Ausco Modular Pty Ltd v Western Downs Regional Council [2025] QPEC 1

PLANNING AND ENVIRONMENT COURT OF QUEENSLAND CITATION: Ausco Modular Pty Ltd v Western Downs Regional Council [2025] QPEC 1 PARTIES: AUSCO MODULAR PTY LTD (Applicant) v WESTERN DOWNS REGIONAL COUNCIL (Respondent) FILE NO/S: BD1979/24 DIVISION: Planning and Environment PROCEEDING: Originating Application ORIGINATING COURT: Planning and Environment Court, Brisbane DELIVERED ON: 13 February 2025 DELIVERED AT: Brisbane HEARING DATE: 21 and 25 October 2024 and 10 February 2025 JUDGE: Kefford DCJ ORDER: The application is dismissed. CATCHWORDS: PLANNING AND ENVIRONMENT – APPLICATION FOR A MINOR CHANGE TO A DEVELOPMENT APPROVAL – where the applicant sought to change an existing development approval to introduce staging – whether the change is a minor change –– whether changes would result in substantially different development LEGISLATION: Planning Act 2016 (Qld), ss 73, 78, 78A, 79 CASES: Highgate Partners Qld Pty Ltd v Sunshine Coast Regional Council [2020] QPEC 19; [2021] QPELR 112, approved Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305, (2001) 52 NSWLR 705, applied Thomco (No. 2087) Pty Ltd v Noosa Shire Council [2020] QPEC 8, [2020] QPELR 1113, approved COUNSEL: C Hughes KC, L Walker and S Formby for the Applicant B Rix for the Respondent SOLICITORS: Piper Alderman Lawyers for the Applicant King and Company Solicitors for the Respondent -- 1 of 12 -- 2 TABLE OF CONTENTS Introduction .......................................................................................................................... 2 What changes are proposed? ................................................................................................ 2 What are the legislative requirements for an application to the Court? ............................... 3 Is the application for a minor change to a development approval? ...................................... 3 Would the proposed changes result in substantially different development? .................. 4 Conclusion .......................................................................................................................... 12 Introduction [1] The Applicant, Ausco Modular Pty Ltd, has a development permit permitting it to make a material change of use for an undefined use (non-resident workforce accommodation – 1,000 rooms) (“the development approval”). The development approval attaches to land at 184 Zeller Street, Chinchilla that is more particularly described as Lot 78 on LY3 (“the subject land”). The approved use has commenced. It operates as “Stayover Chinchilla”. [2] The Applicant wants to change its development approval. It has applied to this Court to make the change. Western Downs Regional Council (“the Council”) does not oppose the relief sought. What changes are proposed? [3] The development approval for non-resident workforce accommodation comprises 1,000 rooms and six laundry units, along with 11 combined laundry and storeroom units in a single stage. [4] The Applicant describes the proposed changes to the development approval as changes that: “… introduce staging as follows: (a) Stage One: 1000 rooms, six laundry units and 11 combined laundry and storeroom units (reflecting what presently exists on the Land); (b) Stage Two: 856 rooms, three laundry units and 11 combined laundry and storeroom units (which involves the removal of 144 rooms – but not the infrastructure supporting them – on a temporary basis); and (c) Stage Three: 1000 rooms, six laundry units and 11 combined laundry and storeroom units (thereby returning the full complement of 1,000 rooms as approved).” [5] The proposed changes also include the insertion of conditions that: (a) indicate that the conditions in the development approval are applicable to each stage of the development unless otherwise specified; and -- 2 of 12 -- 3 (b) require the provision of evidence of relevant plumbing and building approvals and evidence that relevant inspections have been undertaken with respect to the removal of buildings at stage 2 and the re-introduction of buildings as part of stage 3. What are the legislative requirements for an application to the Court? [6] This proceeding was commenced as an Originating Application. The application was purportedly made pursuant to s 78 of the Planning Act 2016 (Qld). [7] Under s 78(2) of the Planning Act 2016, an application to change an approval must be made to the “responsible entity” for the application. By virtue of s 78A(2), the Planning and Environment Court is the responsible entity if: (a) a properly made submission was made about the development application for the development approval; (b) the development approval was given or changed by the Court; and (c) the change application is for a minor change to a development approval. [8] In this case, the evidence readily establishes that: (a) there were properly made submissions made about the original development application for the development approval; and (b) the development approval was given by this Court on 23 May 2018 following a contested hearing before me. My reasons for determining that the development approval should be given are recorded in Ausco Modular Pty Ltd v Western Downs Regional Council & Anor [2017] QPEC 58; [2018] QPELR 80. [9] Whether the application is for a “minor change” is a threshold issue about which I must be satisfied. The application must be dismissed if it is for a change that does not fall within the description of “minor change”. Is the application for a minor change to a development approval? [10] Minor change for a development approval is defined in sch 2 of the Planning Act 2016 as follows: “minor change means a change that— … (b) 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 -- 3 of 12 -- 4 (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.” [11] In the Amended Written Submissions of the Applicant dated 10 February 2025, Counsel for the Applicant submit that a review of the Planning Regulation 2017 reveals that if a development application for the proposed development were made at the date of the submissions, it would not cause: (a) the inclusion of prohibited development in the application; (b) referral to extra referral agencies nor change the scope of any referral agency’s assessment; or (c) changes to the requirements for public notification, as the development application was impact assessable and would remain impact assessable. [12] These submissions were not challenged by the Council. [13] I am prepared to assume that the submissions by Counsel for the Applicant are accurate in this regard. The real issue, with respect to the minor change definition, is whether the proposed changes would result in substantially different development. [14] Whether the proposed changes would result in substantially different development and whether the proposed changes constitute a “minor change” are matters of fact and degree that are to be considered broadly and fairly in all the circumstances of the case: Highgate Partners Qld Pty Ltd v Sunshine Coast Regional Council [2020] QPEC 19; [2021] QPELR 112. Would the proposed changes result in substantially different development? [15] Schedule 1 of the Development Assessment Rules, promulgated by the Minister under s 68 of the Planning Act 2016, provides guidance in relation to what may result in substantially different development. There is no stated legislative requirement to consider those matters. They are not an exhaustive statement of the circumstances that might be relevant to the determination of whether something is substantially different development. Nevertheless, applying a purposive approach to the reading of the planning legislation, I accept that it is appropriate to have regard to them and I have. -- 4 of 12 -- 5 [16] In this case, consideration of whether the proposed staging would result in a substantially different development requires an appreciation of the intended operation of the development. This is one of the matters identified as potentially relevant in s 4(d) of sch 1 of the Development Assessment Rules, which states: “A change may be considered to result in a substantially different development if any of the following apply to the proposed change— … (d) changes the ability of the proposed development to operate as intended; …” [17] The intended operation of the development was a material consideration in my assessment of the development in Ausco Modular Pty Ltd v Western Downs Regional Council & Anor [2017] QPEC 58; [2018] QPELR 80, wherein I relevantly found: (a) at 114 that: “[143] I accept Council’s submission that future projects will, to some extent, replace the inevitable depletion of existing demand as current projects wrap up and that there is no certainty with respect to future projects. As was agreed by the economists, “it is impossible to say with any degree of accuracy what the actual demand will be for non-resident worker accommodation in Chinchilla over the next five years”. [144] Nevertheless, I am satisfied that there is a need for the facility and an absence of conflict with s 3.2.2.2(5). In order to avoid the negative impacts associated with accommodation shortages (such as those that have occurred in Chinchilla in the past) and ensure that Chinchilla can adapt positively to future opportunities and challenges, it is necessary to have non-resident workforce accommodation that is available to cater for potential peak demand, not just average occupancy. I do not accept the evidence of Mr Coghlin that many of these projects have long lead times that allow the market to anticipate when they will proceed. The historical experience in Chinchilla belies this suggestion. Further, and in any event, any future application for a non-resident worker accommodation in Chinchilla would require impact assessment. It is not a code assessable use in any zone. As such, one could not reasonably assume that adequate provision could be made in a timely manner should the approved or proposed projects proceed. (footnotes omitted, emphasis added) -- 5 of 12 -- 6 (b) at 129-32 [222]-[227] that even though the occupation rates for Base Camp and Stayover Chinchilla (operating under a temporary approval) were around 30 per cent: “… as the economists agreed, supply in relation to workers accommodation villages should always be in excess of demand such that there is occupancy well below 100 per cent to accommodate peaks which could be expected or unexpected and to provide choice of location and operator” (c) at 132-3 [229]: “Mr Bradford’s confidence is, no doubt, informed by a contract with QGC for a guaranteed reservation of a large number of rooms, as well as another contract executed during the course of the hearing. However, I do not place significant weight on those individual contracts. They simply corroborate the expert opinion proffered by Mr Duane about the need for a facility with capacity to cater to companies that seek to accommodate large groups of employees. What, to my mind, is more telling is: (a) the evidence of the peak in May 2017; (b) the fact that, if the development is not approved, there will only be one facility remaining in Chinchilla; (c) Mr Leyshon’s acceptance that there is a need for a second workers accommodation facility; (d) there are a number of projects that could, at short notice, produce significant demand; (e) there are significant consequences for the community if the demand is left unanswered; and (f) the ability to provide a nimble response to demand that arises in a short period is hampered by the fact that non- resident workers accommodation is an inconsistent use in every zone in the Western Downs Planning Scheme.” (emphasis added) [18] As is evident from the findings extracted above, the development approval was intended to operate with periods of occupancy well below 100 per cent to ensure that non-resident workforce accommodation would be available to cater for future potential peak demand, not just currently predicted peak demand, or unexpected short term peak demand, or average occupancy. [19] The Applicant submits that the proposed changes would not diminish the ability of the development to operate as intended and would not result in substantially different development. In support of its submission, the Applicant relies on the evidence of: (a) Ms Jessica Robson, the town planner retained by the Applicant; -- 6 of 12 -- 7 (b) Mr Ian Missingham, the National Manager of Stayover. Stayover is the business arm of Ausco Modular Pty Ltd that operates the approved use on the subject land; and (c) Mr Gavin Duane, the economist retained by the Applicant. [20] Ms Robson opines that the proposed changes would not result in a substantially different development. Her opinion is premised on, amongst other things, her opinion that the proposed changes would not alter the ability of the approved development to operate as intended. The basis for that opinion is that: “[t]he land use and service offering of non-resident workforce accommodation will continue and remain unchanged but for the reduction of rooms during Stage 2.” [21] I infer from this statement that Ms Robson regards the proposed change to staging to be an irrelevant or trivial consideration. I do not consider such an approach persuasive. The operational consequence of introducing staging is not a matter that should be summarily dismissed. His Honour Judge Rackemann’s observations in Thomco (No. 2087) Pty Ltd v Noosa Shire Council [2020] QPEC 8; [2020] QPELR 1113 are pertinent in this regard, wherein His Honour found at 1116-7: “[15] 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. [16] 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. [17] 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 -- 7 of 12 -- 8 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. …” [22] I respectfully agree with the observations of His Honour Judge Rackemann. His Honour raises valid considerations, none of which have been addressed by Ms Robson. Ms Robson gives no consideration of the operational consequences should stage 3 not proceed. In the circumstances, I do not find Ms Robson’s evidence persuasive. [23] I turn next to the evidence of Mr Missingham. Mr Missingham gives evidence that the occupancy rates have been less than those anticipated by the Applicant and the expert economists who gave evidence in the appeal. He says that: (a) average nightly accommodation for the financial year ending June 2023 was 397 rooms (39.7 per cent occupancy) and peak accommodation was 715 rooms (71.5 per cent occupancy); (b) average nightly accommodation for the financial year ending June 2024 was 262 rooms (26.2 per cent occupancy) and peak accommodation was 435 rooms (43.5 per cent occupancy); and (c) average nightly accommodation for the financial year ending June 2025 (to date) has been 247 rooms (24.7 per cent occupancy) and peak accommodation has been 409 rooms (40.9 per cent occupancy). [24] According to Mr Missingham, it is impossible to predict the precise future demand for non-resident worker accommodation in Chinchilla. Despite that, Mr Missingham says that it is the Applicant’s current expectation, on information now available, that increases in demand over the next two to three years are unlikely. Mr Missingham says that the Applicant expects that there will be projects that increase demand for accommodation at the approved Stayover Chinchilla, but not within the next three years. [25] I accept the evidence of Mr Missingham about occupancy rates for the financial years ending June 2023, June 2024 and June 2025. [26] As for the balance of Mr Missingham’s evidence, Mr Missingham does not reveal the information that he says is now available to the Applicant upon which its expectations about future demand are founded. As was noted by Heydon JA in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305, (2001) 52 NSWLR 705, at 733 [68], the Court as the trier of fact must arrive at an independent assessment of the opinion offered by experts and their value. This cannot be done unless the basis of the opinions is explained. The opinions are also of little value if they are founded on facts that are not proved. Mr Missingham’s evidence about future demand suffers from these defects. In the circumstances, I do not accept Mr Missingham’s evidence. [27] Finally, the Applicant relies on the evidence of Mr Duane. Mr Duane opines that non-resident worker accommodation in regional areas is essential to ensure the national economy benefits from resources infrastructure and energy projects. He says that the demand for such accommodation is lumpy. -- 8 of 12 -- 9 [28] According to Mr Duane, the demand for non-resident worker accommodation in Chinchilla has reduced since the development approval was granted and is currently in a declining phase. Mr Duane says that the growth foreseen at the time the appeal was heard has not materialised. Mr Duane explains the basis for his opinions in that respect. He reports that the Queensland Government Statisticians Office projects a decline in the non-resident population in the Surat Basin and the Western Downs from 2021 to 2026. [29] That said, Mr Duane maintains the opinion he expressed during the appeal, namely that it is impossible to predict future demand or cycles with any precision. Mr Duane says that some projects may arrive with limited warning, particularly for maintenance projects. As such, he says that the provision of non-residential worker accommodation needs to allow for fluctuations in demand by providing readily available facilities. He considers the facilities would be readily available if they were: (a) existing in situ; or (b) already approved and capable of rapid deployment over and above existing demand. [30] Mr Duane provides cogent explanations with respect to the opinions above. I generally accept that evidence of Mr Duane, save for reservations about his opinion about when facilities could be regarded as readily available. [31] With the matters identified above in mind, in his evidence for this proceeding, Mr Duane proceeds to consider the proposed changes and their implications. He opines that the proposed changes would not result in a substantially different development. He says that the inclusion of a staging plan will allow removal of 144 rooms and associated services during the period of reduced demand and later demand- based reinstatement. According to Mr Duane, this will not reduce the utility of Stayover Chinchilla in providing non-resident worker accommodation in Chinchilla. Rather, Mr Duane says staging will permit economic efficiency because it will allow for the redeployment of assets that are currently unused. He says that, on current trends, those 144 rooms will not be required for the foreseeable future. As such, in Mr Duane’s opinion, the removal of those rooms will not have an adverse effect on the local Chinchilla economy. [32] There are five key matters that underpin Mr Duane’s opinions about the implications of the proposed changes. [33] First, the infrastructure, such as the drains and sewerage infrastructure, will remain in place. That will facilitate a reinstatement of the rooms when the economic conditions require. [34] Second, the Applicant’s proposal to remove 144 rooms from Stayover Chinchilla and reinstate them when demand returns accords with one of the identified benefits of using modular buildings for non-resident worker accommodation. The facility can be reduced in size during periods of low demand and increased in size when demand returns. Mr Duane says that this is economically efficient as the modular buildings can be sold to release capital, or rented to other users off site, or moved to another location where they will be productively used by the Applicant. -- 9 of 12 -- 10 [35] Third, Mr Duane says that although there is a need to maintain a supply of rooms in excess of foreseen and unforeseen demand, it is economically problematic if the excess is too great. This is because the maintenance of excessive rooms and associated facilities: (a) locks up capital and assets without any return on that investment; (b) necessitates ongoing cleaning, maintenance and servicing without financial return; and (c) exposes rooms to weathering and degradation without financial return for those rooms. [36] Fourth, according to Mr Duane, it will be in the Applicants’ best interest to reinstate these rooms. This is because he regards the provision of such accommodation as the source of the Applicant’s revenue. Mr Duane says that the proposed change allows the Applicant the flexibility to expand its operation to the approved maximum number of rooms and to be self-regulating in the timing of the expansion. Mr Duane defends the self-regulation in terms of timing on the “simple economic basis that the operator receives its financial return by providing residential accommodation in its rooms”. Mr Duane says that, having regard to historic trends and future industrial prospects in and around Chinchilla, it is likely that demand will steadily increase over time. He considers that the Applicant is well positioned to quickly reinstate rooms to take up such market demand, either by relocation of existing rooms or by manufacture of new rooms. [37] Fifth, Mr Duane says that, in the Applicant’s circumstances, the ideal economic model involves an approval that permits: (a) an appropriately located accommodation facility containing the maximum number of rooms likely to be required and reasonably sustained; and (b) flexibility to reduce the number of rooms within that maximum at times of lower demand provided the additional rooms can be readily reinstated when demands increases. [38] I accept the first matter that Mr Duane relies on to support his ultimate opinion that the proposed changes would not result in a substantially different development. The maintenance of the plumbing infrastructure, and the proposed conditions with respect to plumbing approval and building approval, assist in demonstrating that the proposed change is not a substantially different development. [39] I am not persuaded of the other four matters relied on by Mr Duane to support his ultimate opinion. [40] With respect to the second matter, the economic efficiency to which Mr Duane refers is the Applicant’s private economic efficiency. This is not a matter that I am persuaded should be attributed determinative weight. To my mind, as I indicated in my original decision, the consequence for the community of unanswered demand is of greater moment. [41] The third matter relied on by Mr Duane also raises considerations of the Applicant’s private economic situation. It focuses on the economic impact of the absence of a return on investment for the Applicant. -- 10 of 12 -- 11 [42] As for the fourth matter, I have serious reservations about Mr Duane’s opinion that it will be in the Applicants’ best interest to reinstate these rooms. As I have identified above, Mr Duane explains his opinion on “the simple economic basis that the operator receives its financial return by providing residential accommodation in its rooms”. Mr Duane does not explain the basis for that opinion. [43] I accept that the Applicant would receive a financial return from providing residential accommodation. That said, it can readily be inferred from the facts referred to by Mr Missingham that there is a cost to achieving that financial return. Examples include the costs associated with relocating the modular units from other premises or the costs of manufacturing new modular units, and the costs associated with obtaining the necessary building and plumbing approvals. Mr Duane does not disclose whether such matters have been considered in reaching his conclusion that it will be in the Applicants’ best interest to reinstate these rooms. There is no evidence of the relevant revenue, nor of the costs associated with reinstating rooms. In the circumstances, I am not furnished with sufficient explanation to test the accuracy of the opinion about the Applicant’s “best interest”. In addition, the facts on which the opinion is premised have not been identified nor proved. [44] The fifth matter relied on by Mr Duane appears to relate to broader economic considerations. I accept that the Applicant currently operates a business that would permit it to reinstate the modular rooms. There is no evidence before me about how quickly unexpected demand arises nor about the time required to respond to market changes by manufacturing new modular facilities or relocating existing ones. There is also no evidence about the time required to obtain the necessary building and plumbing approvals to reinstate rooms. [45] In addition, Mr Duane appears to assume that the additional rooms not only can be readily reinstated when demand increases, but that they will be reinstated to meet unexpected demand. I am not persuaded that this assumption is a reasonable one. At the hearing on 25 October 2024, I queried the absence of an obligation to reinstate rooms to meet demand before acceding to the Applicant’s request for an adjournment to adduce further evidence. My query remains unaddressed. [46] The reinstatement of rooms as part of stage 3 is a matter of importance. That is evident from my original reasons for judgment. The development approval was granted on the basis that, even though there may be low occupancy at times, there is a need for 1,000 rooms of non-resident workforce accommodation to avoid adverse effect on the community from demand left unanswered. The economic importance of this is also evident from Mr Duane’s evidence, particularly in the proviso to which he refers in the fifth matter on which he relies. [47] As I have already identified in paragraphs [21] and [22] above, the planning consequence of introducing staging in a development is that there is no assurance that later stages will proceed. This is a matter that the Applicant has failed to meaningfully address. I am not persuaded by the Applicant’s assertions that self-regulation is a sufficient assurance given they are informed by matters of private economics and there is a paucity of evidence about such matters. In any event, such matters provide no assurance for the community. The Applicant’s assurances and intentions are not reflected in the proposed changes. They will not form part of the development -- 11 of 12 -- 12 approval, which attaches to the land and binds the owner, the owner’s successors in title and any occupier of the premises: s 73 of the Planning Act 2016. [48] For the reasons provided above, I am not persuaded on the balance of probabilities that the use of the land will operate as intended. Conclusion [49] In summary, at the original hearing, in the face of evidence of low occupancy, the Applicant advanced a case that there was a need for 1,000 rooms to: (a) cater for demand that might arise at short notice; and (b) avoid significant adverse consequences for the community were demand left unanswered. [50] The Applicant’s case was successful in that regard. It resulted in the development approval. [51] Under the development approval, the development is intended to operate as a facility that provides capacity to accommodate demand for up to 1,000 rooms. It is intended to provide that capacity even though there will be low occupancy at times. It is intended to provide that capacity because of: (a) the inherently unpredictable nature of the industry to which the approval caters; and (b) the significant consequences for the community when demand is left unanswered. [52] The approved rooms are intended to be provided in the form of modular accommodation. This was the situation at the original hearing. At that time, the Applicant did not propose that there be a fluctuation in the number of rooms located on the subject land from time to time. It now seeks to introduce that flexibility. [53] The Applicant’s asserts that it can nimbly respond to demand that arises in a short period. That it will is not reflected in the changes that it proposes. If the proposed changes were approved, there would be no obligation to proceed with stage 3. As such, the proposed changes remove one of the benefits of approving 1,000 rooms, namely the avoidance of significant adverse consequences for the community occasioned by unanswered demand. That benefit was material to the decision to approve the development. [54] While the Applicant’s assertions about its motivations to maximise revenue and the like informs its pursuit of the proposed changes, I am not persuaded that they demonstrate that the proposed changes would not result in a substantially different development. [55] For the reasons provided above, the Applicant has not discharged its onus of establishing that the proposed changes constitute a minor change. In those circumstances, it is unnecessary to assess the merits of the proposed changes. [56] The application should be dismissed. -- 12 of 12 --