In the case of Blues Point Hotel Property Pty Ltd v North Sydney Council  NSWLEC 27 Justice Duggan of the Land and Environment Court of NSW (the Court) addressed the limitations of existing use rights.
The Applicants (the owners of the land and the pub on it) sought a declaration that the first-floor external terrace (Outdoor Terrace) of Blues Point Hotel (the Premises), benefits from ‘existing use rights’ for the purpose of a pub (as defined under the North Sydney Local Environmental Plan 2013 (the LEP) pursuant to s 4.65 of the Environmental Planning and Assessment Act 1979 (EP&A Act).
The use of the Premises for the purposes of a hotel or pub has continued in at least parts of the Premises since its construction in 1938.
On 19 April 1963, the North Sydney Planning Scheme Ordinance (the Ordinance) commenced, prohibiting hotels in the zone.
On 3 May 2017 North Sydney Council (Council) issued a development control order against the use of the Premises as a hotel.
Blues Point Hotel commenced proceedings seeking a declaration that the development control order issued by Council was ‘was invalid, void and of no effect’ because the Premises benefit from the existing use right as hotel.
Characterising an existing use (section 4.65 of the EPA Act)
The Court first considered whether the whole of the Premises benefits from an existing use for the purpose of a hotel as defined under the Ordinance.
In this case the whole of the Premises was found to benefit from the existing use as a hotel and that the secondary existing use of the Premises for accommodation either fell within the hotel use or was ancillary to it. Justice Duggan considered the following facts in her determination:
- the use as a hotel was permissible up until the Ordinance came into force on 19 April 1963, making the use prohibited. Therefore, existing use rights applied to the use of the building as a hotel from the “relevant date” being 19 April 1963.
- because “hotel” was defined by reference to the Liquor Act 1912 (NSW) (Liquor Act), the question was whether the Premises (i.e. the building as a whole) met the definition of “hotel”, being “any premises specified in a publican’s license issued under the Liquor Act, as amended by subsequent Acts“.
- the Court found that an inference could be drawn from the evidence that the “premises specified in [the] publican’s license” comprised the whole of the land and building that is at the address specified in the license.
- the Premises was not being used for two separate and independent uses of hotel and accommodation. The accommodation use either fell within the hotel use or was ancillary to it, as the uses were physically integrated within a single facility which was evidenced by factors including that there was no separate entrance for the accommodation or reception or booking area for accommodation guests. This is considered in the extract below.
“…The accommodation is so tied to the use as a hotel, so intermingled in the management and physical functioning of the Building that it is incapable of being sensibly separated from the other hotel uses. To apply the language of Foodbarn to these circumstances: … [the accommodation] part of the premises is used for a purpose which is subordinate to the purpose which which inspires the use of another part, it is legitimate to disregard the former and to treat the dominant purpose as that for which the whole is being used.”
The extent of the characterised use (section 4.66 of the EPA Act)
Justice Duggan also considered whether the existing use of the Premises as a hotel extends to the Outdoor Terrace and whether the use of the Terrace for hotel patrons (who may consume food and alcohol) is an enlargement, expansion or intensification of an existing use which requires development consent.
The Court confirmed that existing use rights can only be established for the actual, physical and lawful use of land or a building at the time immediately prior to the use becoming prohibited.
It was determined that the existing use of the Premises as a hotel did not extend to the Terrace because at the date immediately before the hotel use became prohibited, the Terrace was only used as a roof. Therefore, it followed that the use of the Terrace for hotel patrons was either or both an enlargement or expansion of the existing use as a hotel, which required development consent.
In reaching that conclusion, the Court considered the following:
- for the Terrace to form part of the existing use of the Premises, it needed to have been actually physically used for a purpose other than a roof enclosing the areas below it at the date immediately before the use became prohibited in 1963. In reaching this conclusion the court relied on the statutory interpretation of s4.66(2)(b) as follows
“ it is apparent that it operates to limit the use of the building work or land to those areas actually lawfully used in a physical sense, notwithstanding that the use, prior to the date it became prohibited have anticipated that at some point in the future other areas of the building work or land would be physically used for the same purpose.”
- as there was no evidence that the roof was actually being used for any purpose other than as a roof, the Applicant “failed to establish that the contended existing use rights are enjoyed for the Outdoor Terrace as a floor and air space for hotel uses“.
- the Respondent Council produced evidence that the Terrace area was not being used by patrons for food and alcohol consumption until about 2016. Therefore, such use constituted either or both an enlargement or expansion of the prior use.
What does this mean?
The key take-aways from this case are as follows:
- existing use rights can only be established for the actual, physical and lawful use of land or a building at the time immediately prior to said use becoming prohibited; and
- as a land owner it is always important to maintain historical evidence of the actual physical use, of the relevant part of a premises subject to an existing use. In this case the landowners were not able to produce evidence of the Outdoor Terrace’s use for any purpose other than as a roof prior to hotel use becoming prohibited, and the Outdoor Terrace was therefore not found to benefit from the existing use as a hotel.