Stonnington City Council v Southern Property Corporation Pty Ltd
[2006] VSC 435
•15 November 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 9515 of 2005
| STONNINGTON CITY COUNCIL | Plaintiff |
| v | |
| SOUTHERN PROPERTY CORPORATION PTY LTD | First Defendant |
| and | |
| ABGOL PTY LTD | Second Defendant |
| and | |
| GRADNO PTY LTD | Third Defendant |
| and | |
| LATUR PTY LTD | Fourth Defendant |
| and | |
| SOUTH Y PTY LTD | Fifth Defendant |
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JUDGE: | OSBORN J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 26 OCTOBER 2006 | |
DATE OF JUDGMENT: | 15 NOVEMBER 2006 | |
CASE MAY BE CITED AS: | STONNINGTON CITY COUNCIL v SOUTHERN PROPERTY CORPORATION PTY LTD & ORS | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 435 | |
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Exitisting use rights – use for the purpose of hotel – extent of such rights – not restricted to a fixed floor plan – Planning and Environment Act 1987 s.6(3)(b) – Stonnington Planning Scheme cl 63.02 and 63.05
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr Peake | Maddocks |
| For the Fifth Defendant | Mr Antill | Merkin & Apel |
HIS HONOUR:
Introduction
The Argo Hotel, South Yarra, having successfully navigated more than 100 years of hotel operations, has now run into difficulties with Stonnington City Council ("the Council").[1]
[1]By the 19th century Jason’s galley the Argo (meaning “the Swift”) had been translated from Greek legend not only into a metaphor for a voyage of gold seeking adventure, but also into a southern constellation ("the ship"). See Brewer's Dictionary of Phrase and Fable, 14th ed., p.47.
The hotel operator wishes to utilise an upstairs lounge as a function room. The Council seeks to impose a planning permit requirement in order to control possible amenity effects by way of permit conditions.[2]
[2]Both of the principal amenity effects identified in argument, namely, entertainment noise, and on street car parking are susceptible to regulation under legislation other than the Planning and Environment Act 1987.
There is no dispute that the hotel has existing use rights under the Stonnington Planning Scheme ("the planning scheme"), but the Council seeks to contend that such rights are stratified, in the sense that the right to create "public areas" attaches to the ground floor only and a permit is thus required for an upstairs function room.
In my view this contention confuses the notion of the purpose of use at the date of approval of the planning scheme, with that of actual use at such date. It is the notion of purpose which governs existing use rights.
At the relevant date the purpose of use of the building was that of a hotel. The actual use could be broken down into different components, but such components were all used for the same purpose.
If this approach were not adopted then existing use rights would be frozen permanently in floor plan, an outcome which would materially constrain their content and be contrary to well established principles to which I will further refer.
The proceeding comes before the Court following the refusal by the Victorian Civil and Administrative Tribunal ("the Tribunal") to grant declarations to the Council constraining the ambit of the hotel's existing use rights, and the granted cross-declarations to the hotel operator.
The Council now seeks to challenge the Tribunal's decision pursuant to s.148 of the Victorian Civil and Administrative Tribunal Act 1998, by appealing on questions of law. I shall deal with each of the questions in turn.
1. Did the Tribunal err in law and misconstrue clause 63.02 of the Stonnington Planning Scheme ("the Scheme") by defining the use of the subject land at the approval date (13 July 2000) by reference to the classification of the use in Clause 74 of the Scheme rather than by "the purpose of the actual use at the relevant date, subject to any conditions or restrictions applying to the use at that date"?
Clause 63.02 of the Stonnington Planning Scheme provides:
"If a use of land is being characterised to assess the extent of any existing use right, the use is to be characterised by the purpose of the actual use as at the relevant date, subject to any conditions or restrictions applying to the use at that date, and not by the classification in the table to Clause 74 or in section 1, 2 or 3 of any zone."
Question 1 turns on the submission that the Tribunal "effectively" characterised the purpose of use of the land by reference to the definition of hotel found in cl.74 of the planning scheme.
"Land used to sell liquor for consumption on and off the premises. It may include accommodation, food for consumption on the premises, entertainment, dancing, amusement machines and gambling."
In my view it is plain that the Tribunal did not reason by reference to this definition. It did not refer to the definition and it expressly stated:
"14.The characterisation of the use is a question of fact. The Argo Hotel has existed since the 1800s as a hotel with the various activities associated with a hotel namely, the sale of liquor and food and the provision of accommodation occurring on the site. These activities have been conducted in various parts of the hotel not only on the ground floor but also on the first floor."
(Citations omitted.)
2. Did the Tribunal err in law and misconstrue clause 63.02 of the Stonnington Planning Scheme ("the Scheme") by defining the use of the subject land at the approval date (13 July 2000) by reference to the nature and extent of activities "traditionally" associated with a hotel, rather than by "the purpose of the actual use at the relevant date, subject to any conditions or restrictions applying to the use at that date"?
This question is based on the fact that the Tribunal referred with approval to a prior decision by another legally qualified member of the Tribunal:[3]
"Member Komesaroff concluded that the reallocation of the various activities carried out within the site including provision of a dedicated function room upstairs is entirely within the existing use rights enjoyed by the land for a hotel and does not require a planning permit. In reaching this conclusion the Member stated:
The hotel was constructed as such in 1875, prior to the advent of planning controls. It clearly generated existing use rights as a hotel, applying the Shire of Perth v O’Keefe[4] test, and those use rights have not been lost.
Use for the purpose of a Hotel traditionally encompasses activities such as, amongst other things, sale of liquor and meals, accommodation and can reasonably encompass a function room. Whether activities fall within the designation as a hotel will always be a matter of fact and degree. Provided the operation of the function room remains ancillary to the primary purpose of the hotel (and there is nothing to indicate otherwise) no change to the existing use right has occurred.
Furthermore, the use to which land may be put and the activity on it may change, increase or decrease, so long as the same purpose is served. Uses can intensify, expand or contract or occupy different areas of the planning unit, Nunawading CC v Harrington[5].
The fact that the proprietor wishes to convert use of the accommodation portion upstairs to function rooms is consistent with its existing use rights. It merely wishes to refocus its current activities on the site (to use the words of the council’s planning officer) or to reallocate its various activities (to use the words of its Counsel, Ms Brennan).[6]"
[3]Stonnington City Council v Abgol Pty Ltd & Ors [2005] VCAT 2346 at [13].
[4](1964) 110 CLR 529.
[5][1985] VR 641.
[6]MR & J Properties Pty Ltd v Ballarat City Council (unreported) (P50469/2001) at [33-35] and [39].
When the decision is read as a whole it is apparent that the Tribunal in the present case regarded the question of whether the use in issue was for the purpose of a hotel, as a question of fact. It applied the ordinary meaning of the word "hotel" to the characterisation of the facts before it. The ordinary meaning of the word may be regarded as informed by the activities traditionally carried on within a hotel and reference to another decision of the Tribunal reflecting this approach does not demonstrate any error in approach by the Tribunal.
The reference to “traditional” meaning is hardly surprising in considering a use which like many retail and entertainment uses is susceptible to change in the detail of mode of delivery of service. Similar terminology has been used by the Tribunal and its predecessors in like circumstances over many years. Thus, Member AH Smith in considering the characterisation of a use as “hotel” according to common speech in 1992 stated:[7]
“A hotel, at least as that term has traditionally been understood, is a place with a public bar where alcohol is served, which also provides meals, which may provide accommodation, which is readily accessible by the public and where alcohol may be purchased for consumption elsewhere.”
3. Did the Tribunal err in law and misconstrue clauses 63.02 and 63.05 of the Scheme in finding that the confinement of all public activities associated with the existing use to the ground floor of the subject premises prior to 13 July 2000 was not:
(a) a condition or restriction on the Hotel's existing use rights; or
(b)an implied restriction on the extent of the land subject to the existing use right; or
[7]Cherry Lakes Pty Ltd v City of Melbourne (1992) 9 AATR 171 at 175.
(c) an implied restriction on the extent of activities within the use?
Clause 63.05 provides:
"Sections 2 and 3 uses
A use in Section 2 or 3 of a zone for which an existing use right is established may continue provided:
·No building or works are constructed or carried out without a permit. A permit must not be granted unless the building or works complies with any other building or works requirement in this scheme.
·Any condition or restriction to which the use was subject continues to be met. This includes any implied restriction on the extent of the land subject to the existing use right or the extent of activities within the use.
·The amenity of the area is not damaged or further damaged by a change in the activities beyond the limited purpose of the use preserved by the existing use right."
The construction of cls.63.02 and 63.05 falls to be determined in the light of two significant considerations.
First, s.6(3)(b) of the Planning and Environment Act 1987 ("the Act") provides:
"6. What can a planning scheme provide for?
(3)Subject to sub-sections (4) and (4A), nothing in any planning scheme or amendment shall—
…
(b)prevent the use of any building which was erected before that coming into operation for any purpose for which it was lawfully being used immediately before that coming into operation;…"[8]
[8]Compare the provisions of s.17(1D) of the Town & Country Planning Act 1961 considered in Shire of Flinders v TW Maw & Sons (Quarries) Pty Ltd [1971] VR 484.
It follows that the scheme must be construed in a manner which does not derogate from this prohibition.
Moreover, such prohibition is formulated by reference to the concept of purpose of use not actual use. As the Full Court stated in Nunawading v Harrington:[9]
"1.The purpose of the non-conforming use is to be characterized by the appropriately designated purpose of the actual use at the approval date and not by its classification in the list of prohibited purposes such as is to be found here in Column 5 of the PSO: Shire of Perth v O'Keefe.[10] That appropriate designation of purpose is a question of fact to be determined 'by asking what according to ordinary terminology is the appropriate designation of the purpose being served by the use of the premises at the material date': Shire of Perth v O'Keefe at p.535. "[11]
[9][1985] VR 641 at 644.
[10](1964) 110 CLR 529.
[11]Existing uses falling under cl.63 of the present planning scheme may be non-conforming uses in the strict sense, i.e. uses which are prohibited under the scheme but have prior use rights, or they may be permissible uses which have prior use rights.
It is this concept of purpose which is utilised in both s.6(3)(b) and cl.63.02 quoted above.
Next, as the Full Court also stated in Nunawading v Harrington:[12]
"6. In the town planning field, statutory provisions designed to protect and preserve existing rights should be as liberally construed as the language in its context allows: see Mason ACJ, Deane and Dawson JJ in Dorrestijn v South Australian Planning Commission;[13] Parramatta City Council v Brickworks Ltd;[14] Woollahra Municipal Council v Banool Developments Pty Ltd.[15]" (“the construction principle”).
[12][1985] VR 641 At 644.
[13](1984) 56 ALR 295 at 300.
[14](1972) 128 CLR 1 at 25.
[15](1973) 129 CLR 138 at 144.
Insofar as there may be ambiguity in the language of cl.63 such ambiguity was permitted by the draftsperson in circumstances governed by a principle which has been affirmed by both the High Court and this Court.
I turn then to the terms of question 3. It is premised upon "the confinement of all public activities associated with the existing use to the ground floor of the subject premises prior to 13 July 2000." In the first place it must be observed that it appears the public activities were not previously "confined" to the ground floor by anything other than historical circumstance. (Moreover, there was conflicting evidence before the Tribunal as to the extent of such confinement.)
More particularly, it is clear that such activities were not confined either expressly or impliedly by any condition or restriction imposed by a planning control, either within a planning scheme or pursuant to the condition of a permit granted under a planning scheme.
In truth, the Council's argument is that the purpose of the use of the land is to be defined by reference to the extent of particular activities within the building. In my view it is plain from authority that it was permissible for the Tribunal to designate the purpose of the existing use of the whole of the land including the upper level of the building as that of hotel. It was not required to notionally subdivide the premises, when the premises have at all times functioned as an integrated whole.
The Council could only succeed in challenging such characterisation if it were not open to the Tribunal to reach the view it did.[16]
[16]Franceschini v MMBW (1980) 57 LGRA 284; St. Kilda City Council v Perplat Investments Pty Ltd (1990) 72 LGRA 378.
Further, the weight of authority strongly favours the view that whereas "licensed premises" would be an unacceptably broad characterisation of purpose, "hotel" is precisely the level of characterisation which the courts have repeatedly endorsed as appropriate.
That this is so is illustrated by the decision on the facts in Nunawading v Harrington. In that case the municipality sought to contend that the purpose for which existing use rights were held was "to achieve the production of bread" rather than that of a "bakery". Such a conclusion would have presented difficulties to the operations of "Golden Swiss Pastry". The Court stated:[17]
"Mr. Hooper, for the appellant, submitted that on the 'real and substantial' purpose test of Kitto J in Shire of Perth v O'Keefe[18], the use of the subject land in the critical period could not be said to be for the purpose of a bakery. He submitted that the purpose of a bakery is 'to achieve the production of bread' and that the use must be for the achievement of that purpose on the subject land itself. But this is not the test expressed by Kitto J, and departs from the common ground established by the pleadings, in which the respondents pleaded and the appellant admitted that the relevant use permitted to be continued was for the purposes of a bakery, not 'the production of bread', which is much more narrow.
In any case, when Kitto J referred to 'real and substantial' use, he was not speaking of the extent of use or the degree of activity but of the method of determining whether the designated purpose was being served by the actual use or uses. What he said is particularly pertinent where premises are variably used to serve different purposes. It is necessary to recall precisely his words, at (110 CLR) p. 535: 'The application of the by-law in a particular case has therefore not to be approached through a meticulous examination of the details of processes or activities, or through a precise cataloguing of individual items of goods dealt in, but by asking what, according to ordinary terminology, is the appropriate designation of the purpose being served by the use of the premises at the material date. This question being answered, it remains only to inquire, when a use that is being made of the premises at a later date is challenged as not being authorized ..., whether that use is really and substantially a use for the designated purpose'." (my emphasis)
[17][1985] VR 641 At 645 – 646.
[18](1964) 110 CLR 529.
The Court held that it was proper to characterise the use of the land as being for the purposes of a “bakery”.
It did so conformably with a clear line of authority. See Bonus Pty Ltd v Leichardt Municipal Council;[19] Shire of Perth v O'Keefe;[20] and Woollahra Municipal Council v Banool Developments.[21] It is entirely consistent with these authorities that the whole of the building in the present case be characterised as land used for the purpose of a hotel.
[19](1954) 19 LGR (NSW) 375.
[20](1964) 110 CLR 529.
[21](1973) 129 CLR 138.
In my view no implied restriction on the extent of existing use rights can be derived from a meticulous cataloguing of the extent of particular activities as at the relevant date of commencement of the planning scheme:
(a)Such a process would not be to characterise the use by reference to its real and substantial purpose "according to ordinary terminology". This is the process envisaged by s6(3)(b) of the Act, by clause 63.02 and by authority;
(b)Such a process would give to the words "implied restriction" a meaning contrary to their ordinary meaning. It would attribute to circumstances of the degree of extension the notion of "restriction". "Restriction" ordinarily implies an external cause or source.[22] No such cause or source has been identified in the present case. I should add that I incline strongly to the view that such restriction must be founded in a planning control, but it is unnecessary to so decide in the present case.
(c)Such a process would give to the words "implied restriction" a meaning unnecessary for their operation and one which did not give effect to the "construction principle" which I have stated above, requiring them to be interpreted in favour of the holder of existing use rights.
[22]Mr Peake cited the Shorter Oxford English Dictionary for the primary meaning:
"A limitation imposed upon a person or thing; a condition or regulation of this nature." (My emphasis).
The Tribunal was correct to state:[23]
"Although Mr Peake has submitted that the placement of the various activities on the land, in some way acts as a condition or restriction on the use, no conditions or restrictions were placed on the use of the site as a hotel. Whilst it may have been convenient in the past to conduct activities such as the bar, bistro, restaurant, kitchen and service facilities on the ground floor and allocate the first floor for accommodation, the placement of these activities in those locations is not a condition of the use of the land as a hotel, nor is it a restriction on the use of the land. …Nor does the extent of those activities undertaken on the site place an implied restriction upon the use."
4. Did the Tribunal err in law and misconstrue clause 63 of the Scheme in finding that the restriction of the use of the upper floor of the subject premises prior to 13 July 2000 to activities which did not include public access for the consumption of alcohol was not:
(a) a condition or restriction on the Hotel's existing use rights; or
(b)an implied restriction on the extent of the land subject to the existing use right; or
[23][2005] VCAT 2346 at [16].
(c) an implied restirction on the extent of activities within the use?
The above reasons lead to the same conclusions with respect to question 4.
5. Did the Tribunal err in law by failing to take into account considerations which were relevant to determining the nature and extent of the existing use rights attaching to the subject land and/or premises, and/or its "lawful use" namely:
(a)The definition of "hotel" in the former MMBW Planning Scheme ordinance; and
(b)The requirement pursuant to a hotel keeper's licence that the hotel must provide, inter alia, accommodation.
The definition of "hotel" in the former Melbourne and Metropolitan Board of Works Planning Scheme Ordinance reflected the provisions of the Liquor Control Act 1968 which was repealed in 1987. The hotel has since functioned for more than 15 years pursuant to other legislation. Clause 63.11 of the current scheme provides:
"Proof of continuous use
If, in relation to an application or proceeding under the Act or this scheme, including an application for a certificate of compliance under Section 97N of the Act, the extent of any existing use right for a period in excess of 15 years is in question, it is sufficient proof of the establishment of the existing use right if the use has been carried out continuously for 15 years prior to the date of the application or proceeding.
An existing use right may be established under this clause even if the use did not comply with the scheme immediately prior to or during the 15 year period, unless either:
·At any time before or after commencement of the 15 year period the use has been held to be unlawful by a decision of a court or tribunal
·During the 15 year period, the responsible authority has clearly and unambiguously given a written direction for the use to cease by reason of its non-compliance with the scheme.”
It is very difficult to see how the earlier provision of the planning scheme could be said to be relevant in the face of this provision.
Further, and perhaps more fundamentally, it is apparent from both the express terms of cl.63.02 of the scheme and from the authorities summarised in Nunawading v Harrington, that the character of the purpose of an existing use is to be ascertained from the actual use and not from planning scheme definitions.
Finally, it cannot be that detailed liquor licensing requirements as they affected the manner of hotel operation over the last 100 or more years, could satisfactorily define the extent of existing use rights. The cessation of 6 o'clock closing, and other changes have in their time materially modified the manner in which hotel uses have operated. This does not, however, preclude the survival of existing use rights for the purpose of a hotel (my emphasis). Successive changes to liquor licensing laws, have not been intended to have this result and they have not done so.
The Tribunal was constituted by Ms Rickards, an experienced legal member, who was correct to state:[24]
"The existing use rights of the Argo Hotel are not confined to providing public facilities on the ground floor and any reference to impact that the use of the hotel may have on the adjoining residential area does not confine its existing use rights to that of the ground floor only. The activities conducted on the land may change, they may increase or decrease, as long as the same purpose is served[25]. Nor is it necessary to show that all of the land is used for the given purpose. Where part of the land is unused but part is used for the given purpose, the whole of the land may be regarded as used for that purpose[26]."
[24][2005] VCAT 2346 at [17].
[25]Nunawading CC v Harrington [1985] VR 641.
[26]Eaton & Sons Pty Ltd v Council of the Shire of Warringah (1972) 129 CLR 270.
Accordingly, the appeal should be dismissed.
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