The case of Blues Point Hotel Property Pty Ltd v North Sydney Council [2021] NSWLEC 27 offers valuable insights into the interpretation and application of existing use rights.

At its core, this matter focused on whether the first-floor outdoor terrace of the Blues Point Hotel benefited from existing use rights for hotel purposes. Below, we explore the essential points about existing use rights as highlighted by the judgment.

What Are Existing Use Rights?

Under the Environmental Planning and Assessment Act 1979 (EPA Act), existing use rights permit a property to continue a lawful use that existed before a new planning instrument prohibited it. Section 4.65 defines existing use, and section 4.66 outlines limitations on its continuance, including prohibitions against enlargements, expansions, or intensifications of the use.

Key Issues Addressed in the Case

The Court considered whether the outdoor terrace could be characterised as part of the hotel’s existing use under section 4.65. A primary issue was whether the use of the outdoor terrace was part of the lawful hotel use at the time it became prohibited.

The applicants submitted that the outdoor terrace was included in the hotel’s existing use because it was specified in the publican’s licence. The Court emphasised that the determination of existing use requires evidence of actual physical and lawful use before the prohibitory planning instrument’s commencement. Despite the terrace’s capacity for use, there was no evidence to suggest it had been used for hotel purposes before the relevant date, as the records lacked any indication of patron activity, hotel-related operations, or specific use of the terrace in connection with the hotel’s dominant purpose.

Section 4.66(2)(b) prohibits any increase in the area of use from what was physically and lawfully used. The Court found that the terrace had not been used for hotel patrons prior to the commencement of the planning instrument, disqualifying it from existing use rights.

The Court acknowledged that the outdoor terrace was designated on architectural plans as a “flat roof or sun deck” and was physically constructed to be accessible and functional as a sun deck, with a door for access and a parapet for safety. However, even if the terrace had been used as a “sun deck”, the modern use by all hotel patrons for extended hours, food, and drink represented an intensification and enlargement of the original use. Section 4.66(2)(c) prohibits the enlargement, expansion, or intensification of existing use rights.

Ancillary Uses and Dominant Purpose

The judgment also explored the relationship between ancillary uses and the dominant purpose of a property, which is integral to determining the scope of existing use rights. The Court examined whether the outdoor terrace and accommodation areas could be considered separate, independent uses or whether they were subordinate to the hotel’s primary purpose.

The Court concluded that the accommodation use and any use of the terrace were subordinate to the hotel’s dominant purpose. It found that the provision of accommodation was a requirement for the hotel’s licence and was physically and functionally integrated into the hotel’s operations. Similarly, the terrace’s potential use as a sun deck was tied to the broader hotel use. This characterisation ensured that both the accommodation and terrace uses were evaluated as part of the hotel’s existing use rights.

By treating these ancillary uses as subordinate, the Court clarified that any modern changes to the terrace’s use – such as allowing all patrons to access it for extended hours and consume food and beverages – needed to be assessed as an expansion or intensification of the hotel’s dominant use. This interpretation directly affected the scope and limitations of the existing use rights applicable to the property.

This aspect of the decision highlights the importance of understanding how ancillary uses interact with dominant purposes when determining the extent of existing use rights. It serves as a reminder that changes to ancillary uses, even if minor, may impact the permissibility of overall operations under existing planning controls.

Key Lessons

Existing use rights are not assumed based on a property’s potential use or design. Concrete evidence of actual physical and lawful use is essential. Existing use rights freeze the scope and intensity of use as they stood at the time of prohibition. Any deviation, including increased patronage or extended hours, may breach these rights.

Ancillary uses may form part of a dominant use. In this case, the Court rejected arguments that accommodation and terrace use were separate uses, finding them subordinate to the hotel’s dominant purpose, which formed the core issue of this case. Definitions and terms in planning instruments and licensing laws can significantly impact the scope of existing use rights.

Conclusion

The Blues Point Hotel case underscores the importance of understanding existing use rights in planning and development law, illustrating how careful documentation and adherence to statutory limits can shape outcomes in disputes. This case serves as a reminder for ensuring long-term compliance and anticipating challenges in future planning conflicts. It highlights the interplay between legislative provisions, factual evidence, and the historical context of a property’s use.

Further reading

You can access a copy of the judgment below.