Land and Environment Court of New South Wales CITATION : Phoenix Ventures Pty Ltd v Sydney City Council [2006] NSWLEC 632 This decision has been amended. Please see the end of the judgment for a list of the amendments. APPLICANT Phoenix Ventures Pty Ltd PARTIES : RESPONDENT Sydney City Council FILE NUMBER(S) : 10336 of 2006 CORAM: Murrell C KEY ISSUES: Development Application :- Student housing, impact on public domain, heritage items and Fig Street park, solar access, height, bulk and floor space ratio Environmental Planning and Assessment Act Sydney Regional Environmental Plan No. 26 - City West LEGISLATION CITED: State Environmental Planning Policy No. 1 State Environmental Planning Policy No. 65 Residential Tenancies Act 1987 Land Acquisition Act CASES CITED: Winten Property Group v North Sydney Council [2001] NSWLEC 46 DATES OF HEARING: 7-8/09/2006 EX TEMPORE JUDGMENT DATE : 09/11/2006 APPLICANT Ms S Duggan, barrister Instructed by: Mr V Conomos, solicitor SOLICITORS Pike Pike & Fenwick LEGAL REPRESENTATIVES: RESPONDENT Mr S Kondilios, solicitor and Ms C Rose, solicitor SOLICITORS Maddocks JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Murrell C 11 September 2006 10336 of 2006 Phoenix Ventures Pty Ltd v Sydney City Council JUDGMENT This determination was given extemporaneously and it has been edited prior to publication 1 This is an extempore judgement for an appeal under s 97 of the Environmental Planning and Assessment Act (the Act) against the City of Sydney Council's refusal of a development application for the property known as 80-98 Upper Fig Street, also known as 211 Bulwara Road, Pyrmont. 2 The application submitted to the Sydney City Council is for student accommodation in the form of units with between one to seven bedrooms and a shared lounge area. The development application also provides for communal use of a rooftop with a shared laundry and also a common room on the rooftop. 3 The property can be described as an island in that it has three street frontages one to Bulwara Road of some 23 m, to Upper Fig Street of 35 m and to Jones Lane of 52 m yielding a site area of 1700 sq m. To the north of the subject site, which is its major constraint, is the Western Distributor overpass that severs physically the site from the northern properties. The overpass is a considerable constraint and the use of the property in many respects is influenced by this constraint. 4 I will say at the beginning of this extempore judgement that, having assessed the development application in terms of all the relevant provisions, and I will go into what those provisions are, the Court has determined that the development application should be approved with appropriate conditions. 5 A matter raised by the Court issued during the proceedings (but not identified as an issue) was whether the air quality for certain bedrooms and units should be the subject of an air quality study and this would be the subject of a deferred commencement. The applicant accepted this requirement. 6 The context of the area. The subject site is located to the north of what is known as the Fig Street Park. The Fig Street Park is a rather special parcel of open space, a large piece of open space that contains a number of facilities including a children's playground area and park benches, barbeques et cetera. There has been significant expense in upgrading this park that is a focus of this part of Pyrmont. It is important to also note, the site is close to a light rail system and is served by public transport and the proposal is also to provide a shuttle bus to university facilities. 7 On the western side of the site is Jones Lane and this is also the rear of the significant heritage dwellings that have frontage to Jones Street. It is important to ensure that any future development of this site does not overwhelm the terrace heritage housing to Jones Street and must respect the privacy, the amenity and the heritage significance of these dwellings. I am satisfied that the proposed development achieves this in terms of the setbacks proposed and their privacy from the roof deck of the subject dwelling is also maintained. 8 The site currently has erected a single storey office warehouse and is zoned under the Sydney Regional Environmental Plan No. 26 - City West for the purpose of residential/business. The SREP's definition of residential/business zone is, "only uses which the consent authority is satisfied are generally consistent with one or more of the zone objectives permissible in this zone". The objectives of the zone are: + to promote a wide range of uses, particularly business development including tourist, leisure, commercial, retail and office development consistent with the precinct's proximity to the Sydney CBD harbour locations and transport infrastructure; + to accommodate residential development to a level compatible with adjoining business uses, consistent with the objectives of creating a mixed use area; + to accommodate uses which generate employment opportunities and provide facilities and services that enable people to live and work in the same community; + to ensure that the total amount of employment generating development is compatible with the traffic capacity of the precinct and adjoining areas, + to encourage sustainable transport modes of journeys to work and other trips including walking, cycling and other forms of public transport and; + to limit advertising to a level compatible with the creation of a high quality mixed use area. 9 Consent is to be granted to development within this zone only if the consent authority is satisfied that carrying out the proposed development will be consistent with the planning principles for the relevant precinct and for city west, particularly residential provision and amenity. Residential development within this zone is not to be located or designed so that the amenity of the development is adversely affected by an adjoining or nearby use to a level that is considered inappropriate by the consent authority due to excessive noise or odour, or any similar environmental impact. 10 The other controls within the SREP include a height control and the maximum height of buildings must not exceed those that are shown on the accompanying map three. The height control in cl 23 for the subject site is 12 m. The FSR is contained in cl 27 and the FSR must be looked at in terms of whether residential development is the use or whether a business/commercial use of the site. For residential development, a floor space ratio of 2:1 is applicable. For a commercial or business development, a floor space ratio of 2.5:1 is allowed under the plan. 11 The Court had the opportunity of hearing submissions from the council and the applicant about the definitions. The applicant considers that the proposed development falls within the definition of business/commercial. Residential development in the SREP is defined as meaning "the use of land for any form of housing including housing leased on a short term basis subject to the Residential Tenancies Act 1987, but does not include the use of land for a hotel, a hostel, an apartment hotel being a building consisting of suites of rooms rented or hired out without being leased on a short term basis, a boutique hotel, serviced apartments, backpacker accommodation, a motel or the like". The submission of Ms Duggan was that the proposal falls into the category of 'the like', taking on the student accommodation as proposed in the development application, taking on the character of those things which are excluded from residential development, having the characteristics of serviced apartments in terms of the management of the student accommodation. 12 The definition of business use means "any form of development carried out for a commercial or educational purpose, but does not include residential development or public utility undertakings". It is also interesting to note that residential development, unlike many instruments in this particular SREP, refers to the "use of land for any form of housing", it does not refer to a 'dwelling unit' as such as many instruments do. This was not considered to be a legal matter that should be referred for determination by a Judge in terms of the definition. The parties considered the question is is one that should be assessed on the facts at the time of the merits hearing. 13 In my assessment of how the use should be characterised whilst it could be argued that commercial or business is the category for the student accommodation, I have treated the application to be for residential development, because it is a form of housing. By treating it as residential development, this has regard to the fact that the occupants of the building will be more than short-term users and they could be in residence within the student accommodation complex for three to four or more years and, for this time this will be their permanent address. As a residential form of development an assessment under SEPP 65 becomes appropriate and the amenity of the building in terms of permanent occupants has been given greater scrutiny than if assessed as a commercial development. While characterizing the use is important in terms of the controls under which to assess the application this is not determinative of the application. 14 It is noted in the council's assessment of the application, the council identified the need for a policy to address 'student accommodation'. This would be a most useful document for council especially having regard to such facilities being more dominant in the City of the Sydney area due to the number of educational establishments and certainly council is encouraged to develop such a policy. One particular area, for example, is what is an appropriate level of communal facilities that should be provided in a development such as this, whether that be related to the number of rooms in a development or occupants of a development. 15 I am satisfied for the purposes of this application that the communal facilities would not warrant refusal of the application. Mr Juradovic, the court-appointed expert in this matter, provided evidence to the Court and in his experience he considered that the communal facilities were adequate. As I said, there was no evidence to the Court that the communal facilities are not adequate. However, it is also noted that if a particular institution has specific requirements that additional communal facilities could be accommodated by the conversion and amalgamation of certain bedrooms, in particular those that face the courtyard to the east of the subject building. It is noted this would require a s 96 application to amend the application. But, as I said, there was no evidence to the Court that the communal facilities are inadequate and, I accept the Court-appointed expert's evidence. 16 Council raised a number of issues in a Statement of Issues, including non-compliance with the height standard; the loss of privacy to dwellings, the contribution of the development in terms of the public domain; the impact on the park in terms of overshadowing; the definitional use of the building, that I have already commented on, the impact on the adjacent heritage buildings; and the public interest. On the latter for the Court record there were a number of resident objectors who gave evidence to the Court on the site inspection and I detailed their concerns on the first day when the matter returned to Court. For the record, they are: Mr Andrew Niven; Mr Bill D'Anthes; Mr Michael Wright; Mr Charles Chrone; Ms Elizabeth Elenius; Mr Barry Dobson; and Ms Christine Webb. Their concerns relate to the bulk and scale of the building, the excessive height of the building and the overshadowing and amenity impacts on the Fig Street park. 17 On the issue of overshadowing of the park when the Court raised concern about the overshadowing issue of the park and the element that in fact was causing the overshadowing of the park, the applicant agreed to amend the development application to set back the corner of the building on the Jones/Upper Fig Street corner such that the overshadowing of the park is now limited to approximately between 2.30pm to 3.00pm in the relevant hours for consideration of solar access of between 9.00am to 3.00pm. The building as amended would now overshadow the park from 2.30pm mid winter, the worst case scenario. I am satisfied that the impact of the development on overshadowing the park to this limited extent would not warrant refusal of the application. The Court expressed concern about overshadowing if greater than the extent that is now shown in the amended plan given that the park is a community asset and part of an important public domain area, and overshadowing of parks should be minimised. I am now satisfied that the impacts on the park are reduced to the point where the proposal is satisfactory. 18 The urban management plan comments that corner articulation is to encourage variety in the built form and to assist in defining street blocks and that additional height is encouraged at the corners of street blocks where wide streets intersect. However, this is on the corner of Jones Lane and one must also have regard to the fact that there are important heritage items opposite. The development should not be one that makes a statement in terms of this corner, but in fact should be more passive and I am satisfied that the design accommodates and achieves this. 19 It is also noted that the control does not make additional height at corners mandatory and one should have regard to the context. In terms of the context of the heritage items I am satisfied that the development is now a satisfactory resolution of this relationship. As a consequence the architect proposed an amendment to the corner of Bulwara and Upper Fig to ensure the building makes a positive contribution in urban design terms. 20 The Court must assess the proposal under the provisions of State Environmental Planning Policy No. 1 because it does not comply with the provisions of the plan in terms of the height and the floor space ratio. The aims and objectives of the SEPP 1 are well understood in terms of providing flexibility in the application of planning controls, and whether in fact strict compliance with the standard is unreasonable or unnecessary in the circumstances of the case, also having regard to the objects of the Act, which includes the economic use and development orderly development of land. 21 The SEPP No. 1 objection was lodged in terms of the height as the height of the development exceeds the 12 m for that portion of the communal facilities on the rooftop. The communal facilities on the rooftop provide or afford the occupants of the dwelling greater amenity in terms of the use of the rooftop and will not be read in the streetscape. The rooftop is confined to a limited area to ensure that overlooking of the terraces fronting Jones Street is not impacted and that the rooftop area is contained such that it is not visible from the parkland the public domain. 22 The height must be looked at in terms of the underlying objectives, or the stated objectives or purpose, of the development standard, and in this regard I am guided by the principles enunciated in the judgement of his Honour Lloyd J in Winten Property Group v North Sydney Council [2001] NSWLEC 46. Clearly, the control here is a development standard and the underlying principles/objectives or purpose must be satisfied. The development standard is exceeded by 2.7 m, but I am satisfied in terms of the sight lines that these elements will not be visible from the public domain area or from the terraces. The explanation of the proposal achieving the objectives as outlined in the SEPP 1 objection, while not specifically stated, the purpose of the standard is considered to be those principles contained in cl 15 of the SREP that relate to the urban design principles for Ultimo/Pyrmont precinct. Such principles include: 1. Building heights are to reflect and emphasise the topography of the precinct. 2. The heights and scales of buildings are to form a transition between high-rise buildings in the city and low-rise buildings in the suburbs. 3. The heights and scales of new buildings are to respect existing buildings in the locality, but particularly heritage items and building in conservation areas. 4. The heights and forms of buildings are to take account of visual impact, solar access and privacy, and contribute to a high quality of environmental amenity in intensely used parts of the public domain in residential areas. 5. Buildings fronting the public domain should have appropriate height, bulk and finish, and street alignment to enhance its quality and respect the character. 6. In general, the scale of street facades must respect the width of adjoining streets or lane adjoining heritage items or other contextual elements. Higher buildings may be accommodated if they will not compromise the environmental amenity and general scale of development in the area. 23 I am satisfied that the proposed additional height elements on the rooftop will, satisfy the principles or satisfy the underlying objectives/purpose of the development standard. The proposed development will sit comfortably having regard to the heritage buildings to the west, having regard to the frontage or presentation to the park and having regard to the context of other development on the opposite side of the park and the heights achieved for these developments. I am satisfied the proposed development will be of a height and scale that is consistent or compatible with the surrounding area. 24 The visual catchment of the site very much relates to the park, the heritage items and the adjoining residential development to the south that fronts the park as well. To the north and to the northeast of the site to the CBD, the proposed building will provide a most appropriate transition in terms of height. 25 In terms of the objects of the Act, I am satisfied the proposed development satisfies 5(A) of the Act, and in the circumstances of the case I consider that the height standard is unreasonable and unnecessary. Furthermore, the additional height will afford greater amenity for the occupants of the building without adverse impacts, recognising that the absence of environmental impacts is not a reason as to why a SEPP 1 objection is upheld. 26 Clause 27 of the SREP, provides a floor space ratio of 2:1 if I regard the development as being residential for the purposes of my assessment. As such a SEPP 1 objection becomes relevant to my assessment of the fsr. The floor space ratio of the proposal as now amended before the Court is 2.25 : 1. 27 Once again I must look at the objects or the purpose of the standard. The purpose of the standard is described by Mr Betrose in his SEPP 1 objection. In achieving the objective of the standard he says: While not specifically stated, it is assumed that the underlying objective of the floor space standard is to establish reasonable upper limits for development in residential/business areas throughout. It is considered that this will help to reduce the potential for adverse impact on nearby and adjoining development while still providing for reasonable levels of development and redevelopment … . The underlying purpose is the development in the precinct is to provide for a significant increase in residential population and where possible development is to make use of existing underutilised buildings and large areas. The development is to take full advantage of the precinct's existing facilities and proximity to infrastructure and services and the urban design principles, including the height and form of buildings, are to take account of visual impacts, solar access and, where appropriate, privacy of residents, in order to contribute to a high quality of environmental amenity in intensely used parts of the public domain and residential areas … The development should also be consistent with the zone objectives and the proposed floor space is consistent with the principles or purposes behind the standard as the design achieves an appropriate and reasonable built form with acceptable amenity impacts. 28 In my assessment I am of the opinion that the proposed floor space ratio of 2.25:1 does not contravene, is not incompatible and does not undermine the underlying objectives of the floor space ratio. I am satisfied that the building bulk and form and height and the envelope that has been achieved to accommodate the development is one that is appropriate and satisfies the purpose of the floor space ratio standard. The design of the building, its articulation, its stepping back, will provide for a development that 'fits' comfortably in its context and is not one that should be refused on the basis of the floor space ratio. Furthermore, I am satisfied that the exceedence in the floor space ratio satisfies the objects of the Act. In terms of the proposed development and the circumstances of the case, I consider the 2 : 1 FSR is unreasonable and unnecessary in the circumstances of this case. 29 Having assessed the development under the SEPP 1 objections, I am satisfied that the SEPP 1 objections should be allowed and in my merits assessment the proposed development is also appropriate. I have also assessed the development in terms of SEPP 65. A SEPP 65 assessment was provided to the Court in terms of its the principles, that is: context, scale, built form, amenity, safety and security, density, resource energy and water efficiency, landscape, social dimensions and aesthetics. I am satisfied under SEPP 65 that the proposed development, having regard to the fact that it is somewhat of a hybrid use is worthy of approval. The development is for student accommodation and this approval very much ties the development to the use of the building for student accommodation. I am of the opinion that an assessment under SEPP 65, that is for residential flat buildings, allows a more in depth analysis of the development application to satisfy requirements that a commercial building would not be required to satisfy. 30 In terms of SEPP 65, it is noted that some 93 per cent of the units and 70 per cent of the study bedrooms receive two hours of solar access as required for city living. The variables for cross flow ventilation are not achieved due to the double loaded corridors and the very nature of the development being for student accommodation and therefore in the circumstances of this is an acceptable outcome on balance. The balconies also do not achieve the size requirements under SEPP 65, however, this has been purposefully designed to ensure that students in large groups do not congregate on the balconies to create amenity concerns for adjoining residents. The purpose of the rooftop is to allow for the students to congregate in larger numbers without impacting on adjoining properties or the public domain. It is also noted that the building envelope is some 67 per cent of that that would be permitted and overall the built form in terms of urban design in my assessment is appropriate for its location. 31 The issue of noise is addressed by a consultant study, Day Design Pty Limited, and there are certain recommendations that must be incorporated in the development of the building to ensure noise insulation to attenuate noise impacts as there are a number of units that will be severely impacted by the noise from the Western Distributor. This may require the closure of certain windows, permanent closure, double glazing and air conditioning or mechanical ventilation. These matters and recommendations will also need to be looked at in the air quality study that is to be carried out by a suitably qualified person referred to earlier in my judgment. The recommendations and ameliorative measures of the air quality report and the noise report will need to be married to ensure that the amenity of those units most severely impacted by the Western Distributor are of an acceptable standard in terms of noise and air quality. 32 The residents' concerns about surveillance and under the Western Distributor and the dark space that has been created I have considered and I agree with Mr Juradovic that the proposed development will provide for passive surveillance of streets and it should create a safer environment than currently exists under the overpass. It is also noted that the window of the units and balconies have been designed such that there is passive surveillance of the parks and Jones Lane. A footpath to Jones Lane is to be provided and there has been a greater setback from the boundary to allow for this. 33 I am also of the opinion that the resultant built form, the envelope of the building, is satisfactory in urban design terms for this location that is a transitional site that must respect the heritage buildings and that must respect the park and also provides a buffer to the western distributor overpass. I am satisfied the proposed development for student accommodation is satisfactory and is to have regard to the future amenity for the occupants with the noise requirements and the need for an air quality study. 34 A question for the Court is the appropriate conditions to be attached. The council provided for a condition in its set of conditions that could be considered to be tantamount to a refusal by not allowing for 'student accommodation'. The restriction in Condition 2 as proposed by council is that the accommodation portion of the building, (basically the whole building), "must be used as serviced apartment accommodation only and not for permanent residential purposes including student accommodation". I consider this to be an inappropriate condition and I have assessed this development application on the basis of it being used only for student accommodation. That is, I have not assessed it in terms of serviced apartments or for any other use or any other residential use or any other commercial use, but I have assessed it in terms of it being for student accommodation only and as such the development consent should reflect same. 35 The use for student accommodation in the development consent will also require an 88(E) Instrument, such that the development can only be used for student accommodation and a separate development application would have to be lodged if there was any change of use proposed. Clearly, in terms of other residential uses, the issue of the proximity to the Western Distributor and other amenity issues such as size of balconies, natural ventilation to units and the amount of private and communal open space would need to be re-considered. 36 This would apply whether a change of use be for backpackers' accommodation or serviced apartments or units as there would be other matters that may be appropriate for an assessment for a particular use whether commercial or residential in character. I make it quite clear that my assessment, is for student housing and the applicant has made it clear, that they are only seeking approval for student accommodation. The conditions will reflect same and the s 88(E) Instrument will make a future purchaser of the subject site aware that this is an approval only for student accommodation. 37 I do not consider it is necessary to have a signed contract from a nearby university or other educational establishments for the development as such. In many respects it is a risk for the applicant if there is no such contract prior to the development of the subject site for student accommodation. I am satisfied the conditions as framed will ensure that it is used for student accommodation. 38 The other conditions are with respect to height. I am satisfied the height restrictions should not be imposed to remove the communal facilities from the rooftop. In terms of the SEPP 1 objection the purposes of the height controls are satisfied and it will provide amenity for students of the building. The other conditions are with respect to the dedication for road purposes and the applicant's condition is that the market value of the land is determined in accordance with the Land Acquisition Act, and is offset against s 94 contributions. 39 The deferred commencement conditions remain except reference to 'serviced apartments' is deleted. The deferred commencement condition will also include another condition and that will be an air quality study to be prepared by a suitably qualified expert to determine what measures are necessary to incorporate into the design of the building to ensure each unit meets appropriate health standards having regard to the proximity of the Western Distributor. 40 Where conditions relate to a specific unit, for example for windows to be non-openable with air conditioning, these are to be provided in a schedule to be incorporated in the design of the development and amended plans submitted prior to the operation of the consent. 41 The condition about the Plan of Management is to also contain a schedule of the operational matters for those units affected to ensure the occupants are not exposed to unacceptable air quality levels, to be determined by the expert who undertakes the air quality study. 42 As I mentioned prior to handing this judgment down today the need for an updated or a Basix Certificate is necessary given that I have considered this as a residential development. I notice that the proposal already provides for the harvesting of the roof water for irrigation purposes and energy saving water heating units. Such matters will need to be looked at and other sustainable issues included in the Basix Certificate. 43 In summing up, I am satisfied that the proposal, in terms of the design, provides for an appropriate transition from the dwellings facing the park and the Jones Street heritage items and the park itself. In some respects, the development will provide greater amenity for the users of the park by the buffer of a building of an appropriate size and scale, between the park and the Western Distributor. In my overall assessment the proposal will provide for an appropriate buffer and enclosure for the park without overwhelming or significantly impacting on the park and its users. 44 The design, as it has evolved, is a more passive design than shown in the original plan and it will provide for an appropriate fit in the context of the height and scale for the area and respects the heritage items and in my overall assessment warrants approval. The use of the building is appropriate in terms of making greater use of the infrastructure in the area and student accommodation is clearly a needed form of residential accommodation and, within the Pyrmont/Ultimo area. As I stated, the site has the constraint of proximity to the Western Distributor, but it also clearly has opportunities which can be harnessed in terms of the use of the site for student accommodation. 45 I have assessed the development application having regard to the principles also set out in the urban development plan for Ultimo/Pyrmont. This has an emphasis on the public domain and an emphasis on the contribution of sites to the public domain and urban design principles which are articulated within that document. Also in terms of the State Regional Environmental Plan 26 - City West, I have had regard to the objectives of that plan and the controls within that plan and to the definitions contained therein. 46 In deciding whether I classify this development as one that is residential in nature or whether it is commercial, it can be argued that it could fit into either category. It is very much a hybrid application and, in this regard, I consider that a more thorough assessment under the residential controls of SEPP 65 is appropriate given the building will become a permanent address for students for many years and therefore does not strictly fall within the category of "more temporary nature of accommodation or serviced apartments". 47 Accordingly, on the basis of my assessment above, the formal orders of the Court are: 1. The appeal in respect of the property known as 80-98 Upper Fig Street and 211 Bulwara Road, Pyrmont, is upheld. 2. The development application submitted to the Sydney City Council, and as amended and shown in the revision H plans prepared by Architecture & Building Works Project No. 0205 and known as Exhibit O in the proceedings, is determined by the granting of a 'deferred commencement' and the conditions contained in Annexure 'A'. 3. The exhibits except 3, D, E, H, K, M, N, O, Q and S are returned to the parties. ___________________ J S Murrell Commissioner of the Court rjs 14/11/2006 - to add clarity - Paragraph(s) 13, 46, 47 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.