TAH LAND PTY LTD and WESTERN AUSTRALIAN PLANNING COMMISSION [2008] WASAT 227

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2008] WASAT 227
Act:	PLANNING AND DEVELOPMENT ACT 2005 (WA)
Case No:	DR:164/2008	Heard:	15, 16, 17 AND 18 SEPTEMBER 2008
Coram:	MR D R PARRY (SENIOR MEMBER) MR P DE VILLIERS (SENIOR SESSIONAL MEMBER)	Delivered:	26/09/08
No of pages:	35	Judgment Part:	1 of 1
Result:	Respondent's decision to refuse to adopt Kingsway City Activity Centre Structure Plan affirmed
Category:	B
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Parties:	TAH LAND PTY LTD WESTERN AUSTRALIAN PLANNING COMMISSION
Catchwords:	Town planning Structure plan District 'box' shopping centre with retail nett lettable area of 15,434 square metres including one supermarket and one discount department store Structure plan proposes increase in retail nett lettable area to 32,000 square metres including second supermarket and second discount department store principally within extensions to 'box', cinemas in 'box' and mixed used development areas around site enabling future commercial and mixed commercial/high density residential development Whether proposal is consistent with strategic and statutory planning framework State Planning Policy No 4.2 Metropolitan Centres Policy Network City Council Centres Strategy Whether proposal is likely to undermine established hierarchy of centres in which site is identified as district centre Relationship between size and function of centres Whether proposal involves change in function from district centre to regional centre Whether proposal is likely to adversely affect economic viability of existing, approved and planned centres Whether applicant's economic impact assessment is flawed Whether economic impact assessment should be confined to planning land use category 5 shop/retail or can include planning land use category 6 other retail uses
Legislation:	City of Wanneroo District Planning Scheme No 2 , cl 3.7.3, cl 3.7.4, cl 9.6.3, cl 9.8.3(f), cl 9.12.3, Sch 3 Planning and Development Act 2005 (WA), Pt 14, s 241(1)
Case References:	Australian Real Estate Investment Ltd and Western Australian Planning Commission [2004] WATPAT 51 Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; (2002) 122 LGERA 433
Orders	The Tribunal makes the following orders:,1. The application for review is dismissed.,2. The decision of the respondent to refuse to adopt the Kingsway City Activity Centre Structure Plan is affirmed.
Summary	This case concerned a structure plan to increase the retail nett lettable area of an existing district shopping centre from 15,434 square metres, including one supermarket and one discount department store, to 32,000 square metres, including a second supermarket, a second discount department store and a 'main street' precinct, and to allow cinemas and mixed commercial/high density residential development. The key issue in the case was whether the proposal is consistent with the strategic and statutory planning framework. A second issue was whether the economic impact assessment in the structure plan is flawed.,The Tribunal determined that the proposal is materially inconsistent with the strategic and statutory planning framework, principally because the size of the proposed retail area and the introduction of a second discount department store each had the effect of altering the function of the centre from a district centre to a regional centre and thereby to undermine the established and planned hierarchy of metropolitan centres, and although the centre is identified as an activity centre on or adjacent to two activity corridors, the planning framework does not contemplate the extent of retail area proposed. The Tribunal determined that there is no cogent and adequate reason to depart from the planning framework so as to approve the structure plan in the circumstances of this case.,The Tribunal also determined that the economic impact assessment is flawed because it includes inputs for retail floorspace and household expenditure for a planning land use category that should not be included. However, even if the economic impact assessment included only the correct inputs and did not show any adverse effect on the economic viability of existing, approved or planned centres, the structure plan warrants refusal because it is materially inconsistent with the planning framework and there is no cogent and adequate reason to depart from the framework to the extent necessary to approve the structure plan.,Finally, the Tribunal noted, without expressing a considered view, that there may be prospect for a considerably more limited retail expansion at the site to principally include a second supermarket and the proposed main street retailing component, with total retail nett lettable area on the site restricted to no more than 20,000 square metres, particularly if there were confidence that mixed commercial/high density residential uses would also be carried out on the site.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : PLANNING AND DEVELOPMENT ACT 2005 (WA) CITATION : TAH LAND PTY LTD and WESTERN AUSTRALIAN PLANNING COMMISSION [2008] WASAT 227 MEMBER : MR D R PARRY (SENIOR MEMBER)

MR P DE VILLIERS (SENIOR SESSIONAL MEMBER)

HEARD : 15, 16, 17 AND 18 SEPTEMBER 2008 DELIVERED : 26 SEPTEMBER 2008 FILE NO/S : DR 164 of 2008 BETWEEN : TAH LAND PTY LTD

Applicant

AND

WESTERN AUSTRALIAN PLANNING COMMISSION

Respondent

Catchwords:

Town planning - Structure plan - District 'box' shopping centre with retail nett lettable area of 15,434 square metres including one supermarket and one discount department store - Structure plan proposes increase in retail nett lettable area to 32,000 square metres including second supermarket and second discount department store principally within extensions to 'box', cinemas in 'box' and mixed used development areas around site enabling future commercial and mixed commercial/high density residential development - Whether proposal is consistent with strategic and statutory planning framework - State

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Planning Policy No 4.2 - Metropolitan Centres Policy - Network City - Council Centres Strategy - Whether proposal is likely to undermine established hierarchy of centres in which site is identified as district centre - Relationship between size and function of centres - Whether proposal involves change in function from district centre to regional centre - Whether proposal is likely to adversely affect economic viability of existing, approved and planned centres - Whether applicant's economic impact assessment is flawed - Whether economic impact assessment should be confined to planning land use category 5 shop/retail or can include planning land use category 6 other retail uses

Legislation:

City of Wanneroo District Planning Scheme No 2 , cl 3.7.3, cl 3.7.4, cl 9.6.3, cl 9.8.3(f), cl 9.12.3, Sch 3

Planning and Development Act 2005 (WA), Pt 14, s 241(1)

Result:

Respondent's decision to refuse to adopt Kingsway City Activity Centre Structure Plan affirmed

Category: B

Representation:

Counsel:

Applicant : Mr M Hotchkin with Ms M Clarke

Respondent : Mr C Bydder with Mr H Leith

Solicitors:

Applicant : Hotchkin Hanly

Respondent : State Solicitor's Office

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

Australian Real Estate Investment Ltd and Western Australian Planning Commission [2004] WATPAT 51
Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; (2002) 122 LGERA 433

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REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 This case concerned a structure plan to increase the retail nett lettable area of an existing district shopping centre from 15,434 square metres, including one supermarket and one discount department store, to 32,000 square metres, including a second supermarket, a second discount department store and a 'main street' precinct, and to allow cinemas and mixed commercial/high density residential development. The key issue in the case was whether the proposal is consistent with the strategic and statutory planning framework. A second issue was whether the economic impact assessment in the structure plan is flawed.

2 The Tribunal determined that the proposal is materially inconsistent with the strategic and statutory planning framework, principally because the size of the proposed retail area and the introduction of a second discount department store each had the effect of altering the function of the centre from a district centre to a regional centre and thereby to undermine the established and planned hierarchy of metropolitan centres, and although the centre is identified as an activity centre on or adjacent to two activity corridors, the planning framework does not contemplate the extent of retail area proposed. The Tribunal determined that there is no cogent and adequate reason to depart from the planning framework so as to approve the structure plan in the circumstances of this case.

3 The Tribunal also determined that the economic impact assessment is flawed because it includes inputs for retail floorspace and household expenditure for a planning land use category that should not be included. However, even if the economic impact assessment included only the correct inputs and did not show any adverse effect on the economic viability of existing, approved or planned centres, the structure plan warrants refusal because it is materially inconsistent with the planning framework and there is no cogent and adequate reason to depart from the framework to the extent necessary to approve the structure plan.

4 Finally, the Tribunal noted, without expressing a considered view, that there may be prospect for a considerably more limited retail expansion at the site to principally include a second supermarket and the proposed main street retailing component, with total retail nett lettable area on the site restricted to no more than 20,000 square metres, particularly if there were confidence that mixed commercial/high density residential uses would also be carried out on the site.

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Introduction

5 These proceedings involve an application brought by Tah Land Pty Ltd (Tah Land), pursuant to cl 9.12.3 of the City of Wanneroo District Planning Scheme No 2 (DPS 2) and Pt 14 of the Planning and Development Act 2005 (WA) (PD Act), for review of the decision of the Western Australian Planning Commission (Commission) to refuse to adopt the Kingsway City Activity Centre Structure Plan (structure plan) under cl 9.6.3 of DPS 2. The structure plan concerns an approximately 18 hectare, roughly rectangular property at the northeastern corner of the intersection of Wanneroo Road (north/south) and Hepburn Avenue (east/west), which are both major arterial roads (site).

6 The site contains an existing district shopping centre referred to variously in planning instruments as the Madeley, Landsdale and Kingsway City Shopping Centre. The existing centre opened in March 1996 and comprises a single storey internalised 'box' type shopping centre surrounded by car parks which is fairly typical of construction of suburban shopping centres from the 1960s to the 1990s. The 'box' contains a total nett lettable area of 17,340 square metres including 15,434 square metres retail nett lettable area. The retail nett lettable area principally comprises a fullline Woolworths supermarket and a Big W discount department store, as well as some specialty retail shops. There are also a number of smaller buildings which are generally located on the southern and western extremities of the site that contain service stations, car maintenance facilities, fast food outlets, a medical centre and other miscellaneous services. The total existing floorspace on the site is approximately 22,700 square metres. About 8 hectares of the site is vacant including a large contiguous area in the east and northeast which takes up about onethird of the total site area.

7 The proposed structure plan, if adopted in this review, would constitute both an Agreed Structure Plan under DPS 2 and a centre plan under State Planning Policy No 4.2 Metropolitan Centres Policy Statement for the Perth Metropolitan Region (SPP 4.2). Tah Land requires approval of the structure plan because cl 3.7.3, cl 3.7.4 and Sch 3 of DPS 2 restrict development of the site to 15,000 square metres retail nett lettable area 'except where a provision to the contrary is made in an Agreed Structure Plan', and Appendix 2 of SPP 4.2 identifies the site as a district centre within the SPP 4.2 hierarchy of metropolitan centres and cl 4.2.4 of SPP 4.2 states that in district centres 'shopping floorspace should generally be confined to 15,000 [square metres] unless consistent with a Commission endorsed

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Local Planning Strategy or centre plan'. The structure plan proposes 32,000 square metres retail nett lettable area.

Structure plan

8 The structure plan has two parts. Part 1 establishes the permissibility of uses, development standards and requirements, including residential density coding, and development control provisions. If adopted, Pt 1 of the structure plan would have statutory force under cl 9.8.3(f) of DPS 2 as if it formed part of DPS 2. Part 2 of the structure plan is for explanatory and guidance purposes only and would not have statutory force and effect.

9 Clause 1.4.1 of Pt 1 of the structure plan requires that development shall generally be in accordance with the Development Control Plan (DCP) presented in Figure 2, although 'the boundaries of the various use classes shown in Figure 2 are indicative only and subject to change in detailed development plans'. The DCP shows a 'retail core' comprising 32,000 square metres retail nett lettable area incorporating the existing shopping centre and a cinema complex substantially in an expanded 'box'. The western, northern and eastern sides of the proposed retail core would not have any active interface with the rest of the site whereas most of the southern site is designed to present and relate to a proposed internal 'main street' and includes an indent to accommodate a park or piazza. The southern edge of the retail core, the northern edge of a proposed mixed use development area on the other side of the main street and the section of the road between these elements is identified in the DCP as 'main street precinct with two storey minimum development'. Clause 1.4.6 of Pt 1 of the structure plan contains development control provisions for the main street precinct, including requirements for complementary awnings attached to the buildings on both sides of the road, the façades of buildings exhibiting 'a high standard of design' and footpaths on the street and in the park or piazza area having a sufficient width to allow for at least one rank of alfresco dining without restricting movement.

10 The proposed road that forms part of the main street precinct runs substantially parallel to Hepburn Avenue and is accessed at each end by extensions to Hepburn Avenue. The DCP designates the land on one side of each extension road to Hepburn Avenue as 'showroom, other commercial or mixed use development'. The land located between the main street precinct, the extension roads to Hepburn Avenue and Hepburn Avenue itself is identified in the DCP as 'mixed use development'. The land at the peripheries of the site to the east, southwest and west are also

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designated for mixed use development and the remaining areas of the site, to the immediate west, north and east of the retail core, are identified as 'principal parking areas'.

11 Clause 1.4.3 of Pt 1 of the structure plan states, in part, as follows:

(i) Prior to the Mixed Use Development areas being developed for Mixed Use purposes, the following interim uses may be permitted:

• Existing uses;

• Car parking; and/or

• Any other use permitted by the Council.

(ii) Residential development shall not be permitted unless it forms part of a Mixed Use Development and complies with Clause 4.3 of the Residential Design Codes of Western Australia. Any residential development shall conform to the Residential Density Code depicted in the Residential Density Code Map (Figure 3).

12 Clause 1.4.3 of Pt 1 of the structure plan would enable the existing car parks between Wanneroo Road, Hepburn Avenue and the 'box' to remain and new car parks to be developed on virtually all of the currently vacant parts of the site. Figure 3 designates the residential density code for residential development within mixed use developments on the site as 'R160' which is a high density code.

13 Clause 4.1 of Pt 2 of the structure plan, which is the nonstatutory part for explanatory and guidance purposes only, states the following longterm vision for the site:

The vision and longterm objective for Kingsway City is for its transformation from a suburban shopping centre into a fully integrated, mixedused [sic] Activity Centre.

14 Clause 4.1 of Pt 2 of the structure plan states that Figure SP-01 is the Indicative Development Plan (IDP) which illustrates the longterm vision. However, cl 4.5 states that the IDP 'is only one interpretation' of planning and urban design principles set out in cl 4.3.

15 Mr Malcolm Mackay, an architect and urban designer and the author of the IDP, who gave evidence on behalf of Tah Land, explained that the concept of the IDP is a hybrid of 'wrapping the good stuff', namely mixed use development, the piazza and the main street precinct, around the 'box', which is a development constraint that will remain because of its relatively recent construction. Mr Mackay explained that the most significant aspect in the vision

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of the IDP is that it involves a mix of uses and activities that one would expect to find in a town centre but which are generally absent in suburban locations.

16 Clause 4.6 of Pt 2 of the structure plan states as follows:

It needs to be recognised that the IDP is a longterm vision of Kingsway City's development potential that may take many years to fully implement. Figure SP-04 presents the Interim Development Concept, which is intended to form the basis of the first major development application following approval of this Structure Plan.

17 The Interim Development Concept (IDC) presented on Figure SP04 essentially shows the expansion of the 'box' to the northeast to incorporate a second discount department store with similar area to the existing Big W and to the southeast to incorporate a second supermarket with similar area to the existing Woolworths, expansion of retail area to the south to incorporate two storey main street development and a piazza along the northern edge of the main street precinct and development opportunity sites at the eastern and northern extremities of the site. In the IDC the expanded 'box' would remain substantially surrounded by car parking, including in the area between Hepburn Avenue and the proposed main street. In other words, the IDC involves more than doubling the retail nett lettable area, substantially in the form of a second discount department store and a second supermarket, without any substantial mix of other uses.

Assessment of structure plan by Council and Commission

18 Tah Land lodged the structure plan with the City of Wanneroo (City or Council) on 21 August 2006. In December 2006, Tah Land sought review by the Tribunal of the deemed refusal of the application. After discussions between Tah Land and the City, Tah Land agreed to withdraw the application for review if the City advertised the structure plan for public comment and considered whether to approve it.

19 The structure plan was advertised for public comment for a period of six weeks to 21 March 2007. A total of 1,094 submissions were received. Nine hundred and fifty nine submissions were pro forma letters filled out by shoppers at the existing shopping centre. Five submissions were received from representatives of the owners of other shopping centres. A total of 989 submissions supported the proposal, of which 145 indicated support with no additional comments, 566 provided support and commended the design, 96 supported the proposal and made requests for specific shops or facilities, and 182 provided support but raised various concerns. A total of 76

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objections were received. One pro forma response objected to the cinema component, eight pro forma responses objected to high rise residential apartments, 22 pro forma responses opposed both the cinema component and high rise residential apartments and 45 individual objections were made for various reasons.

20 At the City's meeting on 15 May 2007, it received a report from its Director, Planning and Development, that recommended refusal of the structure plan for reasons including the following:

(a) the proposal is inconsistent with the relevant City and [Commission] policies including [SPP 4.2] and the City's Centre's [sic] Local Planning Policy and supporting strategy. The proposal is contrary to the intent and provisions of these policies and hence with the orderly and proper planning of the locality.

(b) the proponent has not adequately demonstrated the commercial impact that the proposal will have on the existing and planned provision of centres and retail facilities in the locality. …

21 A motion to adopt the recommendation was lost four to nine. An alternative motion to approve the structure plan subject to conditions was lost five to eight. Finally, a further alternative motion to 'approve' the structure plan, but subject to conditions including that the structure plan be modified to accommodate no more than 20,000 square metres retail nett lettable area was carried nine to four. Arguably, this 'approval' amounted to an effective refusal of the proposal which involves 32,000 square metres retail nett lettable area. The Council's stated reason for not supporting the Director, Planning and Development's recommendation and for passing the second alternative motion was that its decision was 'based on the merits of the application and the provisions of the current centre strategy document'.

22 On 25 May 2007 the City forwarded the structure plan to the Commission in order for the Commission to consider whether to adopt the structure plan under cl 9.6.3 of DPS 2.

23 On 6 November 2007 the Commission's Statutory Planning Committee resolved to note that the proposal is well in excess of the retail nett lettable floorspace identified in SPP 4.2 and in the City's Centres Strategy and to defer consideration of the structure plan to enable further consideration of certain matters.

24 On 1 April 2008 the Statutory Planning Committee resolved to refuse to adopt the structure plan for the following reasons:

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(a) The Kingsway Shopping Centre is designated as a District Centre in [SPP 4.2] with a maximum floorspace limit of 15,000 square metres. The [Commission] is not prepared to support the increase in floorspace limit due to its inconsistency with [SPP 4.2].

(b) The proposed increase in retail floorspace at Kingsway Shopping Centre would adversely affect the future development of adjacent Regional Centres, which have been identified as preferred locations for high level retail facilities [and] associated commercial and community activity which is associated with higher level retail activity.

(c) The retail modelling submitted to support the proposed increase in retail floorspace at Kingsway Shopping Centre does not adequately demonstrate that the proposal will not result in an adverse impact on adjacent centres. The Western Australian Planning Commission is not prepared to approve an increase in retail floorspace without adequate demonstration that it will not negatively impact upon the other existing retail centres.

(d) Approval of the proposal would create a precedent which would undermine the objectives and principles of [SPP 4.2] and Network City.

25 On 8 April 2008 Tah Land commenced these review proceedings.

26 On 29 April 2008 Mr Anthony Shrapnel, a consultant town planner and the principal author of the structure plan, applied to the City on behalf of Tah Land for 'reconsideration' of the structure plan and in particular of the limitation to 20,000 square metres imposed on 15 May 2007 having regard to the discussion paper prepared by Peter McNabb and Associates in relation to the review of the Council's Centres Strategy.

27 At its meeting on 29 July 2008, the Council received a report from its Acting Director, Planning and Development recommending refusal of the structure plan in its entirety. The report included an assessment by Mr McNabb who advised that, on the basis of the key principles and recommendations in his discussion paper, he does not support the structure plan. In particular, he considered that the predominant focus of the plan is considerably more retail floorspace based around 'a very large retail box with large car parking areas to the east and west'.

28 Notwithstanding the advice from the Acting Director, Planning and Development and Mr McNabb, the Council resolved to approve the structure plan without limiting the retail floorspace. The Council's stated reason for its alternative motion was that:

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It allows the developer to proceed to the next stage of the structure plan while still needing to submit development applications for each individual aspect of the project giving Council plenty of opportunity to monitor the progress of the development in detail.

Issues for determination

29 The following three principal issues arise for determination in this review:

1) Whether the proposal is consistent with the strategic and statutory planning framework.

2) Whether the economic impact assessment prepared by Mr Shrapnel is flawed.

3) Whether the proposal should be approved in the exercise of planning discretion.

30 The Tribunal will address each of these issues in turn.

Is the proposal consistent with the planning framework?

31 The Tribunal received expert evidence from the following witnesses:

• Mr Shrapnel who gave evidence on behalf of Tah Land;

• Mr Mackay who gave evidence on behalf of Tah Land;

• Mr Stephen Allerding, a consultant town planner, who gave evidence on behalf of the Commission;

• Mr Jeremy Dawkins, a town planner and the Chairman of the Commission, who gave evidence on its behalf;

• Mr Christopher Hair, an architect and urban designer who is the Department for Planning and Infrastructure's Acting Director of Network City Policy and Planning, who gave evidence on behalf of the Commission; and

• Ms Janet Iverach, a computational geographer and the Principal Research Analyst, Applied Research and Modelling Branch of the Department for Planning and Infrastructure's Spatial Information and Research Directorate, who gave evidence on behalf of the Commission.

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32 The expert witnesses agreed that the principal elements of the relevant planning framework are contained in:

• SPP 4.2;

• Network City;

• DPS 2; and

• the City's Centres Strategy.

33 However, the experts disagreed in relation to the weight to be given to various elements of the planning framework in determining whether to adopt the structure plan.

34 The Tribunal will address consistency with SPP 4.2 and Network City together because it is common ground that they are to be read together. The Tribunal will address consistency with DPS 2 and the Centres Strategy together because the Centres Strategy is a planning policy for the purposes of DPS 2.

SPP 4.2 and Network City

35 The principal purpose of SPP 4.2 is relevantly stated in cl 2.4 as:

To provide a broad regional planning framework to coordinate the location and development of retail and commercial activities in the metropolitan region. It is mainly concerned with the location, distribution and broad design criteria for the development of commercial activities at the regional and district level.

36 Clause 2.5 of SPP 4.2 states that:

The policy is intended to provide a guide for centre development that is flexible enough to enable commercial development to respond to market conditions and has a degree of certainty to assist in commercial investment decisions.

37 Clause 3 of SPP 4.2 states that the objectives of SPP 4.2 include to:

• establish a hierarchy of welllocated centres in the metropolitan regional that will:

…

• promote Regional Centres as important suburban centres offering a focus for the community by providing a mix of retail, office, entertainment, recreation and community facilities;

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• promote District Centres to meet the weekly shopping and service needs of the community including the provision of offices and community facilities; …

38 Cause 4.1.2 of SPP 4.2 states, in part, as follows:

In determining major shopping development proposals the Commission will not support proposals which are in the opinion of the Commission likely to:

• undermine the established and/or planned hierarchy of centres; [or]

• adversely affect the economic viability of existing, approved and planned centres where this could result in a deterioration of the level of service to the local community or undermine public investments in infrastructure and services; …

39 Clause 4.1.3 of SPP 4.2 states:

In determining centre development proposals, the Commission will have regard to the primary functions of the centre and to the Shopping Floorspace Guide in Appendix 1.

40 The 'primary functions' stated in Appendix 1 for 'District Centres' is 'centres for weekly retail, service and community facilities' whereas the 'primary functions' for 'Regional Centres' is 'multipurpose centres for retail, office, community and entertainment facilities'. The 'Shopping Floorspace Guide' stated in Appendix 1 for 'District Centres' is up to 15,000 square metres nett lettable area whereas for 'Regional Centres' it is up to 50,000 square metres nett lettable area.

41 Clause 4.2 of SPP 4.2 states that the location of centres within the hierarchy of metropolitan centres is shown in Appendix 2. As noted earlier, the centre on the site is identified as a district centre in the hierarchy in Appendix 2. Clause 4.2.4 of SPP 4.2 states as follows in relation to district centres:

District Centres will be promoted as centres serving the weekly shopping and service needs of the suburban population. They should provide mainly convenience goods, a range of comparison goods, local services and local employment.

Shopping floorspace should generally be confined to 15,000 square metres unless consistent with a Commission endorsed Local Planning Strategy or centre plan.

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42 As Mr Mackay explained, 'convenience goods' are things that one needs on a daily or weekly basis, such as grocery items, fruit and vegetables, whereas 'comparison goods' are things that one wants rather than needs and are not purchased on a daily or weekly basis, such as clothing and electrical goods. Mr Mackay said that wants rather than needs are called 'comparison' goods because one tends to compare one item to another.

43 In contrast, cl 4.2.3 of SPP 4.2 states as follows in relation to regional centres:

Regional Centres will be promoted as multipurpose centres, providing a predominantly retail function, a mix of offices, community and entertainment facilities. …

Shopping floorspace should generally be confined to 50,000 square metres unless consistent with a Commission endorsed Local Planning Strategy or centre plan.

44 Clause 5.3 of SPP 4.2 states, in part, as follows:

To maintain a strong hierarchy of centres it is necessary to ensure that commercial functions and uses are appropriate to each centre's position in the hierarchy.

45 Finally, cl 5.4 of SPP 4.2 states, in part, as follows:

The Shopping floorspace Guide in Appendix 1 provides an indication of the nature and quantity of shopping floorspace appropriate for centres in the hierarchy and provides for additional shopping floorspace of up to 1,000 square metres above the shopping floorspace guide in traditional main street centres. Shopping development up to the floorspace indicated is deemed to be acceptable and unlikely to have significant adverse social or economic impacts on the locality or other centres.

Developments which do not result in the shopping floorspace guide figures being exceeded will normally be determined by the local government. However, proposals which would result in the shopping floorspace levels in the guide being exceeded are required to be referred to the Commission for determination unless such proposals are consistent with a Local Planning Strategy or a centre plan endorsed by the Commission. In the absence of an endorsed Local Planning Strategy, any proposal which exceeds the retail floorspace specified in an endorsed structure plan or town planning scheme will need to be referred to the Commission for determination.

46 Network City refers to the following documents:
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• The Network City Framework (Framework);

• The Network City Action Plan (Action Plan); and

• The Network City Community Planning Strategy (Strategy).

47 The Framework and the Action Plan were endorsed by the previous Government. The Strategy was approved for publication by the previous Government. While there is necessarily some uncertainty with the change of Government, the unanimous view of the expert witnesses was that there has been considerable historical bipartisanship in planning policy in this State and that Network City is expected to continue. The Tribunal accepts this view.

48 A draft State Planning Policy entitled 'Network City' (draft SPP) has also been prepared but has not yet been approved or gazetted. However, the existence of the draft SPP does not change the status of Network City as the primary adopted strategy for the metropolitan region.

49 The objectives of Network City include:

• Accommodate urban growth primarily within a Network City pattern incorporating communities.

• Align transport systems and land use to optimise accessibility and amenity. …

• Ensure employment is created in centres. …

50 Clause 6.3 of the draft SPP states that:

Like the previous metropolitan strategies Network City is the foundation for active policy and plan making, not a blueprint or master plan simply to be carried out. Network City will be applied as a system of shared values and priorities for managing Perth and Peel.

51 Clause 6.4 of the draft SPP identifies four core elements of Network City: activity centres, networks, communities and natural environments. It states that the Framework is in diagrammatic form and graphically indicates how the principles of Network City might be applied. Clause 6.9 of the draft SPP states that statutory decisionmaking will be 'tested against the values, principles, objectives and headlines' of Network City.

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52 The Framework identifies the centre on the site as an 'activity centre' on an 'activity corridor', namely Wanneroo Road, and adjacent to a second 'activity corridor', namely Hepburn Avenue between Wanneroo Road and Sorrento. However, it is apparent that the Framework contemplates five levels of activity centres on activity corridors with each level identified diagrammatically by different sized dots. The dot used to signify the level of the activity centre on the site is the smallest of the five dot sizes used in the Framework.

53 The Framework describes activity centres and activity corridors as follows:

Activity centres

are locations where a range of activities are encouraged: for example employment, retail, living, entertainment, higher education and specialised medical services. Strong centres at each end of the 'activity corridors' support an effective public transport system in both directions along the corridor.

Activity corridors are connections between activity centres that provide excellent, high frequency public transport. These corridors are not designed to be highspeed through traffic routes and have a variety of land uses that support public transport.

54 Mr Shrapnel considers that the structure plan is consistent with SPP 4.2 because SPP 4.2 itself describes a process by which centre plans can be considered under the policy where there is an intention to develop a district centre larger than 15,000 square metres. He considers that the structure plan would not undermine the established hierarchy of centres, because Kingsway would remain a district centre in the hierarchy, 'albeit a very large one'. Mr Shrapnel notes that 14 of 47 established district centres in Perth exceed 15,000 square metres and that three exceed 20,000 square metres, namely East Victoria Park at 26,658 square metres, Highgate at 21,230 square metres and Phoenix Park at 21,623 square metres. Furthermore, in terms of future planning, the Commission has accepted by approval of various centre strategies four district centres to exceed 15,000 square metres, including Clarkson at 28,800 square metres, Phoenix Park at 28,000 square metres and Wanneroo at 30,000 square metres. Clarkson and Wanneroo are located within the Wanneroo local government area to the north of the site. In relation to the proposal to incorporate a second discount department store, Mr Shrapnel considers that the presence of discount department stores within district centres is not unusual and that, while there is no existing district centre in the Perth Metropolitan Region that has two district department stores, 'there has to be a first time for everything'.

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55 Furthermore, Mr Shrapnel is of a view that the approval of the structure plan would not undermine the established hierarchy of centres because of the 'uniqueness of the situation … from the commercial perspective requiring the centre's expansion'. Mr Shrapnel is not aware of any other centre in Perth that has been trading viably at its designated upper limit for several years and will experience significant population growth within a section of its primary catchment area that is fairly well removed from the influence of most competing centres. In particular, the northeast quadrant of the centre's trading area has undergone significant expansion over the past 10 years. Development in the northeastern quadrant will continue to expand significantly over the next 25 years. A shopper survey in 2003 showed a large amount of support in the local community for the retail services to be expanded. As noted earlier, a significant number of shoppers also lodged submissions in support of the structure plan with the Council.

56 Mr Shrapnel also considers that the structure plan is consistent with Network City. He notes that the site is the only activity centre in the Framework north of the Perth CBD which is on or adjacent to two activity corridors. He considers that the structure plan serves to implement 'the spirit of Network City by seeking to create a significant activity centre in a location specified by Network City in a manner that fully utilises vacant and available land'.

57 Mr Mackay gave inconsistent evidence in relation to SPP 4.2. In a supplementary witness statement filed before the hearing he expressed the view that SPP 4.2 is 'fundamentally flawed' and is 'at complete odds with the State Government's Network City policy and contemporary planning philosophy', because it fails to adequately acknowledge the effect of the metropolitan movement network on the role of a centre and is concerned only with retail rather than other uses. He also described SPP 4.2 as an 'outdated and inadequate tool for providing the complex guidance required in the development and management of different centres with different range of activities and different roles to perform in the community'. In his original witness statement, which was also filed before the hearing, he said that the structure plan was developed 'on the basis that … SPP 4.2 … [was] 'past [its] useby date' insofar as [it is] due for review and, with an over emphasis on retailing, had been overtaken by contemporary planning and urban design philosophy'. However, in oral evidence, Mr Mackay described SPP 4.2 as 'a moderately useful document' although it needs to be treated 'with a little pinch of salt'. He conceded that a lot of the thinking in Network City has found its way into SPP 4.2 as it presently stands. He also said that he does not think that the hierarchy of centres in

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SPP 4.2 should be abandoned although he considers that the hierarchy of centres may be realigned based on Network City principles and that the 'current caps' on retail Floorspace in SPP 4.2 are 'arguably too low'.

58 Mr Mackay said that while some comparison shopping occurs between discount department stores, the addition of a second discount department store is likely to give people in the district more convenient access to the chain they already prefer, rather than to draw consumers from further afield in the region. He said that it would be different if the structure plan proposed a department store such as Myer or David Jones. Mr Mackay also noted that while there may not at present be any district centre in the region with two discount department stores, he is aware that the owner of the Clarkson district centre wishes to accommodate a second discount department store.

59 Mr Mackay considers that the structure plan is consistent with Network City by 'establishing a significant "Activity Centre" on the intersection of two "Activity Corridors" that can both be well served by regional public transport routes'. He describes the proposal as 'a regionally significant urban element' and as 'a significant destination for service and employment'.

60 In contrast to Mr Mackay's written evidence, Mr Allerding considers that Network City does not replace or overtake SPP 4.2, but rather complements SPP 4.2 by emphasising a mix of uses in activity centres, rather than predominantly retail uses.

61 Mr Allerding considers that the designation of floorspace guidelines and the establishment of a hierarchy form 'a key element of [SPP 4.2] to ensure that development can occur in an orderly and proper way in a planned environment consistent with a centre's intended form and function'. Mr Allerding gave evidence that part of the purpose of floorspace guidelines in SPP 4.2 is to limit the capacity of a centre to accommodate a higher range of uses that could alter a centre's intended form and function as well as potentially impact on the form and function of other existing and planning centres.

62 Mr Allerding drew attention to the relationship between the floorspace guidelines and the anticipated form and function of centres under SPP 4.2:

Having regard to [SPP 4.2], Kingsway has been designated as a District Centre which as described earlier is a centre 'servicing the weekly shopping and service needs of the suburban population, and should provide mainly convenience goods, a range of

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comparison goods, local services and local employment'. To accommodate the anticipated level of services for a District Centre, a Floorspace guide of up to 15,000 square metres is provided.

63 Mr Allerding contrasted the role of regional centres under SPP 4.2 which are 'multipurpose centres providing a predominantly retail function, a mix of offices, community and entertainment facilities' and noted that 'to accommodate the anticipated level of services for a Regional Centre, a floorspace guide of up to 50,000 square metres is provided'.

64 In consequence of the proposed size and function of the centre under the structure plan, Mr Allerding considers that it would undermine the established hierarchy of centres because it would change in its function from a district centre to a regional centre.

65 Mr Allerding considers that Wanneroo is distinguishable from the centre on the site because it has been earmarked as the administrative hub of the City.

66 Mr Allerding disagreed with Mr Mackay's opinion that there is likely to be an increase in the size of retail components within activity centres because other activities need to be introduced under Network City.

67 Mr Dawkins agreed with Mr Allerding that the objectives and controls in SPP 4.2 will not be 'replaced' through Network City and will 'remain a core component of the metropolitan strategy and, if anything, will be reinforced by Network City'. While Network City aims to build a range of activity centres, 'there is no support in Network City for the view that hierarchies and floorspace caps will cease to be relevant'.

68 Mr Dawkins gave evidence that the proposal is a 'radical departure' from the existing hierarchy in SPP 4.2 and is 'clearly inconsistent' with SPP 4.2 because it is contrary to the retail hierarchy.

69 Mr Dawkins disagreed with Mr Mackay's opinion that there is likely to be an increase in the size of shopping centres under Network City. He said that the corollary of that proposition is that there will be less centres under Network City, whereas 'that is not where we are going'.

70 Mr Dawkins also gave evidence that, while there are elements of Mr Mackay's IDP that are to be commended, in Mr Dawkins' opinion, Mr Mackay's vision is 'unlikely to be achieved' with the consequence that the likelihood, even in the long run, is that the areas surrounding the big 'box' will remain hardstand car parks.

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71 Similarly, Mr Hair gave evidence that SPP 4.2 and Network City are 'very closely aligned in terms of their general thrust'. The current version of SPP 4.2 embodies 'many of the aspirations' that form part of Network City. The hierarchy of centres is highlighted by Network City which, as noted earlier, has levels of activity centres in which the centre on the site is identified as the lowest level. Mr Hair considers that the use of floorspace guidelines in SPP 4.2 is reinforced in Network City.

72 Mr Hair agreed with Mr Allerding as to the relationship between floorspace and function in SPP 4.2 and with his opinion that the proposal does not align with the function for a district centre identified in SPP 4.2.

73 Like Mr Allerding and Mr Dawkins, Mr Hair disagreed with Mr Mackay's opinion that the retail component of activity centres is likely to increase under Network City. While there may be some shifting through the current review of SPP 4.2, that does not mean that it will be necessarily up or down. Mr Hair considers that there is unlikely to be a significant increase in retail floorspace guidelines for centres under the Network City principles, because if ratios are introduced to ensure other uses relative to retail use, increasing retail floorspace will make it even more difficult to achieve ratios.

74 Mr Hair investigated the acceptance by the Commission of 28,800 square metres of retail nett lettable area at the Clarkson district centre. He said that he was informed by a named Department for Planning and Infrastructure staff member who was involved in the approval of the relevant retail strategy that it was approved before the current version of SPP 4.2 and Network City. Mr Hair also noted that there is an important difference between the location of Clarkson and the location of the site in that Clarkson is located further away from the closest district centres than is the site and that there are no existing or planned district centres to the northeast of Clarkson.

75 Ms Iverach said that even a single discount department store is unusual in a district centre in the Perth Metropolitan Region. Only seven district centres (14%) have a discount department store.

76 Ms Iverach noted that the discount department store at the site occupies 44% of the current floorspace, whereas the supermarket occupies 26% of the floorspace. Therefore, even now, Ms Iverach considers that the centre 'has an emphasis on comparison goods that is barely consistent with the function or description of a district centre in SPP 4.2'.

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77 Furthermore, Ms Iverach noted that under Appendix 1 of SPP 4.2, the primary functions of district centres are 'centres for weekly retail, service and community facilities' and under cl 4.2.4 to serve 'the weekly shopping and service needs of the suburban population' providing 'mainly convenience goods, a range of comparison goods, local services and local employment'. Ms Iverach gave evidence that, to optimally satisfy the range of weekly shopping needs, a district centre would need retail nett lettable floorspace of between 12,000 square metres and 15,000 square metres. This range does not readily permit a single discount department store, much less two discount department stores, consistently with the shopping floorspace guide of up to 15,000 square metres nett lettable area for retail identified in SPP 4.2.

78 Ms Iverach gave evidence that the addition of a second discount department store, together with a second fullline supermarket, 'would make Kingsway function as a regional centre rather than a district centre, and would therefore undermine the established hierarchy of centres in SPP 4.2'. Significantly, there are no other district centres in Perth that have two discount department stores and only three of nine established regional centres have two discount department stores. Commenting on Mr Mackay's observation about the effect of accommodating a department store, such as Myer or David Jones, at the site, Ms Iverach noted that there are only 11 department stores in the Perth Metropolitan Region and that they serve a higher order function than in other capital cities.

79 Finally, Ms Iverach noted that the East Victoria Park and Highgate district centres referred to by Mr Shrapnel are each distinguishable from the present case, because they existed as centres before commercial centres planning commenced in Perth in the 1970s and because, although larger than typical district centres, a large part of the floorspace in East Victoria Park is contained in small shops on the main street, rather than in a 'box'.

80 The Tribunal does not accept Mr Mackay's evidence that SPP 4.2 is 'fundamentally flawed', 'at complete odds with … Network City', 'outdated and inadequate' or 'past its useby date'. SPP 4.2 is an operative State planning policy which affects the subject matter of the application to which the Tribunal is required to have due regard under s 241(1) of the PD Act. Furthermore, the Tribunal accepts Mr Allerding's evidence that Network City does not replace or overtake SPP 4.2, but rather complements SPP 4.2 by emphasising a mix of uses in activity centres, rather than predominantly retail uses. As Mr Dawkins said, there is no support in Network City for the view that hierarchies and floorspace aligned in their general thrust. This is clearly apparent from a number of provisions in SPP 4.2, including the following:

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• Retail, office, commercial, entertainment, recreational and community facilities should be located and concentrated in centres. (cl 4.1.1)

• Centres should be developed to be conveniently accessible by a range of transport modes including walking, cycling, public transport, cars and commercial and service vehicles as well as by people with disabilities. (cl 4.1.4)

• Centres should be developed with a wide range of uses comprising a mix of appropriate retail, office, entertainment and commercial uses as well as appropriate residential uses. (Cl 4.1.5)

• Employment opportunities should be provided at centres throughout the hierarchy by encouraging the development of a maximum range of appropriate uses to improve access to jobs and reduce the need for long journeys to work. (cl 4.1.6)

• Centres should be planned to provide public transport at central and convenient locations. (cl 4.1.7)

• The 'main street' form of commercial development with street frontages and containing a mix of uses should be encouraged in both new and established centres. (cl 4.1.12)

81 The Tribunal considers that the structure plan is likely to undermine the established and planned hierarchy of metropolitan centres shown in Appendix 2 of SPP 4.2 because it would change the function of the Kingsway centre from a district centre to a regional centre.

82 As Mr C Bydder, who appeared with Mr H Leith on behalf of the Commission, submitted, the floorspace guides in SPP 4.2 are a useful indicator, in and of themselves, of whether a centre is conforming to its place in the established hierarchy. This is because, as Mr Allerding emphasised, there is a strong interrelationship in SPP 4.2 between floorspace and function of centres in the hierarchy. This is implicit in the extracts from cl 4.1.3, cl 4.2.3 and cl 4.2.4 set out earlier. It is also explicit in cl 5.4 which states that the floorspace guide 'provides an indication of the nature and quantity of shopping floorspace appropriate for centres in the hierarchy'.

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83 As Mr Allerding observed, the floorspace guide of up to 15,000 square metres for a district centre both indicates the floorspace that is required to accommodate the anticipated level of services for a district centre and also limits the capacity of a district centre to accommodate a higher range of uses that could be accommodated in a regional centre for which a floorspace guide of up to 50,000 square metres is provided.

84 Furthermore, the evidence as to the floorspace of existing and planned district centres in the region largely confirms Mr Allerding's point about the strong interrelationship between floorspace and function and that a shopping floorspace guide of up to 15,000 square metres nett lettable area is what is generally required to achieve the primary functions of a district centre and to preclude a district centre from accommodating a larger range of functions that are envisaged for a regional centre. As noted earlier, the primary functions of a district centre are as 'weekly retail, service and community facilities' (Appendix 1 of SPP 4.2) and 'serving the weekly shopping and service needs of the suburban population … [providing] mainly convenience goods, a range of comparison goods, local services and local employment' (cl 4.2.4 of SPP 4.2). Thirty-three out of 47 district centres (70%) have shopping floorspace below 15,000 square metres nett lettable area. Eight of the 14 district shopping centres with floorspace above 15,000 square metres are less than 16,007 square metres nett lettable area. The word 'generally' in cl 4.2.4 of SPP 4.2 arguably contemplates a relatively minor exceedence of up to 16,007 square metres. Only six out of 47 district centres (13%) exceed 16,007 square metres.

85 Furthermore, only three district centres exceed 20,000 square metres. These centres are East Victoria Park (26,658 square metres), Phoenix Park (21,623 square metres) and Highgate (21,230 square metres). As Ms Iverach explained, East Victoria Park and Highgate are each distinguishable from the present case, because they existed as centres before commercial centres planning commenced in Perth and because a large part of the floorspace in East Victoria Park is contained in small shops on the main street. While the evidence did not address Phoenix Park, it is apparent from Appendix 2 of SPP 4.2, which shows the hierarchy of metropolitan centres on a map of the Perth Metropolitan Region, that Phoenix Park is located further away from the closest district centres at Kardinya and Bull Creek than the distance between the Kingsway Centre and the nearest district centres at Greenwood Village, Girrawheen Park and Alexander Heights.

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86 Furthermore, each of the three proposed expanded district centres referred to by Mr Shrapnel, namely Clarkson (28,800 square metres), Phoenix Park (28,000 square metres) and Wanneroo (30,000 square metres) are explicable and distinguishable. As Mr Hair explained, the relevant retail strategy contemplating 28,800 square metres retail nett lettable area at Clarkson was approved before the current version of SPP 4.2 and Network City. While this evidence was based on what Mr Hair had been told by another officer of the Department for Planning and Infrastructure, the Tribunal has confidence in this aspect of Mr Hair's evidence, because the officer was named and was at the Department at the relevant time. Furthermore, Appendix 2 of SPP 4.2 confirms Mr Hair's evidence that Clarkson is located further away from the closest district centres than is Kingsway. As noted earlier, Appendix 2 of SPP 4.2 similarly shows that Phoenix Park is located further away from the nearest district centres than is Kingsway. Although the City's Centres Strategy says that the Wanneroo Town Centre may be permitted to 30,000 square metres, it is not only distinguishable from Kingsway because Wanneroo Town Centre is earmarked as the administrative hub of the City, but the following point in cl 5.4.1 of the Centres Strategy in relation to the Wanneroo Town Centre is also relevant:

Modelling indicates there is potential to support of the order of 15,000 [square metres] of retail floor area at Wanneroo by 2006. It is unlikely that this potential will increase significantly in the longer term future. This is a good functional site as a district shopping centre incorporating one or two chain supermarkets and a discount department store.

87 Therefore, although, exceptionally, the Centres Strategy contemplates a maximum of 30,000 square metres at Wanneroo, it also says that it is unlikely that the retail area will increase significantly beyond 15,000 square metres in the longer term and contemplates only one discount department store. Wanneroo currently has 6,931 square metres nett lettable area.

88 Ms Iverach's evidence that, to optimally satisfy the range of weekly shopping needs, a district centre would need retail nett lettable area of between 12,000 square metres and 15,000 square metres, also supports a strong interrelationship in SPP 4.2 between size and function. Ms Iverach's evidence is also consistent with the evidence referred to earlier that 70% of district centres have less than 15,000 square metres retail nett lettable area and that 87% of district centres have less than 16,007 square metres retail nett lettable area. The whole of this evidence is consistent with Mr Allerding's opinion, which the Tribunal accepts, that there is a strong interrelationship between the

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contemplation of size in the floorspace guide and the contemplation of function in SPP 4.2.

89 It follows that although 15,000 square metres retail nett lettable area is a guide and indicative, rather than a mandatory standard, in SPP 4.2, because of its interrelationship with function, it is a strong guide or indication of the likely maximum floorspace generally contemplated for a district centre under SPP 4.2. While SPP 4.2 contemplates exceedences of 15,000 square metres for district centres in certain circumstances under centre plans, the greater the exceedence of 15,000 square metres, the more likely that the proposal would change a district centre into a regional centre and thereby undermine the established and planned hierarchy of centres. The size of the proposal, which is 113% larger than 15,000 square metres, is so great that, in and of itself, it shows that the proposed centre would operate as a regional centre, rather than as a district centre. Indeed, as Ms Iverach pointed out, the size of the proposed centre would place it seventh out of 10 established regional centres in the Perth Metropolitan Region in terms of nett lettable area.

90 Furthermore, the Tribunal accepts the evidence of Ms Iverach that the incorporation of a second discount department store would make Kingsway function as a regional centre rather than as a district centre. As Ms Iverach said, having regard to the functional description of a district centre in SPP 4.2, 'the incorporation of even a single discount department store has an emphasis on comparison goods that is barely consistent with the function or description of a district centre'. Only seven out of 47 district centres (14%) have a discount department store. There are no other district centres in Perth that have two discount department stores and only three of 9 established regional centres have two discount department stores. The addition of a second discount department store is plainly inconsistent with the objective of SPP 4.2 to establish a hierarchy of well located centres that will promote district centres 'to meet the weekly shopping and service needs of the community'. Rather, it is consistent with the objective to establish regional centres 'as important suburban centres offering a focus for the community by providing a mix of retail, office, entertainment, recreation and community facilities'. However, the 'strong hierarchy of centres (SPP 4.2, cl 5.3) established by SPP 4.2 identifies the site as a district centre, rather than as a regional centre. The incorporation of a second discount department store would have the effect of switching Kingsway within the hierarchy of SPP 4.2 from a district centre to a regional centre. We therefore reject Mr Shrapnel's evidence that, in this instance, 'there has to be a first time for everything'.

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91 Mr M Hotchkin, who appeared with Ms M Clarke on behalf of Tah Land, made several submissions in relation to SPP 4.2.

92 First, Mr Hotchkin submitted that SPP 4.2 is intended to be flexible and referred to the words 'flexible enough to enable commercial development to respond to market conditions' in cl 2.5 of SPP 4.2, and to the contemplation in cl 4.2.4 of SPP 4.2 that the Commission has power to endorse a centre plan for a district centre exceeding 15,000 square metres. However, the flexibility to respond to market conditions and the ability to approve a centre plan for a district centre exceeding 15,000 square metres is relevantly restricted to an expansion of a district centre such that it would remain, in functional terms, a district centre, rather than becoming, in functional terms, a regional centre, so as not to undermine the established and planned hierarchy. The significant increase in floorspace that is proposed and the incorporation of a second discount department store travels well beyond the contemplation of 'flexibility' in SPP 4.2, because it undermines the established and planned hierarchy of centres.

93 Second, Mr Hotchkin relies on the decision of the former Town Planning Appeal Tribunal in Australian Real Estate Investment Ltd and Western Australian Planning Commission [2004] WATPAT 51 in which the Town Planning Appeal Tribunal said in relation to the floorspace guide in SPP 4.2, at [61], that the 'district centre retail floorspace cap can be no more than a guide' and, at [64], that the cap is 'at best indicative and in no way determinative and should give way as a primary measure to the question of functionality'.

94 While we agree that 'functionality' is critical, we do not agree that the retail floorspace guide is only 'at best indicative' or that the description of function is the only 'primary measure'. For reasons discussed earlier, it is clear on the basis of the evidence of Mr Allerding and the terms of SPP 4.2 itself, that there is a strong interrelationship between floorspace and function in SPP 4.2.

95 Third, Mr Hotchkin relied on his crossexamination of Mr Dawkins in which Mr Dawkins could not identify any specific provision of SPP 4.2 which limits the exercise of discretion to approve a structure plan/centre plan to any particular floorspace cap or precludes a second discount department store. However, as noted earlier, Mr Dawkins gave evidence, which we accept, that the proposal is a 'radical departure' from the existing hierarchy in SPP 4.2 and is 'clearly inconsistent' with SPP 4.2 because it is contrary to the retail hierarchy. Mr Dawkins was correct in conceding that the floorspace guide in SPP 4.2 is not mandatory and that it does not explicitly preclude a second discount

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department store. However, for reasons discussed earlier, a 113% exceedence of the guide and the incorporation of a second discount department store is plainly and manifestly inconsistent with the retail hierarchy established by SPP 4.2.

96 Mr Hotchkin also suggested that, as Mr Dawkins said that he spoke on behalf of the Commission, that his concessions 'bind the [Commission]'. While Mr Dawkins, as Chairman of the Commission, may well generally speak on behalf of the Commission, he participated in the proceedings as an expert witness, rather than as a representative. Furthermore, Mr Hotchkin's contention is misplaced in administrative review proceedings in which the Tribunal's task is to come to the correct and preferable decision.

97 Fourth, Mr Hotchkin submits that because the structure plan proposes mixed use development areas at the extremities of the site, the proposal is not distinguishable from the Wanneroo Town Centre. However, the contemplation that commercial development may take place in the longer term does not equate to the creation of the 'administrative hub' for the local government area. Furthermore, as noted earlier, although the Centres Strategy contemplates a maximum of 30,000 square metres nett lettable area at the Wanneroo Town Centre, it also considers that it is unlikely that the potential will increase significantly beyond 15,000 square metres in the longer term and that it will accommodate only one discount department store.

98 Fifth, Mr Hotchkin submits, relying on Mr Shrapnel's evidence, that the proposal does not undermine the established and planned hierarchy of centres under SPP 4.2. The proposal is not inconsistent with SPP 4.2, because the increase in retail floor area is justified by the substantial increase in urban growth in the northeast quadrant of the centre's primary catchment area, the site has a prime location on the corner of two major roads and there is a real community desire for the proposal at the site.

99 However, the hierarchy of centres established in SPP 4.2 reflects anticipated growth across the region. There is no evidence that the existing district centre at the site will not be able to adequately serve as the district centre for the likely increased population in the northeast quadrant. If, as Mr Shrapnel observed, the existing centre is trading viably, it will presumably trade even more successfully with the incoming population. Furthermore, the evidence indicates that neighbourhood or local centres are planned in the northeast quadrant. Location of the site on two major roads does not have the effect that the proposal is not likely to undermine the established or planned hierarchy of

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centres; the hierarchy of centres established by SPP 4.2 is premised on the existing road pattern which is shown on Appendix 2. Finally, community support for an expanded centre at the site does not have the effect that the proposal would not undermine the established and planned hierarchy of centres. While the community in the vicinity of the site may appreciate having a regional centre that is proximate, that does not alter the proper characterisation of the proposal as a regional centre having regard to its size and likely function, whereas it is a district centre in the regional retail hierarchy.

100 Finally, Mr Hotchkin submits that the introduction of a second discount department store does not undermine the established and planned hierarchy of centres, because the proportion of the centre allocated to the two discount department stores would be similar to the proportion of the existing centre allocated to the Big W store. Mr Hotchkin contends that the only effect of the second discount department store is to provide competition to the first.

101 However, while the proportion of the centre allocated to discount department store would not change, the quantity of floorspace allocated for comparison shopping would increase significantly to approximately 13,400 square metres. A 'district centre' with 13,400 square metres of discount department stores would be inconsistent with the objective of SPP 4.2 to establish a hierarchy of welllocated centres in the metropolitan region that will promote district centres to meet the weekly shopping and service needs of the community. The extent of comparison shopping that would be provided is not consistent with the function of a district centre. Particularly in a region where no district centres have two discount department stores and only three regional centres have two discount department stores, the proposal would be exceptional and would function as a regional centre rather than as a district centre. It matters not that the proposal would also incorporate two supermarkets that would meet the weekly shopping needs of the community. As Ms Iverach said, a regional centre performs all of the functions of a district centre (such as supermarkets providing for the main weekly shopping trip) as well as significant comparison shopping in discount department stores and specialty nonfood shops. It is the significant comparison shopping component of the proposed centre, as well as its significant size, that transforms it into a regional centre in the hierarchy of centres.

102 Moreover, as noted earlier, cl 4.2.4 of SPP 4.2 states that district centres will be promoted 'as centres serving the weekly shopping and service needs of the suburban population' and that they 'should provide mainly convenience

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goods [and] a range of comparison goods'. The existing centre already provides 'a range of comparison goods'. Thirteen thousand, four hundred square metres of discount department stores could not be reasonably described as merely 'a range of comparison goods'. Rather, as Ms Iverach said, it signifies a change to a regional centre that provides significant comparison shopping.

103 It follows that the proposal is inconsistent with SPP 4.2.

104 Furthermore, the proposed significant increase in retail nett lettable area at the site is not contemplated by Network City. As noted earlier, although the site is identified as an activity centre on or adjacent to two activity corridors in the Framework, the size of the dot signifying the site in the Framework indicates diagrammatically that the site is the lowest level of activity centre. While the site may be the only activity centre north of the Perth CBD which is on or adjacent to two activity corridors, that fact is reflected in the Framework which nevertheless uses the smallest dot to signify the site. It follows that Network City certainly does not contemplate a retail component on the site with a nett lettable area of 32,000 square metres within what Mr Shrapnel described as a 'significant activity centre' and what Mr Mackay described as a 'regionally significant urban element'.

105 SPP 4.2 is currently under review in light of Network City. It is speculative as to whether the floorspace guide for district centres will be reduced, remain the same or increase through the review. The review is not at this stage a seriouslyentertained planning proposal. However, the Tribunal notes that there is logic in Mr Hair's observation that there is unlikely to be a significant increase in the retail floorspace guides for centres under Network City principles, because if ratios are introduced to ensure other uses relative to retail use, increasing retail guides will make it even more difficult to achieve ratios.

106 Finally, although, as each of the witnesses for the Commission recognised, there are elements of Mr Mackay's IDP which are consistent with Network City, principally the contemplation of mixed uses at the extremities of the site, the main street precinct and the piazza, the Tribunal shares Mr Dawkins' concern that Mr Mackay's vision may well not be achieved even in the long term. There is a real prospect that the expanded 'box' will remain surrounded by existing and expanded car parks which is entirely inconsistent with Network City.

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107 It follows that the proposal is inconsistent with SPP 4.2 and Network City.

DPS 2 and Centres Strategy

108 As noted earlier, cl 3.7.3, cl 3.7.4. and Sch 3 of DPS 2 restrict development of the site under the Scheme to 15,000 square metres retail nett lettable area 'except where a provision to the contrary is made in an Agreed Structure Plan'. In January 2005 the Council adopted the most recent version of the Centres Strategy. Clause 5.1 of the strategy report states that the Centres Strategy promotes 'the existing district centres at Madeley (Kingsway City), Alexander Heights and Girrawheen (Newpark)'. Table 5.1 identifies the primary functions of these district centres as 'centres for weekly retail, service and community facilities'. For reasons discussed in relation to SPP 4.2, the inclusion of a second discount department store is inconsistent with the primary function stated in the Centres Strategy.

109 The Centres Strategy also contains the following specific points for the Kingsway Centre:

Modelling indicates there is potential to support of the order of 19,400 [square metres] of retail floor area at Landsdale by 2006. However, population projections for the centre's primary trade area to 2006 may be optimistic, together with evidence of poor trading performance figures for nonfood (specialty) shops for centres in East Wanneroo, suggesting that Council should exercise caution in considering proposals for expansion of Madeley in the strategy period.

Opportunities for the expansion of Madeley beyond this size should be aimed at diversification, mainly with the introduction of mixed business and service commercial uses.

A submission by the owners of the centre promoting the ultimate development of the centre to a 'regional' centre of the order of 30,000 [square metres] is not supported on the grounds that it will detract from the strategic planning objectives for the City of Wanneroo, namely to promote Wanneroo Town Centre as the predominant commercial, administrative and cultural centre for the City (similar to the promotion strategy applicable to Joondalup). (emphasis added)

110 The specific measures stated in the Centres Strategy for the site are as follows:

No expansion of Madeley Centre will be considered until it is demonstrated to the satisfaction of Council that the population of the

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centre's primary trade area, and improvement in the trading performance of nonfood shops for both this centre and nearby centres has reached a level that according to the Council warrants expansion to an area commensurate with Council's Centres Strategy.

Any such expansion will not increase the total area above 20,000 [square metres] NLA

. The balance of the site shall be subdivided off from the shopping centre site for mixed businesses and service commercial uses.

Any further development of the centre and adjoining mixed business uses shall be subject to an approved revised structure plan. (emphasis added)

111 Plainly, as Mr Allerding observed, the proposal is inconsistent with these specific points and measures. The maximum size of retail contemplated for the site is 20,000 square metres if the Council is satisfied of certain matters. The Centres Strategy expressly rejects an even less ambitious precursor to the proposed structure plan.

112 Although the Centres Strategy contemplates that it will be reviewed after 2006, and although the review is currently under way, as noted earlier, the author of the review advised the Council that he does not support the proposed structure plan on the basis of the key principles and recommendations in his discussion paper.

113 It follows that the proposed structure plan is inconsistent with DPS 2 and the Centres Strategy.

Is the economic impact assessment flawed?

114 Clause 1.1.3 of Appendix 3 of SPP 4.2 requires that a centre plan should provide an assessment of the impact of the development on other centres. The structure plan contains an economic impact assessment prepared by Mr Shrapnel. Mr Shrapnel conceded that his impact assessment uses both planning land use category 5 shop/retail (PLUC 5) and planning land use category 6 other retail (PLUC 6) data for inputs for retail floorspace and household expenditure in each zone assessed. Mr Shrapnel conceded that, if assessment of economic impact under SPP 4.2 is restricted to PLUC 5 inputs, then his retail analysis cannot be relied on.

115 Mr Hotchkin submitted that a retail analysis under SPP 4.2 is not restricted to PLUC 5 inputs and that, in order to measure the economy of a proposed centre and its impact, it is important to include PLUC 6 inputs because PLUC 6 goods are sold within retail centres. Mr Hotchkin noted in particular that cl 4.1.9 of SPP 4.2 contemplates the location of bulky goods retailing in regional and district centres. It is common ground that bulky goods retailing is PLUC 6 rather than PLUC 5.

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116 However, the expression 'shopping floorspace' is defined in cl 6 of SPP 4.2 to mean PLUC 5 shopping floorspace. This means that the 'shopping floorspace' of up to 15,000 square metres for a district centre referred to in cl 4.2.4, cl 5.4 and Appendix 1 of SPP 4.2 includes only PLUC 5 floorspace even though a centre may also include PLUC 6 floorspace.

117 Under cl 5.4, shopping development up to 15,000 square metres of PLUC 5 floorspace in a district centre is deemed to be acceptable and any proposal which exceeds 15,000 square metres PLUC 5 floorspace is required to be referred to the Commission for determination unless the proposal is consistent with a Local Planning Strategy or centre plan endorsed by the Commission. As a requirement for a referral to the Commission, a Local Planning Strategy or a centre plan only arises where a proposal exceeds 15,000 square metres PLUC 5 nett lettable area, and as a centre plan should provide an assessment of the impact of the development on other centres, it follows that the assessment of impact that is required by SPP 4.2 is an assessment of PLUC 5 shopping floorspace only.

118 Although it is correct that a shopping centre can contain PLUC 6 floorspace, SPP 4.2 does not limit that floorspace in centres within the retail hierarchy. It would therefore make little sense for economic impact analysis under SPP 4.2 to include PLUC 6 inputs. Indeed, including PLUC 6 inputs, at least without also providing a separate PLUC 5 analysis, would not enable an assessment to be made of the impact of the development on other centres in relation to the shopping floorspace that requires the proposal to be assessed in the first place.

119 It follows that Mr Shrapnel's analysis is flawed, because it does not conform to SPP 4.2.

120 The Tribunal indicated to the parties during the hearing, and the Commission properly agreed, that if this were the only issue warranting refusal of the proposal, then the Tribunal would allow Mr Shrapnel to undertake the analysis afresh in relation to PLUC 5 floorspace. However, because the proposal is materially inconsistent with the planning framework and as it is not appropriate to depart from the framework in the circumstances of this case, the proposal would warrant refusal, even assuming that the retail analysis would conform to SPP 4.2 and would not show any

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adverse effect on the economic viability of existing, approved and planned centres.

Should the proposal be approved in the exercise of planning discretion?

121 As determined earlier in these reasons, the proposal is materially inconsistent with the strategic and statutory planning framework. However, as Barker J held in Clive Elliott Jennings & Co Pty Ltd v Western Australian Planning Commission [2002] WASCA 276; (2002) 122 LGERA 433 at [24], a policy will be expected to guide the exercise of planning discretion, but may not replace discretion in the sense that it is to be inflexibly applied regardless of the merits of the particular case. Nevertheless, the relevant consideration in many applications will be why the policy should not be applied or 'why the planning principles that find expression in the "policy" are not relevant to the particular application'.

122 However, there is no cogent and adequate reason, in the circumstances of this case, as to why SPP 4.2 and Network City, in particular, should be departed from and the proposal approved. The main reasons put forward on behalf of Tah Land are that:

• there is currently a significant undersupply of retail floorspace in the City's local government area compared with the average for metropolitan Perth;

• there has been and will continue to be a significant increase in the number of residences in the vicinity of the site, particularly to the northeast;

• there is community demand as evidenced in surveys in 2003 and the support from shoppers to the Council in relation to the proposal; and

• Coles Supermarkets Australia Pty Ltd (Coles) expressed strong interest in locating a Coles supermarket and a Target discount departmental store to the proposed centre.

123 The Tribunal heard evidence from Mr Ross Cameron, the Western Australian real estate manager of Coles which, until September 2007, also owned Target. Mr Cameron said that there is no doubt that both a Coles fullline supermarket and a Target discount department store would be viable on the site. He said that these stores would provide a total of approximately 250 jobs on a fulltime, parttime and casual employment basis for the centre and that

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a Coles supermarket will provide an additional competitive advantage to the existing supermarket whilst Target will offer a range of goods and services that will complement the existing fashion stores at Kingsway.

124 The Tribunal does not consider that the policy provisions discussed in these reasons should be departed from in the circumstances of this case. The Tribunal has found that the proposal is likely to undermine the established and planned hierarchy of retail centres in SPP 4.2 which is a key component of that policy. In consequence the proposal is contrary to orderly and proper planning. While there may be a general undersupply of retail floorspace in the City's local government area, that undersupply should be addressed, as a matter of orderly and proper planning, through a review of SPP 4.2 and the Centres Strategy. It is inappropriate to change the established hierarchy by allowing a district centre to expand to the point of a regional centre to address the shortfall.

125 The increase in population does not warrant a departure from the policy provisions referred to. There is no evidence that the existing district centre would not be able to adequately cater for the incoming population. Furthermore, neighbourhood or local centres are planned to service new residential areas.

126 Finally, the willingness of Coles and Target to locate to the site and the local jobs that would be created do not warrant a departure from the policy provisions referred to. It would be contrary to orderly and proper planning to allow the strong retail hierarchy established by SPP 4.2 and the levels of activity centres contemplated by the Framework to be set aside for these commercial considerations.

Conclusion

127 The Tribunal has determined that the proposal is materially inconsistent with the strategic and statutory planning framework. In particular, the significant increase in retail nett lettable floor area to 32,000 square metres and the incorporation of a second discount department store is likely to undermine the established and planned hierarchy of metropolitan centres under SPP 4.2 because it would change the function of the retail centre at the site from a district centre to a regional centre. Furthermore, the proposal is inconsistent with Network City, because although the site is identified as an activity centre on or adjacent to two activity corridors, the Framework identifies the site as the lowest of five levels of activity centres and does not contemplate a retail component of the scale proposed. There is no cogent and adequate reason to depart from these policy provisions to the extent necessary to approve the application.

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128 Finally, the Tribunal notes that there may be scope for a considerably more limited retail expansion of the Kingsway Centre than is currently proposed, together with commercial and high density residential uses. An expansion of the centre to include principally a second supermarket and the main street retailing component with piazza shown on the structure plan, with total retail nett lettable floorspace on the site restricted to no more than 20,000 square metres, may be consistent with the planning framework particularly if there were confidence that mixed commercial/high density residential uses would also be carried out on the site. While not a 'traditional main street centre', consistently with the intent of cl 5.4 of SPP 4.2, Network City and the Centres Strategy, it may be suggested that the incorporation of a main street retailing component over the floorspace guide is reasonably contemplated because of the urban design and community benefits involved. As the Big W store occupies 44% of the current centre's retail nett lettable area, it may be suggested that, consistently with Ms Iverach's evidence that 12,000 square metres to 15,000 square metres is required to optimally satisfy the range of weekly shopping needs, greater supermarket floorspace is required to optimally provide for weekly shopping needs, particularly for a growing residential population. However, it would have to be demonstrated that any increase in floorspace would not adversely affect the economic viability of existing, approved and planned centres which could result in a deterioration in the level of service to the local community or undermine public investments in infrastructure or services. The Tribunal does not express any considered view in relation to the limited retail expansion and other uses referred to in this paragraph as such an option was not addressed in the proceedings.

129 It follows that the application for review should be dismissed and the decision of the respondent to refuse to adopt the structure plan should be affirmed.

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Orders

130 The Tribunal makes the following orders:

1. The application for review is dismissed.

2. The decision of the respondent to refuse to adopt the Kingsway City Activity Centre Structure Plan is affirmed.

I certify that this and the preceding [130] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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MR D R PARRY, SENIOR MEMBER

Tah Land Pty Ltd and Western Australian Planning Commission

[2008] WASAT 227

26 SEPTEMBER 2008

TAH LAND PTY LTD and WESTERN AUSTRALIAN PLANNING COMMISSION [2008] WASAT 227