Milem Pty Ltd v Metro Central Joint Development Assessment Panel - [2019] WASC 207

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   MILEM PTY LTD -v- METRO CENTRAL JOINT DEVELOPMENT ASSESSMENT PANEL [2019] WASC 207
CORAM:   ARCHER J
HEARD:   26 MARCH 2019
DELIVERED          :   20 JUNE 2019
FILE NO/S:   CIV 2726 of 2018
BETWEEN:   MILEM PTY LTD
Applicant
AND
METRO CENTRAL JOINT DEVELOPMENT ASSESSMENT PANEL
First Respondent
FABCOT PTY LTD
Second Respondent

Catchwords:

Application for judicial review - Amendment to existing development approval - Precondition to power to approve amendment - Would not 'substantially change the development approved' - Change in use classification - Change in 'use permissibility'

Legislation:

Planning and Development (Development Assessment Panels) Regulations 2011 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:	M C Hotchkin
First Respondent	:	No appearance
Second Respondent	:	P G McGowan

Solicitors:

Applicant	:	Hotchkin Hanly
First Respondent	:	State Solicitor for Western Australia
Second Respondent	:	Clayton Utz

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

Australian Unity Property Ltd v City of Busselton [2018] WASCA 38
Baker Investments Pty Ltd and City of Vincent [2016] WASAT 115
Bechara v Plan Urban Services Pty Ltd [2006] NSWLEC 594; (2006) 149 LGERA 41
Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135
Forrest & Forrest Pty Ltd v The Honourable William Richard Marmion, Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425
Hossain v Minister for Immigration and Border Protection [2018] HCA 34; (2018) 359 ALR 1
Milem Pty Ltd v Metro Central Joint Development Assessment Panel [2018] WASC 371
Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 357 ALR 408
Mohammadi v Bethune [2018] WASCA 98
Moto Projects (No 2) Pty Ltd v North Sydney Council [1999] NSWLEC 280; (1999) 106 LGERA 298
North Sydney Council v Michael Standley & Associates Pty Ltd [1998] NSWSC 163; (1998) 97 LGERA 433
Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144
Presiding Member of the Southern Joint Development Assessment Panel v DCSC Pty Ltd [2018] WASCA 213
Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82
Solomon v Australian Health Practitioner Regulation Agency [2015] WASC 203

ARCHER J:

Introduction

On 14 August 2017, the first respondent, the Metro Central Joint Development Assessment Panel (Panel), granted development approval to the second respondent (Fabcot) for a two storey non‑residential development to be situated at the corner of Canning Highway and Reynolds Road in the City of Melville. The approved development was to incorporate shops, medical centres and office tenancies.
The applicant (Milem) applied for judicial review of the development approval. Milem owns and operates a supermarket on Canning Highway, known as 'Canning Bridge IGA'. Milem's application was dismissed.[1]
[1] Milem Pty Ltd v Metro Central Joint Development Assessment Panel [2018] WASC 371.
Milem now seeks judicial review of the approval of an amendment to the original development. Two amendments to the original development approval have been approved. Milem seeks judicial review of the second of those approvals (Second Amendment Decision).
Under the original development approval, the ground floor comprised a 3,190 sqm supermarket and an area of 180 sqm denoted as 'Specialty'. Both areas were approved for use as a 'shop'.
In the first of the two amendment approvals, which is not the subject of challenge, the City of Melville approved an amendment which, among other things, internally re‑oriented and marginally increased the size (by 1 sqm, up to a total of 181 sqm) of the 'Specialty' tenancy under the original approval. This resulted in the 'Specialty' tenancy being only accessible through the basement carpark or the supermarket tenancy, with no direct access to Reynolds Road. The 'Specialty' tenancy remained approved for use as a 'shop'.
The Second Amendment Decision approved a number of changes to the development approved. Although the application for judicial review referred to two of the changes, Milem ultimately sought only to challenge the amendment to change the use classification of the 'Specialty' tenancy from 'shop' to 'liquor store‑small'.
The Second Amendment Decision was made under reg 17 of the Planning and Development (Development Assessment Panels) Regulations 2011 (WA) (Panel Regulations). By reg 17(1)(c), an application may be made to 'amend an aspect of the development approved which, if amended, would not substantially change the development approved'. By reg 17(4), a development assessment panel may approve such an application, with or without conditions, or refuse it.
It was common ground that reg 17 involves a two-stage process.[2] The first stage requires a precondition to be satisfied before the second stage, the exercise of discretion, may arise.
[2] ts 72 (Milem).
The first stage requires the decision‑maker to be satisfied that the proposed amendment would not substantially change the development approved.[3] If the decision‑maker is so satisfied, the application for the amendment would be a valid application under reg 17(1)(c), and the Panel would then have the jurisdiction to exercise its discretion to approve or refuse the proposed amendment. In these reasons, I will refer to the Panel's satisfaction that the proposed amendment would not substantially change the development approved as the 'Precondition'.
[3] Applicant's Written Submissions in Reply filed 22 March 2019 (Reply) [2] ‑ [3].
The second stage is the exercise of that discretion. It obviously only arises if, in the first stage, the decision‑maker determines that the Precondition has been met.
The application for judicial review is directed to the first stage.

The application for judicial review

In ground 1 of its application, Milem alleged that the Panel committed jurisdictional error by:
(a)purporting to approve an application by the Second Respondent under Regulation 17(1)(c) of the Planning and Development (Development Assessment Panels) Regulations 2011 when the proposed amendment would 'substantially change' the approved development, within the meaning of that expression in Regulation 17(1)(c); and/or
(b)finding only that there would be 'minor amendments to the approved plans that has [sic] no adverse impact on the adjoining properties', when the proper question to consider and evaluate was whether the proposed changes in use from a specialty shop and part of a supermarket to a café/restaurant and a liquor store, together with associated changes to plans required for the changes of use, would 'substantially change' the approved development; and/or
(c)finding that the proposed liquor store was 'ancillary' to the proposed supermarket, because it incorrectly and unreasonably assumed that if a proposed use was 'ancillary' to a predominant use elsewhere in the Centre, it could not also amount to a substantial change in the approved development; and
(d)finding that the proposed liquor store would be 'ancillary' to the supermarket use, as a basis for exercising its jurisdiction, because it would not be an 'ancillary' use as that term is understood in planning law.
In its written submissions in reply (Reply),[4] filed two working days prior to the hearing, Milem clarified what it intended to assert by ground 1(a). It said, in effect, that the Panel had 'misconceived the proper meaning of the [Precondition] and therefore miscarried [sic] the proper exercise of its discretion'.[5]
[4] Applicant's Written Submissions in Reply filed 22 March 2019 (Reply).
[5] Reply [2] ‑ [3].
Milem submitted in its Reply that the Panel failed to correctly construe the criterion by which the judgment as to the Precondition must be made. It submitted that grounds 1(b), (c) and (d) were 'directed to those elements of the decision‑making judgment of the First Respondent which misconstrued the criterion and therefore invalidly concluded that the proposed amendment would not "substantially change" the development approved'.[6]
[6] Reply [4] ‑ [5].
In ground 2 of its application, Milem alleged that the Panel committed jurisdictional error by unreasonably exercising its discretion to make the Second Amendment Decision. However, in its Reply, Milem submitted that, if ground 1 failed, ground 2 'ought not be pressed'. During the hearing, Milem confirmed it withdrew ground 2.
The Panel filed a notice that it intends to abide by the decision of the court, save as to costs.

The issues

The main focus of Milem's challenge related to the different 'use permissibility' of a 'shop' compared to a 'liquor store‑small'. As will be discussed later, a 'shop' use is permitted in a centre of this type if it complies with any relevant development standards or requirements. A 'liquor store‑small' use is not permitted in a centre of this type unless the local government exercises a discretion to approve that use.
The following issues arise:
(1)What is the proper construction of the Precondition to the power under reg 17 to approve an amendment?
(a)In particular, where a change is proposed to the use of an area of the development approved, is an element of the Precondition any change in the 'use permissibility'?
(2)Why did the Panel approve the amendment?
(3)Did the Panel misconstrue the Precondition?
Before considering these issues, I will set out the relevant legal principles.

Legal principles

Jurisdictional error

In dealing with the application for judicial review, the court's jurisdiction does not extend to engaging in a review of the merits of the Second Amendment Decision. The court's jurisdiction is confined to determining whether the Panel made a jurisdictional error in reaching the Decision.[7]
[7] Milem did not allege errors of law on the face of the record.
In Re Refugee Review Tribunal; Ex parte Aala,[8] Hayne J explained:
There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.
[8] Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 [163]. This statement was applied in Forrest & Forrest Pty Ltd v The Honourable William Richard Marmion, Minister for Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425 [86] ‑ [88].
As was recently explained by the High Court in Hossain v Minister for Immigration and Border Protection,[9] determining the limits of a decision‑maker's functions and powers is a question of statutory construction.
[9] Hossain v Minister for Immigration and Border Protection [2018] HCA 34; (2018) 359 ALR 1.
First, it is necessary to identify 'the preconditions which the statute requires to exist for the decision‑maker to embark on the decision‑making process'. It is also necessary to identify the conditions which the statute requires to be observed in order for the decision‑maker to make a decision of that kind. Identifying the preconditions and conditions is a question of statutory construction.[10]
[10] Hossain [23], [27] (Kiefel CJ, Gageler & Keane JJ).
It is ordinarily an implied condition that the decision‑maker proceed by reference to 'correct legal principles, correctly applied'.[11] It is also ordinarily an implied condition that the decision‑maker comply with the standard of legal reasonableness.[12]
[11] Hossain [29].
[12] Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 357 ALR 408 [4] (Kiefel CJ), [53] (Gageler J), [89] (Nettle & Gordon JJ), and [134] (Edelman J).
Second, if the decision‑maker has failed to comply with a precondition or a condition, it is necessary to determine whether the extent of the non‑compliance resulted in the purported decision 'lacking characteristics necessary for it to be given force and effect by the statute pursuant to which the decision‑maker purported to make it'. If so, the purported decision will involve 'jurisdictional error'; that is, the purported decision will have been made outside jurisdiction. Determining the extent of non‑compliance which will have this result is also a question of statutory construction.[13]
[13] Hossain [24], [27].
In Hossain, the plurality said that a 'statute is ordinarily to be interpreted as incorporating a threshold of materiality in the event of non‑compliance. … [The] threshold of materiality would not ordinarily be met in the event of a failure to comply with a condition if complying with the condition could have made no difference to the decision that was made in the circumstances in which that decision was made'.[14]

Statutory construction

[14] Hossain [29] ‑ [30].

As was recently said by the Court of Appeal in Mohammadi v Bethune,[15] '[s]tatutory construction requires attention to the text, context and purpose of the Act. While the task of construction begins and ends with the statutory text, throughout the process the text is construed in its context'.
[15] Mohammadi v Bethune [2018] WASCA 98 [31]. See also all of [31], and [32] ‑ [36].
In Australian Unity Property Ltd v City of Busselton,[16] the Court of Appeal reiterated the primacy of the legislative text in determining legislative intention. The court emphasised that the meaning of the legislation must emerge from the statutory text, understood in its context and having regard to the statutory purpose being pursued.
[16] Australian Unity Property Ltd v City of Busselton [2018] WASCA 38 [77] ‑ [85].

Proper construction of Precondition

As noted earlier, the power to approve an application for an amendment under reg 17(1)(c) is limited to amendments which, if approved, would not substantially change the development approved. As I have said, I will refer to this as the 'Precondition'.
It was common ground that the evaluation requires an assessment of the extent of any change to the built form of the development approved and also any change to its use.
The evaluation requires a comparison between the development approved and the development as it would be if amended as proposed.[17]
[17] Baker Investments Pty Ltd and City of Vincent [2016] WASAT 115 [75].
The change in this case was quantitatively not one that would substantially change the development approved. It dealt with a very small proportion of the overall development, being an area of 181 sqm, compared to the 3,190 sqm supermarket and overall development net lettable floor space of 4,913 sqm. However, it is necessary to consider the change in both a quantitative and a qualitative sense.[18]
[18] Moto Projects (No 2)Pty Ltd v North Sydney Council [1999] NSWLEC 280; (1999) 106 LGERA 298 [52], [56]; Baker Investments [78].
In Baker Investments Pty Ltd and City of Vincent, the State Administrative Tribunal said:[19]
In planning cases, questions of whether alterations 'substantially change' an 'aspect' of the original development will be highly fact specific, perhaps impressionistic to some degree but always require the exercise of 'planning judgement' in a relevantly wide, rather than narrow, context …'

What does 'substantially' mean?

[19] Baker Investments [77].

Both parties asserted, in effect, that an amendment will not 'substantially' change a development if, after such amendment, the development would be essentially or materially the same or have the same essence.[20] Both parties relied upon Baker Investments, in which this was found to be the appropriate construction.
[20] North Sydney Council v Michael Standley & Associates Pty Ltd [1998] NSWSC 163; (1998) 97 LGERA 433 (NSW Court of Appeal); Baker Investments [75].
The tribunal in Baker Investments was considering cl 77(1) of sch 2 of the Planning and Development (Local Planning Schemes) Regulations 2015 (WA). Clause 77 is in materially identical terms to reg 17 of the Panel Regulations. Clause 77 applies where the original development approval was given by the local government, while reg 17 applies where it was given by a development assessment panel.
In finding that this was the appropriate construction, the tribunal relied on several New South Wales cases which construed s 96(2)(a) of the Environmental Planning and Assessment Act 1979 (NSW) in this way. The tribunal found that the NSW provision was 'sufficiently in pari materia with cl 77(1)(c) such that cases from that jurisdiction may usefully elucidate the meaning of the expression "not substantially change" '.[21]
[21] Baker Investments [75].
While I have some doubts as to the similarity between the two provisions, and would ordinarily prefer to simply apply the ordinary meaning of the word 'substantially',[22] it has no impact on the outcome of this case. Accordingly, I will simply assume, for the purpose of these reasons, that the proper construction is as set out in Baker Investments.

'Minor' and 'would not substantially change'

[22] For example, see the online Oxford English Dictionary - 'Fully, amply; to a great extent or degree; considerably, significantly, much'.

Milem relied upon Baker Investments to establish that a change in use that has a minor effect to the built form may nevertheless cause a substantial change to the development approved. Counsel for Milem said Baker Investments, and other cases, were examples of that.[23]
[23] ts 50 ‑ 53.
I accept this. Regulation 17 encompasses changes to the built form and to the use. It encompasses both the quantitative and qualitative nature of the changes. However, the question will always be whether, in light of all of the circumstances, the Panel is satisfied that a proposed change, whether in use or built form, would not substantially change the development approved.
Counsel for Milem then submitted that 'it doesn't take much to be substantial'. Counsel did not accept that this was a contradiction in terms.[24] In my view, a change that could properly be described as minor or insignificant (in the context of both built form and use of the development approved) would not be a change that altered the essence of the development approved.
[24] ts 52.
Further, even a proposed change which can be described as significant in one sense may be properly characterised as one which would not substantially change the development approved.[25] The question, applying the Baker Investments test, is whether, after such amendment, the development would not be essentially or materially the same or have the same essence.
[25] See, for example, Bechara v Plan Urban Services Pty Ltd [2006] NSWLEC 594; (2006) 149 LGERA 41 [39] ‑ [47].
Milem submitted that its position was stronger than the cases it had referred to (which were examples of where a change in use that has a minor effect to the built form may nevertheless cause a substantial change to the development approved). Milem submitted that 'use permissibility' was not an issue in any of those cases.[26]

Change in use classification

[26] ts 53.

The site of the development is located within a designated 'Centre Zone C4'. A 'C4 centre' is a neighbourhood or local centre. The objectives of the C4 Centre Zone are 'to provide for Neighbourhood and Local Centres to focus on the main daily to weekly household shopping and community needs and focus for medium density housing'. The centre to be built on the site is classed as a 'local centre'.[27]
[27] Affidavit of Gregory Ian Brindle sworn 28 September 2018 (Brindle Affidavit) page 10.
A 'shop' use under Local Planning Scheme No. 6 (LPS6) has a 'use class' of 'P' in a 'C4 centre'. This means that the use is permitted in a C4 centre if it complies with any relevant development standards or requirements of the scheme.[28] 'Shop' is defined to exclude a number of premises, including a 'liquor store large' and 'liquor store‑small'.[29]
[28] LPS6, cl 17 and cl 18.
[29] LPS6, cl 38.

Under LPS6, a 'liquor store‑small' has a use class of 'D' in a C4 centre. This means that the use is not permitted unless the local government has exercised its discretion by granting the development approval.[30]
[30] LPS6, cl 17 and cl 18.
Under LPS6, a 'liquor store large' has a use class of 'X' in a C4 centre. This means that the use is not permitted in a C4 centre.[31] The difference between a 'liquor store large' and a 'liquor store‑small' is simply the size of the area.[32]
[31] LPS6, cl 17 and cl 18.
[32] LPS6, cl 38.
The use class assigned to a particular type of use may also be referred to as its 'use permissibility'.
Milem submitted that it was clear from the differences in the use permissibilities that the authors of the LPS6 attached importance to the sale of liquor.
In its written submissions, Milem submitted:[33]
Changing a proposed use from what is permissible under LPS6 to one which is prohibited, even if there is a discretion to allow it, effects a substantial change to the proposed development because, in planning terms, the discretionary power alters from 'ordinary' to 'extraordinary' [Milem footnoted here: 'See Town of East Fremantle v Cornell, [2005] WASCA 18, at [63] ‑ [65]'].
There are sound planning reasons why a change of use which carries with it a difference in use permissibility must substantially change the proposed development. The social implications of selling liquor, for example, will be completely different to the social implications of selling non-alcoholic gifts or clothing. Another example: the impact on amenity of a house (as a 'P' use) in a 'Residential' zone is assumed to differ from the impact of serviced apartments or art galleries in that zone (as 'D' uses). The discretion is exercised, at least in part, by considering whether the difference in use permissibility does not matter enough to warrant refusal [Milem footnoted here: 'LPS6 cl 17 Table 3'] in the particular circumstances of the application. It is precisely why LPS6 prohibits a liquor store unless the decision‑maker properly exercises its discretion, which should include giving the public a reasonable opportunity to make submissions about it.
[33] Applicant's Written Submissions [9]-[10].
In those submissions, Milem appeared to conflate the Precondition with the discretion to approve an amendment. Nevertheless, I accept that, in considering whether a proposed amendment would not substantially change the development approved, the social implications and impact on amenity may be relevant.
In my view, the differences in the use permissibility does not demonstrate that the authors of LPS6 considered that a liquor store‑small would inevitably have greater social implications and impact on amenity. Rather, it showed that they considered that a liquor store‑small may be appropriate in some local centres but not others. By giving a liquor store‑small a 'D' use class, the social implications and impact on amenity in relation to the particular centre in issue can be considered when deciding whether or not to approve a liquor store‑small.
The extent of any differences in social implications and impact on amenity will be relevant to the assessment of whether the amendment would substantially change the development approved. However, I do not accept Milem's submission that a change in use will inevitably substantially change the development approved. It will always depend on the facts and context.
In this case, the context includes that what was approved was a small liquor store which would not have a separate entrance, would not be visible from the exterior of the centre and which would only operate when the supermarket was operating.
Further, the Panel's reasons for exercising its discretion to approve the proposed amendments included that the proposed amendments, as a whole, would not have an adverse effect on adjoining properties. While this is not a merits review, it is not difficult to understand why the Panel may have reached that view, given the access and operational limitations of the proposed liquor store.
Fabcot also pointed out that the Panel did not find that any additional conditions would be required as a result of approving the proposed amendments. Fabcot submitted that, when this is coupled with the fact it considered there would not be an adverse effect on adjoining properties, it can be inferred that the Panel considered that the proposed amendments would not change the overall manner in which the development approved would operate. I accept this submission.
In its Reply, Milem maintained its submission that[34]
a change in use will invariably be 'substantial', if the subsidiary legislation governing the permissibility of the use changes from 'permitted' to 'discretionary'.
[34] Reply [9].
Milem submitted:[35]
That is a conclusion compelled by the planning framework as a matter of law, applying the scheme provisions.
Therefore, an application which seeks to change a use that, in law, alters the use of permissibility of that aspect of the development to a prima facie prohibited use, is necessarily substantial. It has to be treated as a new application, not merely amending one aspect of the development which was approved, because the law governing the permissibility of the use requires it to be so.
[35] Reply [9] ‑ [10].
However, during the hearing, Milem said it did not maintain the proposition that a change in use will invariably be 'substantial', if the use class changes from 'P' to 'D'.[36] It was correct to do so. Whether or not a change in use would substantially change the development approved will depend upon all of the facts and context.
[36] ts 38 ‑ 39.
However, Milem then submitted that it would inevitably be a substantial change in a local centre, as distinct from a larger centre, such as a Neighbourhood or Activities centre.[37]
[37] ts 39.
Fabcot submitted that use classes did not have the significance attached to them by Milem. Fabcot pointed out that different use permissibility was simply one component in the overall development approval framework.
First, no development can take place unless approval is granted. Whether it is a 'P' use class or a 'D' use class, the decision‑maker is required to have regard to a long list of considerations, to the extent the decision‑maker considers them to be relevant.[38] There is not a separate set of criteria that applies solely in relation to the determination of applications involving 'D' use classes.
[38] Clause 67 of sch 2 of the Planning and Development (Local Planning Schemes) Regulations 2015 (WA).
Second, both 'P' use classes and 'D' use classes involve a judgment. With a 'P' use class, the decision‑maker must be satisfied that the use complies with any relevant development standards or requirements of the scheme. Further, the decision‑maker has a discretion to impose conditions on approval.
Fabcot submitted that, having regard to this context, the different use permissibility did not have the significance asserted by Milem. I agree.
There is no doubt that a change in use may substantially change the development approved. There is no doubt a change in use from a use that had a 'P' class permissibility to one that has a 'D' class permissibility may cause a substantial change. Turning a home into an art gallery may be a substantial change. However, I do not accept that such a change in use will invariably substantially change the development approved. It will always depend on an evaluation of all of the facts and context. Nor is it the change of class that is relevant. Rather, it is whether the change in use means that the development as amended is not of the same essence as the development originally approved. I will say more about this later.

Why did the Panel approve the amendment?

Proper approach to reasons

In evaluating a decision‑maker's reasons, it is necessary to have regard to the function being performed and the character of the body performing that function.[39] The Panel, as a joint development assessment panel, was not required to have any legal practitioners as members.[40]
[39] Solomon v Australian Health Practitioner Regulation Agency [2015] WASC 203 [144].
[40] Panel Regulations regs 25(1), 35(1) and 37.
At least where an administrative decision‑maker lacks legal expertise, it is not appropriate to scrutinise its reasons with 'a fine‑tooth comb' and 'an eye keenly attuned to the perception of error'.[41]
[41] Solomon v Australian Health Practitioner Regulation Agency [143].
Further, in evaluating the Panel's reasons, it is relevant that the Second Amendment Decision approved five amendments, including the amendment under challenge.

The City Report

The Panel had before it the report of the 'Responsible Authority' (City Report).[42] The 'Authorising Officer' for the City Report was the City's Director of Urban Planning, Mr Cope. From the context of the City Report as a whole, I infer that Mr Cope wrote or, at least, settled the City Report.
[42] Brindle Affidavit page 7.
The City Report discussed the relevant background and set out the applicable legislation and policies. In relation to the change of use proposal under challenge in these proceedings and an additional proposed change in use to make part of the supermarket a café, it said:[43]
[43] Brindle Affidavit page 10.
Change of Use Approvals
Under the provisions of the City of Melville Local Planning Scheme No 6 (LPS6), the application site is located within a designated Centre Zone C4. The subject centre is classed as a local centre.
The objectives of the C4 Centre Zone are as follows:
'C4 - All Neighbourhood and Local Centres: to provide for Neighbourhood and Local Centres to focus on the main daily to weekly household shopping and community needs and focus for medium density housing.'
Under the provisions of Table 3 - Zoning Table of LPS6, the proposed development of a café is a P use. A 'P' use is defined by LPS6 as a use that is permitted if it complies with the relevant development requirements or standards. The proposed use of liquor store - small is a 'D' use, defined by the Scheme as a use that is not permitted unless the decision maker has exercised its discretion by granting planning approval.
In planning terms the liquor store - small is deemed to be ancillary to the predominant shop (supermarket) use with access provided internally via the supermarket. The liquor store is sleaved from the external view of the building by the proposed café tenancy. The proposed liquor store is considered to compliment [sic] the existing land uses and complies with the objectives of the C4 zone.
It is noted that a Liquor Licence will be required for this development, and the applicant will apply as such to the Department of Racing Gaming and Liquor for this. It is further noted that whilst formal consultation in respect of this amended application has not been undertaken by the City (in accordance with Clause 1.7.12 of LPP1.1, there will be a process of consultation followed by the Department of Racing Gaming and Liquor when they administer and determine the Liquor Licence application.
The City Report then discussed the other proposed amendments and concluded:
The proposal before the [Panel] is considered to be a minor amendment to the approved plans that has no adverse impact on the adjoining properties. The outcome is consistent with the proper and orderly planning sought as part of Local Planning Scheme No. 6.
As such, it is recommended that the [Panel] approve the application as proposed.

The resolutions

The minutes relevantly record the Panel decision in the same terms as had been recommended in the City Report, as follows:[44]
That the [Panel] resolves to:
1.Accept that the [amendment application] is appropriate for consideration in accordance with regulation 17 of the [Panel Regulations];
2.Approve the [amendment application] for the proposed minor amendment to the approved [development] for the following reasons:
The proposal before the [Panel] is considered to be a minor amendment to the approved plans that has no adverse impact on the adjoining properties. The outcome is consistent with the proper and orderly planning sought as part of Local Planning Scheme No. 6.
[44] Brindle Affidavit page 5.
The minutes continued:
All other conditions and requirements detailed on the previous approval dated 14 August 2017 shall remain unless altered by this application.
REASON: In accordance with details contained in the Responsible Authority Report.

The two resolutions

As noted earlier, reg 17 involves a two‑stage process - the Precondition to jurisdiction and the discretion.
Fabcot submitted that the two resolutions made by the Panel reflected those stages. In other words, the first resolution reflected the Panel's decision that the Precondition had been met, and it therefore had jurisdiction under reg 17. The second resolution reflected the Panel's decision to exercise its discretion to approve the proposed amendment. I accept this. There is really no other sensible explanation for the first of the two resolutions.
This conclusion is further supported by the evidence that one of the three matters discussed and debated by the members of the Panel was the 'appropriateness of considering the Second Amendment under Regulation 17' of the Panel Regulations.[45]

What were the reasons for finding the Precondition had been met?

[45] Affidavit of Kristian Joel Nolan sworn 21 December 2018 (Nolan Affidavit) [32].

There are no express reasons in the City Report or the Panel's resolutions for finding that the Precondition had been met.
Milem did not seek to contend that the Panel and the City were unaware of the test under reg 17.[46] Given the nature of the Panel and Mr Cope's position, it must be inferred that the Panel and the City were well aware of the Precondition.
[46] ts 43.
In my view, there are two inferences reasonably open:
(1)either the Panel and the City did not give reasons for finding the Precondition to have been met; or
(2)what was set out under the heading 'Change of Use Approvals' in the City Report were the reasons, or were part of the reasons, for finding that the Precondition had been met (and also the reasons, or part of the reasons, for the Panel's discretionary decision to approve the proposed amendment).
If no reasons were given for finding the Precondition to have been met, it could not be said that the Panel misconstrued the Precondition, unless it can be inferred from the outcome that it did. In other words, if a conclusion that the Precondition had been met was outside the bounds of legal reasonableness, it may be inferred that the Panel misconstrued the Precondition. Although this was not a ground of review,[47] Milem did argue, as noted above, that the proposed amendment would inevitably be a substantial change in a local centre. However, I have rejected this argument.
[47] Although it might have been captured by ground 1(a) on its face, this was not what Milem submitted was intended by this ground.
If reasons were given, they were that:
(1)the 'liquor store - small' is deemed to be ancillary to the predominant shop (supermarket) use with access provided internally via the supermarket. The liquor store is sleaved from the external view of the building by the proposed café tenancy; and
(2)the proposed liquor store is considered to complement the existing land uses and complies with the objectives of the C4 zone.
I will refer to these as the 'Reasons'.
I infer that the Reasons were, at least in part, the Panel's reasons for finding the Precondition had been met. It is likely that they were also part of the reasons why the Panel chose to exercise its discretion to approve the proposed amendment. Obviously, the Panel gave additional reasons for exercising its discretion to approve the proposed amendment, as can be seen from the second resolution itself.
In addition, Milem accepted that it could be inferred from the Panel's reasons that it considered the change in use to be minor.[48]
[48] ts 49.
For completeness, I note that the reference to the liquor licence at the end of the section headed 'Change of Use Approvals' appeared to be directed to the issue of consultation, rather than whether the proposed amendment would effect a substantial change. I will say more about this later.

Milem's construction

The phrase 'a minor amendment to the approved plans'

Milem submitted that the Panel's use of the phrase 'minor amendment to the approved plans' (Minor Phrase) demonstrated that the Panel had misconstrued the Precondition.
Milem submitted that it should be inferred that the Minor Phrase came from cl 1.7.12 of the City's policy 'Planning Process and Decision Making' (LPP 1.1).[49] That clause relevantly provides that, where approval is sought to modify an existing condition of planning approval or to amend the previously approved plans, further consultation is required unless the decision‑maker considers that the proposed amendments are minor and will not result in any additional impact upon any adjoining properties or the surrounding area.
[49] Brindle Affidavit page 80. Clause 1.7.12 is at page 88.
Milem submitted that the Panel's use of the Minor Phrase demonstrated that the Panel had misconstrued the Precondition by considering whether the amendment to the plans was minor, rather than considering whether the amendment to an aspect of the development approved, including its use, would not substantially change the development approved.
It appears that Milem was submitting that the reference to changes to 'the plans' were limited to changes to the built form and would not encompass changes in use. Therefore, Milem submitted, the Panel failed to consider changes in use in determining whether the Precondition had been met.[50]
[50] Reply [12], ts 40 ‑ 43.
I do not accept this.
First, it is not obvious that the Minor Phrase excluded changes in use. The plans for the development approved included the proposed use of various areas.[51] In my view, the words 'approved plans' may simply mean the development approved.
[51] See, for example, the Nolan Affidavit pages 25 and 26.
Second, even if the Minor Phrase did exclude changes in use, it was part of the second resolution; the exercise of discretion. It was not part of the first resolution; the determination that the proposed amendments would not substantially change the development approved. The phrase in the second resolution of 'a minor amendment to the approved plans that has no adverse impact on the adjoining properties' was entirely apposite to the discretionary exercise.
Third, regardless of the proper interpretation of the Minor Phrase, a consideration of the City Report and Panel's reasons as a whole do not permit an inference to be drawn that the Panel considered that the Precondition had been met because the proposed amendment was only a minor amendment to the built form.
In the City Report, the proposed change of use amendments were discussed without any reference to built form or to 'plans', other than in describing the effect of the location of the proposed liquor store on its accessibility and external visibility. Its location was clearly relevant to assessing the significance of the change in use, but was not affected by the proposed amendment.
The Panel's reasons for finding that the Precondition had been met in relation to the liquor store were clearly not related to any finding that the proposed amended would cause only a minor change to the built form - it would not cause any change to the built form.

The reference to 'ancillary'

Milem also submitted that the City's use of the word 'ancillary' demonstrated that the Precondition had been misconstrued.
Milem contended that the City was using the word 'ancillary' in its technical planning sense, as demonstrated by the phrase (emphasis added) 'In planning terms the liquor store - small is deemed to be ancillary to the predominant shop (supermarket) use'. Both 'ancillary' and 'predominant use' are planning expressions.

Milem submitted that the City was wrong in law to say that the liquor store was ancillary to the supermarket shop, as the definition of 'shop' excluded liquor stores. Further, an ancillary use is one that does not require planning approval.
When counsel for Milem was asked why, if the City was using 'ancillary' in its technical planning sense, it would recommend that the amendment should be approved, given approval is not required for such an amendment, Milem said 'That's our point … They've completely misconstrued the criterion'.[52]
[52] ts 44.
I do not accept this. Again, given Mr Cope's position, it is inconceivable that he did not know that an ancillary use does not require planning approval. If he had thought the proposed change in use was ancillary in a technical sense, there would have been no reason to include it in the recommendation. On a fair reading of the City Report, I consider that the City Report was using 'ancillary' in the sense of something that is subordinate. In particular, the City Report noted that access to the liquor store would be provided internally via the supermarket. Consequently, it would only be able to operate when the supermarket was operating. In that sense, it was subordinate to the supermarket.
In any event, for similar reasons, even if the word had been used incorrectly, this would not demonstrate that the Panel had misconstrued the Precondition. To find that the Panel misconstrued the Precondition, it would be necessary to infer that the Panel and the City concluded that, because the change in use was ancillary in the technical sense, the Precondition had been met. I would not draw that inference. It is highly unlikely that the Panel or Mr Cope reasoned that, because the proposed change in use was ancillary in a technical sense (such that no approval was required), this was a reason to find that there was jurisdiction under reg 17 to approve the proposed amendment because it would not be a substantial change.

The reference to the liquor licence

Milem also relied on the reference to 'ancillary' in combination with the reference to the liquor licence. Milem submitted that it was implicit that the Panel concluded that, because the proposed amendment was ancillary, and because there would be further consultation, the proposed amendment would not be a substantial change.[53]
[53] ts 47 ‑ 48. See also ts 58.
Milem submitted that, if the reference to the licence was simply to note that further consultation would occur, that would have been recorded in an earlier section of the City Report which set out the consultation in relation to the original approval and noted that no consultation had been undertaken in relation to the proposed amendment. Milem submitted that the only inference that could be drawn from the location of the reference to the licence was that it was 'referring to an ancillary use'.[54]
[54] ts 48 ‑ 49.
I do not accept this. There is nothing in the City Report to support such an inference. The earlier section dealt with consultation to date. The reference in the section headed 'Change of Use Approvals' was noting that a liquor licence would be required after approval was given, and that, although formal consultation in respect of the proposed amendment application was not required and had not been undertaken by the City, the determination of the liquor licence would involve consultation in the future.
In my view, the reference to the future consultation was simply to let the Panel know that there would, in fact, be future consultation, even though consultation was not necessary at the amendment approval stage.

Milem's construction of the Precondition

Milem accepted that it can be implied from the Panel's reasons and the City Report that the Panel considered that the change in use was minor. However, Milem returned to its proposition that the Panel should have understood that the difference in use permissibility meant it was a substantial change.[55] It will be recalled that Milem said this followed inevitably from the fact that the development was in a local centre, as distinct from a larger centre, such as a Neighbourhood or Activities centre.[56] As I have said, I do not accept this.
[55] ts 49.
[56] ts 39.
Milem did not, and could not, dispute that the City Report had clearly and correctly identified the use class of a liquor store‑small.
Milem did not accept that the Precondition required an evaluation of what the ultimate result would be if the amendment was allowed, namely, in this case, whether a complex containing a supermarket with a liquor store and other shops (and medical centres and office tenancies) would be a substantial change from a complex containing a supermarket with other shops (and medical centres and office tenancies), and not a liquor store. Milem submitted:[57]
What we say is the substantial change is a function of a complex [of[58]] criterion [sic] which includes the use permissibility for those uses. So it's a complex [of] criterion [sic]. You can't look at a proposed amendment and disregard the use permissibility. You cannot say, well, it's just a liquor store, so what. But the authors of the scheme say that it's prohibited unless you exercise your discretion. We go about this a very different way.
We don't just look at the requirements and standards. This calls for a completely different assessment approach. It's a substantial change. That's the planning framework in which this operates.
[57] ts 55.
[58] Although the transcript has the word 'or' here and in the next 'of' in square brackets, counsel said 'of'. See also ts 58.
Milem's Reply clarified what was being submitted here. The Reply stated, citing Plaintiff M70/2011 v Minister for Immigration and Citizenship[59] in support:[60]
Even if a factual criterion involves a 'complex of elements' which requires the making of an assessment or a value judgment on the part of the decision‑maker, the evaluative judgment must still correctly construe the criterion by which that judgment must be made.
[59] Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144.
[60] Reply [4].
There is no doubt that, where a precondition to the exercise of a power requires that the decision‑maker have an opinion of particular matters, an opinion based on a misconstruction of one or more of the matters will not enliven the power.[61] Accordingly, there is no doubt that the Panel was required to properly construe what is meant by a proposed amendment that 'would not substantially change the development approved'. However, Milem appeared to be asserting that 'use permissibility' was a necessary element of the Precondition.[62]
[61] Plaintiff M70/2011 [59].
[62] See also ts 60 and Reply [6].
In Plaintiff M70/2011, there were relevantly four criteria, each of which expressly comprised multiple elements. It was in that sense that the expression 'complex of elements' was used.[63] It does not support Milem's contention that the single, simple Precondition involved the 'element' of use permissibility.
[63] Plaintiff M70/2011 [57], [111]. The criteria are set out in [11]. See also Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 [28].
The Precondition requires an evaluation of whether the proposed amendment would not substantially change the development approved. The decision‑maker must consider any change to the built form and any change in use.
In evaluating a change in use to permit a liquor store, the decision‑maker is required to consider whether it was satisfied that permitting the development of a complex containing a supermarket with a liquor store and other shops (and medical centres and office tenancies) would not substantially change what had previously been approved - a complex containing a supermarket with other shops (and medical centres and office tenancies), and not a liquor store - in light of the facts and context. In considering this, many of the same considerations that no doubt led to a liquor store having a 'D' permissibility use would be considered. However, the Precondition requires a comparison of the 'before' with what would be the 'after' if the amendment was allowed. It requires an evaluation of the effect of the proposed change in use on the development approved. It does not require consideration of the different use permissibility that applies to a proposed change in use.
If the Precondition is met, the Panel has a discretion to approve the proposed amendment. At that point, the Panel would be required to correctly identify the use class of the proposed use, and determine whether it meets the requirements and, where the use class is 'D', whether it should exercise its discretion to allow it.
Milem submitted that, if the Precondition did not require consideration of the different use permissibility that applies to a proposed change in use, the Panel could just allow a 'liquor store large', even though that had an 'X' use class, because it would just be a liquor store.[64] I do not accept this.
[64] ts 55.
First, a 'liquor store large' would not be approved because they are not permitted in a local centre. There would be no need to assess whether it would not substantially change the development approved.
Second, even if the use class of a 'liquor store large' was not 'X', and it was possible to approve it, its size would obviously be relevant in evaluating whether it would not substantially change the development approved, in addition to all of the other factors that caused it to have whatever permissibility use it had.
Milem also relied on Presiding Member of the Southern Joint Development Assessment Panel v DCSC Pty Ltd (DCSC).[65] Milem submitted:[66]
So the use of that case, your Honour - that I make of it is simply this: there was nothing changed about the development. All that was before the Court of Appeal was the potential change of assessment because of a change in the use class definition that had been assessed by the tribunal in its preliminary determination. And because that was discretionary rather than permitted, that was enough for the matter to be remitted even though there was no change at all in the process - in the type of activities that would be taking place on site.
So … the value I take from that case for the purpose of our argument is that the legal question of a substantial change is part of the complex of criterion [sic] that a Joint Development Assessment Panel needs to consider and determine, and it didn't do so in this case because it misled itself into considering that it was ancillary use and, therefore, didn't need to consider the fact that what it required was a different kind of assessment and, therefore, because it required a different kind of assessment, it was a substantial change.
[65] Presiding Member of the Southern Joint Development Assessment Panel v DCSC Pty Ltd [2018] WASCA 213.
[66] ts 58.
In DCSC, the court set aside the decision of the State Administrative Tribunal to grant conditional development approval for a development. The tribunal had found, as a preliminary decision, that the proposed use was properly classified as a 'Convenience Store' rather than a 'Service Station' under the relevant scheme as it then stood. A 'Convenience Store' was a permitted use (a 'P' class) while a 'Service Station' was a discretionary use (a 'D' class) under the relevant scheme.[67]
[67] The meaning of those two use classes under that scheme were the same as the meaning of those two classes under the scheme in this case - see DCSC [12].
After making that finding, the scheme was amended, such that the proposed use was captured by the amended definition of 'Service Station'. Unaware of that amendment, the tribunal granted conditional approval for the development.
The court held that the tribunal erred in failing to have due regard to the provisions of the scheme in force at the time of the tribunal's decision and that the error 'was material, in that the error went to a central issue for consideration (whether the proposed use was permitted or discretionary) and is likely to have impacted on the reasoning process actually adopted by the tribunal'.[68]
[68] DCSC [114].
Milem's reliance on DCSC is misplaced. Obviously, in deciding whether or not to approve a development, the decision‑maker must know and apply the proper test. Where a use is a 'P' class, the decision‑maker need only be satisfied that it complies with any relevant development standards or requirements of the scheme. Where a use is a 'D' class, the decision‑maker needs to determine whether to exercise its discretion to grant the development approval. The tribunal in DCSC had granted approval on the incorrect belief that the use was a 'P' class. The case has no bearing on the issues in this case.

Conclusion

For the reasons I have given, I do not accept Milem's construction of the Panel's reasons or of the Precondition.
I do not accept that the Panel misconstrued the Precondition.
Accordingly, I would dismiss the application for judicial review.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SW
Research Associate/Orderly to the Honourable Justice Archer
20 JUNE 2019