Australia: Case Note – Surfers International - development application

In the recent decision of Body Corporate for Surfers International Community Titles Scheme 12247 and Gold Coast City Council & Anor [2016] QPEC 29, the Court declared that the Council's decision to approve a development application for apartments and other retail uses was invalid and of no effect, because it should have been subject to impact assessment, not code assessment.

The case turned on whether the development proposed "apartments" within the building's podium because the development involved a recreation deck on the roof of the podium. The decision, based on a technical characterisation of the apartment "use", sits uncomfortably with a long line of cases in the Planning and Environment Court that emphasise planning schemes should not be construed in an overly technical manner and that a purposive approach is preferred. A purposive approach involves asking why impact assessment is required where development involves "apartments" within a podium.

The development approval challenged in Surfers International consisted of a development permit for a material change of use for apartments (693 units) cafe, restaurant, shop and tourist shop on land in Surfers Paradise. The development application was accepted by Council as code assessable, and approved on that basis. The applicants sought a declaration from the Court that the decision to issue the approval was invalid and the decision notice should be set aside. The arguments centred around the height of a podium (a question of fact) and the characterisation of the uses within the podium, which was relevant to the level of assessment (a question of law).

There was some controversy over whether or not the podium was three levels or four levels, with the Judge ultimately determining that it was four levels. That question was decided primarily based on the plans for the development, supported by some expert evidence.

The Judge then considered the uses within the podium and, in particular, Level 4. Characterisation of the use within the podium was critical because the assessment trigger indicated that an application for apartments was code assessable only where the apartments were "located above podium level". Otherwise, impact assessment was triggered.

The planning scheme defined "apartment" as: "Dwelling" was then defined as:
"Apartment A dwelling that has another dwelling immediately above or below it. It also includes dwellings contained in mixed use buildings located immediately above, below or abutting nonresidential uses. The term does not include an attached dwelling." "Dwelling Any building or part of a building comprising a self-contained unit used by, or intended for the exclusive residential use of, one household. The term includes outbuildings normal to a dwelling. The term includes the keeping of domestic animals as pets."

The applicants argued that Level 4 was an "apartment" level. In the development application material, Level 4 was described as being one of three "residential recreation levels". It comprised two lap pools, a spa, another pool, a gym and terrace, change rooms, toilets, a sauna, steam room and sun deck. The recreation level was not open to the public. The applicant submitted that the use of Level 4 was incidental to and necessarily associated with the use of the apartments and did not possess any nexus to the non-residential uses contained within the first three levels of the podium (which were used for restaurants, shops and cafes). The argument from the applicants invoked the definition of "use" under the Sustainable Planning Act 2009 (SPA) which is:

"Use, in relation to premises, includes any use incidental to and necessarily associated with the use of the premises".

The Judge considered that the purpose of Level 4 was to exclusively serve the apartment levels above by providing recreational facilities only to the occupants of those apartments. He found, therefore, that the recreation level was part of the apartment use consistent with the case of Walker v Noosa Shire Council [1985] 1 Qd R 387 and the statutory definition of "use'. As such, he concluded that Level 4 was an apartment level, meaning the apartments were not "located above podium level", that the application should have been subject to impact assessment, the assessment manager's jurisdiction to assess the application as code assessable was never enlivened, and the decision was a nullity.

However, the plain language of the trigger requires code assessment where the "apartments" are located above podium level. All of the dwellings were above podium level. The recreation deck was not a dwelling. Rather, it was ancillary to the dwellings.

The Court applied the extended definition of "use" in Schedule 3 of SPA to capture the ancillary recreation aspects of the apartment use, however, the Court did not refer to the case of Boral v Cairns [1997] 2 Qd R 31, a decision of the Queensland Court of Appeal, which holds that the ancillary use must be both incidental to and "inevitably" or "unavoidably" involved with the primary use. That is, it is a cumulative test – requiring an ancillary use to be both "incidental to and necessarily associated with" a use. There is nothing "inevitable" about the recreation uses which may be seen as "optional extras".

The Court's decision is a technical one, which sits uncomfortably with the accepted approach to construing planning schemes – that is, that they should be read as a whole, in a way that is practical and intended to achieve balance between outcomes. The overarching rule is to start and end with the text of the scheme, read in context (Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 and CIC Insurances Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384). The presumption is that defined words have their defined meanings and that is not to be displaced without good reason (Qantas Airways Ltd v Chief Commissioner of State Revenue 2008 NSWSC 1049).

The purpose and intent of the assessment trigger, which required apartments to be located above a podium, can be gleaned from the relevant local area plan (LAP) with Council's 2003 planning scheme. The LAP indicated:

"Retail and tourist activities commercial services, entertainment, restaurants and eateries are encouraged at ground floor level and within podium level to create a vibrant commercial core, with high rise towers permitted above."

The intent is for mixed uses within the podium with high rise apartment towers above. That outcome had been achieved by the development in question. Was it the intention for the impact assessment trigger in the table of assessment to capture all uses ancillary to an apartment? The answer must be no. The obvious intent was for the apartment use (that is, the use as a dwelling – "a self contained unit") to be located above the podium, not to require that all the incidental aspects for that use (such as car parking, lobby/reception, access, lifts, stairwells, and recreation areas) also to be located above the podium. In tall towers, it is physically impossible to have apartments located above a podium without having incidental and ancillary parts of that use, for use by residents, located below.

It remains to be seen whether the Surfers International decision will be appealed to the Court of Appeal or whether the application is re-lodged in response to the Court's decision.

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