SJ Beaumont Investments Pty Ltd v Warrnambool City Council
[2012] VSC 378
•31 August 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST
SCI 2012 2813
| S.J. BEAUMONT INVESTMENTS PTY LTD (ACN 082 308 576) | Applicant |
| v | |
| WARRNAMBOOL CITY COUNCIL | Respondent |
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JUDGE: | EMERTON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29 June 2012 | |
DATE OF JUDGMENT: | 31 August 2012 | |
CASE MAY BE CITED AS: | SJ Beaumont Investments Pty Ltd v Warrnambool City Council | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 378 | |
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PLANNING AND ENVIRONMENT – Application for leave to appeal from the Victorian Civil and Administrative Tribunal – Planning permit to allow for the installation of 19 gaming machines in a tavern – Natural justice – Social and economic impact – Whether Tribunal failed to accord natural justice by indicating to counsel that it did not need to hear evidence from an expert – Expert’s evidence went to subject matter that was central to the Tribunal’s decision – Collection House Limited v Taylor [2004] VSC 49 – Vegco Pty Ltd v Gibbons [2008] VSC 363 – Victorian Civil and Administrative Tribunal Act1998 (Vic) s 148.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr S R Morris QC Ms S J Porritt | Bazzani Scully Brand |
| For the Respondent | Ms E C V Porter | Maddocks |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 2
Background......................................................................................................................................... 2
The Tribunal’s reasons...................................................................................................................... 4
Proposed grounds of appeal............................................................................................................ 7
Ground 1: Natural justice................................................................................................................. 9
Other Grounds.................................................................................................................................. 13
Leave to appeal and disposition of the appeal........................................................................... 13
Remitter.............................................................................................................................................. 13
HER HONOUR:
Introduction
This is an application for leave to appeal under s 148 of the Victorian Civil and Administrative Tribunal Act1998 (Vic) (the ‘VCAT Act’) from the order made by the Tribunal on 19 April 2012 refusing a permit to install gaming machines at Rafferty’s Tavern in Warrnambool (the ‘hotel’).[1]
[1]SJ Beaumont Investment Pty Ltd v Warrnambool CC [2012] VCAT 464 (‘Reasons’).
The applicant applied to the Warrnambool City Council for a planning permit to allow the installation and use of 19 gaming machines and associated works at the hotel. The Council refused the permit. On 19 April 2012, following a hearing on 5 April, the Tribunal made an order affirming the decision of the Council and stating that no permit was granted.
The applicant now seeks orders that it be granted leave to appeal from the Tribunal’s order, that the Tribunal’s decision be set aside and its application remitted to the Tribunal to be re-determined in accordance with the directions of the Court.
The principal basis upon which leave is sought is that the Tribunal failed to accord procedural fairness to the applicant by indicating to counsel that it was unnecessary to call a particular witness, in circumstances where the application was decided on the very basis upon which the witness was qualified to give evidence.
Background
In October 2011, the applicant entered into a contract to purchase the hotel which was conditional on the applicant obtaining planning permission from the Council and approval of the premises as suitable for gaming with 19 electronic gaming machines from the Victorian Commission for Gambling Regulation[2] (the ‘VCGR’).
[2]Now known as the Victorian Commission for Gambling and Liquor Regulation.
On 8 March 2011, a permit application was lodged with the Council seeking:
(a) permission to use and install 19 gaming machines pursuant to cl 52.28 of the Warrnambool Planning Scheme;
(b) buildings and works to the hotel;
(c) variations to the liquor licence to facilitate changes to the building; and
(d) a car parking dispensation.
On the same day, the applicant lodged an application to the VCGR seeking approval of the hotel premises as suitable for gaming.
On 19 August 2011, The VCGR decided to grant the premises approval required under the Gambling Regulation Act 2003 (Vic) (the ‘GR Act’), having concluded that ‘[t]he net economic and social impact of approval will not be detrimental to the wellbeing of the community of the municipal district in which the premises are located’.[3] In so doing, it referred to the evidence of Mr Rhys Quick, a director and senior consultant for Urbis, and co-author of the applicant’s social and economic impact assessment.
[3]In the matter of Rafferty’s Tavern, Decision and Reasons for Decision (Victorian Commission on Gambling Regulation, date of decision 19 August 2011, [3(c)] (‘VCGR Reasons’).
In his reports dated March and July 2011 (‘Mr Quick’s reports’),[4] Mr Quick analysed the social and economic impact of the proposal and summarised his reasons for believing that the benefits of the proposal outweighed any potential detriments.
[4]Affidavit of Alison Veronica Elverd sworn 22 May 2012, Exhibit AVE12 (Mr Quick’s Reports dated March and July 2011).
Relevantly, the VCGR found that the hotel had the potential to be a modern, competitive and profitable venue which could meet the demand for greater social, dining and gaming options not only for the local area, but across and beyond the Warrnambool municipality.[5] Redevelopment and expansion of the hotel facilities would allow it to capitalise on its location to provide the local and wider community with quality dining, entertainment and function facilities and its proposed redevelopment would be a significant boost to the local economy owing to the capital works involved and the estimated 15 equivalent full-time positions that would be created.[6] Although Warrnambool was characterised by relatively low levels of socio-economic disadvantage and had a higher than average gaming machine density and rates of gaming expenditure, this had to be viewed in the light of the fact that venues located in Warrnambool serviced a wider residential catchment and that an additional 1.5% of revenue patronage over the course of a year was attributable to the tourist trade.[7]
[5]Ibid [43].
[6]Ibid [44]-[45].
[7]Ibid [46].
The VCGR considered the potential social harm to the community arising from new gaming expenditure from within Warrnambool, but concluded that the risk was mitigated by the fact that the gaming facility was to be modest in size and not likely to be attractive to problem gamblers.[8]
[8]Ibid [48].
The Tribunal’s reasons
By contrast, the Tribunal concluded that risks associated with the location of the gaming machines within an area of social and economic disadvantage outweighed the benefits of the proposal.
In its reasons for decision, the Tribunal explained its decision as follows:
7.Perusing the tribunal file prior to the hearing it was clear to me that the location of the subject premises within West Warrnambool, and the associated implications of the introduction of gaming machines in this area of relative socio and economic disadvantage was likely to be the most significant issue in this application. The hearing of the application only confirmed this preliminary observation.
8.At the conclusion of the hearing Ms Porritt emphasised her client’s concern for an early decision because of the particular contractual obligations it was facing. For this reason, and because I am of the view that this particular locational consideration is the decisive consideration in this application, my reasons focus on this issue with some further observations on the car parking issue. My reason do not otherwise further explore other matters raised during the course of the hearing.[9]
[9]Reasons [7]–[8].
The Tribunal based its determination of the application for review on the social and economic consequences of locating gaming machines in or near a vulnerable community.[10] Having considered matters such as the risk to residents of West Warrnambool from the location of gaming machines in that locality, the SEIFA[11] index of disadvantage for collector districts within and around Warrnambool, the socio-economic factors predisposing people to problem gambling and the accessibility of the proposed gaming venue and so on,[12] the Tribunal declared itself satisfied that the proposed location did not minimise social and economic effects because it located gambling machines in what was likely to be a more vulnerable community.[13] It then considered whether this effect was outweighed by the social and economic advantages of the proposal. The Tribunal concluded:
On balance, I am satisfied that the risk of harm to the more vulnerable community of West Warrnambool represents a social and economic disadvantage which outweighs any benefits which might result from the project as a whole. This land is not an appropriate location for a gaming venue and the establishment of a gaming venue on the land does not minimise the social and economic impacts of gaming on the community.[14]
[10]Reasons [28].
[11]Socio-Economic Indexes for Areas.
[12]Reasons [23].
[13]Reasons [28].
[14]Reasons [32].
Before the Tribunal, Mr Quick’s report was attached to the report of the applicant’s planning witness, Ms Laura Thomas of Urbis.[15] Ms Thomas’ report dealt with the proposal, the planning policy framework, the current gaming machine provision and planning considerations. Under the last of these headings, Ms Thomas dealt with social impact, problem gambling and West Warrnambool socio-economic characteristics.
[15]Affidavit of Alison Veronica Elverd sworn 22 May 2012, Exhibit AVE12 (Evidence Report – Rafferty’s Tavern dated 22 March 2012).
In relation to social impact, Ms Thomas noted that the proposal had undergone a comprehensive social and economic impact assessment prepared by Urbis for the VCGR hearing and that the initial report and subsequent addendum (Mr Quick’s reports) were appended to her report. Mr Quick’s reports demonstrated that the proposal satisfied the VCGR and she considered that it would also satisfy the objectives of clause 52.28 of the Warrnambool Planning Scheme in relation to social and economic impacts. In relation to West Warrnambool socio-economic characteristics, Ms Thomas observed that the Council had expressed particular concern about the impact of the proposal on the West Warrnambool community, recorded that she had reviewed Mr Quick’s reports with respect to the VCGR application, and then went on to make a number of further observations. These were diverse in nature and concerned, among other things, the relative socio-economic disadvantage of the City of Warrnambool, the location of the hotel near an area of relative disadvantage, the fact that those residents already had access to gaming elsewhere, the observation that while small areas of disadvantage were important to take into account, they needed to be considered in the context of how people would use the venue, the level of existing access to gaming and the extent of the broader catchment of the venue. These observations were presented in dot points which ran to just over a page.
During the course of Ms Thomas’ evidence at the Tribunal hearing, counsel for the applicant raised with the Tribunal the question of calling Mr Quick. The transcript of the hearing[16] reveals the following exchange between counsel for the applicant, Ms Porritt, the Tribunal member Mr Liston, the representative for the Council, Ms Liddell, and the witness, Ms Thomas:
[16]Transcript of Proceedings, SJ Beaumont Investment Pty Ltd v Warrnambool CC [2012] VCAT 464 (Victorian Civil and Administrative Tribunal, P3343/2011, Senior Member Liston, 5 April 2012).
MS PORRITT:
I think we resume with Ms Thomas. It just occurred to me, we – in the covering letter where we served the evidence, there was an offer that in the event we needed Mr Quick, who did the evidence at the VCGR, he could be produced in the event that he’s needed. If anyone is in a position to give me an indication as to whether that’s necessary, at any convenient point, then I would be happy to receive that as, indeed, I suspect with Mr Quick.
MR LISTON:
No, no, I’m content to rely on Ms Thomas and other witnesses that you have produced.
MS PORRITT:
And you don’t need to ask any questions?
MS LIDDELL:
Okay. No, thank you.
MS PORRITT:
Or, indeed, you can address any questions that would have been for Mr Quick, Ms Thomas? -- Okay, so we’re discussing social impact.[17]
[17]Ibid 52.
This exchange reveals the Tribunal member to have given a clear indication that he did not need to hear from Mr Quick because he was content to rely on the evidence of Ms Thomas and other witnesses, and that the Council’s representative did not need to ask Mr Quick any questions. Ms Thomas appeared to agree that she could answer any questions arising from Mr Quick’s reports.
The letter referred to by Ms Porritt was addressed to the Principal Registrar of the Tribunal enclosing the material to be relied upon by the applicant. That evidence included the report prepared by Ms Thomas, a traffic report and a witness statement from a director of the applicant company. The letter stated as follows:
To the extent that it is necessary to consider the Social and Economic Impact Assessment prepared by Rhys Quick of Urbis Pty Ltd, please note that Mr Quick will be on call to attend the hearing on 5 April 2012.[18]
[18]Affidavit of Alison Veronica Elverd sworn 26 June 2012, Exhibit AVE15 (Letter from Bazzani Scully Brand to Principal Registrar, Planning and Environment List, Victorian Civil and Administrative Tribunal dated 22 March 2012).
Counsel for the applicant explained that the reason why the letter was cast in that form was because the solicitors for the applicant took the view that the question of social and economic impacts had been largely resolved by the decision of the VCGR and, although still relevant to the Tribunal’s decision, it was thought that it would probably not be necessary to go over the same ground.
Proposed grounds of appeal
The applicant’s proposed grounds of appeal are as follows:
(1)The Tribunal erred in law by failing to accord natural justice to the applicant by declining to hear from Mr Quick as to evidence of the social and economic impact of the application, where it found that the social and economic impact of the proposal was central to its decision.
(2)The Tribunal erred in law in its consideration of the benefits to the community applicable to the application, by restricting the benefits to those directly associated with the installation of gaming machines rather than all benefits, direct and indirect, of the application.
(3)Further to Ground (2), the Tribunal erred in its assessment of the net benefits of the proposal by failing to have regard to the non-gaming benefits to the community of the upgrade of the hotel.
(4)The Tribunal failed to take into account a relevant consideration, namely the risk management/mitigation measures proposed by the applicant.
(5)The Tribunal failed to take into account a relevant consideration, namely the contrary conclusions in relation to risks and benefits of the application reached by the VCGR in its decision that the installation of 19 gaming machines at the hotel would not be detrimental to the wellbeing of the community of the municipal district in which the premises are located.
(6)The Tribunal misconstrued clause 21.07-2 of the Warrnambool Planning Scheme by construing policy ‘to minimise the social and economic impact of gaming on the community’ by:
(a)interpreting the policy as requiring avoidance of risk, rather than minimisation of risk; or
(b)failing to take into account risk amelioration and minimisation measures; or
(c)constraining consideration to part only of the community.[19]
[19]Applicant’s Draft Notice of Appeal dated 17 May 2012.
The respondent Council appeared by counsel to abide the decision of the Court, but chose not to actively participate in the proceeding.
As a result of the Council’s position, the Court did not have the benefit of a contradictor. Senior Counsel for the applicant submitted that the Court should not proceed to consider the remaining grounds of appeal if it found that Ground 1 or Ground 2 was made out.
Ground 1: Natural justice
The principal ground upon which the applicant relies is that the Tribunal failed to accord natural justice by indicating to counsel that it did not need to hear from Mr Quick in circumstances where the social and economic impact of the proposal was central to the Tribunal’s decision.
According to the applicant, Mr Quick was ‘the main man’ when it came to the very matter or matters that caused the Tribunal to affirm the decision of the responsible authority and refuse a permit. The applicant believed that, having regard to the decision of the VCGR, it did not need to call Mr Quick, but just to have him available. Counsel for the applicant raised the issue of Mr Quick’s availability with the Tribunal and the Tribunal, rather than indicating that it would be assisted by hearing from Mr Quick or even that it was a matter for counsel as to whether Mr Quick was called to give evidence, said that it was content to rely on the evidence of Ms Thomas, thus creating the impression that the social and economic impacts of the proposal were not troubling it.
The applicant submits that in indicating that Mr Quick’s evidence did not need to be heard and tested, the Tribunal failed to disclose a state of affairs, namely the Tribunal’s concern about the social and economic impacts of the proposal, that was highly relevant to the conduct of the applicant’s case. It contends that the Tribunal breached the rules of natural justice by deciding the application by reference to social and economic disadvantage when it had indicated that it did not need to hear evidence directed to that very topic from the applicant’s pre-eminent expert, Mr Quick.
In support of these submissions, the applicant relies on the decision of Nettle J in Collection House Limited v Taylor.[20] That case concerned, in part, whether a party was denied natural justice by the Tribunal when he was refused the opportunity to obtain further evidence about the nature of particular arrangements that were in issue. The litigant was a layperson, which imposed a higher burden of explanation and assistance on the Tribunal. In such circumstances, it falls to the Tribunal to clarify what seems obscure. In this context, his Honour said:
If counsel ask a judge whether further evidence would be of assistance to the court, counsel may properly be told that the way in which they run their case is a matter for them. But if a layperson asks an administrative tribunal whether further evidence on an issue would be of assistance to the tribunal then, depending on the circumstances, the tribunal will need to say if it could be. Otherwise, there is a risk of causing the person to take a mistaken view of the state of affairs relating to the manner in which they might choose to conduct their case. That in itself would be a denial of natural justice.[21]
[20][2004] VSC 49 (‘Collection House’).
[21]Ibid [29].
In this case, the applicant was represented by a professional advocate. The applicant concedes that if the Tribunal had told counsel that it was a matter for her as to whether to call Mr Quick to give evidence, the applicant would have no cause for complaint. However, it says, in substance, that the Tribunal caused it to take a mistaken view of the state of affairs relating to the manner in which it might choose to conduct its case when the Tribunal member told counsel that he was content to rely on the evidence of Ms Thomas and others. This led counsel to believe, in the light of the VCGR finding that the net economic and social impact of approval would not be detrimental to the wellbeing of the community, that the Tribunal did not consider the social and social and economic impacts of the proposal to be a significant issue. The applicant submitted:
Given the way the proceeding was being conducted, a day had been set aside, the parties presumably were trying to finish in the day and there’s always a desire to get on with things and not to do anything that’s not necessary. The impression that was created was well, you don’t have to worry about this. Well we did have to. If we’d been told the correct position no doubt Ms Porritt would have called Mr Quick and fired her best shot. It mightn’t have been good enough, but she would have fired it. But she didn’t feel it was necessary to fire it because of Mr Liston’s response.[22]
[22]Transcript of Proceedings, S.J. Beaumont Pty Ltd v Warrnambool City Council (Supreme Court of Victoria, S CI 2012 2813, Emerton J, 29 June 2011) 23.
Although Ms Thomas gave evidence about the social and economic impacts, the applicant submitted that it could have made a difference to the outcome of the application had Mr Quick been called, because he was in a much better position than Ms Thomas to explain the intricacies of his own evidence to the VCGR, having been the author of it. The weight that would have been placed on that evidence would have been greater had the author given the evidence directly and been tested on it, rather than the evidence given indirectly by Ms Thomas.
In argument, the Court was taken through the evidence that Mr Quick could have given with a view to identifying that part or those parts of it that could have made a difference to the Tribunal’s decision. Having regard to those submissions and the content of Mr Quick’s reports, especially compared to the rather cursory treatment of social and economic impacts in Ms Thomas’ report, I am satisfied that Mr Quick’s evidence could have made a difference to the outcome of the application. The issues upon which he was pre-eminently qualified to address the Tribunal were the very issues upon which the Tribunal decided the application.
That is not, however, an answer to whether the applicant was denied natural justice by the Tribunal.
There is no doubt, having regard to the fact that the Tribunal thought the social and economic impacts of the proposal to be critical to the determination of the application, that the applicant’s case could and would have been better put had Mr Quick been called to give evidence. I note, however, that the applicant did ensure that evidence was given by Ms Thomas about the social and economic impacts of the proposal (albeit in the context of the requirements of the Planning Scheme), so it plainly did not consider that issue to have been entirely resolved before the Tribunal. Further, the Tribunal did have the benefit of the extensive written material prepared by Mr Quick in the form of Mr Quick’s reports.
I am also conscious of the time pressures on the Tribunal, and the fact that counsel essentially left it to the Tribunal to decide whether it wished to hear from Mr Quick, in circumstances where counsel ought to have anticipated that the Tribunal might not yet have focused upon the issues would be important for the disposition of the application. The applicant was represented by experienced counsel, and the Tribunal was entitled to leave it to counsel to decide which witnesses to call. Ultimately it was a matter for counsel to decide how best to present the applicant’s case. I also observe that, where gaming machines are in issue, it would be a brave call to sideline or to omit to call evidence about the social and economic impacts of the proposal.
The question of whether the applicant has been denied procedural fairness is very finely balanced. It is difficult to attribute ‘fault’ or ‘blame’ to the Tribunal and I do not criticise the Tribunal for the manner in which it conducted the hearing generally. However, viewed from the perspective of the applicant, it has not put its case as best it could, and I accept that the reason for this was a brief remark in answer to a question from the applicant’s counsel that gave rise to the mistaken belief that the social and economic impacts of the proposal were not a significant issue for the Tribunal, when in fact they were.
Ultimately, I am persuaded that fairness to the applicant requires that it be given the opportunity to call Mr Quick to give evidence on the social and economic impacts of the proposal. The social and economic impacts loomed large in the mind of the Tribunal from the outset and very large in its determination of the application. The indication that it was not necessary to call Mr Quick gave the impression that this was not the case, and that his evidence would not be of assistance. In fact, there can be little doubt that Mr Quick’s evidence could have been of considerable assistance to the Tribunal.
Ground 1 is made out.
Other Grounds
As I have found that Ground 1 is made out, I do not propose to consider the remaining grounds set out in the proposed notice of appeal.
Leave to appeal and disposition of the appeal
Section 148 of the VCAT Act imposes a requirement for the grant of leave to appeal the orders of the Tribunal. In Secretary to the Department of Premier and Cabinet v Hulls,[23] Phillips JA discussed the considerations relevant to the grant of leave to appeal. Summarising the position, his Honour said:
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 the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be 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.[24]
[23][1999] 3 VR 331.
[24]Ibid 337 [16].
As Ground 1 is made out and the order below is final, leave should be granted to enable the error to be corrected.
Leave to appeal is granted, the appeal is deemed to have been instituted and heard instanter and the appeal is allowed.
The order below will be set aside and the proceeding remitted to the Tribunal to be determined according to law.
Remitter
The applicant submits that the proceeding should be remitted to a differently constituted division of the Tribunal to be heard and determined afresh.
I am not persuaded that such a course should be followed. Although the matter must be heard and determined again as a matter of law, the member who initially heard the application is well placed to do so. It would most likely save both time and expense to the parties to have the same decision-maker re-hear and re-determine the application.
As Kyrou J observed in Vegco Pty Ltd v Gibbons:[25]
Successful applicants in judicial review and appeal proceedings to the trial division of this Court frequently seek remittal to a differently constituted primary decision-maker when the primary decision is set aside and the matter is remitted. If orders are made by this Court as a matter of course requiring decisions to be remade by a differently constituted primary decision-maker, this may have serious resourcing implications for primary decision-makers and add to the costs and delays of the decision-making process. For the Court to be persuaded to order remittal to a differently constituted primary decision-maker, good reason for doing so, based on established principles, must be shown by the party seeking such an order. [26]
[25][2008] VSC 363.
[26]Ibid [33].
Justice Kyrou described the guiding principle in situations of this sort as follows:
The guiding principle is that remittal will be to a differently constituted primary decision-maker where there is some feature of the conduct or reasons for decision of the primary decision-maker which would render it unfair to the successful party or give the appearance of unfairness to that party (whether arising from strongly expressed views on key issues, adverse findings on the credit of witnesses, apprehended bias or otherwise) if the matter were remitted to the same decision-maker or where it would be impracticable for the same primary decision-maker to re-determine the matter.[27]
[27]Ibid.
In the present case, the Court has found that the Tribunal erred in indicating to the applicant that it did not need to hear from Mr Quick, in circumstances where evidence of the kind that could be given by Mr Quick went to the heart of its decision. There was no error in the reasoning of the Tribunal of a kind that it might be tempted to ‘patch up’ on remitter, and the Tribunal’s reasons do not, in my view, display a predisposition to finding that the proposal was not supported by the policies in the Planning Scheme. Indeed, the applicant’s case on natural justice is founded on the proposition that Mr Quick’s evidence could have made a difference to the Tribunal’s decision.
In view of these circumstances, remitting the proceeding to the Tribunal as originally constituted would not give rise to unfairness or the appearance of unfairness. Rather, it would give the Tribunal the opportunity to hear additional evidence on the question of social and economic impacts, such evidence being highly relevant to the issue that it considered to be determinative in this case. It would be a matter for the Tribunal whether it wished to re-hear the evidence on the other considerations that are relevant to the grant or refusal of a permit. I am not persuaded that a reasonably intelligent lay member of the community who knew something of the functioning of the system would entertain a reasonable suspicion that the Tribunal would start off with a predilection of mind that would make it difficult to accept matters that the applicant might wish to raise as to the merits of the proposal and as to the social and economic benefits of the proposal in particular.[28]
[28]See Bashar vComcare Australia (2002) 69 ALD 784, [19].
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