The Business Land use characterisation always real,

It is interesting how concepts that are quotable, or have a memorable name seem to be those that ‘stick’ and become very important. In Victorian planning law, we have terms such as, a ‘planning unit’, ‘secondary consent’, ‘transformation’,’ futility’, ‘piecemeal’, ‘premature’, ‘warehousing’, Kantor, Reichert, Tashounidis, ‘agent of change’, ‘reverse amenity’, ‘innominate uses’, ‘non-conforming uses’ and ‘seriously entertained planning proposals’.

Within this lexicon – not to mention ‘quotability’ – stands Ashley J’s analysis of the ‘real and substantial purpose’ test in Cascone v City of Whittlesea (1993) 11 AATR 175. For interest, we are going back to 1993 to discuss this decision, to get underneath Ashley J’s quotable but somewhat opaque 6 points of principle (not unlike His Honour’s seven-point list in Kantor). Whilst ‘real and substantial purpose’ are the words that have stuck, we’ll see that Ashley J only gave tepid support to this phrase. Nonetheless, now adopted as a term of art, the phrase embodies a meaning not fully captured in its words, hence our interest in going back to basics in this article.

Cascone

A video cassette wholesaler who sold to stores like Movieland etc. operated from a warehouse in an industrial estate in Thomastown. Google Street View shows that the subject site looks like this in 2020:

1. The ancillary misdirection

The Tribunal thought that a Section 1 or 2 use could be an ancillary use, but a Section 3 prohibited use could not. Whilst this is a pretty specific point, it underpins a more important misunderstanding of ‘use’ and ‘ancillary use’, as the Court found. The error is that an ‘ancillary use’ is not in fact a ‘use’ for characterisation purposes at all. Rather, an ‘ancillary use’ is merely a sub-component of activity that forms part of the ‘real’ use. Under planning schemes, ‘use’ is characterised by reference to the purpose being served, not the activities being undertaken per se. For example, one business renting out ‘20 videos per day’ might be running a shop, because the real purpose of the operation is to retail videos to the public. Another business might be undertaking the same activity, yet for a different purpose (e.g., as was argued in Cascone, a ‘market research’ type purpose supporting wholesaling activities). Thus, it all depends on purpose.

2. The ‘real and substantial purpose’ test

A question on the appeal was whether the Tribunal was bound to apply the ‘real and substantial purpose’ approach to characterisation. The genesis of this ‘test’ comes from Shire of Perth v O’Keefe (1964) 110 CLR 529 (an existing use rights case, but subsequently adopted in characterisation cases too) where Kitto J said:

The business was itself set up like a video store so that retailers could come in, ‘get the full experience’ and pick out movies that would be successful in their stores. However, the wholesaler also rented and sold some movies direct to the public. This accounted for about 28% of its turnover. It said that this part of the business was a type of ‘market testing’, to help it ‘talk the talk and walk the walk’, so to speak. ‘Shop’ was prohibited. Did the retailing activity mean the use impermissibly included ‘Shop’?

The Council thought so – it brought enforcement action. The Tribunal agreed. It thought several types of use were occurring, one being a prohibited ‘shop’. The Court didn’t determine what the answer was, but did find two errors in the Tribunal’s reasons, as follows:

“First it is required that a purpose be identified as the end for which it can be seen that the premises are being used at the date of gazettal of the by-laws. 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 application of the by-law in a particular case has therefore not to be approached through a meticulous examination of the details of processes or activities, or through a precise cataloguing of individual items of goods dealt in, but by asking 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 … whether that use is really and substantially a use for the designated purpose.”

The Tribunal didn’t apply this test. Instead, it focussed on whether the activities occurring on the land did or did not fall within the definition of the prohibited land use, ‘shop’. As noted, the question was whether the Tribunal was bound to apply the ‘real and substantial purpose’ test. Ashley J’s answer to this was (our words) ‘kinda’. You can say ‘real and substantial’ or you can just say ‘purpose’ – provided you know what you mean! However you express it, the enquiry centres on purpose, not activity.

The quote

Thus, we come to the highly quotable 6 dot points Ashley J wrote at the end of his lengthy decision and add our commentary in the right hand column:

Ashley J Us

(1) In characterising the proposed use of premises, it is always necessary to ascertain the purpose of the proposed use.

(2) Whilst intended use of premises, in the sense of activities, processes or transactions to be undertaken, will be useful in casting light upon the purpose of the proposed use, it is wrong to determine the relevant purpose simply by identifying activities, processes or transactions and then fitting them to some one or more uses as defined in a scheme.

(3) It is wrong to approach the ascertainment of purpose of proposed use on the footing that it must fit within one (or more) of the uses defined in a scheme; at least that is so where there is provision for innominate uses in the scheme.

(4) The ascertainment of purpose of a proposed use may yield the result that the purpose revealed very largely falls within a defined use. The extent to which it does not may be so trifling that it should be ignored. In that event the purpose as revealed should be taken to fall within the defined use.

(5) The ascertainment of purpose of a proposed use may yield the result that more than one separate and distinct purpose is revealed. In that event the question initially arises whether one is dominant. The further question that may arise is whether the lesser purpose or purposes are ancillary to the dominant purpose. If the answer to both questions is ‘Yes”, and the dominant purpose is available as of right or is permitted, the lesser purpose or purposes are legitimised. Then, in planning terms, there is but one purpose. But if the answer to the first question is “No”, each revealed purpose must be available as of right or permitted, else there will be a breach of the scheme. The mere fact that one purpose is authorised will not prevent other revealed purposes from being prohibited.

(6) In resolving the problems of characterisation raised in the preceding paragraphs(1) to (5) the preferable view, in my opinion, is that the adjectival phrase “real and substantial” qualifying “use” will always be nominally present But it is unlikely to be of practical importance in many cases. It will always serve to emphasise that there is a distinction between “purpose of use” and “use” in the sense of activities, processes or transactions. It should not be used to cloud the potential for more than one purpose being revealed. It should not be thought to provide a basis for treating a combination of activities, processes or transactions as necessarily attracting the appellation of “innominate use”. (our emphasis)

Purpose not activity!

Activities – e.g. ‘drive trucks to site with dirt and dump it’ –sheds light on purpose of use but is not determinative. You could be ‘driving trucks to site to dump dirt’ to fill a hole, or to offload unwanted soil. Same activity, different purpose and therefore different land use characterisation.

Self-explanatory

Self-explanatory

Ancillary should be understood to mean something like ‘helping’ or ‘assisting’, not ‘big v small’.

Similarly, dominant does not mean ‘biggest’ per se. In our view, it should be looked at more like a Venn diagram or as described by Kitto J in O’Keefe, a question of genus or class. As His Honour said: “If the activities, processes or transactions are capable of being treated as all or the majority of a species of a genus, then that genus may properly be regarded as describing the purpose of the use of the land. If they are not, then it may be that the only conclusion is that the land has been used for more than one purpose”.

‘A

rose by any other name.’

It doesn’t matter if you use the phrase “real and substantial purpose” or not, and in some ways it can be seen that focusing on the ordinary meaning of these words rather than understanding them as a term of art might lead to error (especially in the context of dominant and ancillary uses).

Michael Pavlidis is an aspiring planning lawyer, recently graduated and looking for future opportunities as a planning solicitor. He assists various planning barristers with planning law related research tasks. Michael Pavlidis michaelgpavlidis@gmail.com. Sean McArdle is a planning barrister at the Victorian Bar. sean.mcardle@vicbar.com.au