Land and Environment Court of New South Wales CITATION : Caporale Designs Pty Ltd v Hurstville City Council [2004] NSWLEC 25 APPLICANT Caporale Designs Pty Ltd PARTIES : RESPONDENT Hurstville City Council FILE NUMBER(S) : 11209; 11277 of 2003 CORAM: Hoffman C KEY ISSUES: Development Application :- To extend the use of existing ground floor - retail and commercial uses - conversion of residential use Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Hurstville City Council Development Control Plan No. 4 Local Environmental Plan CASES CITED: DATES OF HEARING: 07/01/04 EX TEMPORE 01/08/2004 JUDGMENT DATE : APPLICANT Mrs Mary-Lynne Taylor, solicitor SOLICITORS Taylor Kelso LEGAL REPRESENTATIVES: RESPONDENT Mr P Rigg, solicitor SOLICITOR Deacons JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 11209 of 2003 11277 of 2003 Hoffman C 8 January 2004 Caporale Designs Pty Ltd Applicant v Hurstville City Council Respondent Judgment 1 This was two class one Appeals Nos. 11209 of 2003 and 11277 of 2003 between Caporale Designs Pty Ltd and Hurstville City Council in regard to the refusal of an application to extend the use of existing ground floor retail and commercial units to include residential use as an option along with retail and commercial uses. 2 Appeal 11209 related to the change of use only and Appeal 11277 related to the ability or not of the retail and commercial units to be converted to residential use complying with the Building Code of Australia and other applicable statutes. Appeal 11277 was agreed between the parties to be deferred pending the decision on Appeal 11209. If this decision on Appeal 11209 was favourable to the applicant then construction details would need to be provided as evidence in Appeal 11277. The applicants sought a staged development under s 80 of the Environmental Planning and Assessment Act 1979. 3 The documentation before the Court was sufficient for a stage 1 consent under ss 80(4) and 80 (5) for a further development application. By the end of the hearing the proposal had changed sufficiently that documentation in Appeal 11277 would be considerably different and the applicant chose to withdraw that appeal without objection from the respondent. 4 The site was at No. 17 MacMahon Street, Hurstville, which had on it two residential towers, Block A of 11 storeys and Block B of 8 storeys housing 58 apartments with a shared basement carpark. There was a courtyard between the two towers. At the front of the courtyard on the street frontage was a heritage building, a two-storey brick structure of Federation style housing a pharmacy that had been on the site for almost 90 years and was still trading. The original application sought to permit residential uses in all the ground floor retail and commercial units in both towers. At the on site hearing it was modified by consent of the parties to be for only units 29-32 in Block A. 5 The applicant sought a staged development consent as previously referred to, and on those matters the Court heard evidence and submissions from: * Mr P Rigg, solicitor of Deacons for Hurstville City Council * Ms T Christy, senior planner at Hurstville City Council * Mr G Deehan, senior health and building surveyor, Hurstville City Council * Mrs Mary-Lynne Taylor of Taylor Kelso, solicitors for the applicant * Mr G Caporale, applicant * Mrs R Caporale, applicant, company director and project architect * Mr G Patch, hertiage consultant * Mr P Smith, of Conway Smith and Associates, Building Code Compliance Consultants * Mr M Eversson, economic expert, Hirst Consultant Services * Mr M Neustein, Neustein Rosenberg Partnership, urban planners and * Ms S Parker of Taylor Kelso, legal assistant 6 The plans relied upon were modified to the original application and showed a studio flat in Lots 30 and 31 and one bedroom units in Lots 29 and 32. The modified plans were in Exhibit H. 7 The expert witnesses had concurred and there was a joint statement in Exhibit C that could be summarised as saying that construction solutions could be found for the use of these units as apartments if the Court allowed Appeal 11209 of 2003. Suffice to say in relation to Appeal 11277 of 2003 there were no plans before the Court showing the detailed construction methods by which existing duct work, fan equipment, and hot and cold water, and sewerage, and fire sprinkler services would be dealt with by way of enclosure, relocation, noise proofing, fire proofing and allowance for future maintenance and inspection. 8 In dealing with the issues in Appeal 11209 they were also modified so that only issues 1 and 2 and 7 were pressed. They being: 1 The proposed residential use will result in the development not complying with the objectives of council's Local Environmental Plan 1994 Zone 3(b) City Centre Business Zone as the proposed development will not promote the mixture of commercial, retail, residential uses on site nor will it facilitate the implementation of the development control plan. 2 The proposed residential use will not require the objectives of Hurstville City Council's Development Control Plan No. 4 Town Centre Control Code in relation to the usage. The Code stipulates the ground floor uses to be retail/commercial to promote an active streetscape and to comply with the LEP, and 7 The proposed development is not considered to be in the public interest. 9 In the end the parties agreed on draft conditions in the event of any approval as annotated in Exhibit 10. 10 In regard to the Local Environmental Plan the evidence was that in Zone 3(b) City Centre Business Zone the use of the ground floor for residential units was permissible with consent even though the provisions of Development Control Plan No. 4 Hurstville Town Centre did not encourage it. 11 A brief history of the site is that consent for the two residential towers was granted in 1997 before the Development Control Plan No. 4 was adopted by council. Conditions of consent inter alia required the protection of a historic Elm tree at the front of the site in front of Block A which caused Block A to have its commercial and retail units setback 6 m from the street boundary. There were two floors of units above them creating a three-storey podium for Block A. 12 The 11 storey tower of Block A was setback 12 m from the street. This created a three-storey setback street elevation that was sympathetic to the heritage pharmacy building in the centre of the street elevation as well as protecting the Elm tree. The pharmacy was built at the street boundary. 13 The Development Control Plan when it was adopted in Vol. 2 Site 13 D, was specific to this site, and sought that all subsequent development be six storey maximum and a FSR of 1.9:1 when in fact 11 storeys and a FSR of 3:1 was approved. It also required subsequent development: * to build three-storeys to MacMahon Street, * build four and six storeys at the rear as shown * set building slightly behind the street alignment of the pharmacy to ensure that the heritage Elm tree is retained and to reflect the pattern in MacMahon Street where street front buildings are dispersed and buildings setback and * to ensure that the architecture is complimentary to the pharmacy. 14 Except for the four and six storey requirement the development has complied with these latter requirements. 15 The Court was told that at the time of the adoption of Development Control Plan, there was an old police station in MacMahon Street, and a set of four houses north of the site intended to be heritage items. The police station has been demolished, and the four houses had not, and will not be designated as heritage items, and in fact are a potential development site. 16 There remains an old fire station which is now a doctor's surgery but its MacMahon Street facade is closed up and its access is from an arcade from Woodville Street, the next street east of MacMahon. 17 Also, on the same side of the street as the site there are two churches, an old three-storey block of flats, an art shop and solicitor's office and the blank façade of a new building that faces Barrack Street on its corner with MacMahon Street. This is of interest because the Development Control Plan designates the east side of MacMahon Street as an "active street front" in which pedestrian traffic is to be encouraged by building commercial and retail shops at the street boundary. This has not occurred. The proposal was also approved with a raised street front garden area around the Elm tree in order to ensure its survival. It effectively blocks pedestrian access required for an "active street". Beyond the garden area is a terrace area in front of units 29 to 31 of Block A which would in theory give access to any commercial retail uses. 18 It would seem that the intention of the Development Control Plan to provide active retail and commercial spaces at the street front may never be achieved on the subject site. The fact is, that although the proposal has been marketed since 1997 and all the flats have been sold, the only retail commercial space operating on the site is the pharmacy, and it has the advantage of an almost 90 years of faithful clientele. The only other retail space operating in MacMahon Street between Barrack Street and Park Road is the art shop and it also has a long history of faithful clients over perhaps 30 years. The arcade through to Woodville Street has many vacant shops. 19 It seems the council's long term objectives for MacMahon Street are taking a long time to come to fruition. The applicant seeks that in the interim residential use be permitted on units 29 to 32, and when MacMahon Street does become an "active street", demand for commercial and retail space will cause their conversion back to the use intended long term by the Development Control Plan. 20 The respondent's evidence is that allowing residential use may well put back for many more years the achievement of these objectives. 21 Mr Evesson was the only economics and marketing expert giving evidence. He said that the two main reasons why units over a period of six years had not leased out for retail or commercial was: 1 The setback from the street front and the barrier to street pedestrians of the garden area needed to protect the Elm tree and 2 MacMahon Street between Barrack and Park Street was not yet achieving the active street objective and would not achieved it in the foreseeable future. 22 The first reason was unlikely ever to change, and the second reason may change in time, but was likely to remain as now because: (a) There was no major drawcard destination at the Park Street end of MacMahon Street although there might in the years to come if the church at that end and the four houses were developed; (b) The west side of MacMahon Street contained the council chambers, the council auditorium, a house being converted into a museum, the council carpark and the child day centre. All of which appeared long term uses and did not attract large volumes of pedestrians during the day. (c) The west side of MacMahon Street was not designated to be an "active street" which would indicate it was unlikely to become something in the future that would be a major attractor of pedestrians. (d) The west side of MacMahon Street was in a "deferred area" under Development Control Plan No. 4 so its future was in limbo . (e) MacMahon Street was the western edge of the Town Centre North Precinct and was acting as a fringe area. 23 The main part of CBD was in the Forest Road Centre precinct. The Development Control Plan allowed residential use on the ground floor in "fringe areas" but strangely enough there was no definition of "fringe areas" in the Development Control Plan. One had to go the individual site specifications to discover if residential was allowed on ground floor. 24 It was allowed on the ground floor. It was allowed on most sites on Queens Street one west of MacMahon Street in another precinct called Western End Precinct. But strangely one street east of MacMahon Street, closer to the CBD, in Woodville Street residential was also allowed on the ground floor. Woodville Street was also designated as an "active street" and it must be said on the day of the hearing the Court observed bustling pedestrian and vehicular activity there that was absent in MacMahon Street. 25 In submissions it was said that residential should not be allowed on the ground floor in MacMahon Street in addition to the other reasons given because it was an "important street". That might have been true in 1998 and before the adoption of the Development Control Plan because there was in MacMahon Street council chambers, the public auditorium, the police, the fire station, the historic pharmacy building and two churches and four houses then intended to be heritage items. Only the pharmacy building, the Elm tree and the fire station survived on the east side of the street, and the council is in limbo about what will happen on the west side of MacMahon Street. The Court was told on the east side both church properties as well as the four houses were considered to be potential development sites and therefore short term in their life. 26 The Court has reached the conclusion that the terms of the Local Environmental Plan allow residential uses on the ground floor as a permissible use. The proposal is not anathema to the objectives of Zone 3(b) and can be seen as consistent with the objectives when one reads the Development Control Plan. It couches its terms not in imperatives but in words such as "encourage, facilitate, should". Even in the most direct reference to the issues under appeal in Development Control Plan Vol. 2 cl 4.1.3 it says: All ground floor levels and buildings facing active streets should incorporate retail and/or commercial show rooms or entertainment uses to activate the street. Residential and/or commercial should be provided above as shown in site studies. Some CBD sites are considered to be more suitable for commercial rather than residential use and are designated as commercial. These sites are nominated in the site studies and the building envelope reflects this. Some fringe sites are suitable for either residential or commercial/retail development at ground level. 27 The Court accepts Mr Evesson's evidence that MacMahon Street between Barrack and Park Streets is acting as a "fringe area" now, and will continue do so for the foreseeable future. The interim use of the ground floor of units 29 to 32 for residential purposes with the option of reverting to retail or commercial when or if MacMahon Street becomes an "active street" is a reasonable proposition, provided the spaces can be made acceptable for human habitation under all the relevant considerations and statutes. 28 Therefore the orders of the are: 1. Appeal 11209 of 2003 is upheld in part. 2. Pursuant to s 80(4) and s 80(5) of the Environmental Planning and Assessment Act 1979 approval is given for the proposed residential use of units numbered 29-32 inclusive in Strata Plan 58631 at No. 17 MacMahon Street, Hurstville as shown in the plans in Exhibit H of this appeal and the conditions in Annexure 'A' hereto subject to a second stage development application giving details of unit numbers, configuration, compliance with SEPP 65 and the relevant amenity provisions of Council's planning policies and other relevant matters under s 79C of the said Act. 3. Any further development applications are to include details of the changes proposed to the strata plan for the subject site, including changes in carparking allocations. 4. The exhibits be returned to the parties except Exhibits 1, 10 and A, C, E, F, G and H. ______________ K G Hoffman Commissioner of the Court rjs 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.