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- Unreported Judgment
PLANNING AND ENVIRONMENT COURT OF QUEENSLAND
Thomco (No. 2087) Pty Ltd v Noosa Shire Council  QPEC 8
THOMCO (NO. 2087) PTY LTD
NOOSA SHIRE COUNCIL
3387 of 2019
Planning and Environment
Planning and Environment Court, Brisbane
24 March 2020
12 and 13 March 2020
The application is dismissed.
PLANNING AND ENVIRONMENT – APPLICATION TO CHANGE APPROVAL – whether minor change – where the proposed changes relate to staging of the development – whether as a result of changes the facility currently in stage 1 but now proposed to be in stage 2 may not be developed – whether that would result in substantially different development – whether changes would not in substantially different development
M Batty for the applicant
C Hughes QC and J Lyons for the respondent
Connor O’Meara Solicitors for the applicant
Wakefield Sykes, Solicitor for the respondent
- The applicant (Thomco) wishes to have a change made to a development permit (the existing approval) which applies to its land at 215 David Low Way, Peregian Beach and more particularly described as Lot 1 on SP286680 (the site). The site was formerly used as part of a caravan park that Thomco closed some years ago. The existing approval would permit the development of 19 x 3 bedroom dwellings for visitor accommodation (the dwellings), a manager’s unit and a motel building with 22 x 1 bedroom and 10 x 2 bedroom motel units. The manager’s unit is for permanent occupation by the manager of the dwellings. The conditions of approval require the accommodation otherwise to be for short term visitors only and not to be occupied by persons for continuous occupation in excess of 90 days for each calendar year. The existing approval permits the development to be staged, with the motel being built in the first stage. The proposed change relates to the staging.
- The change application was made pursuant to s 78 of the Planning Act 2016 (PA). Pursuant to s 78(2), the application must be made to the responsible entity. By reason of s 78A(2), this Court is the responsible entity if:
- (a)the change application is for a minor change to a development approval; and
- (b)the development approval was given or changed by this Court; and
- (c)a properly made submission was made about—
- (i)the development application for the development approval; or
- (ii)another change application for the development approval.
- Thomco asserts that this Court is the responsible entity because:
- (a)the change application is, it contends, for a minor change;
- (b)the development approval now sought to be changed was given by this Court by its judgment of 21 June 2019, and
- (c)properly made submissions were made about the development application for the approval.
- The application was made to this Court by filing an originating application (OA) on 18 September 2019. The OA did not join, as a respondent, the Peregian Beach Community Association Inc (the PBA), even though it was a party to the appeal in which the approval had been given and was a party to an agreement to resolve that appeal on the terms which were then reflected in this Court’s judgment. Any concern about the PBA not having been joined has however, been overcome. The PBA has been given notice of this proceeding and has advised that, although being opposed to the change, it does not wish to be a party to this proceeding. Its president, Mr Cotterell, gave evidence in the course of the Council’s case.
- A threshold issue is whether the application is for a “minor change”. That was a matter of controversy. The application must be dismissed if it is for a change that does not answer that description.
- If found to be for a minor change, the application must be assessed pursuant to section 81 of the PA. The matters to be considered include a response notice. In this case the Council gave a response notice pursuant to s 80(4). The response gave notice that the Council opposed the requested change for reasons which may be broadly summarised as follows:
- (i)the previous proceeding would not have been compromised without the staging as approved rather than as requested.
- (ii)the change is not a minor change.
- (iii)the proposed change conflicts with the Planning Scheme and with the draft Planning Scheme.
- Section 81(2)(da) of the PA would require consideration of all matters the Court would or may assess against or have regard to if the change application were a development application. Further, s 81(2)(e) requires consideration of any other matter that the Court considers relevant. Having assessed the application pursuant to s 81 of the PA, a decision is made pursuant to s 81A. The decision is discretionary, but is informed by the assessment.
- The question as to whether the application is for a “minor change” was controversial. The PA defines a “minor change” to mean a change that, for a development approval:
- (i)would not result in substantially different development; and
- (ii)if a development application for the development, including the change, were made when the change application is made would not cause—
- (a)the inclusion of prohibited development in the application; or
- (b)referral to a referral agency, other than to the chief executive, if there were no referral agencies for the development application; or
- (c)referral to extra referral agencies, other than to the chief executive; or
- (d)a referral agency, in assessing the application under section 55(2), to assess the application against, or have regard to, a matter, other than a matter the referral agency must have assessed the application against, or had regard to, when the application was made; or
- (e)public notification if public notification was not required for the development application.
- The change requested in this case would not cause any of the things referred to in sub-paragraph (ii) of the definition. The change will therefore be a minor change if Thomco (which bears the onus) establishes that the change would not result in substantially different development.
- Guidance in relation to what may result in substantially different development is provided by Schedule 1 of the Development Assessment Rules (DAR). Section 68(2) of the PA provides that development assessment rules may provide for any matter in relation to Part 5, Divisions 2 to 4. Section 78 is in Division 2 of Part 5. Paragraph 4 of Schedule 1 lists a number of circumstances in which a change may be considered to result in a substantially different development. As with the corresponding statutory guideline under the now repealed Sustainable Planning Act, the list in paragraph 4 is not exhaustive and the listed changes may, but not must, be considered to result in a substantially different development. As paragraph 3 of Schedule 1 states, the individual circumstances of the development, in the context of the change proposed, must be considered. Both quantitative and qualitative matters may be of relevance. Matters of fact and degree intrude.
- It has already been noted that the requested change relates to staging. Condition 3 of the existing approval provides that the development may be staged in accordance with the approved staging plan. That plan shows the site divided into stage 1 and stage 2, with stage 1 being over the part of the site approved for development of the motel (which also includes a modest conference facility). Stage 2 applies to that part of the site approved for development of 3 bedroom dwellings and the manager’s unit. Condition 6 requires that, if the development is staged, the motel must be built in the first stage.
- The proposed changes are to replace the staging plan and to amend condition 6 so that the staging is, in effect, reversed, with the dwellings in stage 1 and the motel in stage 2. Internal road pavement and footpaths would be constructed through the new stage 2 (motel site) as part of the new stage 1, in order to access the dwellings.
- The applicant’s town planning consultant, Mr Schomburgk, pointed out that once the development is completed, whether staged or not, it would be the same, whether the approval is changed or not. He saw the proposed change as only altering the potential order in which the components of the development may occur and as not altering the extent to which the Planning Scheme’s aspirations for the land are met. He does not consider that it matters which component is delivered first. Similarly, the written submissions for Thomco emphasised that the change would reorder the stages, rather than remove any component.
- Mr Schomburgk’s opinions are based on the assumption that the approval, changed as proposed, would be acted upon to complete the whole of the development. He asserted that ought be the expectation of all parties. The Council’s consultant town planner, Mr Perkins, on the other hand, saw the proposed change as effectively moving the motel from being an essential component of the approved development to a potentially optional component, with the consequent potential deferment or loss of the motel component, which he regards as of importance.
- An approval can only result in development if it is acted upon to some extent. The question of whether the applicant has established that the proposed change would not result in substantially different development must therefore be answered on the assumption that the changed approval would be acted upon to some extent and by considering the resulting development.
- A comparison between pre and post change development scenarios often involves considering the whole of the development authorised by the existing approval and proposed to be authorised by the changed approval. That is because approvals will often be for a particular form of development to occur as a whole at the one time and will not authorise development of parts of a proposal at different times, in a piecemeal way. Where however, approvals permit development to occur in stages, the comparison becomes more complex, because such approvals may generally be acted upon to carry out:
- (i)the whole of the development at the one time;
- (ii)different parts of the development in different stages at different times, or
- (iii)one or some stages of development irrespective of whether the approval is acted upon to develop any subsequent stages.
- Unsurprisingly, given the third of those possibilities, approvals which permit development to occur in stages often require important components, works or other matters to be incorporated into, or provided prior to, or in conjunction with, the first stage. That ensures that those things are provided if the approval is acted upon. In this case, the existing approval requires the motel, all required bushfire management measures, acoustic fencing and screening and a certain pedestrian pathway to be in the first stage. Mr Perkins’ description of the proposed change to remove the motel from the first stage as effectively moving the motel from being an essential component to an optional one is, in substance, correct, because whilst the holder of the approval must, if it acts on it, deliver that which is in the first stage, the second stage is only a potential further stage to be developed should the holder of the approval choose to do so.
- There was no suggestion that, in the event stage 1 of the development (under either existing or changed approval) is developed there is any obligation to proceed with stage 2. The existing approval permits the following:
- (a)construction of the whole development at one time, without staging;
- (b)construction of the motel component (stage 1), followed by the dwelling component (stage 2), or
- (c)construction of stage 1 (motel) absent any future development of stage 2 (dwellings).
- The approval, as changed, would permit:
- (a)construction of the whole development at one time, without staging;
- (b)construction of the dwelling component (the new stage 1), followed by the motel component (the new stage 2), or
- (c)construction of the new stage 1 (dwellings) absent any future development of the new stage 2 (motel).
- The two (A) scenarios are the same. The two (B) scenarios differ as to the sequencing of development and represent that to which Mr Schomburgk directed himself. The two (C) scenarios contemplate the development of different components without subsequent realisation of the balance of what the approval authorises. The (C) scenario under the changed approval would see development on the site pursuant to the changed approval but without provision of the motel and represents a development outcome that is not possible under the existing approval. It is the prospect of most concern to the respondent and to PBA, but which Mr Schomburgk dismissed.
- Counsel for Thomco conceded, in the course of oral argument, that in order to establish that the requested change would not result in substantially different development, Thomco had to establish either that:
- (i)the change would not result in development under the changed approval for the new stage 1 (dwellings) only (the (C) scenario), or
- (ii)if it did, that would not constitute substantially different development.
He contended that both were established. For the reasons that follow I am not satisfied of either.
- Insofar as the first of those propositions is concerned, the respondent pointed to the opportunity which would exist, under the proposed changed approval, for the site to be developed for the new stage 1 without the motel ever being constructed. It is something which, on the face of it, may well result from the change. Counsel for the applicant did not cavil with that as a possibility, but submitted that the evidence of Thomco’s present intention, to go on to develop the new stage 2 after the new stage 1, would satisfy the Court, on the balance of probabilities, that the change would not have that result. For the reasons which follow however, I am not satisfied that the professed present intentions of Thomco provide a sufficiently reliable basis to support that finding.
- Evidence as to Thomco’s present intentions was given by its director Anthony Scanlon (Scanlon). He deposed that it is Thomco’s intention to proceed with the construction of the motel units as soon as it is possible to do so and to then retain ownership of the motel and to operate it as part of its business activities in a similar way to its business at the Surfair Beach Motel. To that end Thomco has:
- lodged a development application for the operational works necessary for both stages;
- progressed design development, and
- completed a business plan.
- The development intentions of Scanlon and Thomco, however genuinely held from time to time, are and have proven to be, changeable. It has been noted that the site is part of what was once a caravan park. That was closed in early 2011. As Scanlon conceded, the intentions of Thomco concerning development of the site have changed from time to time.
- On 12 February 2010, this Court granted a development approval for a range of visitor accommodation on the site. The proposal was known as “Essence of Peregian”. On 24 January 2012, a successful application was made to change that approval to permit the proposal to be developed in 3 stages. On 15 November 2013, an extension of the relevant period for the approval was obtained. The development however, never occurred.
- On 30 May 2014, the Council approved a development application to facilitate the IGA supermarket development on part of Thomco’s land. This appears to be the only approval for part of the old caravan park site that Thomco has acted on.
- The subject proposal has a relatively long history dating back to 20 December 2016, when the development application was lodged with the Council. At that time it included both permanent and visitor accommodation. It attracted a torrent of objections, including as to the intention for permanent accommodation and as to whether stage 2 of the proposal, which was then the motel, would be acted upon (with submissions to the effect that the staging was not appropriate and should be reversed).
- The development application was refused on 20 October 2017, leading to the institution of an appeal to this Court on 25 October 2017. Following a mediation on 8 May 2018, Thomco’s solicitor advised the parties that the staging would be changed so that the motel must occur prior to, or concurrently with, what was previously stage 1.
- It has already been noted that the permanent accommodation component was controversial. Scanlon had strongly asserted the applicant’s intention to develop permanent residential accommodation. Indeed so adamant was Scanlon that it appears that the manager of Council’s development assessment still harbours some apprehension about Thomco’s intention to develop visitor accommodation. She also held concerns about how the dwellings will in fact be used. Nevertheless, Thomco successfully applied to the Court, on 18 October 2018, to change its application so that all accommodation is for visitors only and does not, at least at this time, seek to change that.
- The existing approval was granted by this Court’s judgment of 21 June 2019, to which the applicant consented, in accordance with an agreement reached with the other parties to that appeal. Thomco presumably had a then present intention to develop the site in accordance with the terms of that approval. It was however, only a matter of weeks later, on 2 August 2019, that Scanlon approached the Council about Thomco’s wish to change it. The subject application was then filed on 18 September 2019 seeking to, in effect, return the staging of the development to that initially proposed in the development application.
- Scanlon explained the changing development intentions over time by reference to the need to make commercial decisions. In particular he said in relation to those intentions:
“It has changed, yes. But business changes and different dynamics change. And when you’re in a commercial business, you have to make those decisions at that time, and sometimes it results in some change.”
That is understandable, but it underscores the difficulty in placing reliance on his present intentions in relation to future decisions to proceed with what would become stage 2 in whatever circumstances then apply to Thomco.
- Scanlon explained the desire to change the staging so soon after consenting to the Court’s judgment, pursuant to a settlement amongst the parties, by reference to the fact that Thomco is reliant on finance to carry out the development and that enquiries suggest that it is only by reversing the staging that it will likely get finance on terms acceptable to it. In that regard, Scanlon deposed that:
- (i)estimated construction costs are now higher than previously expected;
- (ii)there will be infrastructure costs not previously expected;
- (iii)the present valuation of the proposed motel units is lower than expected and is less than the estimated construction cost;
- (iv)the valuation of the dwellings however, exceeds their estimated construction cost;
- (v)a number of potential financiers for the development as a whole advised that finance would be dependent on significant (10 to 12) pre-sales of the dwellings;
- (vi)attempts to pre-sell the dwellings have not been successful, but he believes they will be easier to sell if they are constructed;
- (vii)one bank advised that finance to develop the motel first, as stage 1, would only be provided on the basis that Thomco provided security over its other assets or cash reserves to secure the difference between the construction costs and the valuation of the motel. Thomco regards that as unacceptable;
- (viii)the same bank advised Thomco that finance would be available to develop the dwellings first and then to fund the motel once sufficient dwellings had been sold and the debt reduced to an acceptable level. Scanlon presently thinks this would take 1 to 2 years following completion of the dwellings;
- (ix)the current valuation of the motel underestimates its value to Thomco and once the motel is ‘up and running’ he expects its valuation will improve to the point where it exceeds its construction cost;
- (x)Thomco will not be able to proceed with the development at all without the proposed change.
- It may be noted that, despite the Court being assured of Thomco’s continuing desire to develop the motel and Thomco’s confidence in delivering both stages of the development, Thomco is not so confident in its proposal that it is prepared to offer the additional security requested in order to fund the development of the motel first in accordance with the existing approval. Rather than accept that risk it seeks, under threat of not acting on the approval at all, to change the approval so as to, it claims, obtain finance on terms it finds more acceptable.
- That the request is made so shortly after the approval was given, in terms to which Thomco consented as part of the compromise of the appeal to this Court, with parties hostile to the change now sought, and that the circumstances sought to justify the change to the approval to which it agreed primarily pertain to the financial circumstances of Thomco and, in particular, its wish to obtain finance on the better terms it understands are available for the development staged in the way it prefers compared with the terms available to fund the development staged in the way currently approved, might not be thought to provide a compelling basis for the favourable exercise of discretion. Indeed it was argued, on behalf of the respondent, that Thomco’s financial circumstances would be irrelevant to an assessment of, and decision on, the application, just as a person’s personal circumstances, financial or otherwise are, by virtue of s 45(5) of the PA, irrelevant when carrying out impact assessment of a development application. It is unnecessary for me to consider assessment and discretionary matters at this point however, since they only arise if Thomco establishes that the change is a minor change. I have considered Scanlon’s evidence insofar as it goes to that point and, in particular, to the submission that the Court would find that the change would not result in the development of the new stage 1 alone.
- Scanlon’s evidence establishes little more than a current development intention and a possible pathway, on the basis of enquiries to date, to obtain finance in the future to effect that intention in relation to the motel if the new stage 1 (dwellings) goes well and debt is reduced sufficiently to provide capacity for further borrowing for development of the motel if that is what Thomco chooses to do when and if the time comes. There are obviously many factors which might affect the realisation of the professed current intention including:
- (i)Whether Thomco secures and maintains a continuing ability to obtain finance for the motel development on the basis indicated;
- (ii)Whether Thomco enjoys sufficient future success in selling the dwellings (the new stage 1) in whatever economic and market conditions apply, notwithstanding its inability to achieve pre-sales to date;
- (iii)Whether Thomco is able, after developing the new stage 1, to reduce its indebtedness sufficiently to obtain the further finance then needed to develop the new stage 2 (motel) in the context of the circumstances which then apply;
- (iv)Whether Thomco retains ownership of the balance of the site after developing the new stage 1, and if so, whether it (and, to the extent necessary, its financier) still sees merit in developing the motel component, and
- (v)Whether Thomco’s capacity or willingness to develop the new stage 2 becomes affected by material changes of circumstance, be they changes of a general nature, such as economic, lending or market conditions or of circumstances more specific to Thomco such as its financial position or competing development or other business opportunities available to it at the time. As Scanlon said “business changes and different dynamics change”.
- I am not satisfied that Thomco has established that the change would not result in development for the new stage 1 absent development, concurrently or subsequently, for the motel. It very well may do. That is not a development scenario which is possible under the existing approval. The next question is whether that would represent substantially different development.
- It is not uncommon for changes to approvals that permit or alter staging to be accepted as minor. Where development authorised by an approval is relatively homogenous, as can be the case in, for example, new residential, industrial or commercial estates, changes to staging and the potential for later stages not to be delivered often have little, if any, prospect of resulting in substantially different development. There are other cases where that which is, by a proposed change to an approval, to go from being required in the first stage to being assigned to a potential subsequent stage, is not a matter of such significance that its non-provision could be said to result in substantially different development. This is not such a case.
- The Noosa Plan employs ‘nesting’ of uses whereby various uses fall within a use class which, in turn, falls within a primary use. The visitor accommodation authorised by the existing approval all falls within the type 4 conventional use description within the visitor accommodation use class which, in turn, is within the residential primary use category. That the dwellings and the motel building all fall within the type 4 conventional use under the Noosa Plan does not however, mean that the development is homogenous or that development for the dwellings without the motel would not be substantially different development to that which would occur if the motel were delivered, as currently required, in the first stage.
- There are many differences between the motel building and the dwellings. Those differences include: their location on site, the size and form of motel building compared with the individual dwellings; the greater number of motel units but the smaller size of the units and fewer number of bedrooms provided; the space about the curtilage of the dwellings and the convention facility in the motel. One is not just ‘more of the same’ of the other.
- The differences between the dwellings and the motel extend to the market they would likely serve. Whilst Mr Schomburgk pointed out, in his first affidavit, that both stages of the development would deliver additional visitor accommodation to Peregian Beach, which would provide additional choice, competition and convenience to members of the public who might like to visit or holiday in Peregian Beach, he explained, under cross-examination in answer to a question about the point of difference to him, as a planner, between the two, that:
“They’re likely to cater for different market segments. The detached houses are more likely to cater for people who are going to stay a bit longer than just one or two nights and more likely to cater for, for example, families or groups of families, indeed, whereas the motel is normally for much shorter stays and usually only for one or two persons.”
- The motel is also more likely to provide lower cost accommodation, which is something to which Mr Perkins, Ms Coyle and Mr Cotterell all pointed, but which was challenged on behalf of Thomco. Low cost accommodation is referred to in the planning documents, as was acknowledged by both Mr Perkins and Mr Schomburgk. The overall outcomes for the Eastern Beaches locality provides that:
“Emphasis is placed on protection and retention of low cost accommodation consistent with maintaining a diversity of accommodation types for visitors to the locality.”
Further, the specific outcomes seek to protect and retain the now closed caravan park to provide for low cost visitor accommodation needs.
- It was pointed out for Thomco that:
- (i)serviced apartments (akin to the dwellings) are only one step up from motels in the order of cost for visitor accommodation given in the joint report of the economists in the earlier appeal;
- (ii)the existing approval does not mandate the tariff to be charged to those in either the motel or the dwellings;
- (iii)the existing approval does not mandate that the motel is to be of any particular standard (e.g. by requiring it to be of a certain star rating);
- (iv)the dwellings would, like the motel, have some communal facilities, onsite management and likely be able to cater for short notice bookings and offer appropriate payment arrangements;
- (v)on Scanlon’s evidence, the dwellings would be able to be configured, by locking off some bedroom and bathroom doors, to be rented out as 1 or 2 bedroom units for rates “likely to be comparable” to the motel units.
- As to the last of those points, it should be noted that whilst it might be possible to let out the dwellings on that basis, the dwellings would not be so limited and the owners (or manager) would obviously compete for the highest paying visitor market they could attract. The difference between the dwellings and the motel units also goes beyond simply the number of bedrooms offered in each unit.
- (i)has no beach frontage and is set back some distance from the beach;
- (ii)is accessed through a shopping centre;
- (iii)is beside the loading dock of the supermarket;
- (iv)features a number of rooms of modest size, standard for a motel;
- (v)does not have resort-type facilities to a scale which might warrant a high tariff.
- Whilst the dwellings share the access and separation from the beach issues and have limited resort-type facilities, they offer accommodation in larger units (dwellings) with more bedrooms and some outdoor space about them. The motel is likely to offer lower cost accommodation or at least more so than the dwellings.
- The motel will also differ in that it will function in conjunction with the conference facility.
- For the reasons which have been given, the motel component is, in form and function, substantially different from the dwelling component. It is not an insignificant component. As Mr Perkins opined, its non-provision would mean that the proposed development would lack an integral component and not operate as intended. Whilst Mr Schomburgk did not agree that its non-provision would diminish the opportunity for low-cost accommodation, given Scanlon’s evidence about the potential to offer accommodation in the dwellings at different price points, he nevertheless said that the motel would remain an integral component of the overall development approval by which he said he meant that it is an essential component. The change requested however, would treat it as inessential, because it would remove the requirement for its development in the first stage and permit the approval to be exercised to carry out development for the other component (the dwellings) with the motel becoming an inessential potential second stage.
- For the reasons given Thomco has not established that the change it requests is a minor change because it has not established that the change would not result in substantially different development. In particular, it has not established that the change would not result in the site being developed, pursuant to the changed approval, without the motel (the new stage 2) or that such development would not be substantially different to that which would (or could) occur under the existing approval.
- It is unnecessary for me to assess the change application or to consider discretionary factors. The application is dismissed.
 Heritage Properties Pty Ltd & Anor v Redland City Council & Ors  QPELR 510 at 512 C-D.
 Emaaas Pty Ltd v Brisbane City Council  QPELR 579 at .
 Heritage Properties Pty Ltd & Anor v Redland City Council & Ors (Supra) at 512.
 Affidavit of Schomburgk sworn 14/11/19 para 14.
 Affidavit of Schomburgk sworn 14/11/19 para 27.
 Affidavit of Schomburgk sworn 14/11/19 para 31(a).
 Affidavit of Schomburgk sworn 14/11/19 para 34.
 T2-39, 40.
 T 2-40 line 37 – T2-42 line 5.
 Affidavit of Scanlon sworn 8 November 2019 para 31.
 Affidavit of Scanlon sworn 8 November 2019 para 8.
 Although most works are required for the new stage 1 – T2-3.
 Affidavit of Cotterell, Exhibit BAC1, Affidavit of Coyle paras 3, 7, Scanlon T1-87.
 Affidavit of Coyle para 8.
 Affidavit of Coyle para 18.
 A point was also raised about the potential impacts on the motel which would be occasioned by a subsequent construction of the dwellings.
 Affidavit of Schomburgk sworn 14 November 2019 para 12.
 O75 see also O76.
 It may also be noted that the draft new planning scheme seeks for the subject site to provide for a diversity of short-term accommodation types, including low-cost visitor accommodation.
 T2-5, 6.
I note that the joint economic report in the earlier appeal stated that the facility would be pitched in the 3.5 to 4 star range (Affidavit of Sykes pg 492).
 T2-5, 6.
 Affidavit of Schomburgk sworn 17/01/2020 para 13, T1-47, 49.
- Published Case Name:
Thomco (No. 2087) Pty Ltd v Noosa Shire Council
- Shortened Case Name:
Thomco (No. 2087) Pty Ltd v Noosa Shire Council
 QPEC 8
24 Mar 2020