North Sydney Council v Harris Farm Markets Pty Limited

[2017] NSWLEC 67

Land and Environment Court

New South Wales

Medium Neutral Citation:	North Sydney Council v Harris Farm Markets Pty Limited [2017] NSWLEC 67
Hearing dates:	6 and 7 March 2017
Decision date:	09 June 2017
Jurisdiction:	Class 4
Before:	Sheahan J
Decision:	See paragraphs [202] – [207]
Catchwords:	JUDICIAL REVIEW – validity of complying development certificates – alterations to and change of use of a tenancy and shared basement within a mixed use retail/commercial/residential development – amalgamation of tenancies prohibited by a condition of development consent – whether a condition of development consent invalidated the changes authorised by two subsequent complying development certificates – construction of development consents – whether there was ambiguity in the consent condition – consents should be construed so as to “achieve practical results” – interpretation in context – extrinsic evidence – whether development is compliant with the zoning objectives – whether development would impact on traffic and car parking – whether the certifier issuing the CDCs could have been reasonably satisfied that the development standards were met – environmental planning instruments – discretion – form of orders reserved – costs.
Legislation Cited:	Conveyancing Act 1919 Environmental Planning and Assessment Act 1979 Environmental Planning and Assessment Regulation 2000 Hornsby Local Environmental Plan 2013 North Sydney Development Control Plan 2013 North Sydney Local Environmental Plan 2001 North Sydney Local Environmental Plan 2013 State Environmental Planning Policy (Exempt and Complying Development Codes) 2008
Cases Cited:	Agricultural Equity Investments Pty Ltd v Westlime Pty Ltd (No 3) [2015] NSWLEC 75 Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353; [1949] HCA 26 Bankstown City Council v Ramahi (No 2) [2016] NSWLEC 34 Bluestone Property v North Sydney Council [2006] NSWLEC 449 Brown Brothers v Pittwater Council [2015] NSWCA 215 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Electricity Generation Corporation v Woodside Energy Ltd (2014) 88 ALJR 447; [2014] HCA 7 Foley v Padley (1984) 154 CLR 349; [1984] HCA 50 Hamptons Development Group v North Sydney Council [2007] NSWLEC 814 Harris Farm Markets Cammeray Pty Ltd v North Sydney Council [2008] NSWLEC 1413 Hornsby Shire Council v Trives (No 3) [2015] NSWLEC 190 Lend Lease Real Estate Investments Ltd & Anor v GPT RE Ltd [2006] NSWCA 207 Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437; [2014] FCAFC 1 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 Newey v Westpac Banking Corporation [2014] NSWCA 319 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 Ross v Lane Cove Council (2014) 86 NSWLR 34 R v Connell; Ex parte Hetton Bellbird Collieries Ltd (No 2) (1944) 69 CLR 407; [1944] HCA 42 Siminton v Australian Prudential Regulation Authority [2008] FCAFC 90 Stratton Finance Pty Ltd v Webb (Stratton Finance) [2014] FCAFC 110 The Owners Strata Plan 432 v Seddon [2015] NSWLEC 69 Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 Trives v Hornsby Shire Council (2015) 89 NSWLR 268 Western Export Services Inc v Jireh International Pty Ltd (2011) 86 ALJR 1; [2011] HCA 45 Westfield Management Limited v Perpetual Trustee Company Limited & Anor [2006] NSWCA 245
Texts Cited:	DC Pearce and RS Geddes, “Statutory Interpretation in Australia”, 7th ed
Category:	Principal judgment
Parties:	North Sydney Council (Applicant) Harris Farm Markets Pty Limited (First respondent) Harris Farm Markets Cammeray Pty Limited (Second respondent) Brendan Bennett (Third respondent) City Plan Services Pty Ltd (Fourth respondent)
Representation:	Counsel: Mr J Hutton, barrister (Applicant) Mr P Rigg, solicitor and barrister (First & second respondents) Submitting appearance (Third & fourth respondents)   Solicitors: Sparke Helmore (Applicant) Peter Rigg (First & second respondents) Pikes & Verekers Lawyers (Third & fourth respondents)
File Number(s):	2016/155764

Judgment

A: Introduction

The development

1. These Class 4 judicial review proceedings, brought by the applicant, North Sydney Council (“Council”), on 24 December 2014, concern a development complex known as “Cammeray Square” (or sometimes “Cammeray Village”).

2. In particular, they concern the role played in the commercial component of the complex by the 1st and 2nd respondents, Harris Farm Markets Pty Limited and/or Harris Farm Markets Cammeray Pty Limited (together “HFM”), as lessee(s) of tenancies described as “CG01” and “CG02” (sometimes described with hyphens), and, especially, the desire of HFM to amalgamate its two tenancies, and establish a single “supermarket”.

3. The mixed-use complex comprises four buildings on a basement podium, erected on Lot 5 DP1129460, at 450 – 476 Miller St, Cammeray, and 11 Amherst St, but it also adjoins the Warringah Expressway on its southern frontage. The frontages are 85m to Miller St, approximately 80.2m to Amherst St, and approximately 78m to the Expressway, and approximately 84.4m to the west, with a total site area of 6,815m².

4. Relevantly, the complex has been the subject of three decisions of this Court (in 2006, 2007, and 2008), two decisions by accredited certifiers (2013 and 2014), and one decision by an Independent Planning Panel, on appeal from Council (in 2015).

5. Tenancy CG01 has a floor area of 480m², and CG02 236m², and they are on the southern wall of non-residential Building “C”, along with the adjacent third unit, CG03, not associated with HFM (T06.03.17, p6), with a floor area of 231m².

6. Building “C” also includes a child care centre on the upper floors. The upper floors of the other buildings are essentially “shop-top housing”.

7. The shared lower basement provides 65 spaces of resident parking, and the shared upper basement accommodates loading, storage, delivery etc. facilities for the commercial and retail tenants (including HFM). HFM has a dedicated lift (“C2”), and there is another general lift (“C3”), linking the basement and non-residential tenancies (see various plans in Exhibit C1).

The evidence

8. Most of the necessary documentary evidence was included, by agreement between the parties, in an Evidence Book (“EB”), and a Court Book (“CB”).

9. The CB also included an agreed list of issues to be decided by the Court, an agreed statement of facts, an agreed chronology, and an agreed schedule of relevant legislative provisions (tabs 5, 9, 10, and 11 respectively).

10. Council relies, in particular, upon factual and expert evidence given, on affidavit and orally, by its Executive Planner, Geoffrey Mossemenear (EB, tabs D, E and F), but also upon factual affidavits by its solicitors, Christopher Drury (EB, tab H) and Philip Couch (EB, tab G).

11. Council also tendered some other documents (Exhibits C1, being plans, and C2, being Council papers for its 24 September 2007 assessments meeting).

12. Drury deposed to a detailed history of the proceedings, and annexed many informative documents (Tab I).

The argument

13. Council has consistently opposed the amalgamation, and/or any co-ordinated operation, of the two HFM tenancies, and says that it received complaints from the complex’s body corporate, and from residents in the complex, regarding any such amalgamation (see Mossemenear affidavit 16 February 2016 par 20, and Drury affidavit 26 October 2016, pars 41 and 45, and EB, tab H4, fol 250, item 5).

14. HFM regards such a measure as “minor” (EB, fol 250, sec 3.1), and defended these proceedings, and Council’s arguments, vigorously.

15. Council argues also that two relevant Complying Development Certificates (“CDC”), if allowed to stand, will effect an amalgamation of the two HFM tenancies to establish (de facto) a comprehensive supermarket, bypassing the merits assessment process required by the statutory planning/development regime, especially, in this case, affecting matters of traffic and car parking (see T06.03.17, p4).

16. Council submits (par 17) that such amalgamation would be contrary to “numerous assurances” given by HFM to Council and this Court, in 2008, and contrary to both the objectives of the relevant zone (T06.03.17, p5), and the “terms and evident intention” of a key condition of HFM’s consent (condition I 5 – see [96] below).

17. Council also complains that the two tenancies operate to cause unacceptable reductions in the utility of how the basement spaces work for non-HFM users.

The parties

18. The only active parties at the hearing were Council and HFM.

19. The registered owner of the site, The Trust Company Limited, was notified of these proceedings, but did not wish to be joined as a party (see EB, tab G, especially fol 235).

20. However, when these proceedings first came on for hearing (before Pain J) on 14 June 2016, on issues then clearly joined between the active parties, they were stood over, so that the applicant Council could join two further respondents, and amend its summons to challenge the two CDCs.

21. Brendan Bennett, and the company City Plan Services Pty Ltd (“City Plan”), of which he is the sole director, were then joined as 3rd and 4th respondents respectively, because of their role in the granting of the CDCs now challenged in the proceedings, Bennett having issued the CDCs, “purportedly on behalf of the fourth respondent ([City Plan])” (Hutton subs par 10b).

22. Both those respondents ultimately filed a submitting appearance, save as to costs, on 27 February 2017, but, in their Points of Defence (“POD”), filed 22 December 2016, they formally admitted that City Plan had issued CDC No. 132290 (“CDC1”) on 27 September 2013, and CDC No. 132290/1 (“CDC2”) on 5 November 2014.

23. They having then submitted, the Court has no evidence before it from the authors of the CDCs as to the decision making processes adopted.

The amended summons now before the Court

24. After some unsuccessful attempts to resolve the matter, following the events of 14 June 2016, the eventual hearing before me, in March 2017, was conducted on the basis of the Council’s Further Amended Summons, filed 22 August 2016, the material prayers of which summons seek the following relief:

2   A declaration that Condition I5 of development consent issued by the Land and Environment [Court] on 21 October 2008 in proceedings 10699 of 2008 (Consent) prohibits the amalgamation of tenancies CG-01 and CG-02, as identified on Ground Floor Plan number A 2.04 dated May 2006 prepared by Marchese + Partners, on land known as 450 Miller Street, Cammeray, and legally described as Lot 5 DP 1129460 (Premises).

3   A declaration that the amalgamation of tenancies CG-01 and CG-02 at the Premises would contravene Condition I5 of the Consent contrary to section 76A(1) of the Environmental Planning & Assessment Act 1979 [“the EPA Act”] irrespective of the terms of Complying Development Certificate No. 132290 (CDC 132290), dated 27 September 2013, issued by Mr Brendan Bennett for and on behalf of City Plan Services Pty Ltd.

4   A declaration that the amalgamation of tenancies CG-01 and CG-02 at the Premises would contravene Condition I5 of the Consent contrary to section 76A(1) of the [EPA Act] irrespective of the terms of Complying Development Certificate No. 132290/1 (CDC 132290/1), dated 5 November 2014, issued by Mr Brendan Bennett for and on behalf of City Plan Services Pty Ltd.

5   An order restraining the First and Second Respondents from amalgamating tenancies CG-01 and CG-02 at the Premises, as identified on Ground Floor Plan number A 2.04 dated May 2006 prepared by Marchese + Partners, as approved by CDC 132290.

6   An order restraining the First and Second Respondents from amalgamating tenancies CG-01 and CG-02 at the Premises, as identified on Ground Floor Plan number A 2.04 dated May 2006 prepared by Marchese + Partners, as approved by CDC 132290/1.

7   A declaration that CDC 132290 is invalid and of no effect.

8   A declaration that CDC 132290/1 is invalid and of no effect.

9   Costs.

10   Such further or other orders as the Court considers appropriate.

25. Further Amended Points of Claim (“FAPOC”) were also filed on 22 August 2016, and the active respondents filed Further Amended POD (“FAPOD”) on 20 September 2016, denying certain POC, and pleading (par 3 – emphasis mine):

... that in the circumstances of the case, in the proper exercise of the Court’s discretion, the Court would decline to grant the relief claimed.

The “Real” issues

26. The active parties then agreed upon the following list of “real” issues to be decided by the Court (CB tab 5, fol 18 – emphasis added):

1.   What is the correct interpretation of Condition I5 of Development Consent approved by the Land and Environment Court in proceedings 10699 of 2008 and in particular:

(a)   does that condition prohibit only the amalgamation of all 3 of tenancies CG01, CG02 and CG03; or

(b)   does it prohibit the amalgamation of any two of tenancies CG01, CG02 and CG03[?]

2.   Do complying development certificates 132290 and 132290/1 authorise the amalgamation of tenancies CG01 and CG02 despite Condition I5?

3.   Are complying development certificates 132290 and 132290/1 valid?

Issue raised by the Respondent:

4.   Discretion

27. As Mr Hutton noted (par 7), the third of those issues (validity of the CDCs) need be determined only if Council loses on the second issue. Council relies on the decision of the Court of Appeal in Trives v Hornsby Shire Council (“Trives CA”) (2015) 89 NSWLR 268 to the effect that CDCs will be invalid if the opinions in them are found to be “not reasonable”.

28. The Court had the benefit of not only oral submissions, but also written submissions, from both Mr James Hutton of counsel (for the applicant Council – CB tab 6) and Mr Peter Rigg (for HFM – CB tab “O”).

29. Mr Rigg’s written submissions (par 20) reserved HFM’s position on discretion, but both active parties addressed the issue orally (T07.03.17, pp17 – 18, and 44 – 45).

This judgment

30. HFM submitted (T07.03.17, p47, LL31 – 34) that the Court should publish its reasons for decision, reserve the question of costs, and invite all parties to discuss the form of any orders, including as to costs.

31. Council (T07.03.17, p44, LL15 – 29) sought the opportunity to reconsider the wording of some of its prayers for relief.

32. Accordingly, I propose to make my findings, and invite all parties to confer, with a view to their reaching agreement, before I make final orders, hopefully in chambers.

33. Before turning to the evidence and those reasons, I will set out the relevant features of the statutory regime, then the planning instruments/documents.

B: Relevant Provisions of the EPA Act

34. All consents, granted under the EPA Act, may be made subject to conditions (s 80A), but the Act contains special provisions regarding both “exempt” and “complying” development (e.g. ss 76 and 76A).

35. “Complying Development” may receive development consent (“DC”) if it (1) is permissible within the relevant zone, (2) is specified in a relevant complying development code, and (3) meets “specified predetermined development standards” (T06.03.17, p16, LL37 – 40).

36. Section 76A provides:

Development that needs consent

(1)   General

If an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies unless:

(a)   such a consent has been obtained and is in force, and

(b)   the development is carried out in accordance with the consent and the instrument.

(2)   For the purposes of subsection (1), development consent may be obtained:

(a)   by the making of a determination by a consent authority to grant development consent, or

(b)   in the case of complying development, by the issue of a complying development certificate.

(3), (4) (Repealed)

(5)   Complying development

An environmental planning instrument may provide that development, or a class of development, that can be addressed by specified predetermined development standards is complying development.

(6)–(9) (Repealed)

Note. Division 4.1 makes provision with respect to State significant development.

37. Division 3 of Part 4 (commencing with s 84) provides a “special procedure for complying development”.

38. Section 84A(1)(b)(ii) provides:

A person may carry out complying development on land if:

...

(b)   the development is carried out in accordance with:

...

(ii)   any provisions of an environmental planning instrument, development control plan or the regulations that applied to the carrying out of the complying development on that land at the time the complying development certificate was issued.

39. Sections 85, 85A, 86A and 87 relevantly provide:

85   What is a “complying development certificate”?

(1)   Terms of complying development certificate

A complying development certificate is a certificate:

(a)   that states that particular proposed development is complying development and (if carried out as specified in the certificate) will comply with all development standards applicable to the development and with other requirements prescribed by the regulations concerning the issue of a complying development certificate, and

...

(4)   Subdivision of land

A complying development certificate that enables the subdivision of land may authorise the carrying out of any physical activity in, on, under or over land in connection with the subdivision, including the construction of roads and stormwater drainage systems.

Note. A plan of subdivision cannot be registered under the Conveyancing Act 1919 unless a subdivision certificate has been issued for the subdivision.

...

(6)   For the purposes of this section, development standard includes a provision of a development control plan that would be a development standard, within the meaning of section 4, if the provision were in an environmental planning instrument.

85A   Process for obtaining complying development certificates

(1)   Application

An applicant may, in accordance with the regulations, apply to:

(a)   the council, or

(b)   an accredited certifier,

for a complying development certificate.

(2)   (Repealed)

(3)   Evaluation

The council or accredited certifier must consider the application and determine:

(a)   whether or not the proposed development is complying development, and

(b)   whether or not the proposed development complies with the relevant development standards, and

(c)   if the proposed development is complying development because of the provisions of a local environmental plan, or a local environmental plan in relation to which the council has made a development control plan, that specifies standards and conditions for the complying development, whether or not the proposed development complies with those standards and conditions.

...

(6)   Determination

The council or an accredited certifier may determine an application:

(a)   by issuing a complying development certificate, unconditionally or (to the extent required by the regulations, an environmental planning instrument or a development control plan) subject to conditions, or

(b)   by refusing to issue a complying development certificate.

(7)   The council or an accredited certifier must not refuse to issue a complying development certificate if the proposed development complies with the development standards applicable to it and complies with other requirements prescribed by the regulations relating to the issue of a complying development certificate.

...

(9)   In determining the application, the council or the accredited certifier must impose a condition that is required to be imposed under Division 6 in relation to the complying development.

(10)   There is no right of appeal against the determination of, or a failure or refusal to determine, an application for a complying development certificate by a council or an accredited certifier.

...

(11)   Post-determination notification

On the determination of an application for the issue of a complying development certificate:

(a)   the council or accredited certifier must notify the applicant of the determination, and

(b)   the accredited certifier must notify the council of the determination, and

(c)   if the determination is to issue a complying development certificate, the council or accredited certifier must notify any other person, if required to do so by the regulations, in accordance with the regulations.

(12)   For the purposes of subsection (7), development standard includes a provision of a development control plan that would be a development standard, within the meaning of section 4, if the provision were in an environmental planning instrument.

...

86A   Duration of complying development certificate

(1)   A complying development certificate becomes effective and operates from the date endorsed on the certificate.

(2)   A complying development certificate lapses 5 years after the date endorsed on the certificate.

(3)   However, a complying development certificate does not lapse if the development to which it relates is physically commenced on the land to which the certificate applies within the period of 5 years after the date endorsed on the certificate.

(4)   No proceedings may be taken before a court or tribunal to extend the 5-year period.

87   Modification of complying development

(1)   A person who has made an application to carry out complying development and a person having the benefit of a complying development certificate may apply to modify the development the subject of the application or certificate.

(2)   This Division applies to an application to modify development in the same way as it applies to the original application.

40. HFM relies on the Court’s exercising its discretion in its favour, if the Council succeeds. In this respect, s 124 of the Act provides:

Orders of the Court

(1)   Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.

(2)   Without limiting the powers of the Court under subsection (1), an order made under that subsection may:

(a)   where the breach of this Act comprises a use of any building, work or land—restrain that use,

(b)   where the breach of this Act comprises the erection of a building or the carrying out of a work—require the demolition or removal of that building or work, or

(c)   where the breach of this Act has the effect of altering the condition or state of any building, work or land—require the reinstatement, so far as is practicable, of that building, work or land to the condition or state the building, work or land was in immediately before the breach was committed.

(3)   Where a breach of this Act would not have been committed but for the failure to obtain a consent under Part 4, the Court, upon application being made by the defendant, may:

(a)   adjourn the proceedings to enable a development application to be made under Part 4 to obtain that consent, and

(b)   in its discretion, by interlocutory order, restrain the continuance of the commission of the breach while the proceedings are adjourned.

(4)   The functions of the Court under this Division are in addition to and not in derogation from any other functions of the Court.

(5) Nothing in this section affects the provisions of Division 3 of Part 3 of the Land and Environment Court Act 1979.

C: Relevant Planning Instruments and Documents

LEPs 2001 and 2013

41. At the time of the relevant earlier decisions by this Court (to which I will return), the development site was within the Residential D (Neighbourhood Business) Zone, under the North Sydney Local Environmental Plan 2001 (“LEP 2001”).

42. The objectives of that zone were (EB, tab A, fol 2 – my emphasis) to:

(a)   encourage a wide range of services and shops which serve the surrounding residential neighbourhoods, and

(b)   permit a range of small scale businesses which serve local needs, and

(c)    encourage active street life while maintaining high residential amenity, and

(d)   encourage shop top housing.

43. A new LEP was introduced in 2013 (“LEP 2013”), prior to the two City Plan, and the North Sydney Independent Planning Panel (“NSIPP”), decisions.

44. LEP 2013 (EB, tab B) places the subject site in the B1 Neighbourhood Centre zone, the objectives for which are (fol 18 – my emphasis):

•   To provide a range of small-scale retail, business and community uses that serve the needs of people who live or work in the surrounding neighbourhood.

•   To encourage active street life while maintaining high levels of residential amenity.

•   To encourage development for the purpose of shop top housing.

45. In that zone, “neighbourhood shops” and “shops” are permissible with consent. They are defined as follows (fols 39 and 45, respectively):

neighbourhood shop means premises used for the purposes of selling general merchandise such as foodstuffs, personal care products, newspapers and the like to provide for the day-to-day needs of people who live or work in the local area, and may include ancillary services such as a post office, bank or dry cleaning, but does not include restricted premises.

shop means premises that sell merchandise such as groceries, personal care products, clothing, music, homewares, stationery, electrical goods or the like or that hire any such merchandise, and includes a neighbourhood shop, but does not include food and drink premises or restricted premises.

46. Clause 5.4(7) of the LEP 2013 (fol 19) restricts the area of a neighbourhood shop to 80m².

47. “Gross floor area” (“GFA”) is defined (fol 30 – 31) to mean:

... the sum of the floor area of each floor of a building measured from the internal face of external walls, or from the internal face of walls separating the building from any other building, measured at a height of 1.4 metres above the floor, and includes:

(a)   the area of a mezzanine, and

(b)   habitable rooms in a basement or an attic, and

(c)   any shop, auditorium, cinema, and the like, in a basement or attic,

but excludes:

(d)   any area for common vertical circulation, such as lifts and stairs, and

(e)   any basement:

(i)   storage, and

(ii)   vehicular access, loading areas, garbage and services, and

(f)   plant rooms, lift towers and other areas used exclusively for mechanical services or ducting, and

(g)   car parking to meet any requirements of the consent authority (including access to that car parking), and

(h)   any space used for the loading or unloading of goods (including access to it), and

(i)   terraces and balconies with outer walls less than 1.4 metres high, and

(j)   voids above a floor at the level of a storey or storey above.

48. The definition in the 2001 LEP was relevantly similar, in that it also excluded plant rooms (fol 223, par 15).

49. As already noted ([5] above), CG01 has an area of 480m², CG02 236m², and CG03 231m².

50. Mossemenear deposed (16 February 2016, pars 32 – 33) that the floor areas of other retail shops on the ground floor of the complex range from 99m² (BG01), with 9 having areas between 100 and 200m², giving an average shop size of 184m² (including CG01 – 03 – see table at EB, fol 313).

51. CG01 appears to operate as a HFM “supermarket”, and, at 480m², is a significantly larger “shop” than any of its neighbours.

52. Mossemenear deposed (16 February 2016, par 38, fol 85):

The amalgamation of tenancies CG-01 and CG-02 would create a shop with an area that is out of character with the scale of other shops throughout Cammeray Village that are generally characterised as ground floor shops within a two storey building with a 6m frontage.

The Codes SEPP 2008

53. A State Environmental Planning Policy (“SEPP”), covering “Exempt and Complying Development” Codes, came into operation in 2008 (the “Codes SEPP” – EB, tab C).

54. Its Interpretation provisions (cl 1.5(2) – fol 56), specified that:

A word or expression used in this Policy has the same meaning as it has in the Standard Instrument unless it is otherwise defined in this Policy.

55. Several amendments have been made to it over time.

56. The following clauses of the SEPP are presently relevant:

57. Clauses 1.8 and 1.9 (sols 58 – 60) establish some primacy for the SEPP where other instruments are engaged (T07.03.17, p10, LL4 – 10).

58. Clause 1.17 defines complying development (fol 62) as:

(1)   Development that is specified in a complying development code that meets the standards specified for that development and that complies with the requirements of this Division for complying development is complying development for the purposes of this Policy.

(2)   For the purposes of subclause (1), development that is specified includes any specified limitations as to the land on which that development may be carried out.

59. Clause 1.18 (fol 64) provides:

General requirements for complying development for this Policy

(1)   To be complying development for the purposes of this Policy, the development must:

...

(b)   be permissible, with consent, under an environmental planning instrument applying to the land on which the development is carried out, and

...

(3)   A complying development certificate for complying development under this Policy is subject to the conditions specified in this Policy in respect of that development.

60. As at the date of CDC1, cl 5.1 provided:

Specified complying development

An internal alteration to a building that is used as bulky goods premises, commercial premises, premises for light industry or a warehouse or distribution centre is development specified for this code.

61. As at, and since, the date of CDC2, cl 5.1 provided/provides:

Specified complying development

An internal alteration to a building that is used, or is the subject of a development consent for use, for any purpose (other than for the purpose of residential accommodation, heavy industry, sex services premises or restricted premises) is development specified for this code.

62. As at the dates of CDC1, and of CDC2, and presently, cl 5.2 relevantly specified the following development standards:

(a)   the current use of the premises must be a lawful use,

(b)   the current use of the premises must not be an existing use within the meaning of section 106 of the Act,

(c)   the alteration must not result in an increase in the gross floor area of any building within which it is carried out [...],

(d)   the alteration must not involve the conversion of any area that is excluded from the measurement of gross floor area of the building (such as a basement, plant room, car parking space, loading space or void),

...

(h)   [formerly (e)] if the alteration involves a loading dock, the alteration must not:

(i)   reduce the number or capacity of the trucks accommodated, or

(ii)   reduce the area for goods handling, or

(iii)   reduce the area for waste handling (including any recycling area), or

(iv)   reduce the manoeuvring area of the loading dock or access driveway.

...

63. At the time of CDC1, cl 5.4 provided:

Specified complying development

A change from a current use to a new use that is a change from:

(a)   a bulky goods premises to another bulky goods premises, or

(b)   a type of commercial premises to another type of commercial premises, or

(c)   a light industry to another light industry, or

(d)   a warehouse or distribution centre to another warehouse or distribution centre, or

(e)   a light industry to a warehouse or distribution centre, or

(f)   a warehouse or distribution centre to a light industry, or

(g)   a light industry to an ancillary office, or

(h)   a warehouse or distribution centre to an ancillary office,

is development that is specified for this code.

64. Now, and at the time of CDC2, the relevant corresponding provision was (fol 67):

5.3   Specified complying development

(1)   A change of use from an existing use specified in a category in Column 1 of the Table to this clause to a use specified in the corresponding category in Column 2 of that Table is development specified for this code.

Table

Column 1 Existing use	Column 2 New use
...
Category 2	Category 2
business premises	medical centre
office premises	shop
shop	food and drink premises
food and drink premises	kiosk
kiosk	business premises
medical centre	office premises
veterinary hospital
...

...

65. Clause 5.5 became cl 5.4, with some relevant change (the factors square-bracketed in cl 5.4(1)(g) below were added – fols 68 – 70):

5.4   Development standards

(1)   The standards specified for that development are as follows:

(a)   the current use must be a lawful use,

(b)   the current use must not be an existing use within the meaning of section 106 of the Act,

(c)   the new use must not be carried out at premises that are a manufactured home, moveable dwelling or associated structure, temporary structure, tent, swimming pool, ship or vessel,

(d)   the new use must not be any of the following: ...

...

(g)   the new use must not cause the contravention of any existing condition of the most recent development consent (other than a complying development certificate) that applies to the premises relating to hours of operation, [noise], car parking, [loading, vehicular movement, traffic generation, waste management or] landscaping,

...

66. Clause 5.4(1)(i) provided:

if there is no existing condition relating to car parking, the new use must comply with any relevant requirements contained in an environmental planning instrument or a development control plan applying to the land relating to car parking.

67. Clause 5.4(1)(h) now provides:

(h)   car parking must be provided:

(i)   in accordance with any existing condition relating to car parking that applies to the use of the land, or

(ii)   if there is no existing condition relating to car parking either:

(A)   in accordance with any relevant requirements contained in an environmental planning instrument or development control plan applying to the land, or

(B)   if a contribution in relation to car parking in compliance with a contributions plan under Division 6 of Part 4 of the Act is imposed as a condition of approval under clause 136K of the Environmental Planning and Assessment Regulation 2000 [(“the Regulation”)]—if that contribution is made.

68. The former cl 5.6 became cl 5.4(2), in these terms:

(2)   The following requirements of the Building Code of Australia are also standards specified for that development: ...

69. The current version adds the following “Note” to cl 5.4:

Note. Pursuant to the requirement under the Act that a building must be suitable for occupation and use in accordance with its classification under the Building Code of Australia, a change of use may require building work to be carried out despite such work not being included in an application for a complying development certificate.

70. The Codes SEPP does not define GFA, but, as earlier noted, that term was relevantly defined in the two LEPs (see [47] – [48] above).

71. Importantly, the parties reached agreement, overnight between the two days of hearing, that, despite “significant revisions to the SEPP”, there are “no substantial differences” between the form of the SEPP as at the date of CDC1, and as at the date of CDC2 (T07.03.17, p, LL16 – 35). The same clauses remain the subject of the Council’s claim that they “were not the subject of proper or reasonable opinions for the first CDC “ (LL34 – 35).

Development Control Plan 2013

72. Section 10 of the North Sydney Development Control Plan 2013 (“NSDCP” – EB, tab K) relevantly provides (fols 358 – 361):

10.1 INTRODUCTION

Increased traffic flow, congestion and parking demand leads to reduced levels of service for public transport through longer journey times, and loss of fleet efficiency. For pedestrians, increased traffic means more difficulty in walking and increased noise levels on major roads. The can result in roads that are intimidating environments for pedestrians.

These conditions can also lead to loss in residential amenity and increased use of private vehicles as alternative transport modes become less attractive.

...

10.2 PARKING PROVISION

10.2.1 Quantity Requirements

...

Non-Residential Development

P7   Provide on-site car parking at the maximum rates specified in Table B-10.2.

TABLE B-10.2:Non-residential Parking Rates in Specific Locations
Development Type	Zone	Location	Maximum Parking Rate
...	...	...	...
All uses not listed in Table B-10.3 – Specific Uses	B1- Neighbourhood Centre	All	1 space / 100m² non-residential GFA
...	...	...	...

P8   For specific non-residential uses, provide on-site car parking at the maximum rates specified in Table B-10.3.

TABLE B-10.3 – Parking rates for specific non-residential uses
Development Type	Maximum Parking Rate
...	...
Supermarkets	North Sydney Centre Milsons Point St Leonards	•   1 space / 400m² of GFA
	All other areas	•   4 spaces / 100m² of GFA
	...

...

73. I turn, next, to an examination of the relevant approval decisions.

D: The History of Approvals

74. Relevant to the present proceedings are six major decisions – three made by this Court, two made by City Plan, and one by the NSIPP.

75. The subject complex was granted DC by Senior Commissioner Roseth of this Court on 20 July 2006: Bluestone Property v North Sydney Council (“Bluestone”) [2006] NSWLEC 449 (EB, tab E2).

76. Council approved some modifications later in 2006, and in early 2007 (Exhibit C2, p6).

77. Then the learned Senior Commissioner dealt with a further s 96 modification application, on 13 December 2007: Hamptons Development Group v North Sydney Council (“Hamptons”) [2007] NSWLEC 814.

78. A further development application, regarding tenancy CG01, was determined by Commissioner Hoffman on 21 October 2008, while the complex was under construction, but nearing completion: Harris Farm Markets Cammeray Pty Ltd v North Sydney Council (“HFM Cammeray”) [2008] NSWLEC 1413 (EB, tab E5).

79. After 2008, the relevant approvals were a matter for the certifier, and/or the NSIPP.

80. I shall now deal briefly with all six decisions.

Court Approval No 1 – Bluestone, 2006 – the primary consent

81. The original application, which came before Roseth SC for decision, was for demolition of all existing structures on the subject site, and the construction of four buildings, surrounding a landscaped courtyard, and containing retail floor space, child care facilities, 94 apartments, and three floors of basement parking.

82. The appeal was brought against the deemed refusal of that application, on 22 December 2005.

83. The application came to rely upon amended plans, after the Senior Commissioner had declined to sanction basement supermarket and fruit market uses (1500m² and 800m², respectively). He found ([37]) the supermarket and fruit market uses “antipathetic” to the relevant zone objectives, and ([61]) that they would “justify refusal”.

84. He also declined to approve a third basement, and he wanted to limit non-residential parking to 70 spaces.

85. The conditions he attached to the consent which he finally granted (EB, tab E3) included the following (fols 105 and 134):

Development in Accordance with Plans

A1  The development being carried out in accordance with drawings numbered, DA2.02F, DA2.03F, DA2.04F, DA2.05E, DA2.06E, DA2.07E, DA2.08E, A3.01E, A3.02E, A4.01E, A4.02D, A4.03E, A4.04E and DA4.05B, all dated 6 July 2006, drawn by Marchese and (sic) Partners Architects, and endorsed with Council’s approval stamp, except where amended by the following conditions.

(Reason:   To ensure that the form of the development undertaken is in accordance with the determination of Council, Public Information)

...

Allocation of Spaces

H1.   A minimum of one hundred and thirty five (135) car parking spaces shall be provided and maintained at all times on the subject site. The spaces shall be allocated in the following proportions:

65   -  Residential

10   -  Child Care Centre

60   -  Non-Residential

Such spaces are to be identified on-site by line-marking and numbering upon the completion of the works. Car-parking provided shall only be used in conjunction with the uses contained within the development and in the case of Strata subdivision, shall be individually allocated to residential units. Under no circumstances shall Strata By-Laws be created to grant exclusive use of nominated Visitors Parking spaces to occupants/owners of units or tenancies within the building.

(Reason:   To ensure that adequate parking facilities to service the development are provided on site)

86. Plan DA 2.04 (revision F), mentioned in condition A1 above, is before the Court (EB, tab E4, fol 137).

Court Approval No 2 – Hamptons, 2007 – modification

87. The s 96 application which came before Roseth SC in 2007 sought to increase the number of non-residential parking spaces in the upper basement from 70, as per the consent, to 80.

88. It was the subject of a detailed Council report, presented to a meeting on 24 September 2007 (Exhibit C2). The main submissions contained in the report were authored by Mossemenear, then Council’s Executive Assessment Planner, who said, inter alia (pp18 – 19, emphasis mine):

The Residential D Zone [to which I will return] comprises small scale neighbourhood centres and "corner shops". The mix of shops and services provide for daily needs (such as chemist, butcher, small goods, doctor's surgery) and recreation (such as cafes and restaurants). Non-residential uses are balanced with residential uses and are usually at the street level frontage. An important factor is the scale of development; all uses should be compatible with the residential scale, ie. small and intimate and should be clean and quiet, have minimal adverse affect (sic) in terms of noise, traffic, etc.

The Court determined that a supermarket and fruit market were inconsistent with the zone objectives and could not be approved. The proposed supermarket was about fifteen times larger than the average Cammeray shop (about 100m²)

The parking limit imposed on the site was in part to limit uses of the retail space approved to ensure that traffic generation was minimised and the uses would not cause adverse economic effect on the viability of other centres.

Any modification to increase parking could possibly lead to an intensification of the retail use that would be inconsistent with the objectives of the Residential D zone:

For example, a larger supermarket or fruit market on one of the upper levels (1,000m²) or a combination of ground level tenancies (>500m²) would be inconsistent with these objectives.

At best, the maximum size for a market on the site should be limited to the largest ground floor tenancy approved by the Court being 480m². Any larger could not be considered as a small scale business which serve local needs.

The approved parking is adequate for a certain level of use that would not include a large supermarket or fruit market. The non-residential areas can be described as follows:

•   13 separate ground floor tenancies having areas between 99m² and 480m² and having a total area of 2396.2m²

•   level 1 of building C having a floor area of 1017m²

•   level 2 of building C having a floor area of 1150m²

•   level 3 of building C having a floor area of 542m² shown as child care centre

The Court had considered parking at the rate of 10 spaces for the child care centre; 22 spaces for level 1 and 2 at 1 space per 100m²; 36 spaces for the ground floor tenancies assuming half of the area is used as cafe/restaurant (1 space per 50m²) making a total of 68 spaces.

If the largest ground floor tenancy (480m²) is used as a fruit market then 48 spaces would be required for the ground floor and a total of 80 spaces for non-residential uses would be appropriate.

89. The appeal against Council’s refusal of the modification was upheld.

Court Approval No 3 – HFM Cammeray, 2008 – a second consent

90. HFM’s development application (“DA”) dealt with by Hoffman C, sought approval to fit out and use “Unit CG01” as a “fruit and vegetable shop”. Council had already approved HFM’s DA for CG02, which was to operate as a “fresh food outlet” (T06.03.17, p6, LL47 – 48, and p7, LL23 – 30).

91. The learned Commissioner upheld HFM’s appeal, and granted consent for the use and fit out of CG01 as a “fruit and vegetable market”. The decision included consent for conversion of a plant and storage room in basement level 1 to a loading area and cool room, but did not vary the floor space areas approved by Roseth SC (480m² retail tenancy, plus 107m² store room).

92. He noted (at [69]) that HFM businesses “came in different sizes between 550 sq m and 2000 sq m”, so CG01, at 480m², would be “a small outlet” in their range.

93. Mossemenear records (in his affidavit of 16 February 2016, par 20) that HFM’s solicitor (Mr Rigg) assured Hoffman C that “there will never be an operational link between CG-01 and CG-02”, and, on that basis, did not object to condition I 5. Hoffman C noted (at [33]) that such a link (or amalgamation) would establish a business “too big to cater for ‘local needs’”, and “not compatible with the village character”.

94. Mr Hutton noted in this context (T06.03.17, p9, LL35 – 43) that there was no condition of consent stipulating a maximum tenancy area of 480 – 500m², but the reasons given by Senior Commissioner Roseth were clearly in that spirit, and the relevant approved plans had the largest tenancy at 480m².

95. Hoffman C relevantly said, at [67], [90] and [91]:

67.   Mr Waight’s comments on CG-02 are that it is not the subject of this application, he accepts the draft condition that CG-01 and CG-02 not operate as one business. He agreed that whilst HFM has no agreement or association with CG-02 at the moment, nothing excludes that possibility except the draft condition.

...

90   I find it difficult to escape the previous decision that contemplated a fruit & veg market in CG-01 and adjusted the number of parking spaces in the basement to allow for it. Also I do not believe there is certainty of CG-01 being much more than a shop when it is not sited with, and based on the previous decisions will never be sited with, a proper supermarket to form the large “anchor attractors” for weekly shopping. Given that the HFM would be perhaps the smallest outlet in that company’s range, and with the council condition preventing amalgamation with CG-02 and CG-03, it may not provide much more than the incidental shopping role of a local centre.

91.   The respondent says that the applicant has avoided saying there will never be a business or operational or other link with CG-02, and has only sought to exclude CG-03 because it has no knowledge of it. The respondent asks me to infer that there is and will be a co-ordinated operation of the two tenancies. However it seems to me the numerous assurances to the Court that the staff and preparation rooms in CG-02 will not be used for the operation or staff of CG-01 constitute evidence that the respondent can act upon if ever there is a breach. I cannot assume there will be a breach and use it for a dismissal.

96. The learned Commissioner’s orders (tab E6, and see tab I 4, fol 280) imposed conditions, which included condition I 5 (fols 163 and 287) in these terms (emphasis added):

Amalgamation of Tenancies

I5.   The approved tenancies number (sic) CG-01, CG-02 and CG-03 as identified on Ground Floor Plan number A 2.04 dated May 2006 prepared by Marchese + Partners shall not be amalgamated.

(Reason: To ensure the size of the tenancies remain consistent with the objectives of the Residential D Zone)

97. The proper construction of condition I 5 is central to this case.

98. HFM argues that the (highlighted) word “and” in condition I 5 means that the condition outlaws (only) any proposal to amalgamate all three tenancies, and does not outlaw any proposal to amalgamate only any two of them.

99. As Mr Hutton noted on Council’s behalf (T06.03.17, p11, LL26 – 27), paragraph [67] of the judgment ([95] above) appears to record an “entirely unambiguous acceptance”, on HFM’s behalf, of how the contentious condition (I 5) was intended to operate.

100. There were complaints to Council about the two tenancies operating together, and penalty notices were issued, but those notices were withdrawn when HFM “rectified the situation” (T06.03.17, p12, LL14 – 36).

A new LEP comes into force

101. At this point in my recounting of the chronology of relevant approval events, it should be noted that the 2013 North Sydney LEP came into force on 13 September 2013 (CB tab 10, fol 81, item 3).

102. Its relevant zone objectives (EB, fol 313) speak of a “range of small-scale retail, business, and community uses”, which Mr Hutton submits (T06.03.17, p13, LL23 – 26) are “really no different from the earlier zoning objective”, and (LL43 – 45) “inconsistent with” amalgamation of two tenancies.

The Two CDCs Issued by City Plan, 2013 – 14

103. On 27 September 2013, in CDC1, City Plan certified $600,000 worth of work (EB, tab E7, fol 170 – 179, and CB tab 7).

104. The certificate wrongly noted the zoning of the subject property as “B4 Mixed Use”, and described the “scope of works” as “refurbishment of existing store”, but it included approval of the removal of the inter-tenancy boundary wall. (The certified plans are before the Court, at fols 1 to 7 of Exhibit C1.) It relevantly did not involve a change of use (T06.03.17, p18, L35, and p20, LL20 – 21).

105. Council received CDC1 on or about 2 October 2013. (The relevant CDC1 plans are sheets 1 to 7 of Exhibit C1.)]

106. On 5 November 2014, in CDC2, City Plan certified (EB, tab E8, fols 185 – 186, and CB tab 8) “a change of use of tenancy CG01 from a fruit and vegetable market, and a change of use of tenancy CG02 from a fresh produce outlet to a supermarket within CG01 and CG02” (my emphasis).

107. Again, the certificate wrongly noted the zoning as “B4 Mixed Use”. The CDC referred to, and relied upon, a series of architectural plans/drawings (which are also before the Court, at fols 8 to 14 of Exhibit C1).

108. Council received CDC2 on or about 10 November 2014. (The relevant CDC2 plans are sheets 8 to 14 of Exhibit C1.)

109. Mr Hutton submitted (par 8):

... the Council notes that the Second CDC purports to permit more extensive internal alternations (sic) than the First CDC and, unlike the First CDC, purports to permit a change of use for both CG-01 and CG-02 that will enable them to be operated together or amalgamated. Harris Farm appears to have realised that the First CDC was not sufficient to achieve its development goals and to have obtained the Second CDC effectively as a replacement. It seems to the Council that real matters in dispute relate to the effect and validity of the Second CDC, not the First CDC, which can be put to one side. ...

110. He said (T06.03.17, p17, LL34 – 35) that CDC2 “really supersedes” CDC1, but that it was invalid, because, rather than effect a change of use, it attempted to effect an amalgamation, which was not allowed by the Codes SEPP (T06.03.17, p27, LL6 – 9).

111. The Council’s challenge to the CDCs assumed centre stage in the hearing before me, as oral submissions progressed, and I will later return to those submissions, in some detail.

These proceedings are commenced, December 2014

112. The present proceedings were commenced on 24 December 2014.

The NSIPP decision, 2015

113. Pursuit of these proceedings was delayed during 2015 while HFM attempted to resolve them by obtaining a modification to remove condition I 5 from its CG01 consent (Hutton subs par 10a).

114. On 2 December 2015, the NSIPP rejected (EB, tab I 8) a s 96AB review of the Council’s decision on that HFM proposal (fol 295), which sought “to modify consent for use and fit out as a fruit and vegetable market tenancy CG01 and Plant and Storage room in the Basement Level 1 to be converted to a loading area and Cool Room”.

115. The Executive Summary of the Council’s negative recommendation to the NSIPP (i.e., for refusal – EB fol 296) reads (some emphasis added):

Harris Farm Market Cammeray occupies two tenancies on the ground floor of Cammeray Square. The business also occupies storage and delivery space on the basement level. The tenancies are known as CG-01 and CG-02 and the fit out and use of these tenancies has been the subject of two separate planning approvals. CG-01 and the basement loading and cool room were approved by the Land and Environment Court (LEC) in October 2008, while CG-02 received development approval from Council in April 2008.

This is an application under section 96AB for a review of the determination of the section 96AA application which sought to modify the consent granted by the Court with regard to 2 conditions, relating to amalgamation of tenancies and staff numbers. This s.96AB application now only seeks to delete condition I5 to permit the amalgamation of tenancies. This application is referred back to NSIPP as the s.96AA application was determined by NSIPP.

The review application has attracted one submission reiterating particular concerns raised in the original s.96AA application about shop size, Cammeray Village character, back of house facilities, traffic, parking, staff numbers and loading facilities and additional concerns in relation to the photomontages and indicative store layout relating to the use of common areas in the square. The assessment has considered these concerns as well as the performance of the application against Council's planning requirements.

Following this assessment the development application is recommended for refusal consistent with the previous determination, essentially as the proposal would increase the size of the supermarket use beyond that of a small-scale retail use.

116. The Council report was authored by Executive Planner George Youhanna. It gave a detailed history of the development and HFM’s involvement (fols 298 – 306). Key issues raised by the Owners Corporation, and reported upon, included (fols 307 – 308):

lssue 6 – Loading Dock – Management- The larger shop resulting from the proposed amalgamation would understandably have a wider range of goods which is likely to result in a greater number of HFM deliveries in the Loading Dock. This will require close investigation given Conditions I5 and I13 of the LEC 449 (11585 of 2005). It is believed that a formal Loading Dock Management Plan from HFM and from the Owner of the Loading Dock Stratum should be required by NSC.

Issue 7 – Loading Dock – Additional Cool Rooms - Correspondence received from Stockland in May 2014 (referred to in our Strata Manager's June 19th 2014 letter to Council) indicated that there was an intent by Stockland (Lessor to HFM) to submit a DA to Council to install two new cool rooms within the Loading Dock of Cammeray Square. We have objected to and will continue object to such a change in the Loading Dock as it will impact on its current use, vehicle access and manoeuvrability (sic), reducing space available for unloading and fork lift traffic. This would also be detrimental to use of the loading dock by the other 17 retailers, commercial suites and apartment residents.

...

Issue 8 – Trolley Management – the present trolley guard system is inadequate in ensuring LEC (10699 of 2008) condition I4 is met. Customers are currently able to take trolleys (even the new ones) to their cars parked in Amherst St and Fredben Avenue, defeating the objective of ensuring that parking is encouraged within the complex. There are also significant issues in terms of trolleys being left in egress paths, throughout the square, unlocked in the evening, and exceeding the approved trolley bay space. Whilst HFM are aware of this issue and are putting in operational procedures to deal with this, Council should review the trolley management system to ensure that it is adequate to satisfy current I4 condition, and the issues raised.

Issue 9 – Loading Dock Use by Other Retailers – The loading dock is predominantly used by HFM. Given their size and requirements in comparison to the other 17 Cammeray Square retailers this results in the majority part of the loading dock area being taken up by HFM deliveries and pallets in the mornings. As a consequence suppliers to the other retailers find access difficult and inexpedient and so resort to parking and making deliveries from their vehicles in Amherst Street – and sometimes Miller Street. Because of this whilst HFM are in fact complying with Condition I7 of the LEC (No 10699 of 2008), this is not usually so for other retailers.

...

Issue 12 – Changes in Retail Garbage Room – It is noted that the plans submitted in [CDC 132290/1] showed a change of use of the existing Retail Garbage Room (a shared facility) to a use as a Dry Storage area for HFM. This has no validity as the prerequisite approval of the Cammeray Square Building Management Committee ('BMC') had not been given. Any building works in the basement area to facilitate this would require a DA in addition to approval by the BMC. Stockland and HFM have already been advised by the BMC that such approval will not be .given.

117. HFM responded to those issues in these terms (fols 309 – 310):

Issue 6 – Loading Dock – Management

The loading dock management is an operational issue that is not relevant to the application by Harris Farm Markets. Stockland, the Centre Manager, is responsible for ensuring that their Loading Dock Management Plan is executed and updated in a way that accommodates different types of traffic throughout the development. Stockland conduct regular meetings and spot checks to ensure that Harris Farm adhere to the policies and procedures that were formed in line with the Strata Management Statement for Cammeray Square.

Issue 7 – Loading Dock – Additional Cool Rooms

Harris Farm Markets are not applying for additional storage or changes to the loading dock.

Issue 8 – Trolley Management

Trolley Management is considered an operational issue that is dealt directly with Stockland Centre Management on a regular basis. Harris Farm Markets are adhering to the agreement formed in line with the Strata Management Statement for Cammeray Square.

Issue 9 – Loading Dock – Use by Other Retailers

Not relevant to the current s.96 AA application. However by way of comment, Harris Farm Markets notes that activity in the loading dock makes it essential that all users show cooperation and understanding toward each other, given that all tenants have critical time lines to meet that is managed through Stockland by way of communication and planning. Any breach of these protocols is taken up directly by Stockland with the contractor or tenant responsible. Stockland Centre Management have final judgment on any discrepancies, disputes and/or disagreements pertaining to lift and loading dock bookings.

118. There appears to be no HFM response on Issue 12, although the report contains (fols 310 – 311) comments from “Stockland” to the following effect:

1.   Retail Garbage Room to be relocated:

This has been approved under CDC 132290. There will be no changes to the operational aspects of rubbish removal. The rooms will be configured to ensure all bins can be stored within the rooms. A drainage point will be installed to ensure the cleaners can carry out their regular bin cleans.

2.    Two new Cool Rooms to be built on the dock level:

These two cool rooms require a DA submission because they impact the traffic flow of the dock. Stockland have had a traffic consultant review the impact of these changes to the dock. This report is included as attachment 4.

In summary the changes would limit the size of vehicle to an 8.8metre truck. This is sufficient length for all our tenancies, including Harris Farm. And is sufficient for residential removal vehicles.

119. The report then moves into a “consideration” section (fols 311 – 317), in the course of which it notes (fol 314 to 315 – some emphasis added):

Tenancy CG-01 is currently used as a Harris Farm Market (a supermarket) and compared to all other tenancies in Cammeray Square is a significantly larger shop, providing a wide range of products.

The proposed amalgamated tenancy would also be out of character with the scale of other shops throughout Cammeray Village.

A further consequence of allowing the amalgamation of the tenancies is the loss of a small scale retail use in tenancy CG-02.

The proposal would alter the scale and nature of the approved development to beyond what can be considered to be a small scale retail use, with regard to the previous extensive deliberations of the Land and Environment Court and the application of condition I5, and with regard to a comparison of the scale and nature of the proposed development to other shops in both Cammeray Square and Cammeray Village.

The proposal is both qualitatively and quantatively not essentially or materially the same, particularly when the approved development is already at the upper limit of what is considered a “small-scale shop”, as evidenced by the imposition of the subject condition I5.

It should be noted that in the event that the proposal is considered to be substantially the same development, the proposal remains unsatisfactory with regard to being inconsistent with the zone objectives in relation to small-scale retail, for the reasons detailed above.

...

It was considered previously by NSIPP that the proposed modification is inconsistent with the objectives of the B1 Neighbourhood Centre zone, as the Panel was not satisfied that the proposed modification would retain the small scale nature of the use and objective of the zone.

On the basis of the previous discussion in this report in relation to s.96AA and whether the proposal is substantially the same development, it is considered that the proposal is not consistent with the objective of the zone in relation to providing (a range of) small-scale retail uses. As discussed in detail, the proposal would alter the scale and nature of the approved development to beyond what can be considered to be a small scale retail use, with regard to the previous extensive deliberations of the Land and Environment Court and the consequent imposition of condition I5, and with regard to a comparison of the scale and nature of the proposed development to other shops in both Cammeray Square and Cammeray Village. The proposal is both qualitatively and quantatively not essentially or materially the same, particularly when the approved development is already at the upper limit of what is considered a “small-scale shop”.

120. On the question of car parking, the report later notes (fol 316):

As previously identified to the applicant, under NSDCP 2013 Table B-I0.3 Parking rates for specific non-residential uses, the parking requirement for supermarkets is 4 spaces per 100m² under NSDCP 2013. As parking for tenancy CG-02 was approved at the rate of 1 space per 100m², the use of the tenancy for a supermarket would result in a deficiency of seven (7) car spaces. No traffic/parking reports have been provided to justify the proposed deficiency of seven (7) spaces, which is considered to be a significant deficiency. As such, approval of the proposed modification of consent in relation to condition I5 would have the effect of allowing tenancy CG-02 to be amalgamated with CG-01 and used as a supermarket, despite a deficiency of seven (7) car parking spaces.

121. It also then notes (fol 316):

Storage, cool rooms, back of house operations – The applicant has advised that no additional storage or cool room functions are proposed in this modification. It is considered that a development application is the appropriate means of obtaining consent for the proposed supermarket within two existing tenancies and that the minimum level of information that should be provided with a development application would include full details of the operation of an expanded supermarket use, including storage, cool rooms and back of house operations.

122. The report concludes and recommends as follows (fols 317 – 318):

CONCLUSION

This report is a review of the determination of the subject s.96AA application. In summary, the Court approval related only to the use and fitout of tenancy CG-01 and not the fitout and use of tenancy CG-02, and the proposed modification relates to a condition of consent imposed by the Court. The intent of condition I5 was to restrict the size of tenancy CG-01 to the maximum size that was considered to be a small scale retail use, in order to be consistent with the zoning objectives. Although the zone has changed to B1 Neighbourhood Centre under [North Sydney LEP 2013], the relevant objective remains the same.

A review of the Cammeray shops reveals traditional sized retail shops as found in any neighbourhood retail strip found in greater Sydney. This includes more recent development such as No.520 Miller Street where a total of approximately 700m² of retail space is divided into four shops.

It is considered that the proposal would have the effect of altering the scale and nature of the approved development to beyond what could reasonably be considered to be a "small scale retail" use, with regard to considerations including the previous extensive deliberations and decision of the LEC and the application of condition I5, and with regard to a comparison of the scale and nature of the proposed development to other shops in both Cammeray Square and Cammeray Village.

The proposal is both qualitatively and quantatively not essentially or materially the same, particularly when the approved development is already at the upper limit of what was considered a "small-scale retail use'', as evidenced by the imposition by the LEC of the subject condition I5. This raises the issue of the proposal not being substantially the same development. In this regard, modification from a small-scale retail use to a use that is beyond a small-scale retail use is considered to transform the development such that it is no longer substantially the same development approved by the LEC.

However, in the event that the proposal is considered to be substantially the same development, and on a quantitative assessment is it not, (sic) then the proposal remains unsatisfactory with regard to being demonstrably inconsistent with the zone objectives in relation to small-scale retail, for the reasons enunciated in this report.

In relation traffic (sic) and parking, the use of tenancy CG-02 for a supermarket would result in a deficiency of seven (7) car spaces and no traffic/parking reports have been provided to justify the proposed deficiency.

RECOMMENDATION

THAT the North Sydney Independent Planning Panel, under delegation from the General Manager, as the consent authority, not modify consent No.179/08 (Land and Environment Court Proceedings No.10699 of 2008 determined on 21 October 2008), as detailed in s.96.AA application No. 179/08/2 and subsequent s.96AB review application with regard to condition I5 for the following reasons:

1.   The proposed modification would facilitate amalgamation of tenancies CG-01 and CG-02, thereby substantially increasing the size of the supermarket use beyond a small-scale retail use, which is inconsistent with the objectives of the B1 Neighbourhood Centre zone.

2.   The proposed modification would result in the loss of a small scale retail use, being tenancy CG-02.

3.   An increase in the size of the supermarket use beyond a small-scale retail use results in the development being not substantially the same development approved by the Land and Environment Court, particularly as the approved development is considered to be at the upper limit of a small-scale retail use,

4.   No traffic and parking report was provided with the application and it is not known whether the deficiency of seven (7) car spaces and the potential increase in traffic generation as a result of the expanded supermarket use will have an adverse impact on local parking and traffic movements.

E: Expert Evidence

123. Mossemenear opined (affidavit 24 October 2016, EB, tab F, fol 222, pars 9 and 12) that;

1. for development involving internal building alterations to be complying development for the purposes of the Code, it must satisfy all of the development standards in cl 5.2 of the Code; and

2. a reasonable certifying authority could not have been satisfied that the development covered by CDC1 and CDC2 satisfied all of the cl 5.2 standards, nor that the change of use purportedly authorised by the CDC either (a) was a change specified in cl 5.3, or (b) satisfied all the development standards in cl 5.4.

124. He also opined (fol 223, pars 16, and 17, as amended) in respect of an increase in GFA:

16   The alterations purportedly authorised by CDC 1 and CDC 2 increase the gross floor area of tenancy CG-02 by removing cool rooms located within that tenancy and replacing them with retail display areas. These alterations are shown in approved drawing CDC 03 in CDC 1 and drawing CDC 02 in CDC 2.

17   Cools rooms are a type of plant room and as such are excluded from the matters required to be included when calculating gross floor area of a building. By contrast, retail display areas are included in the calculation of gross floor area. At the time that CDC 1 was issued, the words “except if the increase is required for the alteration to comply with the Premises Standards” did not appear in cl 5.2(1)(c). The absence of those words at the time CDC 1 was issued does not affect my opinions regarding CDC 1.

125. He further opined (fols 223 – 227), in respect of the Council’s FAPOC, especially par 13 (CB fols 10 – 12):

Conversion of areas excluded from Gross Floor Area

...

20   In my opinion, the alterations to the building authorised by CDC 1 and CDC 2 convert areas referred to in clause 5.2(1)(d).

21   As stated above, CDC 1 and CDC 2 purport to authorise alterations that convert an area that is excluded from the measurement of gross floor area by removing cool rooms located within tenancy CG-02 and replacing them with retail display areas.

Loading dock

...

23   [Paragraph 13(c) of the FAPOC] refers to clause 5.2(1)(h) of the Commercial and Industrial Alterations Code which provides:

(h)   if the alteration involves a loading dock, the alteration must not:

(i)   reduce the number or capacity of the trucks accommodated, or

(ii)   reduce the area for goods handling, or

(iii)   reduce the area for waste handing (including any recycling area), or

(iv)    reduce the manoeuvring area of the loading dock or access driveway

24   In my opinion CDC 2 purports to authorise alterations that reduce the area for goods handling in the loading dock by relocating the retail garbage area (so as to make room for dry storage) to an area that would otherwise be for goods handling, as shown in the Proposed Basement Plan (Drawing CDC 04).

Not a specified change of use

...

26   The change of use purportedly authorised by CDC 2 is:

A change of use of tenancy CG01 from a fruit and vegetable market and a change of use of tenancy CG02 from a fresh produce outlet to a supermarket within CG01 & CG02.

27   I note that clause 5.3 of the Commercial and Industrial Alterations Code only specifies a "change of use from an existing use specified in a category in Column 1 of the Table ... to a use specified in the corresponding category in Column 2 of that Table."

28   In my opinion, nothing in the Table referred to in clause 5.3 authorises a change of use of two premises to enable them to be operated as a single business or operation, or a change of use from a "fruit and vegetable market" to a "supermarket" or a "fresh produce outlet" to a "supermarket". In my opinion, the change of use described in CDC 2, if it is to be understood as authorising the operation of CG-01 and CG-02 as a single business or operation, is not a change of use specified in clause 5.3.

Contravention of existing condition of consent related to traffic generation and parking

...

30   [Paragraph 13(d) of the FAPOC] refers to clause 5.4(1)(g) of the Commercial and Industrial Alterations Code which provides:

the new use must not cause the contravention of any existing condition of the most recent development consent (other than a complying development certificate) that applies to the premises relating to hours of operation, noise, car parking, loading, vehicular movement, traffic generation, waste management or landscaping,

31   In my opinion, the new amalgamated use approved under CDC 2 will cause a contravention of Condition I5 of the Consent applying to the Site. Condition I5 provides:

Amalgamation of Tenancies

The approved tenancies number CG-01, CG-02 and CG-03 as identified on Ground Floor Plan number A2.04 dated May 2006 ... shall not be amalgamated

(Reason: To ensure the size of the tenancies remains consistent with the objectives of the Residential D Zone).

32 The objectives of the Residential D Zone under LEP 2001 when Condition I5 were imposed were:

(a)   encourage a wide range of services and shops which serve the surrounding residential neighbourhoods, and

(b)   permit a range of small scale business which serve local needs, and

(c)   encourage active street life while maintaining high residential amenity, and

(d)   encourage shop top housing.

33   In my opinion, a planning consequence of "small scale neighbourhood shops" and "small scale businesses which serve local needs" is that traffic generation and parking demand is lower than for larger scale developments.

34   In the decision granting consent subject to Condition I5 (amongst other conditions), Commissioner Hoffman of this Court made various observations relating to the need to prevent tenancies CG-01 and CG-02 being operated together as a single supermarket and referred to "numerous assurances" given by the applicant for consent that they would not be operated together: ...

35   Having regard to the nature of the zone objectives, and the decision of Commissioner Hoffman, in my opinion Condition I5 is a condition "relating to" traffic generation and parking because one of its effects is to limit traffic generation and parking and restrict any supermarket type use to tenancy GC-01 (sic – CG-01) that has adequate parking provision at the higher rate. Condition I5 was imposed as a result of, amongst other things, concerns about the traffic impacts of GC-01 (sic – CG-01) and GC-02 (sic – CG-02) being amalgamated.

36   In my opinion, if the change of use authorised by CDC 2 is understood to permit the operation of the two tenancies as a single business or operation then it will contravene Condition I5.

Car parking

...

38   [Paragraph 13(e) of the FAPOC] refers to clause 5.4(1)(h) of the Commercial and Industrial Alterations Code, which provides:

(h)   car parking must be provided:

(i)   in accordance with any existing condition relating to car parking that applies to the use of the land, or

(ii)  if there is no existing condition relating to car parking either:

(A) in accordance with any relevant requirements contained in an environmental planning instrument or development control plan applying to the land, ...

39   At the time the Consent was granted overall parking within the Centre was assessed as adequate under the NSDCP 2002 on the basis of tenancy CG-01 at 4 spaces per 100m² (on the basis that it was classified as a supermarket) and tenancy CG-02 at 1 space per 100m² (on the basis that it was a retail shop). Parking was also considered specifically for the child care centres on the site in Building C. Additional parking was allowed by the Court in response to a Section 96AA application when it was envisaged that tenancy GC-01 (sic – CG-01) was likely to be a Fruit and Vegetable shop. ...

40   As is apparent from those documents, the Court had considered parking at the rate of 10 spaces for the child care centre; 22 spaces for level 1 and 2 at 1 space per 100m²; 36 spaces for the ground floor tenancies assuming half of the area is used as cafe/restaurant (1 space per 50m²) making a total of 68 spaces. With the largest ground floor tenancy (CG-01 at 480m²) used as a fruit market then 48 spaces would be required for the ground floor (12 more than the 36 originally provided for) and a total of 80 spaces for non-residential uses.

41   The new amalgamated use will involve tenancy CG-02 being assessed at the higher rate of 4 spaces per 100m² which is the applicable rate for a supermarket under Section 10 – Car parking & Transport of NSDCP 2013, requiring 7 additional parking spaces that are not available. The current parking provisions require a general rate of 1 space per 100m² for non specified uses in the B1 Neighbourhood zone, with a different rate for a specified use. Supermarkets are specified at 4 spaces per 100m²; Food & Drink premises are specified at 1 space per 50m².

42   In my opinion, the change of use purportedly authorised by CDC 2 will have the effect that car parking will not be provided in accordance with any existing condition relating to car parking or in accordance with any relevant requirements contained in an environmental planning instrument or development control plan applying to the land.

126. Mossemenear adhered strongly to his expert opinions, and to all his other evidence, in the face of searching cross-examination by Mr Rigg (T06.03.17, pp44 – 57). In fact, I found his responses totally unhelpful to HFM’s case.

F: Competing Positions and Submissions on the “Real” Issues

Council’ submissions

127. Council’s position in the case is (T06.03.17, p14, L50 – p15, L3) that HFM failed in its “amalgamation” endeavours when it pursued the “planning merits route”, so it sought to pursue the same result through the CDC process, HFM’s objective being (Tp20, LL5 – 10) to have the SEPP construed, and applied, such that two shops could be converted to one large shop (i.e. a supermarket – see T06.03.17, p17, L47).

128. As noted in Mr Hutton’s written submissions (par 2), HFM sought to effect the amalgamation under the CDCs which:

... purportedly permitted the refurbishment of the two tenancies in a manner that will see them operate as a single retail business or operation and, in the case of the Second CDC, purports to permit “[a] change in use of tenancy CG-01 from a fruit and vegetable market and change in use of tenancy CG-02 from a fresh produce outlet to a supermarket within CG-01 & CG-02”.

129. After dealing with the CDCs in his opening submissions, Mr Hutton said (T06.03.17, p20, LL3 – 16) that what HFM attempted was not only “very unusual”, but “way beyond power”:

... So a change of use of tenancy 01 from a fruit and vegetable market, and a change of use of 02 from a fresh produce outlet- and these are the critical words - "to a supermarket within both tenancies". "A supermarket within", so by those words, it seems to be attempted to say, "We're going to amalgamate them both."

Now, we say that's what you can't do because that's not changing one shop to a medical centre, or business premises, or something else - it's changing two shops into one shop. And there's nothing in the Codes SEPP that says you can do that and I'll come to the reasons why we say one would not construe the Codes SEPP so that you can do that.

130. In respect of Real Issue 1 – the correct construction of condition I 5 – Council contends (subs pars 21 – 22) that, properly construed, it prohibits amalgamation of “any two or more” of the three relevant tenancies (CG01 – 03), c.f. only all three of them, into a “single amalgamated use”.

131. Mr Hutton relied (par 23) upon the general principles of construction for conditions of consent, as summarised by Pepper J in Agricultural Equity Investments Pty Ltd v Westlime Pty Ltd (No 3) (“Westlime”) [2015] NSWLEC 75, at [93] (citations omitted):

(a)   consents are to be construed, “not as documents drafted with legal expertise, but to achieve practical results” ... ;

(b)   consents are to be construed fairly and liberally, with the meaning of their text to be determined objectively, having regard to the context in which the consent was issued, and taking into account the fact that, unlike a contract, a consent operates in rem and is for the benefit of subsequent owners and occupiers, as well as for the applicant ... ;

(c)   as a general rule, a development consent should be construed without reference to extrinsic evidence other than to identify a thing or place referred to in it ... ;

(d)   plans and other documents may be incorporated in a development consent expressly or by necessary implication ... ;

(e)   a mere reference in a development consent to another document, such as a development application, will not usually be sufficient to incorporate that document into the consent ... However, if a development consent expressly incorporates another document, or part of it, or if a document is attached to a development consents or referred to in it for the purpose of identifying or describing something dealt with in the consent, this will generally be sufficient for the purposes of incorporation ... ; and

22.   In the present case, if upon the application of the SEPP and the LEP, correctly construed, to the clear facts the decision is plainly unreasonable, the Court should infer that the decision-maker misinterpreted, failed to address or overlooked the requirements of those instruments or that in some other way there has been a failure to properly form the prerequisite state of satisfaction.

23.   Such environmental planning instruments may be construed in the light of practical considerations rather than by a meticulous process such as might be appropriate in construing an Act of Parliament: Tovir Investments Pty Ltd v Waverley Council [2014] NSWCA 379 at [54].

156. Mr Hutton noted (subs 49) that the Biscoe/Craig approach involves the following four principles:

a.   The legal standard of unreasonableness is not limited to an irrational if not bizarre decision – that is to say one that is so unreasonable that no reasonable person could have arrived at it. Unreasonableness encompasses, for example, a decision­maker misunderstanding his or her statutory obligation. What must be evident is that some error has been made in forming the opinion or state of satisfaction.

b.   A court of judicial review may infer that in some way there has been a failure to properly arrive at the state of satisfaction or opinion if upon the facts the result is unreasonable. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.

c.   "Unreasonable" encompasses, among other things, failure by a decision-maker to obey rules requiring proper application of the law.

d.   The fact that the repository of the power has not made known his reasons why he was satisfied will not prevent judicial review of his decision. His decision may, on consideration of the material that was before him, be found to be capable of explanation only on the ground of misconception such as some mistake of law.

157. In its FAPOC (pars [13](a) to (e)), Council gave five reasons for contending that the opinions in the CDCs in the present case were “not reasonable”:

13.   Further or in the alternative to paragraph 12 above if, contrary to the Council's contentions, the Court finds that CDC 1 and CDC 2 do operate to relieve any person carrying out development in tenancy CG-01 from compliance with Condition I 5 in accordance with the proper construction of that Condition as pleaded in paragraph 7, then the Council contends that either or both of CDC 1 and CDC 2 were not validly issued because:

(a)   in the case of CDC 1 and CDC 2, the Third Respondent could not reasonably have been satisfied that the alterations would not result in an increase in the gross floor area (GFA) of the building contrary to cl 5.2(1)(c) of the Commercial and Industrial Alterations Code;

Particulars

The GFA of the building is calculated by excluding, amongst other things, basement, plant room and loading space. The effect of the alterations purportedly authorised by CDC 1 and CDC 2 is to increase the gross floor area of the building by removal of the cool rooms located on tenancy CG-02 (which would have been excluded from any calculation of GFA) and replacing them with "front of house" or display areas (which would be included in a calculation of GFA);

(b)   in the case of CDC 1 and CDC 2, the Third Respondent could not reasonably have been satisfied that the alteration would not involve the conversion of an area excluded from the measurement of the GFA of the building including basement, plant room and loading space contrary to cl 5.2(1)(d) of the Commercial and Industrial Alterations Code;

Particulars

The alterations purportedly authorised by CDC 1 and CDC 2 convert areas referred to in cl 5.2(1)(d) of the building by:

(i) converting the cool rooms located on tenancy CG-02, which are "plant room" as described in cl 5.2(1)(d) into "front of house" or display areas, as shown in the Proposed Floor Plan (Drawing CDC 03 in CDC 1 and Drawing CDC 02 in CDC 2);

(ii) in the case of CDC 2, converting the basement, which is a "basement" as described in cl 5.2(1)(d), as shown in the Proposed Basement Plan (Drawing CDC 04); and

(iii) in the case of CDC 2, converting part of the loading space in the loading dock, which is a "loading space" as described in cl 5.2(1)(d), as shown in the Proposed Basement Plan (Drawing CDC 04).

(c)   in the case of CDC 2, the Third Respondent could not reasonably have been satisfied that the alteration would not involve a loading dock, and reduce the area for goods handling contrary to cl 5.2(1)(h) of the Commercial and Industrial Alterations Code;

Particulars

CDC 2 purports to reduce the area for goods handling in the loading dock by relocating the retail garbage area (so as to make room for dry storage) to an area that would otherwise be for goods handling, as shown in the Proposed Basement Plan (Drawing CDC 04).

(d)   in the case of CDC 2, the Third Respondent could not reasonably have been satisfied that the new amalgamated use would not cause the contravention of an existing condition of the most recent development consent that applies to the premises relating to traffic generation, as required by cl 5.4(b) of the Commercial and Industrial Alterations Code;

Particulars

The new amalgamated use will cause a contravention of Condition 15 (sic). Condition I 5 is a condition "relating to" traffic generation and parking because one of its effects is to limit traffic generation and parking.

(e)   in the case of CDC 2, the Third Respondent could not reasonably have been satisfied that car parking would be provided in accordance with any existing condition relating to car parking or in accordance with any relevant requirements contained in an environmental planning instrument or development control plan applying to the land as required by cl 5.4(h) of the Commercial and Industrial Alterations Code;

Particulars

Non-residential parking within the Centre was assessed as adequate at 80 spaces under Section 9 – Car Parking – NSDCP 2002 on the basis of tenancy CG-01 at 4 spaces per 100 sq/m (on the basis that it was a supermarket) and tenancy CG-02 at 1 space per 100 sq/m (on the basis that it was non-specified non-residential floor space): see Report of Geoff Mossemenear, Executive Assessment Planner dated 10 September 2007 at pp 18-19 and Hampton Development Group Pty Ltd v North Sydney Council [2007] NSWLEC 814 (13 December 2007).

The new amalgamated use will involve tenancy CG-02 being assessed at the higher rate of 4 spaces per 100 sq/m which is the applicable rate for a supermarket under both the previous NSDCP 2002 and the current NSDCP 2013, requiring at least 7 additional parking spaces that are not available.

158. These FAPOC are supported by the expert evidence of Mossemenear (including his opinion, in the context of cl 5.2(1)(c) ([124] above), that cool rooms, such as those in CG02, are plant rooms, and their area should be included in GFA (T06.03.17, 30, LL9 – 36).

159. Mr Hutton says, therefore, that the certifier could not reasonably have been satisfied that that alteration would not result in an increase in GFA (T06.03.17, p30, L46 – p31, L3). Characterisation of cool rooms as plant rooms was not accepted by Mr Rigg, but he reached agreement with Mr Hutton that if a cool room area became retail space, it would count towards GFA (T06.03.17, p34, LL21 – 24).

160. Mr Hutton also relies on Mossemenear’s analysis of impacts on goods storage and goods handling areas, garbage rooms, and the loading dock (T06.03.17, pp 31 and 32).

161. In terms of cl 5.4(1)(g), the “most recent” DC which applies to the whole area affected by the CDCs is Senior Commissioner Roseth’s Bluestone consent, which contains the relevant conditions on parking, traffic etc., and Mr Hutton submitted (T06.03.17, p35, L46) that there is no evidence that the certifier “even had regard to it” and (p36, LL24 – 25) “could not reasonably have formed an opinion” that car parking would be provided for a supermarket in accordance with the NSDCP.

162. Mossemenear’s written and oral evidence were unshaken; the certifier respondents put on no evidence, and HFM offered no opposing expert evidence.

163. Mr Hutton’s submissions relied upon Mossemenear’s evidence, and he reiterated many of them when he replied to Mr Rigg’s oral submissions (at T07.03.17, pp18 to 43).

HFM’s submissions

164. Mr Rigg’s written submissions of 3 March 2017 responded to the FAPOC, and to Mr Hutton’s submissions, summarized above.

165. He commenced his oral submissions with the following remark (T07.03.17, p4, LL44 – 47):

... in this case, quite an unusual proposition is being put to the Court, that the CDC regime does not cater for or embrace the notion of an amalgamation of tenancies of the kind that's considered by the CDC, which are now in the issue before the Court.

166. He explored the notions of “development” and “subdivision” (T07.03.17, p5), and then noted (LL30 – 33) that:

... there is no relevant difference in the status of a development consent, either it being one which has been carried out pursuant to a development application, or one which has been carried pursuant to a complying development application.

167. He conceded (LL35 – 41) that the CDC regime does not embrace all the merits considerations required when a DA is lodged, but went on to submit that the Council’s NSDCP would apply only where there was no pre-existing DC attaching conditions on, e.g., parking (T07.03.17, p8, LL24 – 29).

168. He rejected (T07.03.17, p11, LL9 – 12) any notion that condition I 5 of the pre-existing consent “essentially sterilises” the CG01 to CG03 arrangements.

169. On Real Issue 1 – the proper construction of condition I 5 – he submits that the condition is neither ambiguous, “nor susceptible of more than one meaning” (see [135] par 78 above). His primary submission is that the condition is irrelevant because it is not called up by any of the CDC development standards (T07.03.17, p17, LL34 – 38)..

170. He notes (par 1) that Council’s expert (Mr Cullen) contended before the Commissioner that CG03 could “ultimately operate” with CG01, but that the Court should not permit all three to operate together. Paragraphs [90] and [91] of Hoffman C’s judgment ([95] above) make clear that the inclusion of CG03 in condition I 5 was intentional, even though the consent related to CG01 only, and CG01 could not be amalgamated only with CG03. Condition I 5 could not preclude amalgamation of CG02 and CG03, subject to necessary consent. CG02 “must always be part of any amalgamation” (pars 2 and 3).

171. He characterised the Council’s argument on the construction of I 5 as “absurd”, and, submitted (par 2(4)) that:

... To avoid such absurdity the use of the word “and” and the non inclusion of words such as “each of’ (sic) in condition I5 must be regarded as intentional and the condition given its normal grammatical meaning.

172. He urged the Court to find that the certifier acted reasonably “and was unconstrained by condition I 5” (par 4), and was “bound and compelled by s 85A(7) ... to issue the subject CDCs” (par 5). Condition I 5 was not a development standard within that provision.

173. Section 84A entitled HFM to carry out development in accordance with the CDCs. Condition I 5, “being a non specified type of condition under cls 5.2 or 5.4 ceased to operate from the date of the issuance of the CDCs” (par 6).

174. Mr Rigg went on to submit (par 7):

The Codes SEPP is a beneficial and facultative planning instrument. The accredited certifier was not required to consider section 79C matters other than to comply with the evaluation matters specified in section 85A (3) and additionally pursuant to Section 85A (7) to also have regard to any other relevant requirements prescribed by the Environmental planning (sic) and Assessment Regulation 2000, none of which are relevant to this amalgamation issue.

175. It would have been “both unnecessary and unreasonable” for the certifier to examine Hoffman C’s reasons, because condition I 5 did not relate to a matter specified as a relevant development standard under either cl 5.2 or cl 5.4(g) of the SEPP. The certifier could not reasonably be expected “to search out for answers about conditions and their true meaning in the manner suggested by Council” (par 8).

176. Moving on to Real Issue 2 – Do the CDCs authorize amalgamation of CG01 and 02, despite condition I 5? – Mr Rigg submitted that, to get orders under s 124, the Council has to satisfy the Court that a breach of the Act has occurred or will be committed (par 9), and/or that the CDCs were not authorized by the SEPP and s 85A (par 10).

177. Mr Rigg noted (par 11) that a CDC has status as a consent, and he submits that it overtakes amalgamation conditions like I 5. In any event, condition I 5 was not part of the original consent for the centre’s development (par 12). It was imposed in 2008 when “shops” were a prohibited use, and compliance with the then zone objectives was mandatory (par 13). The 2013 LEP intervened, “repealing” the need for I 5, and rendering it “no longer relevant to” any assurances upon which Council relies (par 13). The only extant pre-CDC conditions of consent, which continue to apply (par 14) relate to “hours of operation, noise, car parking, loading, vehicular movement, traffic generation, waste management or landscaping”.

178. Mr Rigg says (par 14) that, in view of cl 5.4(g) ([65] above), it “may reasonably be submitted that all other existing conditions cease to apply unless preserved by the Regulations (if any)”.

179. Mr Rigg concludes (par 14) that condition I 5 ceased to apply to CG01 upon issuance of the relevant CDC, but it never applied to CG02, let alone to the whole centre (as he says is submitted by the Council in subs par 43).

180. Real Issue 3 concerns the validity of the CDCs.

181. Mr Rigg asserts (par 16) that “it ill behoves” Council to argue that some five opinions of the certifier were not reasonable.

182. Council’s approach to the case changed over time, and its focus moved to the joinder of Bennett and City Plan, and the challenging of the CDCs.

183. Mr Rigg wants the Court to conclude that, for that period of twelve months, the Council considered, reasonably or unreasonably, that the certifier had met the requirements of the SEPP and s 85A. Council had twelve months to form its opinion, but insists that a certifier is to take only ten days.

184. On the question of whether there are errors or deficiencies in the certifier’s opinions about the impact of proposed building alterations on GFA (cl 5.2(1)(c)), Mr Rigg concentrated (par 18) on (1) the removal of cool rooms from within CG02 and their replacement by “front of shop” or display areas, and (2) Council’s argument that “cool rooms” should be excluded from GFA because they are “plant rooms”, which are excluded from “GFA” by the Standard Instrument. (Neither category of room is defined in the dictionary to the SEPP, nor in the Standard Instrument.)

185. He argues that the certifier was reasonably entitled to form the opinion that, for the purposes of cl 5.2(1)(c), they were not “plant rooms”. A cool room is used for the storage of food or drinks at a controlled temperature, and is not a room or area used exclusively for mechanical services or ducting: see Spigelman CJ in Lend Lease Real Estate Investments Ltd & Anor v GPT RE Ltd [2006] NSWCA 207, at [30].

186. He acknowledges (par 18) that, if the cool room had been located in the basement, it would probably have been regarded as “basement storage”, and Council may have been correct to exclude it from GFA in those circumstances.

187. He says (par 19) that Council’s arguments on other alleged “errors” or “deficiencies” would be found to be “likewise wrong”. He indicated that he would demonstrate that in his cross-examination of Mossemenear, but Mossemenear was unshaken in his views.

G: Consideration

188. As Mr Hutton observed (T07.03.17, p22, L22), there is a “useful description” of the DA and CDC regimes in the Court of Appeal’s decision in Trives CA (at [19] – [22]):

19   Part 4 of the [EPA Act] contains a structured scheme for the regulation of development, including the use of land and the carrying out of work on land. As the heading to Div 1 indicates, that structure depends upon a three-fold classification. First, some activities, described as “exempt development” may be undertaken without the need for consent. This case was not concerned with exempt development. Secondly, there is development that needs consent. Thirdly, there is prohibited development. Prohibited development is development which is not to be carried out on land, with or without consent. However, it is an important part of the Council’s argument that development which can be carried out with consent is prohibited if carried out without consent.

20   The kinds of development which fall within each category are identified by environmental planning instruments. The relevant instruments in the present case were the Hornsby Local Environmental Plan 2013 (“the Hornsby LEP”) and the [Codes SEPP]. The Hornsby LEP, like most such instruments, regulates permissible forms of development by reference to the zoning of land within the local government area and categories of development.

21   Relevantly for present purposes, there are two sets of procedures for obtaining consent where that is required. The primary procedure is that identified in Div 2, covering ss 77-83 of the [EPA Act]. This requires a development application to be made to the relevant consent authority, which is usually the local council. Different forms of development may require different steps to be taken. Thus “designated development” requires that the application be placed on public exhibition, followed by a process of public consultation. There are also special procedures with respect to “staged development”.

22 Importantly for present purposes, there is a separate set of procedures with respect to “complying development”, described in the heading to Div 3, as “Special procedure for complying development”, to be found in ss 84-87 of the [EPA Act]. A person may carry out complying development if he or she has been issued with a “complying development certificate”. This is intended to be a streamlined process available for development “that can be addressed by specified predetermined development standards”. Further details as to the nature of such development are set out in the [Codes SEPP] for complying development, but the straightforward principle is that development which can be determined by reference to predetermined standards does not need to go through a discretionary process of assessment by a consent authority and the formulation of detailed conditions appropriate to the specific development.

189. The Court of Appeal went on (at [28] – [30]) to discuss s 85A ([39] above):

28   Accepting that the Council’s reliance upon the use of the term “complying development” is not conclusive, it is necessary to turn to the primary arguments relied on by the applicant. These were three-fold. First, the applicant submitted that the very question (is the proposed development complying development?) was expressly identified as the first question to be determined by the certifier. That followed from the terms of s 85A(1) and (3) ...

29   The second matter relied upon by the applicant was that, in answering that question, the certifier might need to make an evaluative judgment, but it had no discretion. Thus, the certifier “must not refuse to issue a complying development certificate if the proposed development complies with the development standards applicable to it and complies with other requirements prescribed by the regulations relating to the issue of a complying development certificate.” ...

30   In short, s 85A(3) required the certifier to consider the application and form an opinion as to each of the three elements identified. The obligation to issue the certificate (under sub-s (7)) must be engaged by the formation of the relevant opinion. No doubt, if the opinion were not validly formed in accordance with relevant legal requirements, the obligation would fall away; however, it makes little sense to suggest that the obligation in sub-s (7) depends upon some objective view of whether the proposed development was complying development or not.

190. Biscoe J applied these principles in his judgment (on the remitter) in Trives No 3, and Craig J also did so, later, in Ramahi (see [154] – [155] above).

191. I accept the correctness and appropriateness of those principles, and am content to adopt and apply them here.

192. Applying the development standards in the SEPP “requires judgment”, or “some form of reasonable assessment” (T07.03.17, p25, LL28 – 33), by the certifier, preferably after a site inspection: The Owners Strata Plan 432 v Seddon [2015] NSWLEC 69.

193. Mr Hutton identified six deficiencies on the certifier’s part, and he needs to succeed on no more than one (see [151] above).

194. Overall, I accept the arguments he put, and their basis in the evidence and opinions of Mossemenear, which I also accept. I am satisfied that Mr Hutton made good five, if not all six, of his claims, and I find that the CDCs are tainted by unreasonableness, and/or error.

195. The debate regarding the alterations and conversions necessarily came close to descending into an analysis of matters of merit, and I will not set out all of the detail into which the oral submissions delved. It must be borne in mind that the basement areas are not solely for the use or convenience of HFM. While I remain unconvinced that a “cool room” should be counted as a “plant room” when doing GFA calculations, I do not, on the other hand, accept that “goods handling” can be an acceptable use of an area of basement approved as a vehicular manoeuvring area, when there are spaces above the kerb line earmarked for the handling use (T07.03.17, p32, L34 – p33, L31).

196. I reject the suggestions by HFM that the Court must read extra words into SEPP clauses, such as 5.2(1)(d), and that cl 5.3(1) is engaged in this case, and can authorise the amalgamation. Clause 5.4(g) has clearly not been complied with.

197. I accept Mr Hutton’s submission (T07.03.17, p35, LL1 – 42) that the very purpose of a clause like 5.2 is to avoid the use of CDCs to bypass the merits assessment required on issues such as those involved here, and that, if the impacts of the alterations had been inspected by the certifier, as expected by the Regulation, it would be unreasonable to conclude that they ought be approved.

198. On the construction of the disputed condition, I 5, I clearly prefer the submissions of Mr Hutton. On the basis of recent Court of Appeal authority, I do not need to find ambiguity in it, in order to construe it in its context. That context is set by Hoffman C’s reasoning, and consideration of that is to be preferred to decision-making based on an abstract debate on the use of the word “and”. I have no need to resort to any “extrinsic evidence” when the learned Commissioner’s reasons are clear. (Compare Westlime principles (b) and (c), and note principle (f) – all in [131] above.)

199. In the final analysis, even Mr Rigg was compelled to rely upon something beyond the wording of the condition – i.e. the physical realities of tenancies CG01 to CG03 – as much as on the use of the word “and”, to construe I 5. If I am in error in what I have said, I would accept Mr Hutton’s contention that there is some ambiguity in the terms of I 5, as imposed, and I can, therefore, go beyond the actual wording to find its proper meaning and effect from its context.

200. Turning, therefore, lastly, to the question of discretion, it seems that all that Mr Rigg argues in favour of my refusing relief on discretionary grounds is (1) that the LEP changed after 2008, (2) that the Council adopted a late change in its approach, after Trives, and (3) that the dividing wall between the tenancies has already been removed.

201. I find no merit in those submissions.

H: Conclusion

202. I have concluded that the Council should succeed.

203. Prima facie the Court should, therefore, make declarations that:

1. Condition I 5 prohibits amalgamation of tenancies CG01 and CG02;

2. Any amalgamation of those two tenancies, contrary to that condition, would infringe s 76A(1), irrespective of either of the two CDCs; and

3. Those two CDCs are invalid and of no effect;

and orders restraining the HFM respondents from effecting any such amalgamation.

204. As the Council has, therefore, been completely successful in obtaining relief generally along the lines of the amended summons on which the case was finally argued, it could ordinarily expect an order in its favour in respect of most, if not all, of its costs, on a party-party basis. However, all parties, including those who submitted, are entitled to be heard on costs, so I formally reserve the question.

205. As the active parties (Council and HFM) sought time to consider the Court’s reasons, I will stand the proceedings over to enable all parties to consider these reasons, and seek to reach agreement upon orders which I could make, by consent, in chambers, to give effect to this judgment, and also resolve the question of costs.

206. If no consent orders are submitted to me by 30 June 2017, and there is thought to be a need for further argument, the case will be listed before the Registrar on Friday 7 July 2017 for further directions.

207. The exhibits will be retained until orders are finalised.

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Decision last updated: 09 June 2017