Grace & Anor v Thomas Street Cafe Pty Ltd & Ors [2007] NSWCA 359 (12 December 2007)

Last Updated: 6 February 2008

NEW SOUTH WALES COURT OF APPEAL

CITATION: Grace & Anor v Thomas Street Café Pty Ltd & Ors [2007] NSWCA 359


FILE NUMBER(S):
40627/06

HEARING DATE(S): 10 September 2007

JUDGMENT DATE: 12 December 2007

PARTIES:
Peter Grace & Angela Pearman (Appellant)
Thomas Street Cafe Pty Ltd (First Respondent)
Catherine Patricia Kortt (Second Respondent)
Primary Court Pty Limited (Third Respondent)
North Sydney Council (Fourth Respondent)

JUDGMENT OF: Spigelman CJ Beazley JA McClellan CJ at CL

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S): LEC 41204/05

LOWER COURT JUDICIAL OFFICER: Lloyd J

LOWER COURT DATE OF DECISION: 4 October 2006

LOWER COURT MEDIUM NEUTRAL CITATION:
Grace & Anor v Thomas Street Café Pty Limited & (3) Ors [2006] NSWLEC 547

COUNSEL:
CW McEwen SC; SA Duggan; M Staunton (Appellant)
J Doyle (First to Third Respondents)
B Walker SC; PW Larkin (Fourth Respondent)

SOLICITORS:
Staunton Beattie (Appellant)
Thompson Playford (First to Third Respondents)
Maddocks (Fourth Respondent)

CATCHWORDS:
ENVIRONMENT AND PLANNING – existing use rights – characterisation – liberal approach to be adopted – land to be described only at level of generality necessary and sufficient to cover individual activities – characterisation not to be so general that it embraces activities or transactions which differ in kind – existing use can evolve over time – town planning purposes to be emphasised when characterising existing use – whether trial judge erred in characterising existing use at relevant date
ENVIRONMENT AND PLANNING – refreshment room prohibited under local planning instrument – change of use permitted under incorporated provisions of Environmental Planning and Assessment Regulations 2000 – development application lodged with local council to install awning for use as a café – premises contained no existing use rights – whether trial judge erred in finding development application effected a change of use
ENVIRONMENT AND PLANNING – development consent – Environmental Planning and Assessment 1979 s 81A - development consent did not make permissible use of land otherwise prohibited under relevant planning instrument
ENVIRONMENT AND PLANNING – privative clause – Environmental Planning and Assessment Act 1979 s 101 – validity of development consent cannot be challenged after three months from date of public notice – proceedings brought out of time – s 101 applies to a challenge to a grant of consent not to construction of consent

LEGISLATION CITED:
Environmental Planning and Assessment Act 1979 ss 76B, 79C, 80, 81A, 96, 101, 104A, 106, 107, 108, Pt 4 Div 10
Environmental Planning and Assessment Model Provisions 1980
Environmental Planning and Assessment Regulation 1994
Environmental Planning and Assessment Regulation 2000 cls 43, 124, Pt 5
Land and Environment Court Act 1979 s 58(1)
North Sydney Local Environmental Plan 2001
North Sydney Planning Scheme Ordinance
Supreme Court Act 1970 s 75A

CASES CITED:
Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404
Bonus Pty Limited v Leichhardt Municipal Council (1954) 19 LGR (NSW) 375
Dorrestijn v South Australian Planning Commission [1984] HCA 76; (1984) 59 ALJR 105
Epivision Pty Ltd v Blacktown City Council (Commissioner Brown, LECNSW, 5 May 1999, unreported)
Foodbarn Pty Limited & Ors v Solicitor-General (1975) 32 LGRA 157
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Gameplan Sports and Leisure Pty Ltd v South Sydney City Council (NSWLEC, Pearlman J, 4 October 1996, unreported)
Grace & Anor v Thomas Street Café Pty Limited & (3) Ors [2006] NSWLEC 547
North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited & Ors (1989) 16 NSWLR 50
Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305
Shire of Perth v O’Keefe & Anor [1964] HCA 37; (1964) 110 CLR 529
The Turnbull Group v North Sydney Council (1998) 101 LGERA 354
Woollahra Municipal Council v Banool Developments Pty Limited [1973] HCA 65; (1973) 129 CLR 138

DECISION:
1. The appeal be allowed;
2. The matter is remitted to the Land and Environment Court for determination of the orders that should be made on the appellants’ application;
3. The respondents are to pay the appellants’ costs.


JUDGMENT:

- 49 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40627/06

SPIGELMAN CJ

BEAZLEY JA

McCLELLAN CJ at CL

12 December 2007

Peter Grace & Anor v Thomas Street Café Pty Ltd & Ors

Headnote

The first respondent operates a café in the local government area of North Sydney Council. The café operates both on the ground floor of the premises as well as within an adjoining courtyard. Prior to 19 April 1963, the land upon which the café is located was zoned light industrial. However, on this date the North Sydney Planning Scheme Ordinance came into force with the result that the premises were zoned residential with shops and refreshment rooms prohibited. Pt 4 Div 10 of the Environmental Planning and Assessment Act 1979 provides that the use of the premises at the time the Ordinance came into force was not affected.

On 27 September 1999, North Sydney Council granted consent to a development application to install an awning in the courtyard area for outside café seating. On 30 April 2001, a modification to the application was made and subsequently granted on 13 July 2001. On 30 August 2001 North Sydney Council published a public notice for the purposes of s 101 of the Environmental Planning and Assessment Act which section provides that the validity of a consent cannot be challenged after three months from the date of the publication of the public notice. Proceedings were not commenced until 2005.

The appellants brought proceedings in the Land and Environment Court against the first, second and third respondents (the respondents) alleging that the use of the premises as a café was unlawful as there were no existing use rights. The trial judge dismissed the application. His Honour found that the existing use of the premises as at 19 April 1963 was as a refreshment room, or alternatively that there had been in fact two uses, one of these being a milk bar, which was sufficient to support the existing use rights. In addition, the trial judge found that if the existing use was correctly described, not as a refreshment room, but as a take-away food shop, then the development consent granted by North Sydney Council amounted to a consent to a change of use in the form of a café or refreshment room.

The appellants appealed against his Honour’s decision. By way of separate Notices of Contention, the respondents and North Sydney Council contend that the appellants are not entitled to question the validity of North Sydney Council’s development consent as they did not do so within three months of the publication of the notice of the grant of consent.

Held per BEAZLEY JA (SPIGELMAN CJ and McCLELLAN CJ at CL agreeing):

Characterisation of the use

(1) When characterising an existing use, a liberal approach should be adopted with the purpose of the land described only at that level of generality which is necessary and sufficient to cover the individual activities and transactions at the relevant date. However, it is not to be so general that the characterisation can embrace activities or transactions which differ in kind from the use which the activities as a class have made of the land: [58]-[59]

Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 (applied)

(2) An existing use can naturally evolve over a period of time and changes in the method of operation of a particular category of use will not deny existing use rights: [61], [144]

Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 (applied)

(3) The town planning purposes behind the legislative provisions are to be emphasised when characterising an existing use: [66], [69]

Woollahra Municipal Council v Banool Developments Pty Limited [1973] HCA 65; (1973) 129 CLR 138; North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited & Ors (1989) 16 NSWLR 50 (referred to)

(4) From a town planning perspective, a milk bar with takeaway food is a different use from a café. There was a change in use and his Honour erred in classifying the use as a refreshment room as at 19 April 1963. Therefore, the premises do not have existing use rights as a café/restaurant/refreshment room: [86]-[92], [148]

North Sydney Council consent

(1) A development consent granted pursuant to s 81A of the Environmental Planning and Assessment Act 1979 does not make permissible a use of land which is otherwise prohibited under a relevant planning instrument: [115]-[117], [151]

Gameplan Sports and Leisure Pty Ltd v South Sydney City Council (NSWLEC, Pearlman J, 4 October 1996, unreported) (approved)

(2) As there were no existing use rights, North Sydney Council’s development consent could not operate to effect a change of use: [123]

(3) The development application was for the erection of an awning in the courtyard. Even if it did have the effect of permitting the use of the courtyard as a café, it did not act as a consent to the use of the building proper as a café: [126], [153]

Section 101

(1) As there was no existing use and the development consent was not a consent to a change of use, s 101 of the Environmental Planning and Assessment Act 1979 does not apply. Section 101 relates to a challenge to the grant of consent, not to the construction of the consent that has been granted: [135]-[136]

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40627/06

SPIGELMAN CJ

BEAZLEY JA

McCLELLAN CJ at CL

12 December 2007

Peter Grace & Anor v Thomas Street Café Pty Ltd & Ors

Judgment

1 SPIGELMAN CJ: I agree with the judgments of Beazley JA and McClellan CJ at CL.

2 BEAZLEY JA:

Introduction

3 This is an appeal from a decision of Lloyd J dismissing a Class 4 application brought by the appellants in which they had sought to restrain the first, second and third respondents from using premises known as the “Thomas Street Café”, for the purposes of a refreshment room contrary to the provisions of the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act): Grace & Anor v Thomas Street Café Pty Limited & (3) Ors [2006] NSWLEC 547. The appeal is as of right on questions of both fact and law: the Land and Environment Court Act 1979 (NSW) (the LEC Act), s 58(1). North Sydney Council is the fourth respondent to the appeal.

4 The first respondent, Thomas Street Café Pty Ltd, operates a café at 2 Thomas Street, McMahon’s Point, which is in the local government area of North Sydney Council. The café operates both on the ground floor of the premises as well as within an adjoining courtyard. It is located in a residential precinct and is zoned for residential purposes pursuant to the North Sydney Local Environmental Plan 2001 (North Sydney LEP 2001). The use as a café in this precinct is unlawful unless it can be established that there are existing use rights for use as a café, or alternatively, consent was granted to use the premises as a café pursuant to a development consent determined on 27 September 1999 in respect of Development Application 939/99 (DA 939/99), lodged by prior owners of the business. The onus of establishing existing use was upon the respondents.

5 The trial judge held, at [52], that

“... immediately before 19 April 1963, and at all relevant times thereafter, the major component of the business being conducted upon the premises was that of a milk bar, which included the sale of sandwiches and other forms of prepared food and that later developed into a take-away food business and café”.

His Honour concluded at [55], that the use of the premises in 1963 was as a refreshment room, that being a phrase well understood in local government terms, and that continued to be the use at the present time. His Honour held, at [58], that that use had not been abandoned, notwithstanding that there had been periods when no business operated from the premises.

6 His Honour also considered that there may have been in fact two uses of the premises, one a corner store and the other a milk bar or café. The fact that the latter may have been an ancillary use did not deprive that use of having the status of an independent use that was sufficient to support the existing use rights: see Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404. However, his Honour’s determination rested on there being a single use as a refreshment room.

7 His Honour found, alternatively that if the existing use was correctly described, not as a refreshment room, but as a take-away food shop, then the development consent granted to DA 939/99 amounted to a consent to a change of use to a café or refreshment room.

8 The appellants contend that the evidence did not establish that the premises were used as a refreshment room as at 19 April 1963. They also challenge the finding of dual uses. The appellants further contend that his Honour erred in his alternative finding that the use of the premises as a café was authorised by the consent to DA 939/99 (I will refer to the consent as DC 939/99), because there was no application before North Sydney Council for a change of use, as was required by the EPA Act and the Environmental Planning and Assessment Regulation 1994 (NSW) (the EPA Regulation 1994).

9 The first, second and third respondents’ (to whom I shall refer as the respondents) primary contention was that provided that the milk bar use existed as an independent use in 1963, as found by the trial judge, that use could be continued and expanded without consent up until the amendment to s 107 of the EPA Act which commenced on 3 February 1986. Alternatively, they submitted that there was consent to a change of use granted by DC 939/99. The fourth respondent, North Sydney Council supported their submissions.

10 Further, by Notice of Contention, the respondents and North Sydney Council, in separate Notices of Contention, contend that the appellants are not entitled to question the validity of DC 939/99, as they did not do so within three months of the publication of a notice of the grant of consent: see s 101 of the EPA Act and cl 124 of the Environmental Planning and Assessment Regulation 2000 (NSW) (the EPA Regulation 2000). The respondents also contend that the Court would not, in its discretion, make the orders sought by the appellants as the premises have been conducted by them in the honest belief that their use was lawful and with the knowledge of the appellants for 12 years and of North Sydney Council for decades.

11 The appellants object to the respondents placing any reliance upon the time limits specified in s 101, as they contend that that point was not raised at trial.

The statutory scheme

12 As there are distinct statutory and regulatory provisions relating to the issues raised on the appeal, the relevant provisions will be considered at the time of considering each of the issues. It will also be convenient to consider the factual matters as they relate to each of the issues. However, as the issues on the appeal focus on three distinct points of time, it is useful to introduce, in general terms, those periods and the legislation and planning ordinances relevant to the issues so raised. There is a final period relevant to the use of the premises from 2001 to which regard also needs to be had.

13 The entitlement to lawfully use premises as an existing use is governed by the provisions of Pt 4, Div 10 of the EPA Act. Section 107(1) provides that, except where expressly provided by the EPA Act, “nothing in this Act or an environmental planning instrument prevents the continuance of an existing use.” (There are no exceptions relevant to the matter before the Court).

14 The definition of “existing use” is contained in s 106. That section relevantly provides:

“106 Definition of ‘existing use’

In this Division, existing use means:

(a) the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would ... have the effect of prohibiting that use ...”

15 The first relevant date is 19 April 1963. The respondents contend that they had existing use rights as a café because as at that date, the premises were used as a refreshment room or as a milk bar/takeaway food outlet. Accordingly, they claim that the present use of the premises is lawful: EPA Act Pt 4 Div 10 (“Existing uses”).

16 The second relevant period commences on 3 February 1986. This period also involves a consideration of the existing use provisions of Pt 4 Div 10 of the EPA Act and Pt 5 of the EPA Regulation 1994. On 3 February 1986, s 107(2) of the EPA Act was amended to insert a new para (b1). The new subsection provided that enlargement, expansion, or intensification of an existing use was not authorised without consent.

17 It is relevant to note at this stage that on 1 July 1998, the Environment Planning and Assessment Amendment Act 1997 (NSW) came into force, inserting, relevantly, a new Pt 4 into the EPA Act. The existing use provisions retained both their section numbering and content. However, the previous s 104A, which prescribed a time period in which to bring any challenge to the validity of a consent, became s 101. This is relevant to the Notice of Contention.

18 The third relevant date is 27 September 1999, when North Sydney Council granted development consent to DA 939/99. In that Application, the then owner had sought development consent for the creation of an awning over the outdoor seating of the café. The provisions of s 81A of the EPA Act are relevant to this period. That section provides that if development consent is granted to the erection of a building, that consent is sufficient to authorise use of the building for the purpose for which it was erected.

19 It is also relevant to note that on 1 January 2001 the EPA Regulation 2000 came into force, replacing the EPA Regulation 1994.

20 13 July 2001 is also relevant to this third period as North Sydney Council consented to the modification of DA 939/99, pursuant to a modification application lodged under s 96 of the EPA Act, on 30 April 2001. The terms of “the incorporated provisions” made under Pt 5 of the EPA Regulation 2000 are relevant at this point.

21 I would add that the use of the premises, and the period of action and lack of action of the appellants in the period after 1999, is also relevant.

Existing use: the factual background

22 Prior to 19 April 1963, the land upon which the Thomas Street Café is located was zoned “light industrial, shops permissible with consent” pursuant to the Cumberland Planning Scheme Ordinance, which came into effect on 27 June 1951. On 19 April 1963, the North Sydney Planning Scheme Ordinance was introduced and the premises were zoned “2(c) Residential special redevelopment – shops and refreshment rooms prohibited”. Subsequent planning instruments maintained the residential zoning and prohibited shops and refreshment rooms.

23 The first question that arises for consideration on the appeal is the characterisation of the use of the premises as at 19 April 1963.

24 The evidence as to the use of the premises prior to 19 April 1963 came principally from Mr Brian Bury and Mr Warren Bury.

25 Brian Bury and Warren Bury lived from 1943, in Victoria Street, McMahon’s Point. Brian Bury was approximately six years old when the family moved to the home in Victoria Street and lived there until 1954 and then from 1957 until 1963. He recalled the premises at 2 Thomas Street and said that, when he was a child and then a teenager, it served as what could be described as a local milk bar. He described it as a place that “all of the local residents and local industry patronised for small items such as bread, milk, refreshments and sandwiches”. He said that children visited regularly for ice cream and milkshakes.

26 Brian Bury described the physical layout of the premises as having a counter and shelves on the walls where goods for sale were stored. He also remembered that there was a seat on which some of the patrons would sit. He recalled a backyard used as a storage area for goods and bottles. He also said that the shop made and sold sandwiches that were either ordered at the counter or pre-ordered. In particular, he recalls that the shop provided daily lunches to workers from the boat building yards and industrial businesses on the nearby waterfront. He said that he recalled someone coming up from the boat yards to collect the sandwiches each day.

27 He also said that the shop was an important meeting point for the local community and that particularly after the war, the proprietors of the shop were known for providing local residents with their daily small goods and food purchases on credit.

28 Warren Bury was one year old when the family moved to Victoria Street. He says that he remembers the premises at 2 Thomas Street well, as it was the local milk bar and a corner shop. He remembered that take-away lunches could be purchased and that it supplied lunches to a number of surrounding businesses. He remembered lunches being collected by someone from the local boatyards.

29 There was no other direct evidence as to the use of the premises prior to 1963. The only other direct evidence that has any contemporaneity was that of Carmel LaMaro, who owned the property from around 1965 until 1984 and with her husband conducted a business from the premises. She said when she purchased the property it was a grocery store that also had a milk bar component.

30 Carmel LaMaro recalled that there was an “Arnott’s” chair for customers to sit on. It is possible, although not completely certain from the evidence, that this was the seat to which Brian Bury referred. She could not recall whether the previous owners sold take-away food. She said that as soon as she bought the business, she worked on developing a take-away food business which soon grew to comprise about three-quarters of the takings. The take-away food included sandwiches and pies, sausage rolls and pasties. She also said that she sold toasted sandwiches and ham and egg sandwiches at breakfast time.

31 Carmel LaMaro obtained annual take-away food licences from North Sydney Council. She also delivered food to a number of industrial and other businesses in the area. She said there were still grocery sales from the premises and that the shelves were stocked with household goods. She said that that side of the business, however, was essentially “nickel and dimes business” compared to the take-away food profits.

32 Evidence was given by Professor Richard Mackay AM, a Heritage Consultant. Professor Mackay researched the history of the use of the property for the period up until 1990. The sources of his research included the North Sydney Building Register and associated plans, the North Sydney Building and Development Application Register, the North Sydney Rate and Assessment Books, the North Sydney Heritage Centre collection, records of the Mitchell and State Libraries and land title records held by the Department of Lands.

33 Professor Mackay’s research revealed the following history.

34 The first record of the premises being used as a shop was in the North Sydney Rate and Valuation Books for the period 1939-1942. Prior to that, the property was recorded as being used as a workshop, and in particular as a builder's workshop. In 1941, the premises were recorded in “Wise’s New South Wales Post Office Commercial Directory” as a “mixed business”. “Mixed business” was defined in that Directory to mean “grocery, dairy produce, confectionery, pastry etc”. That remained the listing for the premises until 1950, when Wise’s ceased publication, except for the period 1943-1946, when there was no listing of the premises.

35 The premises were owned by Vasilious Eustace Syrmiss from 1952 until 12 November 1965, when they were transferred to Carmel LaMaro.

36 The premises were listed as a shop in the North Sydney rate records for 1956. Professor Mackay reports that there was no other record held by North Sydney Council for the period up until 1965, although he noted that the transfer of the property to Carmel LaMaro in 1965 is recorded. The only relevant material on that transfer was that she was recorded as being the wife of Egidio Luigie LaMaro, 2 Thomas Street North Sydney, “shopkeeper”.

37 The North Sydney Council rate records for 1966 specify that the property was a shop.

38 Evidence was also given by Josef Liebhardt, who owned the premises between 1984 and 1996. Josef Liebhardt’s evidence was considered relevant to the question of existing use, because he had been involved in the food industry since 1955 and for over a 40 year period had been involved in the management and operation of approximately seven café and milk bar-styled premises, in addition to the premises at 2 Thomas Street. He said that informal eating styles had changed over this 40 year period and that it was his experience that from the 1950s, milk bars and cafés grew in popularity, as did alfresco dining. He said that in the 1970s, the local take-away had become increasingly a place where prepared meals could be purchased and taken to work or taken home as a family meal in the evening. He also said that when he took over the premises in 1984, there were tables and chairs both inside and outside the building and approximately 20 patrons were seated each day to have a meal at the premises.

39 At the time that he purchased the premises, Josef Liebhardt made enquiries of North Sydney Council as to whether the premises either had consent or existing use rights for use as a sandwich shop. North Sydney Council advised him that whilst its records did not show any consent to the use, it had, in the previous four years, issued a small-goods and take-away licence for the premises and that the building had originally been erected as a shop. On 20 March 1984, a Committee of Council resolved that there was no objection to the continued use of the premises for the purposes of a small goods and take-away food shop.

40 In 1985, North Sydney Council granted consent to the construction of a residence above the existing shop. In the Development Application, the use of the shop was described as “takeaway food business”.

41 There was evidence in the form of a DVD taken in 1985 which showed that the use of the premises at that time was as a café. The evidence also established that by then the premises were frequented by people who worked in the surrounding areas and came to the café to purchase lunches, either as takeaway food, or on the premises.

Findings of the trial judge on existing use

42 The trial judge, at [29], found that the evidence of Warren Bury was that the premises had two distinct uses, namely: “the local milk bar and corner shop”, as well as having a takeaway component, in the sense that lunches could be purchased and were supplied to a number of surrounding businesses. His Honour found that this takeaway component was a substantial part of the business and could not be described as ancillary. His Honour considered that

“... it would appear rather that the milk bar/takeaway food use was the more substantial objective of the business.”

43 The trial judge, at [30], summarised the effect of the evidence of Brian Bury as being that there were two substantial and distinct uses of the premises, one for groceries and the other as a milk bar/take-away food business. His Honour found that Brian Bury’s evidence made it clear that the latter use was the more substantial or principal objective of the business.

44 His Honour then found, at [31], after a consideration of the evidence of Carmel LaMaro, that the prepared food side of the business grew to be not merely a substantial use, but the most significant use, with the sale of groceries being an ancillary use.

45 His Honour, at [36], considered that the evidence of Professor Mackay supported this conclusion.

46 There was a “gap” in the evidence as to use between 1963 and 1965. However, his Honour considered that the operations described by Brian Bury and Warren Bury and by Carmel LaMaro were very similar and as Vasilious Syrmiss had owned the property during most of the period described by the Bury Brothers until it was purchased by Carmel LaMaro it could be assumed that the operations during the period 1963 to 1965 were the same as those described by the Bury brothers and Carmel LaMaro.

47 His Honour noted, at [38], that as at the time of Josef Liebhardt’s purchase in 1984, so far as North Sydney Council was concerned, the premises had existing use rights for two purposes, being smallgoods and take-away food. It should be said, however, that the Council’s opinion has no legal status.

The trial judge’s finding as to use as at 19 April 1963

48 His Honour found, at [52], that:

“... immediately before 19 April 1963 and at all relevant times thereafter, the major component of the business was that of a milk bar which included the sale of sandwiches and other forms of prepared food.”

49 His Honour then found that the business “later developed into a take-away food business and a café” (emphasis added). He said that the evidence showed that “the sale of groceries was generally a minor part or ancillary use, which was provided mainly for the benefit of local residents”.

50 His Honour also held, at [53], that the evidence established that “the take-away food component remained a significant part of the business even after it evolved into a café or refreshment room”. His Honour based this finding on the evidence of various witnesses, the detail of which is not presently relevant, and the depiction of the use of the premises in a DVD taken during 1985, which showed, on his Honour’s description, “a thriving take away food business in addition to the café/refreshment room side of the business.”

51 His Honour considered, at [55], that the change in emphasis from a milk bar to a café was a natural change in the method of carrying on a business as explained in Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305, so that the existing use rights was not lost. His Honour characterised that use as a “refreshment room”, a phrase that his Honour stated was well understood in local government.

52 His Honour held, at [57], that the natural change in the method of carrying on the business which occurred in this case did not render the existing use rights valueless. It remained and continued to be a refreshment room, involving the sale of prepared food to the public, and that use was protected by the existing use provisions of the EPA Act: Pt 4 Div 10.

53 His Honour also found that the expansion into the courtyard had occurred by 1985 and that expansion was also protected, as the amendment to s 107 by the insertion of s 107(2)(b1) that prohibited enlargement, expansion, or intensification of an existing use did not commence until 3 February 1986: see s 107(2) of the EPA Act.

54 His Honour also considered that, if he was wrong in finding that there was a single use, namely as a refreshment room, then there were two uses: one as a corner store and the other as a milk bar or café. He observed that even if the latter use was ancillary, it was nonetheless an independent use and that was sufficient to establish an existing use right: see Baulkham Hills Shire Council v O'Donnell.

Did his Honour err in the classification of the use as at 19 April 1963?

55 The appellants contend that his Honour erred in his classification of the use of the premises as at 19 April 1963 as a refreshment room or café. They contend it was a corner shop that as a concomitant part of its business sold sandwiches and milkshakes. In particular, they referred to a photograph taken in 1977 (there being no evidence of alterations to the premises between 1963 and 1977), which showed the premises as being a single storey brick structure with a number of advertising signs on it, including: “SANDWICHES ... Buttercup Bread”; “FAMILY FOOD STORE Free DELIVERY”; “WE SELL Streets ICE CREAM”; and “We Serve Dairy Farmers’ ICE CREAM”. To the extent that this advertisement referred to the sale of immediately consumable foods, their argument, as I understand it, is that that was simply part and parcel of the corner shop business which sold groceries.

56 The appellants contend that it is fundamental for the purposes of a use as a refreshment room that food be consumed on the premises and that there be tables and chairs for that purpose. It was submitted that the evidence of there being a seat, which, most likely was the “Arnott’s” chair, to which Brian Bury referred, was of a very different order to tables and chairs being available to seat customers for the purposes of having a meal or taking refreshments as would be the position if the premises were used as a “refreshment room”. They point out that the town planning considerations relating to the two different type of considerations are markedly different. The appellants do not dispute, however, that as at 1985, the premises were used as a café. Their argument is that that was not its use in 1963, and that its conversion to use as a café was the conversion to an unlawful use.

The law

57 The proper test for characterising the purpose of an existing use was stated by McHugh JA (as his Honour then was) in Royal Agricultural Society of New South Wales v Sydney City Council. As his Honour explained, the purpose of existing use provisions in town planning legislation was to permit the continuation of a use which, by virtue of later regulation, had become prohibited either in whole or in part. The existing use provisions recognised not only the unfairness of depriving an owner of the use of land for an existing purpose, but also the rights and obligations of the local authority to enforce its own town planning legislation.

58 To that end, his Honour noted that the courts had refused to characterise an existing use “so narrowly that natural changes in the method of using the land or carrying on a business or industry will render an existing use right valueless”: see Royal Agricultural Society of New South Wales v Sydney City Council at 310. Likewise, the courts had been concerned not to construe the purpose so widely that the premises could be used for a prohibited purpose that was not part of the use as at the time of the commencement of the legislation.

59 His Honour then continued at 310:

“Accordingly, a test has been devised which requires the purpose of the land to be described only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on at the relevant date. Thus the test is not so narrow that it requires characterisation of purpose in terms of the detailed activities, transactions or processes which have taken place. But it is not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities etc, as a class have made of the land.”

60 After considering the decisions of Bonus Pty Limited v Leichhardt Municipal Council (1954) 19 LGR (NSW) 375, Shire of Perth v O’Keefe & Anor [1964] HCA 37; (1964) 110 CLR 529; and Woollahra Municipal Council v Banool Developments Pty Limited [1973] HCA 65; (1973) 129 CLR 138 (which are considered below), McHugh JA observed, at 311, that those cases were concerned with the activities of a particular business industry or activities of a common kind. However, his Honour could see no reason why the principles applied in those cases were not also applicable where land was used for activities, or transactions of widely differing kinds, if such activities could be treated as a species of a genus, in which case, the purpose of the genus could properly be regarded as describing the purpose of the use of the land. However, where there was no genus, then the only conclusion to be drawn was that land had been used for more than one purpose. In that case, each purpose had to be characterised in accordance with the principles stated earlier by his Honour.

61 It has long been recognised that a use can naturally evolve over a period and changes in the method of operation of a particular category of use will not deny existing use rights. The task is always to categorise the purpose for which the premises have been put. In Shire of Perth v O’Keefe, the question arose whether premises used for pottery making might continue to be lawfully used after the commencement of by-laws that changed the zoning of the area to residential. Under the new by-laws, pottery making was classified as “light industry” and both pottery making and light industry were prohibited in a residential zone. However, existing use provisions applied.

62 At first instance the court held that the relevant “existing use” was for the “purpose of light industry” as defined in the by-laws. There was no doubt that pottery making fell within the category of light industry. The question was whether the “purpose” for which the land was being used needed to be defined more narrowly for the purpose of the existing use provisions. Kitto J (with whom Owen J agreed), considered that there was a distinction between the use for the purpose of pottery making and use for some other form of light industry, although a change in the method of pottery making would not have been sufficient to destroy the existing use. His Honour, at 534, drew attention to the relevance of town planning considerations in the description in the by-laws of the purpose for which premises could be used.

63 At 535, Kitto J noted that in determining whether a “use” was protected by existing use provisions, two steps needed to be kept distinct:

"[First] ... a purpose [had to] be identified as the end for which it can be seen that the premises are being used as at the date of gazettal of [the new planning provisions]. Then the provision is made that the land may continue to be used for that purpose: not that the precise manner of use for that purpose may alone continue but that use generally for that purpose may continue.”

The question, therefore, as his Honour posed it, was:

“... 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 authorised [by the new planning regulations] whether that use is really and substantially a use for the designated purpose.”

64 Kitto J pointed out that this was often a question of fact and that borderline cases would inevitably arise. His Honour said it was not useful to state the principle more particularly than set out above. Rather, he proceeded by looking at a number of examples. Thus, if premises were being used as professional offices, his Honour considered that no greater degree of particularity was required in defining the purpose. His Honour thought that the position in relation to a “shop” was not as straightforward. Use for the purpose of a butcher’s shop was likely to be considered as a use for that particular purpose. It was not so clear, however, in the case of a general store, where there might be a wide variation in the type of stock carried and the methods of merchandising before it could be said that the premises were not being used for the same purpose as previously.

65 Menzies J agreed substantially with Kitto J. He stated that although pottery making fell within the description of light industry, it did not follow, either in logic or in town planning, that use for one purpose which falls into the category of light industry was to be regarded as use for any purpose that fell into that category. His Honour observed at 537 that when it was necessary to determine whether premises had existing use rights, it was necessary to look for a particular purpose such as “an office or a shop” and not for some general purpose such as “industry or light industry”. His Honour added that, whilst substantially agreeing with Kitto J, he preferred to express no view as to whether any greater particularity than “shop” was required.

66 In Woollahra Municipal Council v Banool Developments Pty Limited, Mason J (with whom the other members of the Court agreed), accepted as correct the approach of Kitto J to the determination of the question, whether a use was protected by existing use provisions. In particular, Mason J refuted an argument that no more particular description than, for example, “neighbourhood shops” was required because for town planning purposes no finer detail would be relevant. His Honour said at 146:

“I should have thought that the particular purpose for which a shop is used, e.g. whether it sells food, has a relevance for town planning purposes.”

67 His Honour also considered that there was “an air of unreality” in describing the purpose of the use of the particular premises as a “neighbourhood or village retail shop”.

68 In Dorrestijn v South Australian Planning Commission [1984] HCA 76; (1984) 59 ALJR 105, Mason ACJ, Deane and Dawson JJ observed at 108 that the existing use provision under consideration in that case was designed to protect continuing use in the broad sense and that to give a broad interpretation to it conformed with the principle that statutory provisions designed to preserve rights were to be construed as liberally as the language of the statute permitted. See also North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited & Ors (1989) 16 NSWLR 50 especially at 59, where Kirby P (as his Honour then was) stressed that a broad approach is to be taken to the categorisation of a use for existing use purposes.

69 In North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited & Ors, Kirby P emphasised at 59 the town planning purpose for which a use is to be categorised, for the purposes of determining whether a use has protection as an existing use. As his Honour stated, the use has to be considered:

“... from the perspective of the impact of the use on the neighbourhood. This is because the regulation of the use within the neighbourhood is the general purpose for which planning law is provided.”

70 The question in North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited & Ors was whether the respondent’s warehouse had existing use rights. A question arose whether the description “warehouse” was too broad a classification of the purpose to which the premises were put, or whether it should be confined more narrowly, as a warehouse for electrical goods. The Court held that on the facts in that case, the description or classification of “warehouse” was appropriate. To confine it more narrowly would have paid insufficient regard to the evidence of warehousing of other goods. It had been argued that to merely classify it as a “warehouse” would have permitted the storage of noxious goods, meat, liquor, or motor vehicles. Kirby P, at 62, rejected that as being a problem that should affect the classification on the basis that the use of the premises established by the evidence would not extend to cover use of such a kind. Samuels and Priestley JJA accepted this approach on the facts of the appeal.

Characterisation of the use

71 The characterisation of the use of the premises has thus to be determined in accordance with these principles, the relevant date for the characterisation being 19 April 1963, when the North Sydney Planning Scheme Ordinance came into effect.

72 The trial judge found, at [52], that the evidence demonstrated that “immediately before 19 April 1963 and at all relevant times thereafter, the major component of the business was of a milk bar, which included the sale of sandwiches and other forms of prepared food, and which later developed into a take-away food business and café”. His Honour found that the evidence showed that the sale of groceries was generally a minor or ancillary part of the business that was provided mainly for the benefit of local residents. His Honour further considered, at [55], that “the change in emphasis from a milk bar to a café seemed to be a natural change in the method of carrying on a business consistently with the principles explained by McHugh JA in the Royal Agricultural Society case”. His Honour considered that this change was consistent with the evidence of Josef Liebhardt. In particular, his Honour found that the change in use did not mean that it was a different use or that the use had been abandoned, citing North Sydney Municipal Council v Boyts Radio & Electrical Pty Limited & Ors per Kirby P and Shire of Perth v O’Keefe per Kitto J.

73 The appellants contend that the evidence did not support his Honour’s finding that the dominant use of the premises was as a take-away food business. They also submit that the evidence did not support his Honour’s finding that the use of the premises was as a refreshment room. They contend that, even in the 1960s, there was a clear distinction between concepts such as refreshment room, restaurant, café and eating house and a shop. In this regard, reference was made to a number of definitions to be found in local government legislation. Thus; in Local Government Ordinance 69 of 1983, “refreshment room”, was defined in cl 3 to mean “restaurant, café, tea room, eating house or the like”. (The same definition is contained in the Environmental Planning and Assessment Model Provisions 1980 (NSW)). In the County of Cumberland Planning Scheme Ordinance, “shop” was defined to mean “any building or place or portion of a building used or designed for the purpose of exposing or offering goods for sale by retail”, but specifically excluded “refreshment room” from the definition. Counsel acknowledged that statutory definitions were not determinative of the characterisation in a given case.

74 The appellants accept that the evidence of Brian Bury and Warren Bury was that the shop had two uses, namely, as a local milk bar and a corner shop. They submitted, however, that it was insufficient for the purposes of classification of use to simply find that an activity was undertaken as part of, in this case a corner store, that is, the sale of take-away food such as sandwiches, milkshakes and ice creams. They emphasised that there was no evidence that hot food was sold from the premises at any time prior to 19 April 1963, and that the sale of take-away sandwiches and the like was merely an attribute of a corner store or mixed business and it did not, of itself, become a separate use.

75 The appellants point out that it is likely that childhood memories such as those recounted by Brian Bury and Warren Bury would focus upon milk shakes and ice cream, rather than necessary food commodities available from a corner store. It was submitted that when consideration was given to the layout of the premises and the evidence of its use, these premises functioned as a corner shop. Likewise, it was submitted that the evidence of the Bury’s did not support any finding of a dominant use as found by his Honour.

76 The respondents contend that it was sufficient for the purposes of establishing existing use that there had been a take-away food shop in operation at the premises as at 19 April 1963. They submitted that it was irrelevant whether such a use was the dominant use or merely a use. It was sufficient that there was such a use. Accordingly, the respondents were content to rest their case on the alternate finding made by his Honour at [56], that there were two uses of the premises, one as some kind of corner shop or convenience store and the other as a milk bar or café: see Baulkham Hills Shire Council v O'Donnell.

77 His Honour’s analysis of the facts and his ultimate findings gave emphasis to the milk bar/takeaway food aspect being the principal objective of the business and that under the proprietorship of Carmel LaMaro, that became not merely a substantial use, but the most significant use of the premises. It is unclear why his Honour focussed his attention on the question of dominant use in this way, unless it was what led him to find that there had been an evolution in the use of the premises from milk bar to café or refreshment room (see judgment [52]-[53]), and that all that had happened was that there had been a change in emphasis from milk bar to café. It also seems to have been relevant to his Honour’s analysis that there had been a continuation of the takeaway food component of the business.

78 Usually it is not necessary to seek out or determine a dominant purpose. In Foodbarn Pty Limited & Ors v Solicitor-General (1975) 32 LGRA 157, Glass JA (Hutley and Samuels JJA agreeing) observed, at 160-161, that incidental purposes were to be disregarded for town planning purposes. However, premises may have dual uses. In that case, as his Honour observed at 161:

“Where the whole of the premises is used for two or more purposes none of which subserves the others, it is, in my opinion, irrelevant to inquire which of the multiple purposes is dominant. If any one purpose operating in a way which is independent and not merely incidental to other purposes is prohibited, it is immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged. The ordinance is nonetheless being disobeyed.”

79 In Baulkham Hills Shire Council v O’Donnell, Meagher JA (Samuels AP and Clarke JA agreeing), stated at 409-410 that:

“Notwithstanding the principles laid down in Foodbarn, it does not follow that a use which can be said to be ancillary to another use is thereby automatically precluded from being an independent use of the land. It is question of fact and degree in all the circumstances of the case whether such a result ensues or not. When a resident uses his land to park his motor car at his house, he is no doubt not conducting an independent use of car parking; when an employer installs at his factory a canteen for his workers, no doubt he is not conducting an independent use of running a restaurant; when the Clarks grew vegetables for their table they were not conducting an independent use of vegetable growing. But when one use of the land is by reason of its nature and extent capable of being an independent use it is not deprived of that quality because it is ‘ancillary to’, or related to, or interdependent with, another use. If a book publisher opens a sales room at his publishing house to sell his products, the selling of books is an independent use although ancillary to the use of publishing. The series of cases dealing with dual uses (of which the decision of this Court in Warringah Shire Council v Caltex Oil (Australia) Pty Ltd (1989) 68 LGRA 206 is an example) illustrate the point: they show that a ‘convenience store’ and a petrol station are two independent uses, although the former is clearly ancillary to the latter. This is a fortiori the case where the ‘ancillary’ use has pre-dated the use to which it is said to become ancillary and when it has done so in circumstances where it was initially not ‘ancillary’ to any other use.”

80 The respondents submit that, as his Honour found, the premises were not only a place where young people in the neighbourhood came to purchase milkshakes, but were also used for the preparation of lunches, which were then delivered to local businesses. They acknowledge that his Honour did not deal with the question of seating or the consumption of food on the premises up until 19 April 1963. Nonetheless, they submit that the effect of his Honour’s finding was that that use ‘developed’ into use as a café, which was a natural progression of a method of achieving the purpose that his Honour found existed in 1963. Accordingly, the fact that seating had been increased from a single chair in 1963 to outdoor seating for 20 people in early 1985 was ‘simply a means of sale and distribution of food to the public’ and was thus the same purpose as his Honour found had existed in 1963.

81 This submission was also relevant to a question raised during the course of argument as to whether the presence or, more particularly the absence of any relevant seating as at 1963, was relevant to the question whether the use of the premises as a café constituted a change of use, rather than a natural evolution. Counsel for the respondents submitted that that was irrelevant, having regard to the finding of the purpose of the use as found by the trial judge. He referred the Court to the decision of The Turnbull Group v North Sydney Council (1998) 101 LGERA 354 and Epivision Pty Ltd v Blacktown City Council (Commissioner Brown, LECNSW, 5 May 1999, unreported) as examples of this proposition. In The Turnbull Group v North Sydney Council, Sheahan J held that the provision of seating did not have the effect of changing the use to which premises were put. In Epivision Pty Ltd v Blacktown City Council, Commissioner Brown rejected an argument that the question of the provision of additional seating in a food shop was relevant to the classification of use. However, each decision must be read in accordance with its own facts and I have not found anything in either of these decisions that assists with the present matter.

82 The respondents and North Sydney Council also contend that, as found by his Honour, the evidence established that there had been a “development” of the business from, relevantly, a milk bar/takeaway food business in 1963, to a small café with outdoor seating as at early 1986 and that expansion and/or intensification of use was protected as an existing use.

83 The respondents acknowledge the relevance of town planning purposes in the characterisation of the use. They submitted that there were number of factors, including town planning requirements, that demonstrated that the present use was a “development” of the existing use.

84 At its most basic level, it was said that, as found by his Honour, the premises were used for the preparation of food and the distribution of that food to the public for immediate consumption. There had been no change in that purpose, although it was now carried out in a different, indeed, a significantly different, manner. It was said that the same hygiene considerations were involved, namely the hygiene requirements associated with food preparation, disposal of rubbish and the like.

85 The respondents acknowledge that the introduction of seating was a change in the manner of using the premises but, it was submitted, not so as to constitute a change of use. Rather, it was a progression of the use that was already in existence. They rely in particular upon the evidence of Josef Liebhardt as supporting this proposition, although they acknowledged that this is a borderline case.

86 It must first be recognised that his Honour’s finding as to use was a finding of fact and as such requires the respect to be given to the findings of a trial judge. However, his Honour’s essential findings with which I am presently concerned are not specifically protected as findings based on credit, although his Honour was required to evaluate the evidence of witnesses who were recalling circumstances which existed nearly half a century ago. see generally Fox v Percy [2003] HCA 22; (2003) 214 CLR 118. Nonetheless, the appeal is by way of rehearing: s 75A(5) of the Supreme Court Act 1970 (the Supreme Court Act) and this Court is required to form its own judgment on the facts in issue: Fox v Percy at 124-129, [20]-[31].

87 The evidence supported his Honour’s finding that as at 19 April 1963, the premises were used as a milk bar/takeaway food shop. They were also used for the sale of groceries in the style of an old fashioned corner store. The evidence also supported his Honour’s finding that both aspects comprised a substantial portion of the business. It is not necessary, however, to be concerned as to whether one or other purpose was dominant. It is sufficient to say that one was not subservient to the other such as to call for the classification of the purpose of the premises as a single use. Accordingly, no error will have been shown if his Honour correctly determined that the change or intensification in use up until 3 February 1986 was a natural evolution of a lawful use as at 19 April 1963. However, if the change from a milk bar/takeaway food shop to a refreshment room or café constituted a different use, then his Honour will have erred in his characterisation.

88 There is no doubt that both use as a milk bar and use as a café involve the purchase of food for immediate consumption and in the former case, the consumption of food on the premises, even as at 19 April 1963. There is also no doubt that use as a milk bar and use as a café invites and facilitates social interaction amongst patrons, either accidentally or intentionally. In this case, the evidence permitted an inference that children socialised at the milk bar, but there is no evidence that this was done in numbers or in groups. Nor was there any evidence that adults socialised as such as part of the milk bar/takeaway business. Rather, that aspect of the adult patronage was of the shop. The takeaway aspect of the business as at 1963 largely involved the preparation of lunches, which were collected by employees from the local boatyard and other businesses. There may, of course, have been some social interaction involved in that activity, but it would have been fleeting and of short duration.

89 From a town planning point of view, the incidents of a milk bar/takeaway business are different in nature from the incidents of a café. In the case of a milk bar, patrons come and go, stay for a short time and do not congregate or sit down or generate noise in a way that is usual in the case of a café. There is unlikely to be traffic or parking issues arising from such use. In the case of a café, the very purpose of attending is to stay for a period of time to consume a meal, sitting at a table or bench, often in company. Patrons are likely to attend for an extended period, such as at lunch time, and there are likely to be a number of persons present at the same time, and leaving in groups of similar or large numbers. The fact that a number of persons are coming, staying and going is likely to have impacts in relation to creating noise, traffic and parking.

90 As I have indicated, the law recognises a natural evolution of use without losing the protection of existing use. In this case, if what was in question was the grocery side of the business, then a natural evolution would have been from a corner store to a convenience store. Likewise, if the facts had been different and as at 19 April 1963, the premises were used as a lunch place, with, for example, booths, a progression to more sophisticated food, tables and chairs and a blackboard menu would have been a natural evolution. However, that is not this case.

91 The town planning considerations in respect of the two uses is markedly different. Use as a café involves the concentration of people for an extended period of time. Use as a milk bar does not have those aspects. Accordingly, noise considerations for local residents, the pattern of the movement of people, and traffic and parking issues are different and give rise to very different town planning considerations. There are potentially other differences, such as the quantity of rubbish removal, which could involve industrial rubbish removal unsuitable for residential precincts, and the emission of cooking smells, both of which may have significant town planning impacts.

92 In my opinion, these considerations make it apparent that a milk bar with takeaway food is a different use from a café. I consider, therefore, that his Honour erred in classifying this use as a refreshment room as at 19 April 1963. Admittedly, the use to which the premises were put at that time involved a use for food distribution, including all the ancillary aspects of such use, such as food preparation, cleaning up of and removal of food waste and the like, as submitted by the respondents. However, the town planning considerations for use of a milk bar/takeaway food shop are fundamentally different from those of a refreshment room or café. As Mason J pointed out in Banool Developments, the detail required for town planning purposes is relevant for the classification of the particular purpose to which premises are put. The town planning purposes relevant to a refreshment room or café would include: the numbers of persons on the premises at the same time with consequent noise and parking considerations, and possibly regulatory staff amenities and different rubbish removal considerations. The town planning considerations in relation to a milk bar/takeaway would not involve those considerations or at least would not be as critical.

93 It follows, therefore, for the reasons that I have given, that the premises do not have existing use rights as a café/restaurant/refreshment room.

The 1999 consent

94 The alternative case for lawful use was based upon the consent granted by North Sydney Council to DA 939/99. That Development Application was lodged by Gregory Charles Higgs, with the consent of the owner, Wallaby Hill Property Pty Ltd.

95 The Development Application was lodged on a pro forma document. Part 1 of the document specifies the application and site details that are required to be supplied. In para 4, under the heading “Description of work”, there is a direction to describe briefly everything that the applicant wants approved by North Sydney Council, including the use sought to be approved. There are then a number of boxes which have to be ticked, specifying the type of work to be carried out. In this case, two boxes were ticked: “Carrying out of works” and “Other”, with the following detail added in handwriting: “Replacement of 2 existing large market umbrellas with a freestanding demountable awning (open sided)”.

96 Part 2 of the Application made provision for “Development Details”. In para 11, which was headed “Proposed use of the building” and accompanied by the explanatory note “What will be the principal use of the building if this application is approved”, the applicant specified “Cover for outside cafe seating”. Paragraph 13 required information as to “Operating details”, although the note to the section indicated that this information was used by the Department of Urban Affairs and Planning for statistical purposes. Nonetheless, under the column “Existing”, the details of the then operating hours were inserted, namely 8am to 4pm Tuesdays to Sundays and the number of staff nominated as eight. Under the column “Proposed” the words “No Change” were inserted.

97 Then, in para 15, “Current use”, the application stated that the current use was “café” and that this use was still operating. There were two pro forma notes to para 15. The first stated, “This information is imperative for a development application”. The second stated, “If you are relying on existing use rights for your approval, the onus is on you to prove that the use was lawful, and that it is still current”.

98 The Development Application was the subject of a town planner’s report to North Sydney Council. In that report, one of the issues raised was as to existing use rights. The assessing officer commented that North Sydney Council had previously considered and accepted the use of the site as a refreshment room, so that the site had existing use rights and that as such, the use may be changed or intensified. The report concluded that as the property had existing use rights for the purpose of a refreshment room, the construction of an awning was permissible with consent and stated that the erection of the awning was to be assessed on its individual merit.

99 In considering the Development Application for the purposes of North Sydney Council’s policy controls, it was noted that if development consent was granted, the existing rear courtyard would become almost completely covered by the proposed awning. It was noted that approximately two-thirds of the area was already covered by the existing market umbrellas and that that area was also occupied by seating for the restaurant.

100 Development consent was granted by North Sydney Council on 27 September 1999 in these terms:

“Pursuant to Section 81 of the Act, notice is given that Development Application No 939/99 proposing replacement of two large market umbrellas with a free-standing demountable open-sided awning to be installed above the outdoor seating area in the courtyard of the restaurant situated on land described as 2 Thomas Street, McMahons Point was determined by Council at its meeting of the 27 September 1999 by the granting of consent subject to the Conditions below.”

101 Included in the conditions was a requirement that the awning was not to be enclosed at the sides and to remain an open-sided structure. The hours of operation were restricted to daylight hours, six days per week.

102 On 30 April 2001, an application was made by the then owners of the Thomas Street Café for a modification of DC 939/99 so as to install PVC curtaining and attenuation materials as a noise barrier and to amend the operating conditions of the café so as to address noise complaints by a neighbouring resident.

103 Consent to the modification was given by Council on 13 July 2001.

Relevant statutory provisions

104 The legislative background to the issues raised by the operation of DC 939/99 commences with the provisions of ss 107 and 108 of the EPA Act. Before the commencement of the 1986 amendment, s 107 provided:

“107

(1) Except where expressly provided in this Act, nothing in this Act or an environmental planning instrument prevents the continuance of an existing use.

(2) Nothing in subsection (1) authorises -

(a) any alteration or extension to or rebuilding of a building or work;

(b) any increase in the area of the use made of a building, work or land from the area actually physically and lawfully used immediately before the coming into operation of the instrument therein mentioned;

(c) the continuance of the use therein mentioned in breach of any consent in force under this Act in relation to that use or any condition imposed or applicable to that consent or in breach of any condition referred to in section 91(3)(b); or

(d) the continuance of the use therein mentioned where that use is abandoned.”

105 On 3 February 1986, the Environment Planning and Assessment Act 1979 was amended so as to introduce into s 107(2) a new provision (b1), with the effect that nothing in s 107(1), which permitted the continuance of an existing use, authorised:

“(b1) ... any enlargement or expansion or intensification of an existing use”

(Section 107(2)(a) and (b) were unaffected by the new para (b1).)

106 Section 108 was also amended and provided:

“108

(1) The regulations may make provision for or with respect to existing use and, in particular, for or with respect to –

(a) the carrying out of alterations or extensions to or the rebuilding of a building or work being used for an existing use;

(b) the change of an existing use to another use; and

(c) the enlargement or expansion or intensification of an existing use.

(2) The provisions (in this section referred to as ‘the incorporated provisions’) of any regulations in force for the purposes of subsection (1) shall be deemed to be incorporated in every environmental planning instrument.

(3) An environmental planning instrument may, in accordance with this Act, contain provisions extending, expanding or supplementing the incorporated provisions, but any provisions (other than incorporated provisions) in such an instrument that, but for this subsection, would derogate or have the effect of derogating from the incorporated provisions have no force or effect while the incorporated provisions remain in force.”

107 Part 5 of the EPA Regulation 1994 dealt with existing use and relevantly, are the incorporated provisions for the purposes of s 108. They provided:

“Certain development allowed

39

(1) An existing use may, in accordance with this Division, be:

(a) enlarged, expanded or intensified; or

(b) altered or extended; or

(c) rebuilt; or

(d) changed to another use, including a use that would otherwise be prohibited under the Act.

(2) A use to which an existing use is changed is itself taken to be an existing use for the purposes of the Act and may, subject to this Division, be changed to another use.

Development consent required for enlargement, expansion and intensification of existing uses

40

(1) Development consent is requirement for any enlargement, expansion or intensification of an existing use.

(2) The enlargement, expansion or intensification:

(a) must be for the existing use, or for a use changed under clause 43, but for no other use; and

(b) must be carried out only on the land on which the existing use was carried out immediately before the relevant date.

...

Development consent required for changes of existing uses

43 Development consent is required:

(a) for any change of an existing use to another use; and

(b) in the case of a building, work or land that is used for different existing uses, for any change in the proportions in which the various parts of the building, work or land are used for those purposes.”

108 As the Development Application was lodged on 10 June 1999, the amendments to the EPA Act had then come into force and as a result, those provisions apply.

109 Section 80(1) of the EPA Act provides:

“80 Determination

(1) General

A consent authority is to determine a development application by:

(a) granting consent to the application either unconditionally or subject to conditions ...” (Emphasis added)

110 Section 81A of the EPA Act provides, relevantly:

“81A Effects of development consents and commencement of development

(1) Erection of buildings

A development consent that enables the erection of a building is sufficient to authorise the use of the building when erected for the purpose for which it was erected if that purpose is specified in the development application ...”

“Building” is defined relevantly in s 4 to include “part of a building and any structure or part of a structure”.

111 However, under s 76B:

“If an environmental planning instrument provides that:

(a) specified development is prohibited on land to which the provision applies, or

(b) development cannot be carried out on land with or without development consent,

a person must not carry out the development on the land.”

112 Under the incorporated provisions of the EPA Regulation 1994, an existing use could be enlarged, expanded, intensified or changed, to another use including a use that was otherwise prohibited under the EPA Act provided development consent was obtained. It is the appellant’s case that no such consent was obtained. The respondents and North Sydney Council contend that, DC 939/99 constituted a consent to a change of use pursuant to s 81A.

113 The trial judge held at [66], that the consent to DA 939/99 permitted the use of the premises as a café or refreshment room, for two reasons. First, his Honour rejected the appellants’ submission that the purpose specified in the Development Application was merely for the erection of a “cover” and not for the use of the covered area as a café or refreshment room. His Honour considered that the reference in the Development Application to the proposed use of the building as, “cover for outside cafe seating” as well as the statement in the accompanying plan: “Plan showing proposed freestanding removable awning within courtyard area ...”, was sufficient to demonstrate that the cover was to be used for the purposes of the café.

114 Secondly, his Honour also considered that it was relevant that North Sydney Council, in granting development consent, had imposed conditions regulating or controlling the use of the café, including specifying the hours of operation, the number of seated patrons and a requirement that all patrons be notified by way of a sign adjacent to the entry door and on the menus that they were not to park in “No Standing” zones.

115 His Honour found that if, contrary to his finding that the existing use of the premises was as a refreshment room and that its correct description was as a “take-away food shop”, then the development consent amounted to a consent to a change of use to a café or restaurant. His Honour considered that this followed from the fact that DC 939/99 described the use of the premises as a restaurant and imposed conditions that related to the use of the whole of the subject premises, both the existing building and the courtyard. His Honour found that it was lawful for such a consent to be granted under the incorporated provisions.

116 The appellants challenge both findings. First, they submit that a development consent cannot otherwise authorise a prohibited use: see Gameplan Sports and Leisure Pty Ltd v South Sydney City Council (NSWLEC, Pearlman J, 4 October 1996, unreported). In that case, Pearlman J held that the effect of s 91(4), the predecessor to s 81A, was to streamline the development application process, so that in circumstances where a person was applying for consent to construct a building and use a building, only one application was necessary. Her Honour specifically rejected the proposition that the section made permissible the use of land which was otherwise prohibited under the relevant planning instrument.

117 I agree with this construction of s 81A. First, there is nothing in the words of the section to indicate that properly construed, any development consent could operate as permitting a prohibited use. Secondly, to so construe the consent would fail to give effect to the purpose of the planning legislation in this State. The EPA Act is “An Act to institute a system of environmental planning and assessment for the State of New South Wales”. The Act provides for the making of an environmental planning instrument to implement that purpose. Planning controls are subject to strict statutory and regulatory provisions relating to community consultation. The EPA Act expressly provides that development prohibited by an environmental planning instrument must not be carried out: s 76B. There are penalties for breaching a planning ordinance.

118 If s 81A of the EPA Act was construed so as to validate a prohibited use merely by the grant of a consent, the purpose of the structured planning system instituted by the Act would be fundamentally undermined. Further, to so construe s 81A would fail to give effect to other provisions of the EPA Act which specifically permit a change of use, including to a prohibited use: see incorporated provisions: cl 43. Further, s 79C specifically provides for the matters that must be considered in determining a Development Application, including an application for a change of use. If s 81A operated so as to constitute a consent to a change of use in circumstances where no application to change the use had been made, then the operation of s 79C would be subverted. Further, a Council is specifically protected from the consequences of making an “unlawful” decision by the provisions of s 101, to which I refer more fully below.

119 The respondents and North Sydney Council do not contest the correctness of this construction of s 81A. They contend, however, that DC 939/99 was in fact a consent to a change in use, for the reasons given by his Honour.

120 Whilst accepting that s 81A does not authorise a use which is prohibited, it was submitted that it was sufficient that there be existing use rights of some description, in which case the incorporated provisions operated so as to permit, relevantly, a change of use. It was not necessary on this argument for there to be a specific application for a change of use. The existing use rights upon which the respondents relied for the purposes of this argument was the continuing identifiable use as a take-away food business.

121 The respondents and North Sydney Council submitted that, given the premise that there was an existing use as a take-away food business, no significance should be attached to the omission to tick the box “Use of land/building” in para 4 of the Development Application, “Description of work”. Rather, it was said that it was apparent from the details provided in the Application as a whole and in particular the statement in para 11 that the proposed use of the “building”, for which approval was sought was a “cover for outside café seating” (emphasis added). In other words, this was an application for two purposes: the first was for the erection of a cover for the courtyard area; the second was an application for use as a café. This was reinforced by the details provided in para 13 of the Application, “Operating details”, which specified the hours of operation and the number of staff. It was submitted that this detail was relevant to the operation of the premises as a whole, not only to the operation of that portion of the business that was to be conducted under the cover in the courtyard.

122 Reliance was placed upon the conditions of consent (set out at [100] above). The appellants point out, however, that the conditions relating to the manner of use of the restaurant, such as numbers of patrons, operating hours and the like, were conditions that had been “offered” by the applicants at the time of seeking development consent. Accordingly, it could not be asserted that North Sydney Council had engaged in a proper evaluative process as required under s 79C of the EPA Act if it was considering this as an application for a change of use. It was submitted that for that reason, little relevance could be attached to the imposition of such conditions and in any event, as the consent was only to the awning, such conditions were likely to have been invalid.

123 Alternatively, it was submitted by the respondents that if the entire premises did not have existing use rights then the effect of DC 939/99 was to grant consent to a change of use for the entire site. It was submitted that this was in fact the more likely effect of the Development Consent, supported by the fact that the s 101 Notice referred to the whole site.

124 In my opinion, the argument that DA 939/99 was an application for a change of use to which consent was granted, fails for the simple reason that the Application was predicated upon the fact that the use of the premises was already a café. This could only have been advanced if the respondents were relying upon existing use rights. I have found no existing use rights so that the argument that the DA 939/99 could change the use fails at the outset.

Effect of consent if not a change of use application

125 The appellants further contend that the only consent that had been given was in respect of the awning. The awning, it was submitted, was a “building” within the meaning of s 81A of the EPA Act. Accordingly, even if the consent authorised the use of the area under the awning, it did not make lawful the use of any other part of the premises. On that basis, it was not lawful for the respondents to use the existing building for the purposes of a restaurant, nor could it use the existing building to facilitate the functioning of the courtyard as a restaurant.

126 The respondents contended that even if the purpose of the existing use would not extend so as to permit the use of the courtyard premises for the consumption of food purchased from the premises, then that consent was forthcoming with the approval of the outdoor seating area, consequent upon the grant of development consent to DA 939/99. In this regard, the respondents submitted that there were two ways of considering the matter. First, the building itself had existing use rights for the preparation of food and its delivery and that the effect of the development consent was to grant consent to delivery of the food to the courtyard. However, if I am correct in the conclusion that I have reached that there were no existing use rights, this argument fails at the outset.

127 Secondly, it was said that s 81A permitted the use of the courtyard as a restaurant. However, a consent can only relate to the application that is made. As I have said, this was an application for the erection of the awning in the courtyard. Even if this did have the effect of permitting the use of the courtyard, it does not act as a consent to the use of the building proper, as a café.

Section 101

128 The respondents and North Sydney Council, by way of Notice of Contention, contend that the appellants cannot now question the validity of DC 939/99 or the consent to the modification of DA 939/99, because they failed to question the validity of the consent within three months of the giving of public notice of the consent. This point was raised at trial but not dealt with by his Honour, as he had otherwise held that the respondents had existing use rights or alternatively had been granted consent to the use of the premises as a café by DC 939/99.

129 North Sydney Council caused to be published a public notice for the purposes of s 101 in the Mosman Daily on 30 August 2001.

130 Section 101 provides:

“101 Validity of development consents and complying development certificates

If public notice of the granting of a consent or a complying development certificate is given in accordance with the regulations by a consent authority or an accredited certifier, the validity of the consent or certificate cannot be questioned in any legal proceedings except those commenced in the Court by any person at any time before the expiration of 3 months from the date on which public notice was so given.”

131 Clause 124 of the EPA Regulation 2000 provides, relevantly:

“124 What are the public notification procedures for the purposes of section 101 of the Act?

(1) The granting of a development consent is publicly notified for the purposes of section 101 of the Act if:

(a) public notice in a local newspaper is given:

(i) by the consent authority or ...

... and

(b) the notice describes the land and the development the subject of the development consent ...”

132 The notice published by North Sydney Council was in these terms:

“939/99 2 Thomas Street, McMahon’s Point

Modification of DA No 939/99 to include construction of a freestanding demountable awning installed above the outdoor seating area of the café”

133 The modification application was made pursuant to s 96(4) of the EPA Act which provides:

“The modification of a development consent in accordance with this section is taken not to be the granting of development consent under this Part, but a reference in this or any other Act to a development consent includes a reference to a development consent as so modified.”

134 The respondents and North Sydney Council contend that the notice in the Mosman Daily was a public notice within the meaning of s 101 and notified that consent had been given not only to the original development application, DA 939/99, but also to its modification. It was submitted, therefore, that no challenge could be made to the consent unless that was done within three months of the date of notification. The appellants did not commence these proceedings until 2005 and are thus out of time to bring any challenge to the validity of the consent.

135 The respondents accept that if there is no existing use, then s 101 cannot be brought in aid. However, they submit that provided there was an existing use, DC 939/99 gave consent to a change of use and that cannot be challenged. I have concluded that there was not an existing use of the premises as a café and I have also concluded that DC 939/99 was not a consent to a change of use. It follows, therefore, that s 101 is academic on this point.

136 Section 101 has nothing to say about the consent that was granted. In other words, s 101 relates to a challenge to the grant of a consent. It does not relate to the construction of the consent which has been granted.

137 Accordingly, Ground 1 of the respondents’ Notice of Contention fails, as does the whole of North Sydney Council’s Notice of Contention.

Conclusion

138 The appellants have succeeded on the issues raised on the appeal. The question arises, however, whether, notwithstanding their success on the appeal, they should be granted the relief they seek, and in particular, whether the Court should make an order restraining the respondents from using the premises for the purposes of a café. This question is particularly critical in the present case because of the long use by the respondents of the premises as a café without steps being taken to lawfully restrain them from doing so.

139 The range of relief that the Court might grant in such circumstances is extraordinarily wide, extending from refusing relief to granting relief, but allowing the café to continue to trade for a period of time, with or without conditions of continued use being imposed, to ordering full relief as sought by the appellants. Whatever orders it is ultimately determined ought to be made, it is likely that evidence will need to be adduced for the Court to make that determination. This is not the appropriate court in which that should be done. Accordingly, I would propose the following orders:

1. The appeal be allowed;

2. The matter is remitted to the Land and Environment Court for determination of the orders that should be made on the appellants’ application;

3. The respondents are to pay the appellants’ costs.

140 McCLELLAN CJ at CL: I have had the benefit of reading in draft the judgment of Beazley JA. I agree with her Honour’s reasons and wish to add some limited remarks. Reference should be made to the reasons of Beazley JA for the relevant statutory provisions and detailed discussion of the authorities.

Existing use at April 1963

141 The trial judge found that as at April 1963 “the major component of the business (on the site) was that of a milk bar which included the sale of sandwiches and other forms of prepared food.” His Honour found that the use existing at 1963 “later developed into a take-away food business and café.” The meaning which his Honour intended by the use of the word “developed” in this context is not clear. Elsewhere his Honour speaks of the business “evolving into a café or refreshment room” and there being a “change in emphasis from a milk bar to a café.”

142 Because of this “development” or “evolution” of the business his Honour concluded, apparently applying the reasoning of McHugh JA in Royal Agricultural Society v Sydney City Council (1987) 61 LGRA 305, that the “change in emphasis from a milk bar to a café seems to be a natural change in the method of carrying on the business.” Accordingly, his Honour concluded that the purpose for which the premises were used had not changed since 1963 and their present use as a refreshment room is lawful.

143 The relevant passage in the judgment of McHugh JA is as follows (at 309):

“Because "existing use" provisions are incompatible with the main objects of the legislation of which they form part, the courts have had to develop principles which reconcile the right of owners to have the full benefit of the existing use of land with the right of the local authority to enforce the conflicting objectives of town planning legislation. The courts have done so by refusing to categorise an "existing use" so narrowly that natural changes in the method of using the land or carrying on a business or industry will render an existing use right valueless. At the same time, the courts have been concerned not to categorise the purpose of an existing use so widely that the land or premises could be used for a prohibited purpose which was not part of its use at the commencement of the legislation. Accordingly, a test has been devised which requires the purpose of the use of land to be described only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on at the relevant date. Thus the test is not so narrow that it requires characterisation of purpose in terms of the detailed activities, transactions or processes which have taken place. But it is not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities etc as a class have made of the land.”

144 The essential principle is that when a use of land or a building undergoes “natural change” so that, although carried out by contemporary methods the purpose of the use remains the same, the existing use will be maintained. In the present case his Honour found that the business had changed. A “milk bar” had become a “take away food business and café” or “refreshment room.” The question which must be answered is whether the contemporary use, described as a “take away food business and café” involved a “natural change” in “the method of use” in 1963 of a “milk bar.” In my judgment it did not. The fact that his Honour concluded that the purpose of the use in 1963 should be described in different terms to the purpose today is a significant indication that a change of use had occurred.

145 The relevant characteristics of a “milk bar” for planning purposes are a shop from which refreshments, including milk, but other small items, sandwiches and simple food items are sold. Purchases will generally not be large and the time a customer spends on the premises will be short. In the ordinary course customers will not congregate within the premises in a manner which may create inconvenience to neighbouring properties because of noise. They are unlikely to come and leave the premises in groups, particularly in the later evening hours or impose burdens on the local availability of car parking. A milk bar provides an incidental convenience to its customers. If a customer comes by car but parking is not conveniently available a purchase may be deferred or made at another location altogether. The evidence in the present case confirms that the premises functioned in 1963 as a typical milk bar.

146 On the other hand a café will provide tables and chairs where patrons can sit and consume either a refreshment, snack, light meal or a more significant meal. Patrons may arrive in groups or join friends for a meal which may occupy a period of hours. The noise impacts from the group of patrons may be significant and continue well into the evening. If the premises are a café, a reservation may have been made by patrons or arrangements made to share a meal with others. In those circumstances a patron to a café will tolerate a delay in finding a carpark or accept a walk from an available car space to the premises. This, as experience shows, may impose considerable burdens on the availability of car parking in the neighbourhood.

147 The trial judge found that applying the liberal approach to classification required by Boyts (at 65) the premises “remains and continues as a refreshment room involving the sale of prepared food to the public.” It is correct that at the relevant dates the premises were used to sell prepared food to the public. However, more was required when identifying the proper characterisation of their use for planning purposes (see the discussion in both Shire of Perth and O’Keefe and Banool). Both a mobile coffee bar and an a la carte restaurant sell prepared food to the public. But they are a use for a different purpose.

148 In my judgment the essential characteristics of a milk bar are different from a café. The appropriate conclusion in the present case was the premises were used in 1963 as a milk bar. However, that use was abandoned when the use of the premises changed to a café. Because the change occurred without consent the use of the premises as a café or refreshment room is contrary to the Act.

The 1999 consent

149 The development application lodged in 1999 identified the purpose for which the awning was proposed to be used as “cover for outside café seating.” The premises were referred to as the “Thomas Street Restaurant.” These descriptions applied both to the existing use of the premises and the intended future use.

150 His Honour found that, by reason of the operation of s 81A of the Act, when the council approved the awning it also approved its use for the specified purpose of a café or restaurant. This was either because, as his Honour found, the use as a café or restaurant, was protected as an existing use which was being enlarged, or, because approval of the awning for the purpose specified in the development application, carried with it consent to change the use of the entire premises to a café or restaurant.

151 As I have already indicated the change of use from a milk bar to a café or restaurant without consent was illegal. As a consequence by 1999 the premises were not being used for any lawful purpose. In these circumstances, as the trial judge recognised s 81A(1) could not operate to authorise the use of the awning for which approval had been granted. The situation was considered in Gameplan Sports and Leisure Sports Pty Ltd v South Sydney City Council NSWLEC Pearlman J in which her Honour, with respect correctly, held that the relevant section (it was previously s 91(4)) did not operate to permit land or buildings to be used for a purpose which was prohibited.

152 However, it is otherwise if the proposed use is permissible with consent. Section 81A is not confined. It will operate to permit the use of a building whether that use is permissible in the relevant zone or permissible only by operation of the “Existing Uses” provision of the Regulations (Pt 5 – “Existing Uses” – of the Environmental Planning and Assessment Regulation 1994).

153 Accordingly, if in the present case, the premises had been used for an “existing use” in 1999 approval of the awning would have authorised its use for the purpose of a café, being the purpose specified in the development application. However, as Beazley JA has indicated, although it would operate to permit the use of the approved building it could not operate to permit the use of other parts of the premises as a café or restaurant. Before the entirety of the premises could be lawfully used as a café or restaurant a development application extending to the entirety would have been required to be lodged with and considered by the Council.

154 The trial judge held that if the “existing use” was correctly described as a “take away food shop” then the development consent amounts to a consent to change the use to a café or restaurant. The difficulty with this proposition, as has already been identified, is that his Honour found that by 1999, the premises were already being used as a café or restaurant but without consent. Any use as a “takeaway food shop”, if that was the proper description of the purpose for which it was used in 1963, had been abandoned. Because the consent could not operate to permit the use for a prohibited purpose it could not have the effect identified by his Honour.

Orders

155 Regrettably I can see no alternative but to remit the matter for determination by the Land and Environment Court. The discretionary questions are complex and this Court does not have the benefit of any findings by the trial judge with respect to them. It will be necessary to consider both the fact that the existing business is trading without consent and is for a purpose prohibited in the zone. It would be expected that the continued use would, unless strict conditions are imposed, be incompatible with the reasonable enjoyment of neighbouring properties. However, appropriate conditions to protect the neighbours may render the business unviable.

156 There has undoubtedly been a considerable delay in bringing proceedings. That delay is sought to be explained by the appellant. Delay in these circumstances may have two consequences, each of which operate to favour different parties. The operator of the premises will have had the benefit of trading, presumably at a profit, when the use was illegal. This is a benefit which can in some cases be quite substantial. However, it may also be that, in the belief that there would be no difficulties, the operator has invested significant capital in the premises the benefit of which may be wholly or partly lost if ordered to close.

157 In some cases the resolution of these issues may require orders for the immediate cessation of a business. In others the business may be allowed to continue for a confined period but subject to appropriate conditions. A further possibility is that the business is allowed to continue indefinitely with or without conditions. Because the question is complex it should be resolved in the trial court where appropriate facts can be found and the competing interests considered.

158 I agree with the orders proposed by Beazley JA.

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LAST UPDATED: 12 December 2007