This article originally appeared in New Planner – the journal of the New South Wales planning profession – published by the Planning Institute of Australia. For more information, please visit: www.planning.org.au/news/new-‐planner-nsw
It is not uncommon for a medical complex to have its own pharmacy that dispenses products to out-patients and members of the public. However, when development for the purpose of “commercial development” is prohibited, how should the pharmacy be characterised? This was the question recently considered by the NSW Court of Appeal.
The approved development
The appeal related to a pharmacy located inside a medical complex known as the Greenway Medical Hub, in the Fairfield local government area. The Greenway Medical Hub relied on a complying development certificate which was issued for the fit out of a medical centre, and a subsequent occupation certificate which explicitly excluded a “retail pharmacy” but permitted a “medical pharmacy”.
The pharmacy was described as selling six categories of goods, being:
- prescription or controlled medicines;
- pharmacist only substances;
- over the counter pharmaceuticals;
- therapeutic goods, complementary or alternative medicines;
- occupational therapy, mobility and physiotherapy produces; and
- items described as complementary and ancillary to the maintenance or improvement of human health or the prevention of disease in humans.
Fairfield Local Environmental Plan 2013
The Greenway Medical Hub was located within Zone B5 Business Development pursuant to Fairfield Local Environmental Plan 2013 (FLEP 2013). Pursuant to the Land Use Table, development for the purpose of a “health services facility” (which includes a medical centre) was an innominate permissible use, however development for the purpose of “commercial premises” was a nominated prohibited use.
The Dictionary to FLEP 2013 defines “commercial premises” as any of the following: “(a) business premises, (b) office premises, (c) retail premises.”
“Retail premises” is defined as including “shops”, which is separately defined as “premises that sells merchandise such as groceries, personal care products… or the like”.
Bronger v Greenway Health Centre Pty Ltd t/as Greenway Plaza Pharmacy  NSWLEC 91
The appellants commenced civil enforcement proceedings under section 9.45(1) of the Environmental Planning and Assessment Act 1979 (EP&A Act) to stop the operation of the pharmacy as they alleged it was operating as a “shop” which was prohibited and therefore in breach of section 4.3 of the EP&A Act.
The primary judge, Justice Pain, found that the pharmacy was not being used as a “shop” contrary to FLEP 2013. In reaching this conclusion, her Honour rejected the contention that the items in categories (a)−(e) were “personal care products” and concluded that the sale of category (f) items was “ancillary to the pharmacy operation” and not “an independent use as a shop”.
The primary judge also found that no “retail pharmacy”, as opposed to “medical pharmacy”, was being conducted contrary to the occupation certificate. Her Honour rejected any distinction between the two terms being based on who the items could be sold to.
Bronger v Greenway Health Centre Pty Ltd t/as Greenway Plaza Pharmacy  NSWCA 104
The appellants appealed the decision of the primary judge to the Court of Appeal, on the following grounds: “… the appeal effectively reduced to a consideration of whether or not it was established that the respondent’s pharmacy answered the descriptions “shop” in the relevant planning instrument and “retail pharmacy” in the occupation certificate for the subject premises.”
In the judgment, the Court of Appeal outlined the principles of characterisation as follows:
- The characterisation of the use of premises involves ascertaining the purpose for which the various physical acts are being conducted on the land.
- The use of land can be characterised as having more than one purpose, with each purpose relevantly separate to the other and characterised in accordance with established principles. However, where one purpose is subservient to the other, in the sense of being subordinate, incidental or ancillary, it is to be disregarded.
- Even if one use can be said to be ancillary to another, it does not necessarily follow that it cannot be an independent use of the land.
- If the use of the land satisfies the definition of both the permitted and prohibited use, it is nevertheless prohibited.
The Court of Appeal made the following relevant findings:
- The items in categories (a)-(e) constituted “merchandise” and “items sold by retail” and as such the proper characterisation of the transactions being conducted was the sale of “merchandise” or “items”.
- Even if the operation of the pharmacy had been found to meet the definition of “medical centre”, if it also meets the definition of “shop” then the use is prohibited.
- The phrases used in the occupation certificate should be construed in the context of, and consistent with, FLEP 2013. That is, the reference to “retail pharmacy” being akin to “retail premises” and “shop”, and the reference to “medical pharmacy” being akin to an ancillary, non-independent use of a pharmacy or dispensary for out-patients of a medical centre.
The Court of Appeal ordered that the Respondent be restrained from making retail sales to persons who are not patients of health care professionals at the Greenway Medical Hub.
This case is a reminder of the importance of properly characterising development, particularly where development falls within two or more different definitions. The judgment also provides useful guidance on how to construe occupation certificates, with reference to the relevant environmental planning instrument.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.