The NSW Land and Environment Court has confirmed the importance of showing actual physical use in proving existing use rights claims in the recent case of Blues Point Hotel Property Pty Ltd v North Sydney Council  NSWLEC 27.
HWLE represented North Sydney Council (Council) as the Respondent in the Class 4 judicial review proceedings. The two Applicants operate the Blues Point Hotel (Hotel) in McMahons Point. Despite a prohibition on pubs in the zone, the Hotel, having been in continuous operation since its construction in the late 1930s,operates under the benefit of the existing use provisions in ss4.65 and 4.66 of the Environmental Planning and Assessment Act 1979 (NSW).
The proceedings arose from a Development Control Order (DCO) issued by the Council in 2017, ordering that the Applicants cease to provide food, alcohol, and entertainment on an outdoor terrace connected to the Hotel. The Applicants sought a declaration that the outdoor terrace benefited from the existing use rights. Council agreed that a finding that existing use rights applied to the outdoor terrace would constitute grounds for setting aside the DCO.
The parties agreed that, as a threshold issue, existing use rights were only available to the Applicant if the use of the outdoor terrace had been lawful to begin with. In this case, the planning use that was prohibited, and thereby giving rise to a potential existing use, was a use defined by reference to the Liquor Act 1912 (NSW). The relevant definition within the Liquor Act 1912 (NSW) as applicable at the time of the prohibition of the Hotel’s use pertained to “licenced premises“, defined as “the premises in respect of which a license granted under this Act… is in force“. Hence, although unusual in proceedings of this kind, the parties adduced historical extrinsic documents in an attempt to resolve the question of whether or not the outdoor terrace had been subject to the liquor licence.
The Court was satisfied that, on the available factual evidence, the outdoor terrace formed part of the area covered by the liquor licence held by the Hotel at the time that development for the purpose of a pub was first prohibited in the area. However, the substantive matter in the proceedings turned on the scope of the Hotel’s existing use rights. In the absence of sufficient evidence that the outdoor terrace itself was actually used for the purposes of a pub at the time of the prohibition, the Applicants argued that the Hotel’s existing use rights should capture the outdoor terrace as a part of the Hotel.
However, Council successfully argued that the Applicants needed to show that the outdoor terrace was actually being used as a part of the pub when the prohibition came into effect, and had failed to do so. In judgement, Duggan J found that the Applicants’ position would leave the words “area actually physically and lawfully used” in s4.66(2)(b) without any function. Council’s position; that the concept of ‘actual physical use’ must, on the evidence, disclose an actual physical use of the specific area comprising the outdoor terrace; was preferred.
Her Honour also accepted that the Hotel’s current use of the outdoor terrace represented both an enlargement and an intensification of use. This also meant that the Hotel’s current use of the outdoor terrace exceeded the scope of any existing use rights.
This case demonstrates the importance of ensuring that the evidence of actual and physical lawful use is presented when making and assessing claims for existing use rights.
The HWLE team was led by partners Kirston Gerathy and John Paul Merlino, with assistance from senior associate Kara Mezinec and solicitor Liam Fairgrieve.
This article was written by John Paul Merlino, Partner and Liam Fairgrieve, Solicitor.