. Dictionaries recognise that usage varies over time and place, but they are often not internally consistent. They must, therefore, be used with care. Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1991) 25 NSWLR 541 (per Mahoney JA at 560-1) and House of Peace Pty Ltd & Anor v Bankstown City Council (2000) 48 NSWLR 498. In House of Peace, Mason P said (at 505):

They can illustrate usage in context, but can never enter the particular interpretative task confronting a person required to construe a particular document for a particular purpose.

111. So, what assistance, if any, can the court obtain in this case from the various dictionary meanings drawn to its attention.

112. The Macquarie Dictionary, Third Edition, defines:

“ convenience shop ” or “ convenience store ” as “ a small shop, usually located in the suburbs, which caters to the needs of nearby households by offering a range of food and domestic items most commonly in demand ”.

“ general store ” as “ a shop at some distance from a major shopping centre, stocking a wide range of goods, as the main store in a small country town” .

“ supermarket” as “ a large, usually self-service, retail store or market selling food and other domestic goods ”.

“ merchandise ” as “ goods; commodities; especially manufactured goods, the stock of a store ”.

“ general ” as an adjective meaning “ relating to, affecting, including, or participated in by all members of a class or group; not partial or particular… not restricted to one class or field; miscellaneous… not specific or special ”.

113. The Australian Pocket Oxford Dictionary, Fourth Edition, defines:

“ general ” as “ including or affecting all or most parts or cases of things, prevalent, usual, not partial or particular or local, not limited in application, … not restricted or specialised ”.

“ general store ” as “ shop which stocks a wide range of miscellaneous goods, esp. in a country town ”.

“ supermarket ” as “ large self-service store selling food, household goods, etc ”.

Discussion

114. The retailing “use” or industry has undergone enormous change over the years, illustrated by, e.g., the change in the role of service stations, which are now frequently coupled with “convenience stores”. See Caltex Oil (Australia) Pty Ltd v Holroyd Municipal Council (1983) 49 LGRA 77, in which McClelland CJ said (at 86-7):

Unquestionably, … social changes have occurred which have resulted in a public demand which has been inevitably catered for by watchful entrepreneurs, namely to combine the use of the motor car with the universal imperative of household shopping.

Proliferation of the comprehensive retail outlet under its various names with the indispensable concomitant of adjacent parking space is the most obvious example of this trend. If it has become obvious that, since most people own cars, they will prefer to shop where they can buy everything (or almost everything) that they want for recurring household needs at one place from which it is easy to convey those goods to their cars and then to their dwellings it was but a short step to the discovery that, when people drive their cars to a service station to buy petrol a store alongside the bowsers will tempt them to buy other goods which are available on the same site.

However, such an evolution in public habits does not transform the meaning of language… the most pervasive transformation in public habits cannot transform the meaning of the particular into the general in planning instruments. Such instruments which make the selling of one particular class of commodity, such as petroleum products, permissible in a certain zone but ban from that zone ‘shops’, which are defined as having the general purpose of ‘selling, exposing or offering for sale by retail goods, merchandise or materials’ must be treated as meaning what they say.

115. See also my discussions of the authorities in York Developments Pty Ltd v Liverpool City Council [2000] NSWLEC 174, a case not factually dissimilar from the situation in this matter, and in Turnbull Group v North Sydney Council (1998) 101 LGERA 354, a case involving a “shop”.

116. Quite obviously some traditional types of shops, e.g. chemist, butcher, etc. have changed their complexion over the years. Whereas historically we generally saw single-product line shops for such goods as cakes, groceries, meat, clothing, hardware, newspapers, etc., we now see wide ranges of those lines sold from a single location in what could be called a “general store”. The task of characterisation, in the present era, as in the past, poses questions of fact and degree. Perth v O’Keefe.

117. Where a large “general store” sells a general range of merchandise, including foodstuffs and homewares, it may be referred to colloquially as a supermarket. “Supermarket” is not a planning term; labelling the proposed development as a “supermarket” is irrelevant; a supermarket is a shop, and may be a “general store”. A “department store” is probably also a “general store”. It is irrelevant also that a store’s approval may have impacts. The merit question is different from the permissibility question.

118. There are no specifications as to what constitutes “general merchandise”, and product lines change over time.

119. In this case, does the proposed shop, with 66% of floorspace and 80% of expected sales being “food and drink”, qualify for the title “general store”? Will it sell “general merchandise”?

120. It is proposed that it will retail a wide range of products (Exhibit M2), viz:

Garden Products Electrical
Stationery Clothing
Video Cleaning products
Grocery Items Health products
Beauty products Asian foods
Gourmet foods Health foods
Bakery Patisserie
Chicken Fish
Bakery Butcher
Fresh produce Frozen foods

121. In Perth v O’Keefe, Kitto J found difficulty in the characterisation of shops, and noted (at 535): “in the case of a general store, wide variations in the use as regards the nature of the stock carried and the methods of merchandising might occur before one would say, in an ordinary use of language, that the premises were not being used for the same purpose as before”.

122. Perth v O’Keefe, and North Sydney Municipal Council v Boyts Radio & Electrical Pty Ltd (1980) 67 LGRA 344: “establish that it is not appropriate to take a narrow or pedantic approach to the characterisation of use, nor to look at the precise activities going on, but rather to the broad purpose for which the use was exploited at the relevant date” (see Turnbull at p359).

123. The planning regime in this case distinguishes between “convenience stores” and “general stores”. They may have different dimensions and product ranges, but both are “species” of a “genus”, which might be called “one-stop shopping”, and so is a “supermarket”.

124. As Mr Tobias points out, the dictionary definition of “general store” differs from the statutory provisions. Whatever the term “general store” may or may not be commonly understood to encompass, it is defined in the Model Provisions, and the applicant’s submissions focus on factors which are not included in, or referred to in, those statutory definitions (i.e. floorspace limitations, proportion of food and drink, etc).

125. General stores which comply with the statutory definition predated the emergence of the supermarket as a type of “shop”. The concept of the general store has thus evolved over time as a response to changing needs, and how a facility looks in comparison to a supermarket is irrelevant. The traditional general store was always a one-stop destination - a derivative of the relative isolation of a rural community.

126. The statutory definition does not now stipulate any size - a general store in a small town, cf a general store in a large town; the definition does not deal with the balance or mix of merchandise, which does not need to be “balanced” in terms of floorspace or turnover; it does not distinguish between types of merchandise - fresh, canned, etc. A “general store” in a rural area may carry less food items because rural customers produce their own, and so on. The Council planning instruments in this case envisage a “general store” in an urban locality, not just in a rural area, and, in so far as Horizon Pacific might still be regarded as good law, the actual method of retailing is really irrelevant.

127. The operative element of the statutory definition is the retailing of “general merchandise”.

128. It is that concept which distinguishes “general store” from “shop”.

129. In terms of “general merchandise”, Mr Craig goes beyond the dictionary definition of “not special or particular”, and urges the adoption of a criterion of mix or balance. He relies on Perrignon J’s decision in Horizon Pacific that 60% of food items and only 40% of other lines meant that the store was not a “general store”. However, the definition does not stipulate the width or range of “general merchandise”, and, with great respect to His Honour, the usage of the relevant terms has, in my view, varied between 1986 and now, just as it did between 1960 and 1971, and between 1971 and 1985-6.

130. The proposed “general store” in this case is larger than most of the (competing) supermarkets surveyed. It will be located on a major thoroughfare and in a rapidly growing densely population residential area. There is nothing in the zoning to give rise to a conclusion that the permitted uses were designed only to satisfy the needs of passing motorists. The permitted uses include childcare centres, educational establishments, etc. Land in the zone must play a greater role in satisfying the needs of the population located there, rather than just passing motorists. A general store in that location would be expected to have a large range of fresh and packaged food related product lines available for its local and passing customers.

131. A general store must have a greater range and variety of product lines than a specialty shop. The range and variety depends upon the needs of those the store exists to serve, and the modern methods adopted for retailing. It is not, therefore, surprising that a general store in an urban area will have a predominance of a variety of food related product lines presented in large open aisles with a checkout.

132. The definition does not distinguish between food and other merchandise, nor does it limit size, nor specify predominance or non-predominance of various product lines, such as food. The definition is satisfied where a range and variety of product lines are offered for sale by retail, and to analyse a proposal in terms of floorspace or turnover as Perrignon J id in 1986, is contrary to the current definition. I do not adopt that approach. The range of goods for sale here is clearly “general merchandise”.

133. That factual determination cannot in law be elevated to a jurisdictional fact, such as to permit reconsideration of the merits or validity of that determination by this court. The planning instruments make it clear that the determination of whether the proposal falls within the meaning of the ordinary words used in the relevant definition, is a question of fact for the consent authority. Londish.

134. At the time of its decision, Council was well aware of the full range of products to be retailed from the premises, as well as the floor space proportions, anticipated sales volumes, etc. It had before it numerous submissions, guideline documents, and legal advisings all of which urged it towards various characterisation options, and none of which demonstrated that the proposal was to retail “specialised”, as opposed to “general merchandise”.

135. The Council had to choose between “general store” and “shop” as the correct characterisation, and the choice of “general store” was not only justifiable on the material before it, and therefore reasonably open to it, but probably correct. Mittagong Mushrooms.

136. As Mr Tobias’s written submissions say (at 4.3 and 6.2):

Where, as here, the Council has had drawn to its attention the very pitfall that the Applicant alleges the Council fell into, it will be almost impossible to describe Council’s considered rejection of the pitfall and its exercise of subjective judgment that the proposal does involve the sale by retail of general merchandise as being devoid of plausible justification.
…
Council’s subjective view as to whether the proposed range and variety of general merchandise (a matter of fact and degree) was such as to constitute a general store cannot be said to be devoid of plausible justification. This is especially so given the legal advice (both from the Applicant’s and Council’s solicitors) that the Council had before it.

137. Nothing in either of the planning instruments, or in the Council’s files, suggests that the Council’s decision was vitiated by any irrelevant considerations or, when viewed objectively, was so devoid of plausible justification as to found a submission that it was not a conclusion reasonably open to be drawn. Bromley, Bentham, and Mittagong Mushrooms.

138. The Council determined that the range of product lines set out (in, e.g, Exhibit M4 p27) represented “sale by retail of general merchandise”, and that determination could not objectively be held to be implausible or unreasonable.

Conclusion

139. The class 4 application should be dismissed with costs.

The Question of costs

140. Both respondents seek a special order for costs as a result of the following series of events.

141. The class 4 application was filed against only the First Respondent on 11 December 2000.

142. On 19 January 2001 the Second Respondent was joined in the proceedings and the whole matter was set down for hearing on 1 and 2 March 2001.

143. On 8 February 2001, on the motion of the applicant, and on reference from the Registrar, Bignold J, as Duty Judge, gave directions which allowed the applicant to file expert evidence by 15 February 2001. As the respondents argued that expert evidence on the interpretation of the DA proposal as a “general store” would be inadmissible in these proceedings, His Honour granted the parties liberty to restore the matter on 24 hours notice to argue, preferably before the trial Judge, the question of admissibility of any expert evidence filed by the applicant.

144. His Honour also directed that any evidence in reply by the respondents was to be filed by 28 February 2001.

145. The applicant served affidavits from its expert witnesses between 15 and 19 February. Both respondents incurred costs in preparing to meet that evidence - the First Respondent prepared detailed submissions on the question of inadmissibility, which were handed up by Mr Austin during the hearing, and the Second Respondent also retained experts to reply to the applicant’s expert evidence, in anticipation that it may, over the respondents’ objections, be admitted by the trial Judge.

146. The First Respondent’s solicitors wrote to the applicant’s solicitors on 19 February, once all the applicant’s affidavits were received, advising that it would object, at the hearing, to the admission of the evidence. They received no reply.

147. Neither respondent sought to restore the matter to the list, and seek a determination from the Trial Judge, in the nine days between 19 and 28 February. The Second Respondent’s affidavits were served on the applicant late on 28 February.

148. Senior Counsel for the applicant did not seek to adduce his expert witnesses’ evidence at the hearing.

149. The applicant now contends, on the question of costs, that the respondents should have sought the determination of the admissibility question before the hearing began. The counter argument is that there was insufficient time, between 19 and 28 February, for the respondents to retain experts and put on their evidence by 28 February in the event of seeking the early ruling and losing on the point.

150. The applicant further complains that, while the Second Respondent submitted that it had retained 4 experts between 8 and 12 February, it served its three reports only on the evening of 28 February 2001, the day before the hearing, the last day allowed by Bignold J’s directions.

151. In par 26 of its written submissions of 7 March, the applicant said:

The Applicant reserves its right to make additional submissions to the Court depending on the way the matter is determined by His Honour as the Applicant’s submissions on costs may not be complete and may be premature. The Applicant may wish to make further submissions on the use of material contained in the experts affidavits by the Second Respondent during its oral submissions to the Court. This is particularly relevant in relation to a special cost order.

152. The Second Respondent responded to that in these terms (par 3):

The Second Respondent agrees with the submissions of the Applicant to the effect that when judgment is handed down it will be necessary to revise these submissions and speak to these submissions. Because:
a. If judgment is in favour of the Respondents the only issue is whether the costs should be paid on an indemnity basis in relation to the expert evidence;
b. If judgment is in favour of the Applicant the issue is
(i) whether a costs order should be made in favour of the Applicant in relation to all or part of its costs
(ii) whether a costs order should be made in favour of the Second Respondent in relation to its costs concerning the expert evidence and if so whether those costs should be paid on an indemnity basis.

153. The written submissions filed in this matter refer to a number of decided cases. I recently reviewed the most relevant cases on indemnity costs in Styles v Wollondilly Shire Council(No.3) [2001] NSWLEC 133, as had Lloyd J in Hofer v Howell Developments Pty Ltd(No.2) [2001] NSWLEC 42.

154. The order made by Bignold J allowed the filing of the expert evidence, but that does not bind the party filing it - either the applicant or the Second Respondent - to rely on it, nor does it impose any duty to give notice, or explain, to the court why it chooses not to do so.

155. The applicant has lost the case and should pay the respondents’ costs, but costs are compensatory, not punitive in character. Latoudis v Casey (1990) 170 CLR 534.

156. I can identify no authority which would lead me to the conclusion that indemnity costs are appropriate in this situation.

157. There has been, on the material so far put before me, no “relevant delinquency”, abuse of process, ulterior purpose, or unreasonableness (Styles par 14, and Hofer par 17). The applicant sought leave, obtained it, and then made a tactical choice not to rely on certain evidence, albeit apparently after it saw the Second Respondent’s competing evidence. The conduct of both those parties was reasonable, as was that of the First Respondent in indicating, and preparing, its objection to the applicant’s evidence.

158. In the circumstances, I am not disposed, at this time, towards making any order for indemnity costs. However, as the applicant and Second Respondent may still wish to pursue this matter, once this judgment has been considered, I will make the usual costs order, but stay it for 21 days to enable any of the parties to revive the question by Notice of Motion, if they so choose.

Orders

159. The orders of the court will, therefore, be:

1. The applicant’s class 4 application is dismissed .
2. The applicant is ordered to pay the costs of the First Respondent and the Second Respondent, on a party-party basis, in amounts to be agreed, or assessed according to law.
3. Order 2 is stayed for 21 days, pending a decision by any one or more of the parties to file a Notice of Motion to enable it/them to make further submissions on the question of costs in the light of these reasons for judgment.
4. All exhibits may be returned.