Land and Environment Court New South Wales Medium Neutral Citation: Lot 11 Neil Street Pty Ltd v Cumberland Council [2021] NSWLEC 1037 Hearing dates: Conciliation conference on 13 January 2021 Date of orders: 22 January 2021 Decision date: 22 January 2021 Jurisdiction: Class 1 Before: O'Neill C Decision: The Court orders that: (1) Leave is granted for the Applicant to amend the application to rely on the amended documentation listed at condition 2 of the conditions of consent at Annexure A and attached at Annexure B. (2) The Applicant's Clause 4.6 written request prepared by Chapman Planning Pty Ltd in relation to the height of buildings development standard pursuant to clause 4.3 of the Holroyd Environmental Plan 2013 is upheld. (3) The Applicant's Clause 4.6 written request prepared by Chapman Planning Pty Ltd in relation to the floor space ratio development standard pursuant to clause 4.4 of the Holroyd Environmental Plan 2013 is upheld. (4) The appeal is upheld. (5) Development Application No. DA2020/0103 for the construction of four additional storeys comprising 32 additional residential units and a rooftop communal open space on top of an approved 12 storey residential flat building (known as Building 3) (Development Consent DA2016/496) at 20-22 Dressler Court, Merrylands is approved, subject to the conditions at Annexure A. Catchwords: DEVELOPMENT APPLICATION – conciliation conference – agreement between the parties – exceedance of development standards for height and floor space ratio Legislation Cited: Environmental Planning and Assessment Act 1979 Holroyd Local Environmental Plan 2013 Land and Environment Court Act 1979 Cases Cited: Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 90 Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 RebelMH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130 Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 Category: Principal judgment Parties: Lot 11 Neil Street Pty Ltd (Applicant) Cumberland Council (Respondent) Representation: Counsel: B Salon (Solicitor) (Applicant) C McFadzean (Solicitor) (Respondent) Solicitors: Mills Oakley Lawyers (Applicant) Cumberland Council (Respondent) File Number(s): 2020/327518 Publication restriction: Nil Judgment 1. COMMISSIONER: This is an appeal pursuant to the provisions of s 8.7(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) against the refusal of Development Application No. 2020/0103 for an additional four storeys on top of an approved twelve storey residential flat building to provide an additional 32 units, increasing the overall provision of units within the building from 178 to 210 (the proposal) at 20-22 Dressler Court, Merrylands (the site) by Cumberland Council (the Council). 2. The Court arranged a conciliation conference under s 34 of the Land and Environment Court Act 1979 (LEC Act) between the parties, which was held on 13 January 2021. I presided over the conciliation conference. 3. At the conciliation conference, the parties reached agreement as to the terms of a decision in the proceedings that would be acceptable to the parties. 4. Under s 34(3) of the LEC Act, I must dispose of the proceedings in accordance with the parties' decision, if the parties' decision is a decision that the Court could have made in the proper exercise of its functions. The parties' decision involves the Court exercising the function under s 4.16 of the EPA Act to grant consent to the development application. 5. There are jurisdictional prerequisites that must be satisfied before this function can be exercised. I have had regard to the parties' agreed statement of reasons, at Attachment 1. The two issues raised by the Council in the Statement of Facts and Contentions filed 18 December 2020 related to the exceedance of the height of buildings and floor space ratio (FSR) development standards. The site 1. The site comprises Lot 30 in Deposited Plan 1268071 and is otherwise known as 22 Dressler Court, Merrylands. 2. Lot 30 is an irregular shaped lot (including at its below ground stratum boundaries) and has an area of 3,333m2 at ground level. 3. The site contains Building 3, which is currently under construction. 4. The locality is characterised by existing low rise former industrial premises to the west along Neil Street; mixed use and residential flat building developments approved, under construction, and recently completed to the west and north; commercial and retail development to the south-west; and residential to the east and south. 5. A'becketts Creek (to be modified as part of regional drainage works) is located to the general west. The land borders the Leppington to City / Richmond rail line to the east. The site is approximately 350m north-east from Merrylands train station. Background 1. The site has its origins in Lot 1 DP 203533 (Lot 1) registered on 23 January 1961 and Lot 11 DP 228782 (Lot 11) registered on 21 January 1964. Lot 11 contained two parts, bisected by A'becketts Creek. Lots 1 and 11 1. Upon the coming into force of the Holroyd Local Environmental Plan 2013 (LEP 2013) on 5 August 2013, Lots 1 and 11 in their entirety were zoned R4 High Density Residential, as was A'becketts Creek. The floor space ratio (FSR) development standard, also applying to the entire lots, was 3:1 for Lot 1 and 2.8:1 for Lot 11. The precise location of A'becketts had not been surveyed for the DPs or the LEP 2013 maps, hence its differing shape and location. Across the combined areas of Lots 1 and 11, approval has been granted for four residential flat buildings numbered 1, 2, 3 and 4. 1. Building 2 was approved by the Land and Environment Court on 18 May 2016 and has been the subject of four subsequent modifications applications. The development was then modified by a further development consent that approved an additional 3 storeys and 20 units. In its final approved state, Building 2 contains 113 units and a gross floor area (GFA) of 9,292m2. 2. Building 1 was approved by the Land and Environment Court on 20 December 2016 and has been subject of three subsequent modifications applications. In its final approved state, Building 1 contains 120 units and a GFA of 9,424m2. 3. On 26 June 2017, the Court approved DA No. 2016/496 for the consolidation of Lots 1 and 11, subdivision of the consolidated lot into 3 lots and 4 stratum lots (total 7) and the construction of Building 3 containing 178 units with a GFA of 13,592m2 and Building 4 containing 133 units with a GFA of 9,760m2. Buildings 3 and 4 were located over a common, three level, basement car park. Registration of the subdivision in this form did not proceed. 4. On 11 September 2017, modification 2016/496/2 was approved for minor amendments to the consent. 5. On 8 December 2017, LEP 2013 Amendment No. 15 came into force which had the effect of rezoning part of Lots 1 and 11 SP2 Infrastructure (Drainage) and RE1 Public Recreation. 1. LEP 2013 Amendment No. 15 also altered the FSR map, excising part of the Lots 1, 11 and A'becketts Creek from the FSR development standard and leaving the remaining part of Lots 1, 11 and A'becketts Creek subject to a 3.5:1 FSR development standard. 1. On 5 July 2018, Landmark Group Australia Pty Ltd lodged a planning proposal. The proposal was premised upon making permissible an additional 4 storeys and 2,468m2 of GFA at Building 3. The proposal sought to increase the permitted FSR for a 7,053m2 portion of land, over which buildings 3 and 4 are located, to 3.66:1. The 2,468m2 was calculated as the land area multiplied by the proposed FSR limit (7,053 x 3.66 = 25,814m2, rounded to 25,820m2), less the approved GFA of Buildings 3 and 4, i.e. 25,820m2 – 13,592m2 – 9,760m2 = 2,468m2. The rationale underlying the proposed increase in FSR related to offsetting lost development potential stemming from the SP2 and RE1 zones introduced under LEP 2013 Amendment No. 15. 2. The Planning Proposal request further sought to increase the permitted height for land covered by Building 3 to 50m. 1. On 14 August 2018, modification 2016/496/5 was approved to alter the approved subdivision from 7 lots to 6. Buildings 3 and 4 were located over approved Lot 3. 1. On 4 October 2018, modification 2016/496/6 was approved to correct the description of the development on the notice of determination. It did not alter the approved buildings or subdivision. 2. On 4 October 2018, Council approved DA2018/306 for subdivision of Lot 1 and 11 into 6 lots, including 2 stratum lots (lots 2 and 6). The approved subdivision was identical to that approved under modification 2016/496/5 but was approved under a separate consent so as to progress the subdivision at an earlier stage of the development, unencumbered by other conditions and timing obligations relating to building works. 1. Further to Development Consent 2016/496, on 7 December 2018, Lot 20 DP 1248755 (Lot 20) was registered, representing a consolidation of Lot 1 and Lot 11. 1. On 13 March 2019, modifications 2016/496/3 and 2016/496/4 were approved for alterations and additions to Buildings 3 and 4, resulting in Building 3 having a GFA of 13,657m² and Building 4 having a GFA of 9,962m². 2. On 5 April 2019, DP 1248018 was registered, subdividing consolidated Lot 20 into 6 lots, numbered 1-6. The registered plan reflects the subdivision approved under modification application 2016/496/5 and DA2018/306. Buildings 3 and 4 are located on Lot 3 DP 1248018 (Lot 3). Lot 3 had an area of 6,765m2. Of that area, approximately 298.6m2 was zoned SP2 and was not the subject of a FSR development standard. The remainder (6,466.4m2) was zoned R4 and subject to a FSR development standard of 3.5:1. 1. On 28 August 2019, modification 2016/496/7 was approved for alterations to Buildings 3 and 4, changes to parking, and the introduction of 8 dual key apartments to Building 4. There was no change to GFA. 2. On 23 September 2019, gateway approval was given for the Planning Proposal to increase the permitted FSR and height to 3.66:1 and 50m respectively. 3. On 27 May 2020, modification 2016/496/8 was approved for alterations to buildings 3 and 4 and changes to parking as well as other miscellaneous changes not relevant for present purposes. The application also sought the introduction of 11 dual key units to building 3 and a further 5 dual key units to building 4, but those aspects of the development were not approved. 4. On 15 September 2020, Council approved modification application 2020/0257. Despite its numbering, this modification is an extension of DA2016/496 and is further to 2016/496/8 referred to in the previous paragraph. The new numbering format is a consequence on a new computerised records management system. Modification application 2020/0257 related to conditions 38G and 127. 5. On 15 September 2020, Council approved modification application 2020/0102, a modification of DA2018/306. The effect of modification 2020/0102 was to subdivide approved Lot 3 into two stratum lots such that each of Buildings 3 and 4 were on their own lot. The reason for the stratum subdivision relates to basement parking not sitting evenly under the ground level subdivision pattern. A consequence of the subdivision is that there is a move from having one combined FSR calculation for Buildings 3 and 4 to have two FSR calculations, one for each building and each new lot. As the application proceeded as a modification, it was not necessary for the applicant to provide a written request pursuant to cl 4.6 of LEP 2013 for any numeric variation of the FSR development standard. 1. LEP 2013 (Amendment No. 20) came into force on 25 September 2020. LEP 2013 prescribed an FSR of 3.66:1 for all but 298.6m2 of Lot 3. There is no FSR development standard for the 298.6m2 area which correlates to the SP2 zoning. 1. The area of land subject to the 3.66:1 development standard (6,466.4m2) was less than the 7,053m2 envisaged by the Planning Proposal Request. At 3.66:1, the envisaged permissible GFA was 25,814m2 (3.66 x 7,053). If that GFA was applied to a reduced site area of 6,466.4m2, the (hypothetical) permitted FSR would be 3.99:1. 2. Applying the 3.66:1 FSR to a site area of 6,466.4m2 facilitates a permitted GFA of across Buildings 3 and 4 of 23,667m2. That is close to the then approved GFA of Buildings 3 and 4 of 23,619m2 (13,657m2 + 9,962m2). Rather than facilitating the strategic intent of permitting an additional 2,468m2 of GFA, LEP 2013 Amendment No. 20, as made, has the effect of permitting only an additional 48m2 of GFA (23,667m2 – 23,619m2). 3. On 18 November 2020, DP 1268071 was registered, being a stratum subdivision of Lot 3 into two lots numbered 30 and 31. Building 3 is located on Lot 30 DP 1268071 (Lot 30) which at ground level has an area of 3,333m2. 144.6m2 of Lot 30 is not subject to an FSR development standard while the remainder 3,188.4m2 is subject to the 3.66:1 development standard. 4. Building 4 is located on Lot 31 DP 1268071 (Lot 31) which at ground level has an area of 3,432m2. 154m2 of Lot 31 is not subject to an FSR development standard while the remainder 3,278m2 is subject to the 3.66:1 FSR development standard. The registered plan reflects the subdivision approved under modification application No. 2020/0102. The boundary at each of basement levels 1, 2 and 3 between Lots 30 and 31 differs from that at the ground level by a factor of up to 163m2. Planning framework 1. Lot 30 is zoned part R4 High Density Residential and part SP2 Infrastructure (Drainage). The proposed new works, forming part of a residential flat building, are located exclusively within the R4 zone and are permissible with consent. Clause 2.3(2) of LEP 2013 provides that regard must be had to the zone objectives. The R4 zone objectives are: • To provide for the housing needs of the community within a high density residential environment. • To provide a variety of housing types within a high density residential environment. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. 1. The SP2 zone objectives are: • To provide for infrastructure and related uses. • To prevent development that is not compatible with or that may detract from the provision of infrastructure. 1. Clause 4.3 of LEP 2013 provides for a maximum building height of 50m. 2. Clause 4.4 of LEP 2013 provides for a maximum FSR of 3.66:1. Contravention of the height of buildings development standard 1. The proposal has a height of 50.87m. 2. The applicant provided a written request seeking to justify the contravention of the height of buildings development standard, prepared by Chapman Planning Pty Ltd and dated 6 January 2021. 3. Clause 4.6(4) establishes preconditions that must be satisfied before a consent authority or the Court exercising the functions of a consent authority can exercise the power to grant development consent (Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 at [13] "Initial Action"). The consent authority must form two positive opinions of satisfaction under cl 4.6(4)(a). As these preconditions are expressed in terms of the opinion or satisfaction of a decision-maker, they are a "jurisdictional fact of a special kind", because the formation of the opinion of satisfaction enlivens the power of the consent authority to grant development consent (Initial Action at [14]). The consent authority, or the Court on appeal, must be satisfied that the applicant's written request has adequately addressed the matters required to be addressed by cl 4.6(3) and that the proposal development will be in the public interest because it is consistent with the objectives of the contravened development standard and the zone, at cl 4.6(4), as follows: (4) Development consent must not be granted for development that contravenes a development standard unless: (a) the consent authority is satisfied that: (i) the applicant's written request has adequately addressed the matters required to be demonstrated by subclause (3), and (ii) the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and (b) the concurrence of the Secretary has been obtained. 1. On appeal, the Court has the power under cl 4.6(2) to grant consent to development that contravenes a development standard without obtaining or assuming the concurrence of the Secretary of the Department of Planning and Environment, pursuant to s 39(6) LEC Act, but should still consider the matters in cl 4.6(5) (Initial Action at [29]). The applicant's written request to contravene the height of buildings development standard 1. The first opinion of satisfaction required by cl 4.6(4)(a)(i) is that the applicant's written request seeking to justify the contravention of a development standard has adequately addressed the matters required to be demonstrated by cl 4.6(3) (see Initial Action at [15]), as follows: (a) that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and (b) that there are sufficient environmental planning grounds to justify contravening the development standard 1. The applicant bears the onus to demonstrate that the matters in cl 4.6(3) have been adequately addressed by the written request in order to enable the Court, exercising the functions of the consent authority, to form the requisite opinion of satisfaction (Initial Action at [25]). The consent authority has to be satisfied that the applicant's written request has in fact demonstrated those matters required to be demonstrated by cl 4.6(3) and not simply that the applicant has addressed those matters (RebelMH Neutral Bay Pty Limited v North Sydney Council [2019] NSWCA 130 at [4]). 2. The common ways in which an applicant might demonstrate that compliance with a development standard is unreasonable or unnecessary are summarised by Preston CJ in Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827 [42]-[51] ("Wehbe") and repeated in Initial Action at [17]-[21]: 1. the objectives of the development standard are achieved notwithstanding non-compliance with the standard; 2. the underlying objective or purpose of the development standard is not relevant to the development, so that compliance is unnecessary; 3. the underlying objective or purpose would be defeated or thwarted if compliance was required, so that compliance is unreasonable; 4. the development standard has been abandoned by the council; 5. the zoning of the site was unreasonable or inappropriate so that the development standard was also unreasonable or unnecessary (note this is a limited way of establishing that compliance is not necessary as it is not a way to effect general planning changes as an alternative to strategic planning powers). 1. The five ways to demonstrate compliance is unreasonable/unnecessary are not exhaustive, and it may be sufficient to establish only one way (Initial Action at [22]). 2. The applicant's written request justifies the contravention of the height of buildings development standard on the basis that compliance is unreasonable or unnecessary because the exceedance of the development standard is confined to the lift overrun and plant, which are located centrally on the roof of the building and will not be visually discernible from the public domain. 3. The grounds relied on by the applicant in the written request under cl 4.6 must be "environmental planning grounds" by their nature, and environmental planning grounds is a phrase of wide generality (Four2Five Pty Ltd v Ashfield Council [2015] NSWLEC 90 at [26]) as they refer to grounds that relate to the subject matter, scope and purpose of the EPA Act, including the objects of the Act (Initial Action at [23]). The environmental planning grounds relied upon must be sufficient to justify contravening the development standard and the focus is on the aspect of the development that contravenes the development standard, not the development as a whole (Initial Action at [24]). Therefore, the environmental planning grounds advanced in the written request must justify the contravention of the development standard and not simply promote the benefits of carrying out the development as a whole (Initial Action at [24]). 4. I am satisfied, pursuant to cl 4.6(4)(a)(i), that the applicant's written request has adequately addressed the matters required to be demonstrated by cl 4.6(3). The applicant's written request defends the exceedance of the development standard as a justified response to achieving form and scale of the building as envisaged by the planning proposal that resulted in LEP 2013 (Amendment No. 20). I am satisfied that justifying the aspect of the development that contravenes the development standard in this way can be properly described as an environmental planning ground within the meaning identified by his Honour in Initial Action at [23]. Whether the proposal is in the public interest because it is consistent with the objectives of the contravened development standard and the zone 1. The second opinion of satisfaction in cl 4.6(4)(a)(ii) is that the proposed development will be in the public interest because it is consistent with the objectives of the development standard that is contravened and the zone objectives. The consent authority must be satisfied that the development is in the public interest because it is consistent with these objectives, not simply that the development is in the public interest (Initial Action at [27]). The consent authority must be directly satisfied about the matters in cl 4.6(4)(a)(ii) (Initial Action at [26]). 2. I am satisfied that the proposal will be in the public interest because it is consistent with the objectives of the development standard and the zone, for the reasons given by the applicant in the written request. Contravention of the FSR development standard 1. Clause 4.5 of LEP 2013 defines FSR and sets out rules for calculating site area for the purpose of applying the FSR development standard. In relation to the site area rules, the following clauses are of relevance: * Clause 4.5(3)(a) If the development is to be carried out on one lot only, the site area is taken to be the area of that lot; * Clause 4.5(3)(b) If the development is to be carried out on 2 or more lots, the site area is taken to be the area of any lot on which the development is proposed to be carried out that has at least one common boundary with another lot on which the development is being carried out. * Clause 4.5(4)(a) Land on which the proposed development is prohibited must be excluded from the site area. * Clause 4.5(6) The site area must not include a lot additional to a lot or lots on which the development is being carried out unless the proposed development includes significant development of that additional lot. * Clause 4.5(9) When development is granted to development on a site comprising of 2 or more lots, a condition of the consent may require a covenant to be registered that prevents the creation of floor area on a lot (the restricted lot) if the consent authority is satisfied that an equivalent quantity of floor area will be created on another lot only because the site included the restricted lot. 1. Based on the terms of cl 4.5 of LEP 2013, the Council submitted that the FSR development standard must be calculated for Lot 30; and the area of the SP2 zone must be excluded from the site area. The proposed FSR is 5.15:1, based upon the approved GFA (13,657m2) plus the proposed GFA (2,754.2m2), divided by the site area of 3,188.4m2. 2. The Council further submitted that the approved GFA of Building 4, now on Lot 31, is 9,962m2 whilst its R4 zoned area subject to the 3.66:1 FSR control is 3,278m2, resulting in an FSR of 3.04:1. If FSR was to be calculated across Lots 30 and 31 combined, it would be 4.08:1. 3. The parties agreed that the unusual circumstances of this site and this development are relevant, whereby a reduction to the site area subject to an increased FSR under LEP 2013 (Amendment No. 20) from that contemplated by the forerunner Planning Proposal and the subsequent subdivision of a parent lot have culminated to result in a numerically significant variation on Lot 30, although the overall form of development is broadly consistent with the form of development envisaged by the Planning Proposal and LEP 2013 Amendment No. 20. The parties further noted that an agreed condition requiring the imposition of a covenant over Lot 31 to prevent an effective double dipping of FSR will ensure that the strategic intent underlying the Planning Proposal and LEP Amendment No. 20 will be realised. 4. The applicant provided a written request pursuant to cl 4.6 of LEP 2013 for an exception to the FSR development standard, prepared by Chapman Planning Pty Ltd and dated 11 January 2021. 5. The applicant's written request justifies the contravention of the FSR development standard on the basis that compliance is unreasonable or unnecessary because the exceedance is a result of the reduction in the site area after the planning proposal was lodged, and the form and scale of the proposal and the approved development is consistent with the building envelope envisaged by the planning proposal and LEP 2013 (Amendment No. 20). I am satisfied, pursuant to cl 4.6(4)(a)(i), that the applicant's written request has adequately addressed the matters required to be demonstrated by cl 4.6(3). The applicant's written request defends the exceedance of the development standard as a justified response to achieving form and scale of the building as envisaged by the planning proposal that resulted in LEP 2013 (Amendment No. 20). I am satisfied that justifying the aspect of the development that contravenes the development standard in this way can be properly described as an environmental planning ground within the meaning identified by his Honour in Initial Action at [23]. 6. I am satisfied that the proposal will be in the public interest because it is consistent with the objectives of the development standard and the zone, for the reasons given by the applicant in the written request. Orders 1. The orders of the Court are: 1. Leave is granted for the Applicant to amend the application to rely on the amended documentation listed at condition 2 of the conditions of consent at Annexure A and attached at Annexure B. 2. The Applicant's Clause 4.6 written request prepared by Chapman Planning Pty Ltd in relation to the height of buildings development standard pursuant to clause 4.3 of the Holroyd Environmental Plan 2013 is upheld. 3. The Applicant's Clause 4.6 written request prepared by Chapman Planning Pty Ltd in relation to the floor space ratio development standard pursuant to clause 4.4 of the Holroyd Environmental Plan 2013 is upheld. 4. The appeal is upheld. 5. Development Application No. DA2020/0103 for the construction of four additional storeys comprising 32 additional residential units and a rooftop communal open space on top of an approved 12 storey residential flat building (known as Building 3) (Development Consent DA2016/496) at 20-22 Dressler Court, Merrylands is approved, subject to the conditions at Annexure A. ___________________ Susan O'Neill Commissioner of the Court Attachment 1 (189638, pdf) Annexure A (470731, pdf) Annexure B (2402460, pdf) ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 January 2021