As demonstrated by the recent decision in Bowie Ferris Investments Pty Ltd v Woollahra Municipal Council, heritage listings can also present significant challenges, particularly when the use of a building is integral to its heritage value.

The Case Overview

The matter involved a proposed change of use for the Village Inn Hotel in Paddington, a heritage-listed building operating as a pub since the mid-19th century. The development application sought consent to convert the pub into a retail and commercial space.

While the proposed physical alterations were largely uncontentious, the Land and Environment Court dismissed the application, concluding that the cessation of the pub use would adversely impact the heritage significance of the site.

Central to the Court’s reasoning was the recognition that the continuous operation of the building as a pub was not just incidental but a primary element of its heritage significance, reflected in both the Woollahra Local Environmental Plan 2014 and supporting heritage documents. The applicant’s failure to adequately demonstrate that the pub use was unviable ultimately proved fatal to the application.

The Role of Viability Evidence

In this decision, the Court emphasised the need for robust evidence of unviability when seeking to justify a change of use for a heritage-listed property.

The applicant relied primarily on anecdotal evidence from a sales agent and assertions about changing demographics and market trends. However, the Court found this to be insufficient, noting the absence of financial records, profitability analysis, or expert valuation evidence to substantiate the claim that the pub could no longer operate viably.

Implications for heritage developments

This decision serves as a cautionary tale for matters that involve changes to the use of heritage-listed buildings. Key takeaways for practitioners include:

1. Understand the heritage listing – review the heritage listing and associated planning controls to determine whether the building’s use is a significant component of its heritage value. Statements of significance and conservation management plans are crucial documents to consult.
2. Consider robust viability evidence – if an application puts forward that an existing use is no longer viable, it is appropriate for that application to provide comprehensive evidence, including historical and projected financial performance of the current use, details of marketing efforts to attract operators for the current use, including pricing and market feedback, and/or expert opinions (such as valuation reports or operational analyses) addressing the specific challenges of maintaining the current use.
3. Consider community and social impacts – heritage significance often extends beyond physical characteristics to include social and cultural value. Proposals should account for and, where possible, mitigate the impact of a change of use on the local community.
4. Engage with the community – community views can be a powerful force in shaping planning decisions. Engaging with the community early is critical for both local councils and applicants on matters such as these.

Read more

You can read the full judgment below.