Land and Environment Court of New South Wales CITATION : Priority One Group Pty Ltd v Ryde City Council [2006] NSWLEC 395 APPLICANT Priority One Group Pty Ltd PARTIES : RESPONDENT City of Ryde FILE NUMBER(S) : 10061 of 2006 CORAM: Hoffman C KEY ISSUES: Appeal :- Loss of low-cost rental housing, State Environmental Planning Policy No. 10, necessity for renovation of existing building, provision for compensating low-cost accommodation elsewhere in the locality Environmental Planning and Assessment Act 1979 s 93D LEGISLATION CITED: Land and Environment Court Act 1979 s 39(6)(a) Ryde Planning Scheme Ordinance 1979 State Environmental Planning Policy No 10 — Retention of Low-Cost Rental Accommodation cl 3A(1)(c), cl 3A(2), cl 7(3), cl 7(4), cl 7(5) Byron Shire Council v Chrestal Pty Ltd and Others (1983) 49 LGRA 88; CASES CITED: Michel Projects Pty Ltd v Randwick Municipal Council (1982) 46 LGRA 410; NSW Land and Housing Corporation v Campbelltown City Council [2002] NSWLEC 18 DATES OF HEARING: 03/05/2006, 20/06/2006, 23/06/2006 EX TEMPORE JUDGMENT DATE : 06/23/2006 APPLICANT Mr T To (barrister) SOLICITORS DTA Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr S Griffiths (solicitor) SOLICITORS Pike Pike & Fenwick JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Hoffman C 23 June 2006 10061 of 2006 Priority One Group Pty Ltd v City of Ryde JUDGMENT 1 This is appeal 10061 of 2006 between Priority One Group Pty Limited and City of Ryde against a deemed refusal of consent to renovate alter and strata subdivide an existing block of six flats, three storeys high above garages at 10 Ross Street, Gladesville. 2 The site has a total area of 537.82 sq m. The site is a rectangular shaped allotment with a frontage to Ross Street of 12.19 m and a frontage to Orr Street of 44.12 m. There is underneath the building car parking for three cars. There is a fourth garage under the building, but its entry ramp has such a steep transition down from the footpath that vehicles would scrape their undersides. It cannot be used by a car. 3 The building dates from the 1960s and apparently was constructed that way. There are also two open car spaces within the side setback of the eastern boundary with a drive crossing off Orr Street and there is another open car space in the side setback of the southern boundary with a drive crossing off Ross Street. 4 The site slopes gently downwards from the rear eastern boundary along the Orr Street frontage to Ross Street. The site contains no significant vegetation. The locality is predominantly residential. Three and four storey residential flat buildings of brick veneer and tiled roof construction are located to the north, east and south of the site. The development to the west of the site on the opposite side of Ross Street consists predominantly of either one or two storey detached dwellings of brick and tiled roof construction. 5 On 8 November 1968 development consent was granted for the erection of a residential flat building described as a residential flat building containing six three-bedroom flats. Development consent is sought for alterations and additions to the residential flat building as well as the strata subdivision of the building into six allotments. 6 The alterations and additions include the following works: (1) Two carports are to be erected over the existing car-parking spaces to the east of the building. A single carport will be erected over the single car space to the south of the building. (2) The external elevations of the building will be finished in cement bagging and cement rendered. (3) The height of the fence in part of Orr Street is proposed to be increased to one metre, this fence will be cement rendered, a lattice fence to a height of 1.8 m is to be on top of the one metre high wall near the balcony on unit 2 and near the car ports along the eastern boundary. (4) Fencing to a height of 1.8 m is to be erected within the front setback area. Fencing is also proposed on the boundaries with the adjoining properties. (5) The existing steel balustrades on the balconies are to be replaced with glass balustrades. (6) Fire safety measures within the building will be upgraded to comply with the Building Code of Australia. (7) The existing internal wall around the kitchen is to be demolished and a steel beam fitted in support of the existing concrete floor over the proposed brick openings in each unit. (8) A new kitchen, bathroom and laundry are to be installed in each unit. 7 At the time of the internal inspection of two of the apartments, much of the internal work and some of the external work had already occurred and apparently the other four apartments are at a similar stage. 8 The issues are: (1) The building is defined as a low rental residential building pursuant to cl 3A(1)(c) of the State Environmental Planning Policy No 10 - Retention of Low-Cost Rental Accommodation ("SEPP 10"). Particulars: (a) At any time in the twenty-four month period prior to the development application being lodged the dwellings in the building were let at a rental not exceeding the median rental level for that time specified in the publications referred to in cl 3A(2) of SEPP 10 in relation to a dwelling of the same type having the same number of bedrooms and located in the same local government area. (b) In the SEPP 10 assessment submitted by the applicant, the applicant advised that they do not consider the existing dwellings in the residential flat to constitute low rental dwellings as defined in SEPP 10 as all apartments were let at a rental exceeding the median level for two bedroom units in the Ryde Local Government area. (c) On 8 November 1968 development consent was granted by the council for the erection of residential flat building containing six three-bedroom units and therefore the correct rental level referred to in cl 3A(2) of SEPP 10 is for a three-bedroom unit. (2) The SEPP 10 assessment submitted by the applicant does not address cl 7(4) and therefore council has been unable to assess the application as required under SEPP 10. (3) The concurrence of the director general has not been obtained as required by cl 7(3) of SEPP 10. (4) The proposed development is likely to result in a loss of low rental accommodation on the site and within the area due to a higher rent being charged and units being owner occupied as a result of strata subdivision. (5) The proposed development will adversely impact on the streetscape and the public domain. (a) The development has proposed fencing within the front setback of Ross Street and Orr Street. (b) Clause 11.3 of the Residential Flat Building Code provides private landscaped areas located within the front building line shall only be delineated by landscaping or low fencing consistent with similarly situated fencing in the locality. (c) The front fencing would detract from the amenity of the public domain as it fails to respond to the architectural character of the street and the area. (6) The development is not in the public interest in that the development does not allow for the retention of low cost rental accommodation. 9 Appearing for the respondent were Miss N Lowe, Mr Griffiths and Miss Walsh, solicitors. Witness for the council was Miss S Bailey, consultant town planner. The proposal had been advertised and there were no objectors. 10 Appearing for the applicant were Mr T To, barrister, and Mr D Trodden, solicitor. Witnesses for the applicant were Mr L Fletcher, town planner, and Mr B Pugh, designer and builder. 11 The site is zoned Residential C5 pursuant to the Ryde Planning Scheme Ordinance 1979 as amended and as currently in force. The planning scheme ordinance provides mandatory controls in respect of the minimum size of allotments, density, landscaping and parking for residential flat buildings. The proposed development will not affect any of these requirements. 12 State Environmental Planning Policy 10, retention of low cost rental accommodation, applies to the proposed development. The site is also affected by the Residential Flat Building Code which took effect on 14 July 1987. 13 In regard to issues 1(b) and (c), the parties asked me to determine a preliminary question of fact on whether each unit had two or three bedrooms. It is clear from the inspection that the room in each unit shown on the plan as a study has in the past been suitable for use as a bedroom for a single bed or double bunks. There is a built-in wardrobe in place. The room has dimensions that make it a habitable room. Markings on the floor at the time of the inspection showed a comfortable layout for a single bed, a dressing table or chest of drawers and the built-in wardrobe. 14 Some parts of the existing building did not comply with the 1968 council approved plans but this did not have a bearing on the number of bedrooms. I determined the preliminary question early in the proceedings as the units being three bedrooms each. As a result, SEPP 10 does apply to the proposal under cl 3A(2). 15 The instrument required the concurrence of the Director General of the Department of Planning under cl 7(3). The council said it had not forwarded the matter for concurrence as it had no record of a letter from the applicant seeking the council to do so in case the application was found to consist of three bedroom units. The council had advised the director of this appeal but had received a reply of "no comment" since the application had been refused by council after the lodgement of the appeal. 16 Evidence was then heard on the assessment requirements under cl 7(4) of the SEPP 10 that I shall return to later. That evidence was given by Mr Pugh, Mr Fletcher and Miss Bailey. Before going to that evidence, I wish to conclude with matters related to the concurrence of the director. 17 The parties are in agreement that the building was in a dilapidated state and did not comply with the current fire regulations even before the current works made the units uninhabitable. Some extensive maintenance was required even if the alterations were not essential. 18 The applicant put that other applications involving maintenance and therefore upgrade of existing SEPP 10 buildings inevitably led to increased rentals. It was also part of the applicant's evidence that the local area was subject to gentrification with higher socio economic groups being in a greater percentage than in the past. 19 SEPP 10 has the objective of retaining low-cost rental accommodation and this can be done in various ways. One way, in Mr Fletcher's experience, where simply the maintenance of a dilapidated building would lift it above the median rentals in the locality, is to come to an agreement with the Department of Housing to make a monetary contribution to it or a licenced provider. The contribution goes to a fund that builds new low-cost housing in the subject area. The applicant was willing to take that course. 20 The respondent put that whilst it acknowledged the Court had discretion to operate the concurrence necessary on behalf of the director, the Court should not do so without knowing the views of the director about the applicant's alternative. The respondent handed up in support of this submission, NSW Land and Housing Corporation v Campbelltown City Council [2002] NSWLEC 18 Bignold J; Byron Shire Council v Chrestal Pty Ltd and Others (1983) 49 LGRA 88, Hope, Hartley, Mahoney JJA, and Michel Projects Pty Ltd v Randwick Municipal Council (1982) 46 LGRA 410, Cripps J. 21 The applicant said it was in the process of negotiation with the government departments and sought an adjournment to obtain their views. The adjournment was not opposed by the respondent. 22 On resumption, the respondent tendered Exhibit 12 where the Department of Planning by letter of 8 June 2006 said that the Director General would be likely to grant concurrence upon securing a memo of understanding for a voluntary contribution of $18,795.20 and the memo must outline how the contribution would be received and used. Such an agreement is permitted under s 93D of the Environmental Planning and Assessment Act 1979. 23 The applicant submitted and the respondent agreed that a direct contribution to a licensed provider who already had a memo of understanding with the Department of Housing, its predecessors or successors, would comply with the director's need for a memo of understanding. The respondent was concerned that unless a memo was established or a contribution made as outlined above, the Court's action to provide concurrence would be invalid. 24 The applicant has today produced in exhibit J evidence of payment in full of the amount nominated to the Ryde/Hunters Hill Community Cooperative Limited, a housing provider ABN 72422020761, registered number PBRS-65, and the letter states that the funds are to be used for the provision of secure low cost housing and accommodation to people on low to moderate incomes or with special needs in the locality. 25 The respondent has advised the Court can now act under s 39(6)(a) of the Land and Environment Court Act 1979. The respondent tendered draft conditions of consent in Exhibit 13 on the basis that the contribution had been made. 26 That being done, I have considered the requirements of SEPP 10 and its guidelines. 27 In cl 7(4)(a) it relates to concern for the loss of low-cost rental units below the median rental on the subject site. There will be loss in this case, even though the evidence is the previous tenants were all employed, and not rental subsidiary recipients. 28 Clause 7(4)(b) relates also to cl 7(5) and the guidelines. They look to the availability of low-cost housing in the locality. The site being close to the border with Hunters Hill Council, those nearby areas are also involved. It seems the average vacancy rate is about 2.9% for the relevant period and indeed it seems that the Sydney-wide vacancy rate is approximately 3%. According to cl 7(5) therefore, there is insufficient comparable low-cost rental accommodation in the locality and the loss of such accommodation on the subject site can only be given concurrence under cl 7(7) after consideration of the matters in cl 7(4). 29 Clause 7(4)(c) is mitigated in regard to the adverse social and economic effects of the loss of this building for low-cost housing by the contribution made to the Department of Housing licenced provider for the locality. 30 Clause 7(4)(d), none of the tenants previously in the building were displaced low-cost housing persons. The premises were vacant at the time of acquisition by the applicant. 31 Clause 7(4)(e) is mitigated by the contribution made to the Department of Housing licenced provider for the locality. 32 In regard to cl 7(4)(f), I am satisfied that at least the new fire safety works were necessary to the existing building and the evident dilapidation on other parts of the building required considerable maintenance at least. The moderate updating of the building by the additional works proposed is reasonable and, given the contribution to the licensed housing provider, the question of cost of such works does not require evaluation. 33 Under cl 7(7) of SEPP 10 therefore I grant concurrence. 34 The streetscape issue has been resolved satisfactorily via the draft conditions of consent in Exhibit 13 and the applicant does not dispute them. Therefore the orders of the Court are: (1) The appeal is upheld. (2) Development consent is granted to alterations and additions and strata subdivision of an existing apartment building consisting of six three-bedroom units at 10 Ross Street, Gladesville as shown in plans DA01 to DA05, all Issue A by Brian Pugh Design and strata plan nos. 1 to 4 by Duncan John Sim, Surveyors, ref. 171-05 all as amended by and built in accordance with the conditions in Annexure A hereto. (3) The exhibits are returned to the parties except Exhibits 1, 2, 12, 13 and Exhibits D and J. ________________________ K G Hoffman Commissioner of the Court je 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. 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