Land and Environment Court New South Wales Medium Neutral Citation: ID Fitouts Pty Ltd v North Sydney Council [2023] NSWLEC 1062 Hearing dates: Conciliation conference on 27 October 2022, 15 December 2022 Date of orders: 14 February 2023 Decision date: 14 February 2023 Jurisdiction: Class 1 Before: Sheridan AC Decision: The Court Orders that: (1) The appeal is upheld. (2) Development Consent is granted to Amend Development Application DA274/21 for the demolition of existing structures and construction of a five storey mixed use development containing two commercial tenancies and one motorcycle parking space at ground level, with a boarding house on levels 1–4 containing 12 rooms (including one manager's room) accommodating a total of 17 occupants, with communal living room and open space, above one basement level for waste and six bicycle parking spaces at 1 Eden Street, North Sydney, subject to conditions in Annexure A. (3) The Applicant is to pay the Respondent's costs that have been thrown away as a result of the amendment of the Application for development consent pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979, in the agreed sum of $11,500 payable within 30 days of Orders being made. Catchwords: DEVELOPMENT APPEAL – mixed use development – boarding house – variation to height of building development standard – conciliation conference – agreement between parties – orders Legislation Cited: Environmental Planning and Assessment Act 1979, ss 4.15, 4.16, 8.7, 8.15 Environmental Planning and Assessment Regulation 2000, cl 55 Interpretation Act 1987 (NSW), s 30A Land and Environment Court Act 1979, ss 34, 39 North Sydney Local Environmental Plan 2013, cll 2.3, 2.7, Pt 4 State Environmental Planning Policy (Affordable Rental Housing) 2009, cll 26, 27, 28, 29 State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 State Environmental Planning Policy (Housing) 2021, Sch 7A, cl 2 State Environmental Planning Policy (Resilience and Hazards) 2021, s 4.6 State Environmental Planning Policy No 55-Remediation of Land, cl 7 Cases Cited: CK Design Pty Ltd v Penrith City Council (No 2) [2022] NSWLEC 97. Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 Texts Cited: North Sydney Development Control Plan 2013 Category: Principal judgment Parties: ID Fitouts Pty Ltd (Applicant) North Sydney Council (Respondent) Representation: Counsel: A Boskovitz (Solicitor) (Applicant) A Seton (Solicitor) (Respondent) Solicitors: Boskovitz Lawyers (Applicant) Marsdens Law Group (Respondent) File Number(s): 2022/173180 Publication restriction: No Judgment 1. COMMISSIONER: These proceedings relate to an appeal to the Land and Environment Court (Court) pursuant to s 8.7(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) against the deemed refusal of Development Application DA No 274/21 (the DA) by North Sydney Council (the Council). In exercising the functions of the consent authority on the appeal, the Court has the power to determine the DA pursuant to ss 4.15 and 4.16 of the EPA Act. 2. The DA relates to a 182.8 m2 parcel of land which is legally described as Lot A in DP 105757 and known as 1 Eden Street North Sydney (the Site). The Site is currently occupied by a part one and part two storey commercial building. The Site is located on the northern edge of the North Sydney CBD, approximately equidistant from the Crows Nest Village Centre. The locality is mixed in use, architectural styles and character, with land to the east of the Site zoned R2 Low Density Residential and land to the south-west zoned R4 High Density Residential. 3. The DA as submitted to Council, sought consent for demolition of the existing buildings and the construction of a five storey mixed use development containing two commercial tenancies, one motorcycle parking space at ground level and a boarding house on levels 1-4 containing 12 rooms with communal laundry, living room and rooftop open space above one basement level for waste and (six) bicycle parking spaces. 4. The Development Application was notified by the Respondent for a period of 14 days from 24 September 2021 until 8 October 2021 and 55 submissions were received. 5. On 8 March 2022, in response to correspondence issued by the Respondent, the Applicant amended the DA by provision of amended plans (DA Amended Plans). The DA Amended Plans were notified to residents in accordance with the Respondent's notification policy between 25 March 2022 and 8 April 2022. 59 submissions were received and are summarised at paragraph 33 of the Statement of Facts and Contentions. An appeal against the deemed refusal of the DA was subsequently filed in Court on 15 June 2022. 6. The Court arranged a conciliation conference under s 34(1) of the Land and Environment Court Act 1979 (LEC Act) between the parties, which was held on 27 October 2022, and at which I presided. During conciliation, final amended plans (Final Amended Plans) were prepared by the Applicant to address Council's contentions. 7. The Final Amended Plans were notified to residents in accordance with the Respondent's notification policy for a period of 14 days. 16 submissions were received, objecting to the Amended Plans and raising the following concerns: * No commitment to a plan of management; * Acoustic impacts; * Lack of privacy between balconies; * Impacts from basement construction; * Poor amenity for future residents; and * Fire safety concerns. 1. The Final Amended Plans and documents were uploaded to the NSW Planning Portal on 18 November 2022 and the BASIX Certificate on 15 December 2022. 2. The main changes between the plans as originally submitted to Council and the Final Amended Plans, the subject of the s 34 agreement, are: 1. the reduction of the building height and scale; 2. the introduction of the communal open space to an area next to the communal living room; 3. the provision of greater amenity for most of the rooms with the provision of the balconies off most rooms; 4. provision of some rear deep soil and landscaping; 5. compliance with required commercial space; 6. number of boarding rooms reduced 7. the provision of a rear deep soil setback to provide for planting to allow a transition between the proposed development and heritage item in the rear; 8. the further reduction in the upper level communal space and communal open space to reduce the extent of the wall height/incline plane non-compliance; 9. further internal planning to comply with LEP requirement for internal commercial space; 10. the area at the front becoming commercial and each room having a washer/dryer 1. The proceedings commenced onsite, with a number of resident objections being heard. Following the onsite view, the parties continued conciliation discussions at which the parties reached in-principle agreement on the matters in contention. I presided over the conciliation conference and adjourned the conference to allow the further amended plans to be prepared. 2. The conciliation conference was reconvened a number of times before a signed agreement was prepared in accordance with s 34(10) of the LEC Act and was filed with the Court on 21 December 2022. This decision involved the Court upholding the appeal and granting conditional development consent to the development application. 3. On 8 December 2022, I further adjourned the conciliation conference to permit the parties to finalise the terms of the agreement that was filed with the Court on 21 December 2022 in accordance with s 34(10) of the LEC Act. This decision involved the Court upholding the appeal and granting conditional development consent to the development application. 4. The parties ask me to approve their decision as set out in the s 34 agreement before the Court. In general terms, the agreement approves the development subject to amended plans that were prepared by the Applicant, noting that the final detail of the works and plans are specified in the agreed conditions of development consent annexed to the s 34 agreement. 5. 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 power under s 4.16 of the EPA Act. 6. In this case, there are jurisdictional prerequisites that must be satisfied before this function can be exercised. The jurisdictional prerequisites of relevance in these proceedings, and how they are satisfied, are set out in [16] – [30] below. Satisfaction of jurisdiction North Sydney Local Environmental Plan 2013 1. The relevant jurisdictional matters in relation to the North Sydney Local Environmental Plan 2013 (NSLEP) are: 1. The Site is zoned B4 mixed use under the NSLEP and development for the purposes of a boarding house and commercial development is permissible in the zone. 2. I am satisfied that the Amended DA is consistent with the B4 zone objectives set out in cl 2.3 of NSLEP, which are as follows: • To provide a mixture of compatible land uses. • To integrate suitable business, office, residential, retail and other development in accessible locations so as to maximise public transport patronage and encourage walking and cycling. • To create interesting and vibrant mixed use centres with safe, high quality urban environments with residential amenity. • To maintain existing commercial space and allow for residential development in mixed use buildings, with non-residential uses concentrated on the lower levels and residential uses predominantly on the higher levels. 1. Clause 2.7 of NSLEP (Demolition) provides that demolition is permissible with consent. Demolition is proposed and I am satisfied that the impacts of demolition have been adequately considered, with appropriate conditions included in the agreed conditions of consent. 2. The development complies with all Pt 4 NSLEP standards except for height pursuant to cl 4.3. The Applicant has prepared a cl 4.6 Written Request (the Request) dated 8 November 2022 in respect of the Amended Plans that seek to justify the variation to the height control in cl 4.3 beyond the permitted 13 m height control. 3. The Request identifies the extent of the height non-compliance as being a maximum of 475 mm associated with the lift overrun being a non-compliance of 3.65% and a maximum of 465 mm for the acoustic screening for the rooftop mechanical plant being a non-compliance of 3.57%. 4. I am satisfied that the Request undertakes the necessary tests for consideration to justify the non-compliance including an assessment against the objectives of the zone and the height standard in the NSLEP as well as the consideration of environmental planning grounds. 5. When dealing with the objectives of cl 4.3 of the NSLEP, the Request includes an assessment of the relevant objectives and outlines the lack of environmental amenity issues associated with the proposed lift overrun and acoustic screen. The height non-compliance does not contribute to any additional impact and the parties agree that the impacts of the development are minimised. Figure 3 in the Request provides for a sight line assessment from the heritage property at the rear. 6. The Request states that compliance with the standard is unnecessary or unreasonable in the circumstances of this case as the objectives of the height standard and B4 zone are achieved, notwithstanding the non-compliance with the numerical standard, for the reasons set out below: 1. The visual impact of the non-compliance is limited, noting the departure is a small, centralised portion of the building that exceeds the mapped height control and that this provides a suitable design response. 2. The building when viewed from the public domain will present as a four storey building in a precinct where there are many recently constructed 4 storey buildings. This is consistent with the desired character of the precinct. 3. The visual impact of the building element that exceeds the maximum building height standard is limited and will not be highly discernible from the street given the centralized nature of the portion of the building that exceeds the height control. 4. The minor departure of up to 475 mm will not be discernible from a compliant scheme. The protrusion of the acoustic screen and lift overrun does not result in a stark contrast to the existing built form when viewed from the street and is compatible with the existing built form. 5. The shadow diagrams demonstrate that the adjoining properties continue to receive appropriate levels of solar access to living areas and private open space areas and that the additional overshadowing caused by the building elements above the maximum building height development standard does not have an adverse impact. 6. The proposed variation will not have any adverse privacy impacts noting that the portion of the building that exceeds the height plane contains no habitable floor space. 1. As shown by Preston CJ in Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256; [2018] NSWLEC 118 ("Initial Action"), an applicant need only establish one way, although if more ways are applicable, an applicant can demonstrate that compliance is unreasonable or unnecessary in more than one way (Initial Action, at [22]). 2. I am satisfied that the relevant standard is not relevant in the circumstances of this case for the grounds set out in the Request. 3. I am also satisfied there are sufficient environmental planning grounds to justify the contravention of the height standard for reasons contained in the written request, that may be summarised as follows: 1. The Proposed Development is contextually responsive to building design and will ensure conformity with the scale and character established by existing development throughout the locality. 2. Allowing for the height breach in response to the height of existing adjoining developments and recent approvals ensures the orderly and economic development of the Site. 3. The particularly small departure from the actual numerical standard and the absence of impacts as a consequence of the departure, constitute environmental planning grounds, as the Proposed Development promotes good design and amenity. 4. The visual impact of the building element that exceeds the maximum building height standard is limited and will not be highly discernible from the street given its recessed and centralised nature. 5. The variation to the maximum building height control enables delivery of an affordable housing development to expand the availability of affordable rental housing in an accessible area close to businesses, consistent with cl 3(f) of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP ARH), which aims to support local business centres by providing affordable rental housing for workers close to places of work. 6. Give the centralised nature of the protrusions, the lift overrun and acoustic plant shield will not be visible from either the ground level or first floor of the two storey heritage listed property to the rear at 44 West Street, North Sydney. This is illustrated by the view from the fire stair diagram at 44 West Street towards the development site that is provided below. 7. The shadow diagrams demonstrate that the adjoining properties receive appropriate levels of solar access to living areas and private open space areas and that the additional overshadowing caused by the building elements above the maximum building height development standard do not have an adverse impact. 1. I consider the proposed development to be consistent with the objectives of the relevant standard, and I am satisfied that the objectives of the B4 zone, set out at [16(2)], are also achieved. In forming this opinion of satisfaction, I note the mixed-use nature of the development provides ground floor commercial tenancies and is located immediately adjacent to good public transport services. 2. Accordingly, I am satisfied that the proposed development is in the public interest pursuant to cl 4.6(4)(a)(ii) of the NSLEP and raises no concern in respect of cl 4.6(5) that would preclude the grant of consent by the Court by reason of s 39(6) of the LEC Act. 3. Clause 4.6(4)(b) of the NSLEP also requires that the concurrence of the Planning Secretary be obtained for development consent to be granted to development that contravenes a development standard. 4. In Planning Circular PS20-002 dated 5 May 2020, it was advised that consent authorities can assume the Planning Secretary's concurrence to vary development standards pursuant to clause 4.6 where a variation does not exceed 10% or relates to a non-numerical standard. The parties accept that concurrence of the Secretary cannot be assumed in these proceedings. 5. Notwithstanding the above, s 39(6) of the LEC Act gives the Court the power to grant development consent without obtaining the concurrence of the Secretary, although consideration ought to be given to the matters in cl 4.6(5) when exercising the power to grant development consent for development that contravenes a development standard. 6. I am satisfied that the contravention of the height standard in the Proposed Development does not raise any matter of significance for state or regional environmental planning, and there is a public benefit served by upholding the written request for the reasons set out above. 7. For the reasons stated above, I find the Request to vary the height standard should be upheld. 8. I am satisfied from the evidence that the Amended Plans do not propose any non-compliances with the Floor Space Ratio standard as noted at cll 4.4 or 4.4A of the NSLEP. 9. In respect of cl 4.4A, there is a requirement for 0.5:1 to be provided as non-residential floorspace. The Site is 182.8m2 in size and 91.4m2 is attributed to non-residential floorspace which is compliant with the provisions in cl 4.4A. 10. In respect of cl 5.10 of the NSLEP, the Site is not a heritage item and is not located in a heritage conservation area. However, the Site abuts Heritage Conservation Area 18 known as 'Holtermann Estate D' and Heritage Conservation Area 09 called 'Holterman Estate C' and located one lot to the north of the Site. Directly to the east of the Site there is a locally listed heritage item known as 'Vera Loblay House'. 11. The Applicant supplied a heritage report prepared by Mr Zoltan Kovacs dated September 2022 which assesses the significance of the place. The heritage report concludes that the Proposed Development with its simple form, conforming scale and setbacks, will not generate any adverse impacts for the adjoining heritage conservation area or the heritage item in its vicinity. The Final Amended Plans propose a two-metre-wide landscape strip planted with two large trees, to provide a transition between the heritage listed property to the east and the Proposed Development. I am satisfied that adequate consideration has been given to the effect of the Proposed Development on the adjoining heritage conservation areas and the heritage item pursuant to cl 5.10(4) of the NSLEP. 12. Clause 6.10 (Earthworks) applies as certain earthworks are proposed. Clause 6.10(3) requires that consideration be given to various matters. The extent of earthworks on the Site is limited and I am satisfied, from the evidence, that adequate consideration has been given to the extent of the excavation and earthworks and can be satisfied that consideration is given to those matters at cl 6.10(3). I also note that the proposed development is the subject of conditions of consent that need be complied with prior to the issue a construction certificate and during construction. North Sydney Development Control Plan 2013 1. The North Sydney Development Control Plan 2013 (DCP) applies to the Site. I am satisfied from the evidence that the DCP controls have been adequately considered in the assessment of the Proposed Development and the conditions imposed. State Environmental Planning Policy (Affordable Rental Housing) 2009 1. Division 3 of the State Environmental Planning Policy (Affordable Rental Housing) 2009 (SEPP (ARH)) applies to the land by operation of cl 26(d) and to the Development by operation of cl 27. The Development is permissible under SEPP (ARH) pursuant to cl 28. The SEPP prevails over the controls in the NSLEP to the extent of any inconsistency. 2. The Development is assessed against the do not refuse provisions of the SEPP (ARH) as follows: 1. Clause 29(1) – FSR. NSLEP does not prescribe an FSR. 2. Clause 29(2)(a) – Height. The Final amended plans result in a minor non-compliance with the height control, but is the subject of an agreed Request to vary the height control. 3. Clause 29(2)(b) – Landscaped Area. The Applicant states that the landscape treatment of the front setback is compatible with the streetscapes of Eden Street in which there is no landscaping. I am satisfied with this. 4. Clause 29(2)(c) – Solar Access. The Development provides a communal living room on the upper most level. The development does not provide for access to solar, in accordance with the do not refuse provision. However, I am satisfied that the Final amended plans as proposed maximise amenity for the occupants of the boarding house. 5. Clause 29(2)(d) – Private Open Space. A communal private open space area of 15 m2 with a minimum dimension of 3 m is provided on the third floor of the Proposed Development, facing the rear of the Site. The provision does not comply with the requirement at cl 29(2)(d)(i), however I am satisfied that the communal open space together with the internal communal area proposed is adequate for the purpose of a boarding house of this size and in this location. Accommodation is provided on site for a boarding house caretaker on the first floor. A private open space with an area of 3.5m2 is provided which does not comply with the do not refuse provision. I am satisfied that adequate facilities are provided for the purpose of the boarding house manager. 6. Clause 29(2)(e) – Carparking. Access for parking is not available on the Site. The parties agree that parking is not a requirement and I am satisfied that parking is not necessary, due to the Site's good location and proximity to services and public transport. 7. Clause 29(2)(f) – Accommodation sizes. All single rooms have a minimum area of 12m2 and all double rooms have a minimum area of 16m2 excluding kitchen and bathrooms in accordance with this clause. 8. All rooms have a kitchenette and bathroom as permitted by cl 29(3). 1. From the evidence provided, I am satisfied that the Proposed Development (as Amended) conforms to all relevant development standards in cl 30 as follows: 1. Clause 30(a) – Communal Room. The Development has more than five boarding rooms and a communal room is provided on the third floor. 2. Clause 30(b) – Maximum Room Area. No boarding room excluding kitchen and bathroom will exceed 25m2. 3. Clause 30(c) – Restriction on Number of Room Occupants. No boarding room will be occupied by more than two adult lodgers by operation of the Plan of Management. 4. Clause 30(d) – Bathroom and Kitchen Facilities. Adequate bathroom and kitchen facilities are provided for each lodger in each boarding room together with those facilities also being provided in the communal room on the ground floor. 5. Clause 30(e) – Boarding House Manager. The Development is not capable of housing 20 or more lodgers. 6. Clause 30(f) – repealed. 7. Clause 30(g) - Commercial Zone. The Proposed Development is in a B4 mixed use zone but nonetheless, the entirety of the ground floor is proposed to be used for commercial use or access. 8. Clause 30(h) – Motorcycle and Bicycle Parking. The Development provides two motorcycle spaces on the Ground Floor and 6 bicycle spaces which are provided in the basement in compliance with this requirement. 1. Clause 30A requires the consent authority to consider whether the design of the Development is compatible with the character of the Local Area. Following the amendments made throughout the proceedings resulting in the Final amended plans, I am satisfied that the development is compatible with the character of the local area. State Environmental Planning Policy (Housing) 2021 (SEPP Housing) 1. SEPP Housing came into force on 26 November 2021. SEPP Housing contained a savings provision in respect of the pre-existing SEPP (ARH) at Sch 7A. The savings provision is found at s 2(1)(a) of Sch 7A where it states: (1) This Policy does not apply to the following matters— (a) a development application made, but not yet determined, on or before the commencement date, 1. The issue of determination has been dealt with by Robson J in CK Design Pty Ltd v Penrith City Council (No 2) [2022] NSWLEC 97. 2. I am satisfied that the DA and its assessment under SEPP (ARH) is saved by this provision. State Environmental Planning Policy No. 55 – Remediation of Land 1. The State Environmental Planning Policy No. 55 – Remediation of Land (SEPP 55) was repealed on 1 March 2022. Its operative provisions were transferred to State Environmental Planning Policy (Resilience and Hazards) 2021 (Resilience & Hazards SEPP). Section 30A(2) of the Interpretation Act 1987 (NSW) provides: "The transfer does not affect the operation (if any) or meaning of the provision, and accordingly the provision is to be construed as if it had not been so transferred." 2. Clause 7 of SEPP 55 has been transferred to s 4.6 of the Resilience & Hazards SEPP. Clause 4.6 is expressed in identical terms to cl 7 of SEPP 55. 3. Section 4.6(1) precludes the granting of development consent unless the consent authority has considered relevantly whether the Site is contaminated. Section 4.6(2) requires the consideration of a report specifying the findings of a preliminary investigation of the land concerned, if the proposed development would involve a change of use and the land concerned is included in the land set out in s 4.6(4). 4. In the present case, the use of the Site is converting from a commercial use to a mixed use commercial and residential use. Accordingly, s 4.6(2) of the Resilience & Hazards SEPP is engaged. 5. I am satisfied from the evidence that the potential for contamination of the Site is limited, and the Proposed Development will be subject to the imposition of appropriate conditions of consent as included in Annexure A. State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004 1. A BASIX certificate dated 14 December 2022 has been prepared and satisfies the requirements of the State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004. Conclusion 1. As the parties' decision is a decision that the Court could have made in the proper exercise of its functions, I am required under s 34(3) of the LEC Act to dispose of the proceedings in accordance with the parties' decision. 2. In making the orders to give effect to the agreement between the parties, I was not required to, and have not, made any merit assessment of the issues that were originally in dispute between the parties. Notes 1. The Court notes that: 1. North Sydney Council, the respondent, as the relevant consent authority has agreed, under cl 55(1) of the Environmental Planning and Assessment Regulation 2000, to the applicant amending the development application DA number DA274/21. 2. The applicant uploaded the amended plans and documents listed in Condition A1 of Annexure A onto the NSW Planning Portal on 18 November 2022, except for the BASIX Certificate which was uploaded on 15 December 2022. 3. The applicant filed the amended application with the Court on 16 December 2022. Orders 1. The Court orders that: 1. The appeal is upheld. 2. Development Consent is granted to Amend Development Application DA274/21 for the demolition of existing structures and construction of a five storey mixed use development containing two commercial tenancies and one motorcycle parking space at ground level, with a boarding house on levels 1–4 containing 12 rooms (including one manager's room) accommodating a total of 17 occupants, with communal living room and open space, above one basement level for waste and six bicycle parking spaces at 1 Eden Street, North Sydney, subject to conditions in Annexure A. 3. The Applicant is to pay the Respondent's costs that have been thrown away as a result of the amendment of the Application for development consent pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979, in the agreed sum of $11,500 payable within 30 days of Orders being made. L Sheridan Acting Commissioner of the Court Annexure A ******** 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: 14 February 2023