Sammut v AVM Holdings Pty Ltd [No 2] - [2012] WASC 27

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: SAMMUT -v- AVM HOLDINGS PTY LTD [No 2] [2012] WASC 27

CORAM: COMMISSIONER SLEIGHT

HEARD: 28 NOVEMBER 2011

DELIVERED : 30 JANUARY 2012

FILE NO/S: GDA 4 of 2011

BETWEEN: KAY JOAN SAMMUT
ANTHONY SAMMUT
Appellants
AND
AVM HOLDINGS PTY LTD
First Respondent
ANTONIO VIOLA
Second Respondent

ON APPEAL FROM:
Jurisdiction              :  STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram  :DR B DE VILLIERS (MEMBER)
Citation  :SAMMUT and AVM HOLDINGS PTY LTD [2011] WASAT 32
File No  :CC 785 of 2010

Catchwords:

Appeal from State Administrative Tribunal - Reference to Tribunal on a question arising under a lease - Alleged breach of lease for non-permitted use and illegal activities - Admissibility of statements and conclusions reached by local authority and regulatory body - Whether any error is an error on a question of law - Whether any decision would have or might have been different - Turns on its own facts

Legislation:

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), s 16(1)
Food Act 2008 (WA), s 22
Metropolitan Water Supply, Sewerage & Drainage By-laws 1981 (WA)
State Administrative Tribunal Act 2004 (WA), s 105

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellants:     Mr C S Williams
First Respondent           :     In person
Second Respondent       :     In person

Solicitors:

Appellants:     Solomon Brothers
First Respondent           :     In person
Second Respondent       :     In person

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

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
Australian Postal Commission v Hayes (1989) 87 ALR 283
Comcare v Etheridge (2006) 149 FCR 522
Helton v Allen(1940) 63 CLR 691
Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty (2010) 241 CLR 390
Mickelberg v The Director of the Perth Mint [1986] WAR 365
Minister for Aboriginal Affairs v Peko‑Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361
R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228
Ramsay v Australian Postal Corporation [2005] FCA 640; (2005) 147 FCR 39
Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 36 FLR 482
Roberts v The State of Western Australia [2005] WASCA 37
Rodriguez v Telstra Corporation Ltd [2002] FCA 30
Secretary to the Department of Premier and Cabinet v Hulls (1999) 3 VR 331
Waterford v The Commonwealth (1987) 163 CLR 54

COMMISSIONER SLEIGHT: This is an appeal from a determination of Dr De Villiers, a member of the State Administrative Tribunal (SAT) in respect of a retail shop lease.
The appellants, Mr and Mrs Sammut, are the owners of premises situated at 306 Odin Drive, Stirling (the premises). The first‑named respondent, AVM Holdings Pty Ltd (AVM) occupied the premises pursuant to an assignment of lease dated 1 September 2006 (the assignment of lease). The lease was dated 4 May 2001 (the lease). The second‑named respondent, Mr Antonio Viola, provided a guarantee under the assignment of lease of compliance of the lease by AVM.
Mr and Mrs Sammut issued a default notice on or about 22 March 2010 against AVM which, in broad terms, alleged relevant to this appeal:
(a)AVM used the retail shop premises beyond the permitted use of a delicatessen; and
(b)AVM's use of the premises was illegal in that it failed to comply with the Food Act 2008 (WA) and a town planning scheme.
On 4 June 2010 Mrs Sammut, on behalf of the appellants, lodged an application with SAT under s 16(1) of Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). The purpose of the application was to resolve issues arising from the notice of default.
The member of SAT determined relevant to this appeal that:
(a)the use of the premises was predominantly consistent with a delicatessen; and
(b)no illegal activities occurred on the leased premises.
Mr and Mrs Sammut appeal this decision.

General background

The Tribunal (a) Non-permitted use

Clause 9.1 of the lease provides, '[t]he Tenant shall only use the Premises for the Permitted Use'. The permitted use designated in the lease is 'Delicatessen'. The assignment of lease contained a similar provision. In addition, the assignment of lease contained in cl 5.3(b) of the schedule, the following:
The assignee wishes to use the premises for the purpose of manufacturing, cooking and selling pasta, and to operate a 'restaurant' from the premises. Such activities are not currently permitted within the Permitted Use of the Premises, and the City of Stirling has rejected an application by the assignee for a change of use for the premises to allow these activities. The assignee agrees that they shall not conduct such activities at the premises, and they must use the premises for the permitted use.
The amended statement of issues filed by the appellants in the Tribunal proceedings alleged non‑permitted use of the premises by AVM in that:
(a)A significant portion of AVM's business is the manufacture and/or preparation of pasta meals which are sold, both fresh and frozen, from the premises. The pasta meals are manufactured and/or produced on the premises (par 8).
(b)AVM sells sandwiches, rolls and other food from the premises for immediate consumption. The extent of these sales falls outside the permitted use as a delicatessen. AVM is using the premises as a lunch bar (par 9).
(c)The preparation of schnitzels and boiled eggs for use within sandwiches prepared in the Premises is not permitted because it does not represent a negligible component of the predominant use of the site (par 10).
At the time of the alleged default, the premises were zoned under the City of Stirling's District Planning Scheme No 2 as a 'delicatessen'. Because of this, the appellants had initiated a complaint to the City of Stirling concerning alleged uses of the premises contrary to the zoning. A series of letters from the City of Stirling were tendered into evidence.
A letter dated 14 August 2006 addressed to Mr Viola provided a definition of 'delicatessen'. It stated as follows:
[A] building for the sale of prepared food (including those of a continental nature) and daily grocery needs, principally to persons resident within the immediate locality. A delicatessen can sell food for immediate consumption (such as pies, rolls, sandwiches and cakes) as an incidental component of the main use however, under the definitions of the Planning Scheme, these food items may not be manufactured on the site, and certainly not in bulk.
Similarly, the production of other foodstuffs (such as pasta) for sale or distribution (including wholesale) is not permitted from the site because of the restrictive current zoning (unless of such a small quantity as to represent an ancillary or negligible component of the site's use). All manufacture of items is to be undertaken elsewhere, with such produce to be sold from the above lot as a part of its broader delicatessen function.
The term 'delicatessen' is not defined in the lease, the assignment of lease or the relevant City of Stirling District Planning Scheme.
In a subsequent letter from the City of Stirling to Maria Viola (the wife of the second respondent) dated 18 August 2010, it was stated that:
I would like to take this opportunity to confirm that the above business premises and all food handling operations carried out on the premises have been fully considered and the City is satisfied that the business complies with the requirements of the Food Act 2008 and the Food Standards Code and also the relevant Planning approval.
A considerable amount of time has been spent investigating this issue including inspections of the premises and review of the City's records and approvals history relating to the premises. Suppliers have also been contacted by the City's Health Section to confirm that pasta products sold at the premises were purchased from other manufacturers or wholesalers and not manufactured on the premises.
The City is satisfied that any food preparation (included limited cooking activities) is incidental to the approved use of the premises as a delicatessen and is entirely consistent medium risk rating assigned to the premises.
In a later letter from the City of Stirling to Mrs Viola dated 5 June 2010, it was stated as follows:
Please note however that under the current zoning, the only use permitted on the site is the operation of a delicatessen, which is a building for the sale of prepared food (including those of a continental nature) and daily grocery needs, principally to persons resident within the immediate locality. A delicatessen can sell food for immediate consumption (such as pies, rolls, sandwiches and cakes) as an incidental component of the main use. The preparation of such food must be done so in a small quantity as to represent an ancillary component of the site's use.
In a subsequent letter dated 25 June 2010 from the City of Stirling to Mrs Maria Viola, it was stated:
As discussed preparation of schnitzels and boiled eggs for use within sandwiches provided that it is done so in a manor [sic] that it would represent a negligible component of the predominant use of the site and is compliant with the City's health requirements is considered to be satisfactory.

(b) Illegal use

Clause 9.2(a) of the lease requires a tenant amongst other things not to use the premises for any illegal purpose.
The amended statement of issues filed by the appellants in the Tribunal proceedings alleges the following illegal uses of the premises:
(a)The food manufacture and/or production being carried out by AVM at the premises without a kitchen is likely to render the food unsuitable as defined in the Food Act 2008 (par 15).
(b)Section 22 of the Food Act 2008 requires that a person must comply with requirements imposed by the Food Standards Code. The premises do not comply with the Australian and New Zealand Food Standards Code, at least, in relation to the walls and ceiling of the store room where food manufacture and/or preparation takes place at the premises (par 16).
(c)The use of the storage area as a kitchen required a development approval from the City of Stirling which was not sought or obtained (not in its entirety) (par 18).
(d)The Water Corporation of Western Australia has issued a permit (number 21156) to discharge industrial waste to AVM in relation to use of the premises. (It was a condition of this permit that a grease trap be installed which was not done.)
The appellants referred these matters to the City of Stirling. The City of Stirling, by letter to Mrs Viola dated 18 August 2010 (referred to earlier in this decision) indicated that the City of Stirling was satisfied that the business complied with the requirements of the Food Act 2008, the Food Standards Code and the relevant planning approvals.

(c) Other alleged breaches

There were other allegations of breaches of the lease raised by the appellants in the proceedings before the Tribunal relating to the installation of fixtures, a bank guarantee and repair. None of these matters need to be described, as they are not the subject of the appeal.

Decision of the member of SAT

(a) Non‑permitted use

Dr De Villiers in his decision stated as follows:
Is there a breach of the lease in that the premises is not being used for the permitted use namely the operation of a delicatessen?
The answer to this question is 'no' there is not a breach of the lease, since the Tribunal finds that the premises is predominantly operated as a delicatessen as provided for by the lease and the local government planning scheme [12].
The reasons for this finding are as follows:
a)The Tribunal concurs with the legal representative of the applicants, Mr Carmody, when he says the question whether the premises is being used as a delicatessen or a lunch bar is a factual question which can only be addressed by taking into account all of the actual activities on the premises. The Tribunal also agrees that the difference between a delicatessen and a lunch bar or sandwich bar may be one of degree, with a grey area in‑between. It is not possible to draw a definitive line or exact distinction when an operation ceases to be a delicatessen and becomes a lunch bar, especially not in the absence of a definition in the lease by what is meant by a delicatessen and no reference in the lease to a lunch bar or a definition thereof. All information about the activities that occur on the premises must therefore be taken into account to form a view of what is the predominant activity and what are possible ancillary activities. It is especially in the absence of a definition of 'delicatessen' in the lease that the Tribunal must rely on the general evidence and information provided to it, communications from the City of Stirling (City), as well as its own observations during the site inspection.
The Macquarie Concise Dictionary (Third Edition) defines 'delicatessen' as follows:
'A shop selling cooked or prepared goods ready for serving; usually having a noticeable proportion of continental or exotic items.'
It must be noted that, other than the evidence of Ms Sammut and the contentions of Mr Carmody, there is no evidence before the Tribunal of any expert provided by the applicants.
When all the information before the Tribunal is taken into account, the Tribunal is satisfied that the proper characterisation of the predominant use of the premises is consistent with the lease, namely, a delicatessen. The items on display in the photographs, and the stock visible during the site inspection and in the inventory of all products on the premises, are clearly of the kind that would fall within the description of a delicatessen, and most certainly offer a much wider range of products than would be expected of a lunch bar. While the provision of some prepared food and sandwiches for lunch or for immediate consumption may be part of the range of products offered by the respondent, such sandwiches and prepared food are incidental to its general profile as a delicatessen. Both objectively and subjectively speaking, one could not possibly conclude that the list of items on the inventory, the photographs provided and the range of items visible during the inspection, were indicative of a lunch bar.
b)...
... If the applicants had called an expert to assess the content of the shop, its inventory and the nature of the activities, and such an expert had found that the premises was not being used in accordance with what is generally understood to be a delicatessen, their contentions may have been on firmer ground.
In the absence of an expert assessment of the activities, the Tribunal is guided for its conclusion by the inventory, observations by inspectors of the City and the Water Corporation, the photographs tendered and observations made by the Tribunal during the site inspection.
After taking into account all of such information, the Tribunal concurs with the assessment of the City's Mr Neil Duffin in his letter of 18 August 2010 when he says that 'the City is satisfied that any food preparation (included limited cooking activities) is incidental to the approved use of the premises as a delicatessen and is entirely consistent with the medium risk rating assigned to the premises'.
The Tribunal must stress that it does not seem as if Mr Duffin had come to this conclusion, as was suggested by Mr Carmody, based solely on information given to him by Ms Viola. On the contrary, the evidence is that the City had on various occasions inspected the premises and that its views were very well informed and reflective of information gathered over an extended period. Ms Sammut also acknowledged that she had brought complaints to the City and officials of the City had investigated the complaint. The inspectors of the City therefore seemed to have a very good and intimate knowledge of the entire business operation and were not merely relying on the information provided to them by Ms Viola. The City's understanding of the entire operation is evidenced by Mr Duffin saying as follows in his letter, namely, that 'all food handling operations carried out on the premises have been fully considered' by the City … ' (Tribunal emphasis).
Although Mr Duffin was not called to give evidence, the Tribunal can take into account his assessment and, on the basis of the lack of other expert evidence, concurs with his categorisation, since it is consistent with the other evidence and information provided to the Tribunal as well as the observations made by the Tribunal during the site inspection.
...
g)The Tribunal notes the contention of the applicants that the commercial activities in the delicatessen have shifted from 'take‑home' products to immediate consumption products. The applicants did not offer any expert assessment of stock to substantiate their contention. Mr Carmody referred in this regard to the milk and cold drink container sizes to show that clients are, in effect, encouraged to consume what they buy on the spot. According to Mr Carmody, this is indicative of a lunch bar rather than a delicatessen. The Tribunal does not accept this contention. First of all, it is not supported by any evidence or assessment by an expert of the stock profile of a delicatessen. ...
...
i)The Tribunal accepts that the assessment of the City cannot, in itself, determine the questions. However, the Tribunal had the benefit of a site inspection as well as the evidence of the photographs, inventory and the evidence of Ms Sammut and Ms Viola. If all of this is taken into account, the Tribunal reaches the same conclusion as the City [13]. (original emphasis)

(b) Illegal purposes

Dr De Villiers in his decision stated that:
Is part of the premises being used for an illegal purpose?
The answer to this question is 'no' there is not a breach of cl 9.2(a) of the lease, namely, that the premises is used for an illegal purpose. The Tribunal finds that there is insufficient evidence to conclude that any part of the premises is being used for an illegal purpose as contended by the applicants [15].
The reasons for this finding in reply to the issues raised by the applicants are as follows:
a)The Tribunal does not accept there is a breach of the lease, since a grease arrestor is not provided. There is no requirement in the lease for a grease arrestor as a condition for the premises being used as a delicatessen. The letter of the Water Corporation dated 12 November 2010 is unequivocal, namely, that the respondent is 'not required to discharge the kitchen waste to a grease arrestor. There was no evidence that cooking was being carried out'. The Tribunal accepts that the original approval granted by the Water Corporation suggested that a grease arrestor was required but, as Ms Viola explained, this was on the assumption that the respondent might apply to manufacture pasta on site and the possibility of operating a restaurant, thereby changing the use of the premises. The respondent subsequently changed its mind and decided to continue with the delicatessen. For purposes of these proceedings, it must be noted that whatever misunderstanding had existed regarding the grease arrestor, the letter of the Water Corporation dated 12 November 2010 should have allayed any concerns of Ms Sammut. The letter makes it clear that the Water Corporation came to its conclusion after having visited the delicatessen and inspected the activities. It escapes logic how Ms Sammut could continue to allege in her evidence before the Tribunal that there was a breach of the lease if there is not a requirement for a grease arrestor to be installed. Even if it was Ms Sammut's view that an arrestor had to be installed, the letter of 12 November 2010 from the Water Corporation should have allayed her concerns. Her contention during the hearing that the lease was being breached, since a grease arrestor had not been installed, demonstrated that the concern was frivolous, without any factual base and unfounded.
b)... The Tribunal notes that, if zoning or other statutory requirements are breached, the relevant local authority is required to investigate and take action if a potential breach occurs. Although the question arises under the lease, the applicant must put forward some credible evidence to support its contentions. The mere allegations by Ms Sammut were not supported by any credible independent evidence of illegal activities. It is not primarily for the Tribunal to determine if an illegal activity occurs on the premises since it is not the enforcement or prosecuting authority. The Tribunal deals with a question arising under the lease. On the basis of the absence of any negative finding by the City; the absence of any prosecution or penalties being imposed on the respondent; and the Tribunal's assessment of all the evidence before it, the Tribunal is satisfied that there is insufficient evidence to make a finding that an illegal activity occurs on the premises in general, and in the back room in particular. ... It is unclear how the applicants could, in light of these letters and the absence of any other credible evidence, bring the application to suggest illegal activities without any expert or independent evidence to support their allegations. While Mr Carmody did his best to explain why health and/or planning requirements may have been breached, there is nothing in the form of substantial evidence before the Tribunal to justify this question or the conclusions drawn by Mr Carmody. While Ms Sammut says that the 'kitchen', as the back area has been called, does not, in her opinion, comply with health requirements, she fails to explain what makes her an expert to come to such a conclusion. She also fails to explain why the activities in the front area constitute an illegal activity. She does not recognise that the City had conducted various inspections and has found the contrary, and she does not offer any expert or independent evidence. Her contentions are, in light of all the information, frivolous and without ground [16].
The response to the second question is therefore that there is insufficient evidence to find that any part of the premises is being used for an illegal purpose [17].

Grounds of appeal

The grounds of appeal are:
Failure to Use Premises for Permitted Use
1.       The State Administrative Tribunal ('SAT') erred in law in concluding that the lease of the premises at 306 Odin Drive, Stirling Western Australia ('Premises') dated 4 May 2001 assigned to the first named respondent ('AVM') by a deed of assignment dated 1 September 2006 ('Lease') had not been breached because the predominant use of the Premises was as a delicatessen, in circumstances where the SAT should have determined whether any use(s) of the Premises, whether predominant or otherwise, was or were not permitted by the Lease.
2.       The SAT erred in law in relying on statements made in documents by officers of the City of Stirling without the officers who authored the documents giving oral evidence.
3.       The SAT erred in law in placing weight upon conclusions reached by the City of Stirling as to compliance with City of Stirling District Planning Scheme No 2 and City of Stirling District Planning Scheme No 3 (the 'Schemes'), in circumstances where the SAT should have held that the City of Stirling's conclusions, further or alternatively the extent of compliance with the Schemes, were not relevant to determining whether AVM had used the Premises for a purpose or purposes other that that permitted by the Lease.
4.       The SAT erred in law in holding that expert evidence relating to the meaning of the word 'delicatessen' should have been adduced further or alternatively by placing weight on the absence such evidence, in circumstances where the parties had agreed the ordinary meaning of the word 'delicatessen' and the issue of whether AVM had used the Premises for a purpose or purposes other than as a 'delicatessen' was a question of fact the determination of which did not require expert evidence.
5.       The SAT erred in law in holding that the description of the Premises as a 'lunch bar' in an advertisement placed on behalf of AVM was an error on the part of a selling agent without the agent having given evidence.
6.       The SAT erred in law in failing to hold that AVM selling pasta from the Premises constituted a breach of clause 5.3(b) of the deed of assignment of the Lease.
Illegal Use of Premises
7.       The SAT erred in law in holding that it was not primarily for it to determine if any illegal activity occurred on the Premises since it is not the enforcer or prosecuting authority, in circumstances where the SAT should have held that clause 9.2(a) of the Lease prohibited AVM from using the Premises for any purpose that was illegal and the question of whether there had been compliance with clause 9.2(a) of the Lease was a question arising under the Lease jurisdiction to hear and determine which was conferred on the SAT by s.16 of the Commercial Tenancy (Retail Shops) Agreements Act 1985.
8.       The SAT erred in law by placing weight upon conclusions of the City of Stirling and the Water Corporation, or lack thereof, further or alternatively the failure of the City of Stirling or the Water Corporation to pursue enforcement action, when determining whether the Premises were used for an illegal purpose in breach of the Lease, in circumstances where the SAT should have determined the questions before it by reaching its own conclusions based on the available evidence of the underlying facts.
9.       The SAT erred in law in holding that it was lawful for AVM to discharge industrial waste without installing a grease arrester in circumstances where the SAT should have held that it was unlawful for AVM to discharge industrial waste without installing a grease arrester as required by conditions of the permit dated 7 November 2006 granted to AVM by the Water Corporation, alternatively, prior to 12 November 2010, it was unlawful for AVM to discharge industrial waste without a grease arrester.
10.     The SAT erred in law in holding that expert evidence or independent evidence as to compliance by AVM with the Food Act 2008 was necessary to determine whether the AVM's use of the Premises complied with the Food Act 2008, further or alternatively by placing weight on the absence of such evidence, further or alternatively by failing to accord due weight to the evidence adduced by the appellants on the basis that there was no supporting or expert evidence, in circumstances where evidence as to the condition and use of the Premises was adduced and the question of whether AVM complied with the Food Act 2008 was a question of law to be determined by the SAT based on the available evidence of the underlying facts.

Principles on appeal

(a) Leave to appeal

The appeal is pursuant to s 105 of the State Administrative Tribunal Act2004 (WA) (the SAT Act). A party may appeal against a decision of SAT if the court to which the appeal lies gives leave to appeal (s 105(1)).
On 23 May 2011, Hall J ordered that the application for leave to appeal be heard at the same time as the appeal.
The circumstances in which leave should be granted were considered by the Court of Appeal in Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361, 372 ‑ 373 [16] ‑ [18]. Buss JA, with whom Wheeler and Pullin JJA agreed, cited with approval the decision of Phillips JA in Secretaryto the Department of Premier and Cabinet v Hulls (1999) 3 VR 331), which enunciated the guidelines for determining whether to grant leave to appeal under in relation to s 148 of the Civil and Administrative Tribunal Act 1998 (Vic). The provisions of s 148 are not materially different from the provisions of s 105(1) and (2) of the Western Australian Act: Phillips JA said at 337 [16]:
When leave is sought to appeal under s 148, it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would‑be appellant in a particular case, will probably be relevant. The applicant must show there is a real or significant argument to put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the order below is final, that injustice will often be more readily discernible (337).
Buss JA in Paridis [18] expressed the view that those guidelines are not rigid or exhaustive, and leave should be granted, if, in all the circumstances, a grant of leave is in the interests of justice.

(b) Question of law

Under s 105(2) of the SAT Act an appeal can only be brought 'on a question of law'.
As to the meaning of the expression 'on a question of law', it must be first observed than it has a narrower meaning that the expression 'involves a question of law': Paridis [53] (Buss JA, with whom Wheeler & Pullin JJA agreed).
The narrower right of appeal given by s 105 of the SAT Act discloses an intention on the part of the legislature to limit the capacity of the court on appeal to review factual findings of the Tribunal (see Comcare v Etheridge (2006) 149 FCR 522, 527 [14] in the context of s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth); this provision is not materially different from s 105(1) and (2) of the Western Australian Act).
An appeal on a question of law is of the same character as the subject matter of a submission of a question of law to the Supreme Court under s 59(1) of the SAT Act: see Comcare v Etheridge [13].
A mixed question of law and fact is not a question of law within s 105(2): Paridis [53].
A Tribunal does not commit an error of law merely because it finds facts wrongly or upon a doubtful basis: Paridis [55].
A ground of appeal that a Tribunal has failed to take into account a consideration which, in the circumstances, it was bound to take into account, alleges an error of law: see Minister for Aboriginal Affairs v Peko‑Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39 ‑ 40. An error of law which the appellants may rely upon is one which vitiates the findings of fact: Waterford v The Commonwealth (1987) 163 CLR 54, 71. Accordingly, an error of law occurs where there is no evidence in support of a finding of fact: Kostas v HIA Insurance Services Pty Ltd t/as Home Owners Warranty (2010) 241 CLR 390, 418 [91] (Hayne, Heydon, Crennan & Kiefel JJ).
An error on a question of law only occurs if the error is material to the decision in the sense that it contributes to it so that, but for the error, the decision would have, or might have been, different. Accordingly something more than a mere error is required. The critical question is whether but for the alleged error of law, the decision might have been different by reason of the possibility that the Tribunal would not have made the findings of fact but for the error: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 [80] (Mason CJ), [46] (Gaudron & Toohey JJ).

(c) Power of court on appeal

A court dealing with an appeal may:
(a)affirm, vary or set aside the decision; or
(b)make any decision that the Tribunal could have made in the proceedings; or
(c)send the matter back to the Tribunal for reconsideration, either with or without the hearing of further evidence, in accordance with any directions or recommendations that the court considers appropriate and, in any case, may make any order the court considers appropriate (s 105(9) of the SAT Act).

Conclusions

(a) Grounds of appeal relating to failure to use premises for permitted use

Ground 1

The appellants contend that the member made an error of law in that he used an incorrect test as to whether the premises were being used as a delicatessen. This ground of appeal is based upon the member stating in his decision that there was no breach of the lease, since the predominant use of the premises was for the operation of a delicatessen. The appellants contend it was not a question of the predominant use. The premises could only be used as a delicatessen.
For the purpose of proceedings before the Tribunal, the parties had agreed that the definition of 'a delicatessen' in the lease documents should be the same definition as contained in the correspondence from the City of Stirling tendered into evidence. This definition contemplates activities that are 'incidental' to the main use (see letter from the City of Stirling dated 14 August 2006 referred to earlier in this decision).
In my view, the use of the expression 'predominant use' by the member in his findings was, to convey the conclusion that other activities complained of were incidental to the main or predominant use of the premises as a delicatessen. This was a formula in accordance with the agreed definition. Therefore, I conclude that no error on a question of law has been made out. Although I grant leave in relation to this ground, I dismiss the ground of appeal.

Grounds 2 and 3

These two grounds of appeal can be dealt with together. The grounds relate to the extent the member relied upon statements of officers of the City of Stirling and placed weight upon their conclusions relating to a planning issue.
Section 32(1) ‑ (6) of the SAT Act provides as follows:
32.Practice and procedure, generally
(1)The Tribunal is bound by the rules of natural justice except to the extent that this Act or the enabling Act authorises, whether expressly or by implication, a departure from those rules.
(2)The Evidence Act 1906 does not apply to the Tribunal's proceedings and the Tribunal -
(a)is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that it adopts those rules, practices or procedures or the regulations or rules make them apply; and
(b)is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
(3)Without limiting subsection (2), the Tribunal may admit into evidence the contents of any document despite non compliance with any time limit or other requirement specified in the rules in relation to that document or service of it.
(4)The Tribunal may inform itself on any matter as it sees fit.
(5)To the extent that the practice or procedure of the Tribunal is not prescribed by or under this Act or the enabling Act, it is to be as the Tribunal determines.
(6)The Tribunal is to take measures that are reasonably practicable ‑
(a)to ensure that the parties to the proceeding before it understand the nature of the assertions made in the proceeding and the legal implications of those assertions; and
(b)to explain to the parties, if requested to do so, any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceeding; and
(c)to ensure that the parties have the opportunity in the proceeding ‑
(i)to call or give evidence; and
(ii)to examine, cross examine or re examine witnesses; and
(iii)to be heard or otherwise have their submissions considered.
The appellants contend that s 32 of the SAT Act did not entitle the Tribunal to take into account the conclusions and observations of the City of Stirling as contained in letters tendered into evidence and to do so constituted an error in law. The appellants rely upon the authority of Rodriguez v Telstra Corporation Ltd [2002] FCA 30, which dealt with s 33 of the Administrative Appeals Tribunal Act 1975, which is in similar terms to s 32 of the SAT Act. In this decision Kiefel J stated as follows:
The tribunal is not bound by the rules of evidence (s 33 of the Administrative Appeals Tribunal Act 1975 (Cth)) and may inform itself in such a manner as it thinks appropriate. This does not mean that the rules of evidence are to be ignored. The more flexible procedure provided for does not justify decisions made without a basis in evidence having probative force: Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33 at 41; 26 ALR 247 at 256; 36 FLR 482 at 492, referring to Consolidated Edison Co v National Labour Relations Board 305 US 197 at 229; R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 256. The drawing of an inference without evidence is an error of law: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355‑6; 21 ALD 1 at 23‑4; 94 ALR 11 at 37‑8; Repatriation Commission v Maley (1991) 24 ALD 43 (Full Court). Similarly such error is shown when the tribunal bases its conclusion on its own view of a matter which requires evidence. In Collector of Customs (Tasmania) v Flinders Island Community Association (1985) 7 FCR 205 at 210; 8 ALN N102; 60 ALR 717 at 722 a Full Court of this court held that it was unjustifiable, and therefore legally erroneous, for a tribunal to base its conclusion upon its own understanding of traditional aboriginal concepts of community ownership and interests, in the absence of any evidence on the matter [25].
The reliance of Kiefel J on the decisions in Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 36 FLR 482 and the decision of Evatt J in R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 case is worthy of some examination.
In Pochi's case, Brennan J stated (493) that a Tribunal which is not bound by rules of evidence is entitled to have regard to evidence which is logically probative whether it is legally admissible or not. Further, this would appear to be so even though a party has not been given an opportunity to cross‑examine on the material.
In Bott's case, the High Court dealt with an appeal from a decision of the War Pensions Entitlement Appeal Tribunal. The Tribunal had requested two independent medical specialists to examine the appellant and report to the Tribunal. The reports were read to the Tribunal (in the absence of the applicant, but in the presence of his counsel) and cross‑examination was not allowed. Evatt J, in a dissenting judgment, stated:
But this does not mean that all rules of evidence may be ignored as of no account. After all, they represent the attempt made, through many generations, to evolve a method of enquiry best calculated to prevent error and elicit truth. No tribunal can, without grave danger of injustice, set them on one side and resort to methods of enquiry which necessarily advantage one party and necessarily disadvantage the opposing party. In other words, although rules of evidence, as such, do not bind, every attempt must be made to administer 'substantial justice' (256).
Starke J, who formed a part of the majority, stated:
The appeal tribunal can obtain information in any way it thinks best, always giving a fair opportunity to any party interested to meet that information; it is not obliged to obtain such independent medical opinion, for instance, upon oath, and whether the cross‑examination shall take place upon that opinion is entirely a question for the discretion of the Tribunal; it is not bound by any rules of evidence, and is authorised to act according to substantial justice and the merits of the case (249) ‑ (250).
Australian Postal Commission v Hayes (1989) 87 ALR 283, was another case which considered the operation of s 33 of the Administrative Appeals Tribunal Act 1975. Wilcox J noted:
Although s 33 gives to the tribunal a wide discretion as to the procedure to be adopted in reviewing a decision, it is clear that the tribunal is bound to accord to the parties natural justice; or as the concept is now more frequently called, procedural fairness. The principles enunciated by the High Court of Australia in Kioa v West[1985] HCA 81; (1985) 159 CLR 550; 62 ALR 321 apply: see particularly the exposition of Mason J (CLR at 582; ALR at 345‑6). An essential ingredient of procedural fairness is the opportunity of presenting one's case: see per Brennan J in Kioa (CLR at 615; ALR at 370). In Sullivan v Department of Transport (1978) 20 ALR 323 at 342 Deane J expressed the view that s 39 of the Administrative Appeals Tribunal Act 'constitutes statutory recognition of an obligation which the law would, in any event, imply. Where a Tribunal is under a duty to act judicially, the principle that a party must be given a reasonable opportunity to present his case is at the heart of the requirements of natural justice which it is obliged to observe' (288).
Section 33 of the Administrative Appeals Tribunal Act 1975 does not contain any express provision giving a party the right to cross‑examine witnesses in similar terms to s 32(6)(c)(ii)of the SAT Act. However, the right to cross‑examination is viewed as an important feature of procedural fairness. In Australian Postal Commission (289), Wilcox J accepted the submission that:
[T]he testing of opposing relevant material by cross‑examination is an essential feature of the opportunity to correct or contradict that material; it is not enough that the party against whom the evidence is led has the right to present evidence in reply.
In the case of Ramsay v Australian Postal Corporation [2005] FCA 640; (2005) 147 FCR 39 the Federal Court also considered the issue of the right to cross‑examine. In that case, the Tribunal had failed to give the applicant an opportunity to cross‑examine a medical practitioner that the applicant had requested to cross‑examine, but the respondent had forgotten to arrange attendance of the medical practitioner. Spender J held the Tribunal was in breach of s 39 of the Administrative Appeals Tribunal Act 1975 which provided the Tribunal shall ensure that every person to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case. This was notwithstanding a provision that the Tribunal was not bound by the rules of evidence. Relevantly, the General Practice Direction of the Tribunal provided that a party may require the attendance for cross‑examination of a medical practitioner who has made a report which will be taken into account in proceedings. Further, that a failure of the medical practitioner to attend in these circumstances will not, in itself, render the report incapable of being taken into account. However, such failure may be relevant in assessing the weight to be given to such a report.

In relation to the right of cross‑examination Spender J stated:
Procedural fairness requires fairness in the particular circumstances of the case. The duty imposed on a decision maker pursuant to s 39 of the SRC Act is to give each party an opportunity to present their case. While a right to cross‑examination is not necessarily to be recognised in every case as an incident of the obligation to accord procedural fairness, the right to challenge by cross‑examination a deponent whose evidence is adverse, in important respects, to the case a party wishes to present, is.
The right to cross‑examination contained in s 32(6) of the SAT Act is a qualified right. That is, the Tribunal is required to take measures that are 'reasonably practicable'.
It is important to examine how the evidence of the statements and conclusions of the City of Stirling came to be before the Tribunal. Both parties tendered into evidence a bundle of documents. The appellants' bundle contained a number of letters from the City of Stirling which contained definitions of the word delicatessen. The appellants' bundle also included letters from the City of Stirling dated 5 June 2010 and 25 June 2010 which expressed the view that the preparation of schnitzel and boiled eggs for sandwiches, provided it is done as a negligible component of the predominant use of the site, is considered satisfactory. Further letters from the City of Stirling were tendered into evidence through Mrs Viola, who gave evidence on behalf of AVM. In her tendered written statement of evidence, Mrs Viola stated:
13.By letter dated 18 August 2010 at the City of Stirling informed me that it is satisfied that the pasta is sold on the premises was purchased from other manufactures [sic] and not manufactured on the premises [I produce letter from the City of Stirling dated 18 August 2010].
...
25.The City of Stirling has informed me that it is satisfied that any food preparation complies with the requirements of the Food Act 2008 and the Food Standards Code. [I produce a letter from the City of Stirling dated 29 March 2010, 20 May 2010 and 18th of August 2010 (referred to in paragraph 13 above) and 26th of August 2010].
No objection was taken to this evidence by counsel appearing for the appellants before the Tribunal. Also, the letters referred to by Mrs Viola in her evidence were placed into evidence as part of the bundle of documents tendered by AVM. No objection was made by counsel appearing for the appellants before the Tribunal to the tendering of these letters.
Further, no request was made by counsel appearing for the appellants that the authors of the letters be required to attend the Tribunal for the purposes of cross‑examination.
In his opening in the proceedings before the Tribunal, counsel for the appellants stated in reference to the letter from the City of Stirling dated 18 August 2010 that:
It's almost meaningless. Unless we know what the investigations were, what the City of Stirling took into account, what they saw, it can't be given any weight, and ultimately it's a matter for you, we would say, to determine whether or not, within the definitions, which seem to be largely agreed on the facts as you find them, is there compliance. It is not up to the City of Stirling who may have an incomplete picture, and we don't know what to picture they had when they made this statement (ts 12).
In his closing written submissions, counsel for the appellants stated, in relation to AVM's reliance upon the correspondence from the City of Stirling:
This reliance is misplaced. The questions before the Tribunal will arise under the terms of the lease: are the premises being used in accordance with the permitted use described by the lease and other premises being used for an illegal purpose? These are questions within the jurisdiction of the Tribunal to determine. Any views expressed by the City of Stirling cannot determine these questions in these proceedings.
...
In any event the correspondence from the City of Stirling can have no probative value in determining the factual questions before the Tribunal. There is no evidence as to the material that was properly before the City of Stirling when the correspondence was written. Without an understanding of the factual context within which the correspondence was written it cannot be given any weight. For example, was the City of Stirling aware of the true extent of cooking being undertaken at the premises? Only boiled eggs and schnitzel is are referred to, so it appears not. In any event, the City of Stirling's view on these issues cannot determine that position for this Tribunal. It is this Tribunal, which has had the benefit of evidence and submissions from both parties, that must determine these questions.
Given that the normal rules of evidence do not apply, the evidence of the conclusions reached by the officers of the City of Stirling is not necessarily excluded on the basis of opinion evidence. As no objection was made to the evidence of Mrs Viola; and no objection was made the tendering of the letters from the City of Stirling; and the failure of the appellants' counsel to apply to cross-examine the authors of the letters from the City of Stirling; the only basis for arguing that an error occurred is the contention that the evidence of the statements and conclusions of the City of Stirling had no probative value. If the evidence had no probative value it be wrong to take it into account.
It is difficult to see how the statements and conclusions of the City of Stirling could be given any probative value as the full nature of the enquiries made by the City were not revealed in evidence and the author or authors of the letters tendered were not available to be questioned about the basis for the City's statements and conclusions. However, that does not mean that the decision of the member should be set aside based upon an error on a question of law. The member in his decision stated:
The Tribunal accepts that the assessment of the City cannot, in itself, determine the questions. However, the Tribunal had the benefit of a site inspection as well as the evidence of the photographs, inventory and the evidence of Ms Sammut and Ms Viola. If all of this is taken into account, the Tribunal reaches the same conclusion as the City [13 i)].
In my opinion, it is clear that, as the member reached the same conclusion as the City as a result of his inspection of the premises and other evidence, his decision was an independent conclusion that the premises were being used in accordance with the leasehold permitted use. Accordingly, even if an error has occurred by the member taking into account the conclusions of the City of Stirling, the decision made would not have been different if the material had been excluded. Accordingly no error on a question of law has occurred.
For the above reasons, although I am prepared to grant leave, I dismiss grounds 2 and 3 of the appeal.

Ground 4

This ground of appeal relates to a contention by the appellants that the member erred in law in holding that expert evidence relating to the meaning of the word 'delicatessen' should have been adduced, further, or alternatively, by placing weight on the absence of such evidence, in the circumstances where the parties had agreed the ordinary meaning of the word 'delicatessen'. In fact, what the parties had agreed to in the proceedings was a definition of 'delicatessen' as provided in correspondence from the City of Stirling dated 14 August 2006. In his decision, the member stated as follows:
Neither of the parties called any expert evidence as to what is the generally accepted definition of a delicatessen and how such definition reflects on the conduct of the business the subject of these proceedings. However, both parties, on questioning by the Tribunal, accepted for the purposes of these proceedings the definition of a delicatessen used by the City in its letter of 14 August 2006, namely:
'Delicatessen is "a building for the sale of prepared food (including those of a continental nature) and daily grocery needs, principally to persons resident within the immediate locality. A delicatessen can sell food for immediate consumption (such as pies, rolls, sandwiches and cakes) as an incidental component to the main use[;] however, under the definitions of the Planning Scheme, these food items may not be manufactured on the site, and certainly not in bulk" [13 b)].'
Later in his decision, the member stated:
If the applicants had called an expert to assess the content of the shop, its inventory and the nature of the activities, and such an expert had found that the premises was not being used in accordance with what is generally understood to be a delicatessen, their contentions may have been on firmer ground [13 b)].
In my view, ground 4 of the appeal has no merit and leave should not be granted. The member did not, as contended, state that expert evidence as to the meaning of 'delicatessen' should have been adduced. It is clear he simply observed that no such evidence was called and that the parties relied upon the definition for the purpose of the proceedings as contained in the correspondence from the City of Stirling. Other comments about the absence of expert evidence were non‑consequential observations that the member was not assisted in his decision by any expert evidence called by the appellants.

Ground 5

This ground of appeal relates to evidence before the Tribunal of an advertisement for the sale of AVM's business describing the business as a 'lunch bar'. The advertisement was placed by an agent employed by Mr and Mrs Viola on behalf of AVM. Mrs Viola gave evidence that the description was contrary to the instructions provided to the agent. On discovering the advertisement, she contacted the agent and instructed him not to describe the business as a 'lunch bar'.
The member, in his decision, held that the advertisement should not be held to be determinative of the actual use of the premises. The member accepted the evidence of Mrs Viola that the advertisement had been placed by the agent contrary to her instructions and when this was discovered, the agent was instructed to change the description of the business.
The appellants' contention is that the placing of the advertisement was an admission against interest and in the absence of a proper explanation for how the admission was made, the member erred in law in concluding that he should give it no weight.
The appellants' contention has no merit. The Tribunal was entitled to accept the evidence of Mrs Viola's explanation and dismiss the advertisement as not being determinative of the issue as to the use of the premises.
Leave is refused on ground 5 and the ground is, accordingly, dismissed.

Ground 6

This ground of appeal relates to cl 5.3(b) of the deed of assignment of lease. The clause provided as follows:
The assignee wishes to use the premises for the purpose of manufacturing, cooking and selling pasta, and to operate a 'restaurant' from the Premises. Such activities are not currently permitted within the Permitted Use of the Premises, and the City of Stirling has rejected an application by the assignee for a change of use for the Premises to allow these activities. The assignee agrees that they shall not conduct such activities at the Premises, and they must use the Premises for the Permitted use.
The member, in his decision, referring to an inspection of the premises conducted by him, stated:
It is clear that certain specialist and exotic products are available, such as olives, cheeses, sausages, pastas, breadcrumbs and so on. All of these fall within the general expectation of what can be found in a delicatessen [13 f)].
The appellants contend that the member, once he found that pasta was for sale, ought to have found that there was a breach of cl 5.3(b) of the assignment of lease document and that the member had thereby made an error in law.
In my view, the contention of the appellants has no merit. Clause 5.3(b) relates to conducting a business of manufacturing pasta, and is not related to the sale of pasta, on the premises. This is clear from the way in which the case was conducted before the Tribunal. It was not argued before the Tribunal that the sale of pasta that was not manufactured on the premises constituted a breach of the assignment of lease provision. The amended statement of issues filed in the Tribunal proceedings by the appellants contained no allegation that the sale of pasta incidental to the conduct of the business of a delicatessen was in breach of any provision of the lease or the assignment of lease document.
Leave is refused on ground 6 and the ground of appeal dismissed.

Ground 7

This ground of appeal is based upon the member stating that '[i]t is not primarily for the Tribunal to determine if any illegal activity occurs on the premises since it is not the enforcement or prosecuting authority' [16 b)]. The contention is that the member erred in law as he failed to recognise that the question of whether the premises were being used for any purpose that was illegal was a question under the lease to be determined by him as a member of the Tribunal. However the comments of the member must be placed in context. The member earlier stated in his decision as follows:
The Tribunal notes that, if zoning or other statutory requirements are breached, the relevant local authority is required to investigate and take action if a potential breach occurs. Although the question arises under the lease, the applicant must put forward some credible evidence to support its contentions [16 b)].
The member, after referring to the fact that it was not primarily for the Tribunal to determine if an illegal activity occurs, went on to state '[t]he Tribunal deals with a question under the lease [16 b)]'.
In my opinion, the statements of the member recognised that his function was to determine whether there had been a breach of the lease by illegal activities. By his comments the member correctly acknowledged a distinction between the role of the City of Stirling as the watchdog for enforcing the provisions under the relevant Planning Scheme and the Food Act 2008 and the Tribunal's role to determine issues under the lease.
I am not satisfied that any error on a question of law has been demonstrated. Leave is refused on this ground and the ground is dismissed.

Ground 8

This ground of appeal relates to the contention that the member erred in law, when considering the issue whether the premises were being used for an illegal purpose contrary to cl 9.2(a) of the lease, by placing weight upon the conclusions of the City of Stirling and the Water Corporation, including their failure to pursue any enforcement action.
As a matter of law, evidence of any enquiries and failure to prosecute cannot be evidence of non‑violation. This must be so as even an acquittal is not admissible of an evidentiary fact: Helton v Allen (1940) 63 CLR 691. On the other hand, a conviction may be evidence of an illegal activity in a civil proceeding: Roberts v The State of Western Australia [2005] WASCA 37 [146] (McLure P); Mickelberg v The Director of the Perth Mint [1986] WAR 365.
The conclusions of the City of Stirling and the Water Corporation related to two issues:
(a)whether AVM had conducted a food business from the premises contrary to the Food Act 2008;
(b)whether AVM had failed to comply with a permit issued under the Metropolitan Water Supply, Sewerage and Drainage By‑laws 1981 (WA).
The alleged breach of the Food Act 2008 relates to s 22 of the Act which provides that a person must comply with the Food Standards Code in relation to the conduct of a food business. Clause 11 of Standard 3.2.3 of the Code provides that walls and ceilings must be:
11.1constructed in a way that is appropriate for the activities conducted on the food premises;
11.3.asealed to prevent the entry of dirt, dust and pests;
11.3.bunable to absorb grease, food particles or water;
11.3.cable to be easily and effectively cleaned; and
11.4.aable to be effectively cleaned and,
11.4.bto the extent practicable, be unable to provide harbourage for pests.
Evidence was given by Mrs Sammut on behalf of the appellants on this issue. In par 31 of her witness statement dated 21 December 2010, Mrs Sammut stated as follows:
In my opinion, the Premises do not comply with the Australian and New Zealand Food Standards Code, at least, in relation to the walls and ceiling of the store room where the food manufacture and/or preparation takes place at the premises because:-
31.1the floor is painted concrete and is not properly sealed or treated;
31.2the walls are, in part, painted brick, and are not properly sealed;
31.3the ceiling has dropping panels, which are not permitted;
31.4there is an electric insect controller directly over food preparation benches;
31.5there is a metal (RSJ) running below the ceiling and harbouring dust.
In addition to Mrs Sammut's evidence, the member had conducted an inspection of the premises and also had the benefit of photographs of the premises.
Ironically, given the nature of ground 8 of this appeal, the appellants rely upon as evidence of the breach of the Food Standards Code a document from the City of Stirling entitled 'Food Business Guide: Design Construction and Operation'. The document states that it is provided as a guide only. The guide does not include painted concrete as an acceptable solution to the sealing of walls and ceiling. Further it states that drop‑in ceiling panels will not be approved. However, no independent evidence was presented to SAT as to non‑compliance with Standard 3.2.3. In particular, there was no evidence presented as to the following:
(a)that the construction of the walls and ceilings were inappropriate for the activities conducted on the premises;
(b)that the painted surfaces did not provide a seal to prevent the entry of dirt, dust and pests;
(c)that the walls and ceilings absorb grease, food particles or water;
(d)that the walls and ceilings were not able to be easily and effectively cleaned;
(e)that the walls and ceilings were not able to be effectively cleaned and provided harbourage for pests.
The appellants also seek to rely upon photographs of the walls and ceilings as evidence of non‑compliance with the standard, but, in my opinion, these photographs are inconclusive.
I describe later in this decision when dealing with ground 9 of the appeal the issue that arose in relation to the alleged breach of AVM of the Metropolitan Water Supply, Sewerage and Drainage By‑laws 1981. In dealing with ground 9 of the appeal, I conclude that there was no evidence before the Tribunal as to any such breach.
Based upon the above, I conclude that even if the member wrongly gave weight to the conclusions of the City of Stirling and the Water Corporation, it would have made no difference to the outcome. However, I believe that a close examination of the reasons of the member do not support the contention he wrongly relied upon the conclusions of the City of Stirling and/or its failure to take enforcement action. In my opinion, the member made it clear in relation to the Food Act 2008 issue that it was the insufficiency of evidence before him which led to his finding. In his decision, he stated:
On the basis of the absence of any negative finding by the City; the absence of any prosecution or penalties being imposed on the respondent; and the Tribunal's assessment of all the evidence before it, the Tribunal is satisfied that there is insufficient evidence to make a finding that an illegal activity occurs on the premises in general, and in the back room in particular [16 b)]. (emphasis added)
In my opinion, the reference by the member to the absence of any negative finding by the City and the absence of any prosecution or penalties being imposed on the respondent, is simply an observation there was no evidence of a conviction which might have supported the alleged breach of the Food Act 2008 by AVM. However, I believe that the member should have better expressed himself to make this clearer.

In relation to the contention the member wrongly placed weight upon conclusions of the Water Corporation and its failure to pursue enforcement action, I conclude for reasons expanded in this decision in relation to ground 9 of the appeal, that the member reached his conclusions concerning a possible breach of the Metropolitan Water Supply, Sewerage and Drainage By‑laws 1981 on the finding that AVM had not proceeded with a plan to manufacture pasta on the site. The proposed manufacture of pasta was the basis for obtaining the permit which contained a condition that a grease arrestor be installed. Although I accept it appears from the decision the member wrongly placed some weight on the conclusion of the Water Corporation in a letter dated 12 November 2010 that a grease arrestor was not required to discharge kitchen waste, this was in the context of a finding that the original basis for the issue of a permit, with a condition that a grease arrestor be installed, had become redundant as explained in Mrs Viola's evidence. Given my conclusions in relation to ground 9 of the appeal, I do not believe any error made by the member in taking into account the letter from the Water Corporation dated 12 November 2010 would have led to a different result.
I make the further observation that some of comments made by the member in his decision concerning the conclusions reached by the City of Stirling and the Water Corporation were not a part of his reasons for making findings, but rather were made as observations that it was surprising to the member that the appellants pursued these issues given the conclusions reached by the City of Stirling and the Water Corporation. It would have been preferable if these comments had not been made, as they created potential confusion as to the reasons for the member's decision.
In light of the above, I will grant leave to appeal on ground 8, but dismiss the appeal.

Ground 9

Ground 9 of the appeal relates to a permit issued by the Water Corporation. Regulation 28.1.1(b) of the Metropolitan Water Supply, Sewerage and Drainage By‑laws 1981 provides that no industrial waste shall be discharged into a sewer unless a written permit has first been granted by the Water Corporation and an agreement has been executed containing a covenant to comply with the conditions of the permit.
The evidence of Mrs Viola was that when AVM first leased the premises it wanted to use the premises to manufacture pasta. In anticipation that AVM would obtain approval to manufacture pasta on the premises, AVM obtained from the Water Corporation a permit to allow the discharge of industrial waste related to the manufacture of pasta. It was a condition of the permit AVM had obtained from the Water Corporation that a grease arrestor was to be installed. The evidence of Mrs Viola was that the City of Stirling did not allow AVM to manufacture pasta on the premises as the premises were zoned at the time as a special use, being a delicatessen. Mrs Viola and her husband decided that it would be too costly for AVM to seek to rezone the premises and therefore abandoned their plans to manufacture pasta on the premises. Accordingly, on 12 November 2010, the Water Corporation informed Mrs Viola a grease arrestor was not required.
The contention of the appellants before SAT was that up until the time that the Water Corporation withdrew the condition that a grease arrestor was required, AVM was in breach of the permit and the failure to install a grease arrestor constituted an illegal activity on the premises. However, this is a misunderstanding as to how the alleged illegality arises. 'Industrial waste' is defined in the Metropolitan Water Supply, Sewerage and Drainage By‑laws 1981 as meaning any 'liquid, solid or gaseous refuse from any business, industry, warehouse or manufacturing premises other than domestic sewage, stormwater, or unpolluted water'. The illegality created by the regulation is the discharge of industrial waste into a sewer without complying with the conditions of a permit (reg28.1.1). Accordingly, the failure to have a grease arrestor per se does not create an illegality. The illegality only occurs if there is a discharge of industrial waste into the sewer contrary to the conditions in the permit.
The member did not hold, as suggested by ground 9 of the appeal, that it was lawful for AVM to discharge industrial waste without installing a grease arrestor. If he had done so, an error on a question of law would have occurred and this ground of appeal upheld. The member held, in effect, that a grease arrestor was not required as the activity (the manufacture of pasta) which lead to the issue of the permit was not pursued by AVM. To the extent the member decided the issue on this basis reveals an error on a question of law as the question he should have asked himself was whether there had been a discharge of industrial waste into the sewer contrary to the permit. However, this is not the basis of this ground of appeal. However, even if I were to allow an amendment to the ground of appeal, it would not affect the outcome. Under s 105(9) of the SAT Act, I may substitute my decision for the decision of the Tribunal. In supplementary submissions filed, the appellants do not oppose me substituting my decision if any ground of appeal is upheld. Based on the evidence before me, I conclude that there is insufficient evidence to conclude that at any time AVM discharged industrial waste into the sewer, contrary to the issued permit requiring a grease arrestor to be installed. The reason for this conclusion is set out below.
The appellants' counsel has contended that there was evidence presented before SAT that AVM was cooking on the premises and that an inference should have been drawn that this lead to a discharge of waste into the sewer contrary to the permit issued by the Water Corporation.. Mrs Viola's evidence was there were three forms of cooking conducted on the premises:
(a)AVM used a small electric hot plate to boil eggs and a small deep‑fryer to cook schnitzel;
(b)AVM used a toaster to make bacon and egg toasted sandwiches; and
(c)AVM used a bain‑marie to defrost devil Wing Dings.
Based upon these admitted cooking activities, it is contended on behalf of the appellants that the only inference reasonably available on the evidence is that there must have been a discharge of industrial waste from the premises and therefore a grease arrestor was required. However, this contention ignores that a breach of the relevant obligations only occurs if there is a discharge of industrial waste into the sewer. From the cooking activities described in the evidence of Mrs Viola, the only material which is likely to produce industrial waste would be the residue of the cooking oil used in the deep‑fryer. No evidence was led at the hearing before SAT as to how any residual cooking oil was discharged (or for that matter any other cooking residue). There was no evidence that it was discharged into the sewer. There are many ways it could have been discharged, including by placing it in the rubbish bin or discharging it off the premises. Accordingly, in the absence of any evidence that industrial waste was discharged into the sewer, even if an error has occurred, I conclude that it would not have made any difference to the outcome. The error of the member was not an error which could have changed the result.
On the basis of the above, I grant leave but dismiss ground 9 of the appeal.

Ground 10

This ground of appeal is similar to ground 4. It relates to the reference in the member's decision as to the lack of expert evidence called by the appellants. For the same reasons set out in this decision in relation to ground 4, I conclude that no error on a question of law has occurred.

Conclusion

On the basis of the above, the appeal in this matter is dismissed.