Land and Environment Court of New South Wales CITATION : Juego Holdings Pty Limited v Hurstville City Council [2009] NSWLEC 1368 APPLICANT Juego Holdings Pty Limited PARTIES : RESPONDENT Hurstville City Council FILE NUMBER(S) : 10429 of 2009 CORAM: Tuor C DEVELOPMENT APPLICATION :- Construction of a new 3-storey mixed use development KEY ISSUES: variation to height standard whether SEPP 1 objection is well founded Environmental Planning and Assessment Act 1979 State Environmental Planning Policy No. 1 - Development Standards LEGISLATION CITED: State Environmental Planning Policy No. 65 – Design Quality of Residential Flat Buildings Hurstville Local Environmental Plan 1994 Hurstville Development Control Plan No 1 Residential Flat Design Code Winten Property Group Limited v North Sydney Council (2001) NSWLEC 46 CASES CITED: Wehbe v Pittwater Council [2007] NSWLEC 827 Seaside Property Developments Pty Ltd v Wyong Shire Council [2004] NSWLEC 117 DATES OF HEARING: 4 November 2009 DATE OF JUDGMENT: 13 November 2009 APPLICANT Mr S Flanigan, barrister Solicitors Susan Hill & Associates Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr P Rigg, solicitor of Deacons JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Tuor C 13 November 2009 10429 of 2009 Juego Holdings Pty Limited v Hurstville City Council JUDGMENT 1 This is an appeal against the refusal by Hurstville City Council (council) of a development application (08/DA-404) to demolish an existing building and construct a 3-storey mixed retail, commercial and residential development with basement parking at 45 Forest Road, Hurstville (the site). 2 The main issue between the parties is whether the objection under State Environmental Planning Policy No. 1 – Development Standards (SEPP 1) to the 2-storey height control in cl 15A of Hurstville Local Environmental Plan 1994 (LEP 1994) is well founded. Site and context 3 The site is located on the south-east corner of Forest Road and Lily Streets. It also has a frontage to Roberts Lane to the southern boundary and an unnamed lane to the rear, eastern boundary. 4 The site is irregular in shape with an area of 1776 square metres. It is developed with a 2-storey office building located to the rear of the site with parking and a landscaped area to the front. 5 The site is located at the edge of Hurstville Town Centre in a separate commercial/retail strip on Forest Road. 6 Adjoining the site on the north-east corner of Forest Road and Lily Street is a car sales yard (37 - 43 Forest Road), which has approval for a part 2/part 3 storey mixed use development. 7 To the east, along both sides of Lily Street, are single and 2-storey dwellings. On the opposite side of the unnamed lane is a single storey dwelling (75 Lily Street). On the Lily Street corner of Roberts Lane and Forest Road is a 2-storey residential flat building. 8 Opposite the site on Forest Road is Hurstville Public School. Further to the south-west along Forest Road are single and 2-storey commercial/retail buildings. Planning controls 9 The site is zoned 3(c) Business Centre under LEP 1994. The proposal is permissible with consent. 10 The objectives of the 3(c) zone are: (a) to maintain a commercial and retail focus for larger scale commercial precincts, (b) to allow for residential development in mixed use buildings, with non-residential uses on at least the ground level and residential uses above, so as to promote the vitality of business centres, and (c) to provide opportunities for associated development such as parking, service industries and the like. 11 Clause 13(2A) specifies a maximum floor space ratio (FSR) for buildings in the 3(c) zone of 1.5:1, of this the maximum FSR for a non-residential component cannot exceed 1:1. 12 Clause 13(2B) provides that: Nothing in subclause (2) or (2A) shall be construed as removing the need for compliance with clause 15(2). 13 Clause 15A provides: (1) Despite any other provision of this plan, buildings exceeding 2-storeys in height must not be erected on so much of the land within Zone No. 3(a) or 3(c) as is shown edged heavy black on the height map for Zones Nos 3(a) and 3(c). (2) In this clause: height map for Zones Nos 3(a) and 3(c) means Sheets 1-20 of the map marked "Hurstville Local Environmental Plan 1994 – Height Map for Zones Nos 3(a) and 3(c)", as amended by the maps (or specified sheets of maps) marked as follows . 14 The proposal does not comply with the 2 storey height control in cl 15A and the applicant has submitted an objection under SEPP 1. 15 The 1891 building at Hurstville Public School and 76 Lily Street are listed as Heritage items in Schedule 2 of LEP 1994. Clause 33 requires that the impact of the proposed development on the heritage significance of these items in the vicinity of the site must be considered. 16 Development Control Plan No 1 (DCP 1) also applies to the development. Council did not press any issues in relation to compliance with cl 33 of LEP 1994 or DCP 1. 17 State Environmental Planning Policy No. 65 – Design Quality of Residential Flat Buildings (SEPP 65) and the Residential Flat Design Code (the Code) are relevant. The proposal was referred to the Design Review Panel (the Panel) established under Part 3 of SEPP 65. 18 The site is an interface between different zones. Land to the east and the residential flat building adjoining the site to the south is zoned 2-Residential. Land opposite the site, across Forest Road, is zoned 5(a) – Special Uses. To the north along Forest Road is zoned 3(c) – Business Centre. Background of the proposal 19 The proposal is to demolish the existing building on the site and construct a new 3-storey mixed use development comprising: o Basement – parking for 50 cars o Ground floor – four retail suites, 6 commercial suites, loading dock, garbage room and at grade parking for 10 cars. o First and second floor – 16 apartments 20 The Panel considered a pre DA application on 7 August 2008. The Panel's comments included: …… Scale Whilst the scale of the development exceeds the 2-storey height limit established by the Hurstville LEP 1994, it is not excessive in the circumstances of the prominent corner location of this site and would be acceptable for the appropriate form of development on the site. Built Form It is noted that the site defers to a stepped form of development from the main street frontages and, whilst this is generally accepted technique of reducing the apparent scale of development, it is not necessarily appropriate to do this, nor does it produce the best urban form result. Furthermore, the stepping does not occur on the laneway frontage where the scale of the public domain would arguably warrant it more than on the main frontage. The proposed built form could be improved if the form of development were to reinforce, as a matter of priority, the Forest Road frontage. In the view of the panel the corner of Forest Road and Lily Street could support a 3-storey built form offering greater impact and architectural presence. If the built form were to focus on the Forest Road and Roberts Lane frontages, it would define, at first floor level an open courtyard for the use of residents which would enjoy significant morning sunshine, rather than be overshadowed by its own built form. …….. Amenity It is considered that the residential entry from the rear lane would be more appropriately located on Lily Street or Forest Road in terms of access, address and safety. As mentioned previously, reconsideration of the built form could result in an improved north-east courtyard with access to morning sun and views. The long, straight and narrow internal corridor access to units is not conducive to high levels of amenity, nor quality of apartments. 21 The Panel considered the development application on 2 October 2008. The report to the Panel states that the proposal is basically similar to that previously considered by the Panel as a pre DA application. The Report includes the applicant's comments that the proposal should not be redesigned to orientate the open space to front Lily Street. The applicant has considered the further comments from the Design Review Panel and considers that the building has been appropriately stepped from the rear unnamed lane. The provision of an open communal courtyard adjacent to the site's Lily Street frontage was considered but not favoured by the applicant because they consider this would reduce the number of units on the upper floor levels as the site has a smaller frontage to Roberts Lane. Provision of units adjacent to the north-eastern site frontage of Lily Street maximises northern solar access to the living areas and terraces of more units and provides greater capacity for causal surveillance to the street frontages of the site, allowing views to be optimised from those units. 22 The panel accepted these comments but recommended further design refinement of the proposal. 23 The report to council recommended approval of the application. Council refused the application on 10 June 2009. The issues and evidence 24 Mr N Dickson, for the council and Mr T Byrnes, for the applicant provided urban design and planning evidence. There was no resident evidence. 25 The Statement of Facts and Contentions raised issues about the height and scale of the development and its relationship to adjoining development and whether the SEPP 1 objection was well founded (Contentions 1, 2 and 4). The council also raised a contention regarding whether the proposal had adequately addressed the issues raised by the Panel (Contention 5). 26 Council did not press the contention about the provision of car parking for the retail uses which was agreed by the experts to be adequate (Contention 3). 27 Mr Dickson raised additional issues during the joint conference in relation to the internal arrangement of the building including the length of corridors, the dual use of lifts, the location of the open space and the viability of the commercial uses. The Statement of Facts and Contentions was not amended but these issues were addressed in the Joint Statement of Mr Dickson and Mr Byrnes and were stated by Mr Rigg, for the council, to be part of the issues raised by the Panel referred to in Contention 5. Mr Flanigan, for the applicant, did not press his objection to these issues being addressed. SEPP 1 28 In their Joint Statement, Mr Dickson and Mr Byrnes agreed, "the variation from the standard regarding the number of storeys does not create adverse environmental impacts on the surrounding area". Further, they agreed "while the development exceeds the development controls regarding height, the scale of the proposed building is acceptable". 29 While, not resiling from his position that a 3 storey building was acceptable on the site, Mr Dickson provided oral evidence that raised concerns about the location of the communal open space in the south west corner adjoining Forest Road. In his opinion, the open space provided poor amenity as it was largely overshadowed by the development, would be exposed to traffic noise, was not designed as usable open space and was not easily accessible. He also raised concerns about the potential for overlooking of the adjoining residential property from the residential units. 30 Mr Dickson considered that any 3 storey component should be located on the Forest Road frontage, opposite the larger school buildings and that the open space should be located to the north east corner providing better amenity and forming a transition between the commercial and residential zones. Mr Dickson illustrated how this could be achieved with all units and the communal open space receiving north east solar access. However, Mr Byrnes indicated that this would result in a reduction of the number of units. 31 Mr Byrnes accepted that the shadow diagrams did not indicate the full extent of the overshadowing to the communal open space but he estimated that about 50% of the area would receive sun from late morning for at least 3 hours. He considered the amenity of the communal open space to be acceptable and that its location in the south west corner of the development enabled more apartments to achieve good solar access and out look as well as to be set back from traffic noise. In his opinion the communal open space should not be relocated and the 3 storey proposal does not result in adverse amenity impacts and achieves an appropriate form of development which responds to the scale of development in both the residential and commercial zones. Further he stated that the proposal only increased the height of the existing building by 1.5m and that there were other approvals in Forest Road for 3 storey buildings, including the opposite site (37 - 43 Forest Road). 32 Mr Byrnes prepared a SEPP 1 objection, which concluded that compliance with cl 15A was unreasonable and unnecessary in the circumstances of the case. Findings 33 The manner of dealing with a SEPP 1 objection is set out in the judgment of Lloyd J in Winten Property Group Limited v North Sydney Council (2001) NSWLEC 46, at par 26, where a number of questions are asked. …… it seems to me that SEPP No 1 requires answers to a number of questions (not necessarily in the following order). First, is the planning control in question a development standard? Second, what is the underlying object or purpose of the standard? Third, is compliance with the development standard consistent with the aims of the policy, and in particular, does compliance with the development standard tend to hinder the attainment of the objects specified in s 5(a)(i) of the EP & A Act? Fourth, is compliance with the development standard unreasonable or unnecessary in the circumstances of the case? (In relation to the fourth question, it seems to me that one must also look to see whether a development which complies with the development standard is unreasonable or unnecessary, as noted by Cripps J in the Hooker Corporation case.) Fifth, is the objection well-founded? 34 Preston CJ in Wehbe v Pittwater Council [2007] NSWLEC 827 comprehensively examines the requirements to uphold an objection under SEPP 1. Upholding a SEPP 1 objection is a precondition, which must be satisfied before the proposed development can be approved on a consideration of the merits. His Honour states that the Court must be satisfied of the following three matters: 38 First, the Court must be satisfied that "the objection is well founded" (clause 7 of SEPP 1). The objection is to be in writing, be an objection "that compliance with that development standard is unreasonable or unnecessary in the circumstances of the case", and specify "the grounds of that objection" (clause 6 of SEPP 1). The requirement in clause 7 of SEPP 1 that the consent authority be satisfied that the objection is well-founded, places an onus on the applicant making the objection to so satisfy the consent authority: see North Sydney Municipal Council v Parlby, unreported, LEC No. 10613 of 1985, 13 November 1986, Stein J, p. 8. 39 Secondly, the Court must be of the opinion that "granting of consent to that development application is consistent with the aims of this Policy as set out in clause 3" (clause 7 of SEPP 1). This matter is cumulative with the first matter (it is prefaced by the words in clause 7 of SEPP 1 "and is also"). The aims and objects of SEPP 1 set out in clause 3 are to provide "flexibility in the application of planning controls operating by virtue of development standards in circumstances where strict compliance with those standards would, in any particular case, be unreasonable or unnecessary or tend to hinder the attainment of the objects specified in section 5(a)(i) and (ii) of the Act". The last mentioned objects in s 5(a)(i) and (ii) of the Act are to encourage: "(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment, (ii) the promotion and coordination of the orderly and economic use and development of land." 40 Thirdly, the Court must be satisfied that a consideration of the matters in clause 8(a) and (b) of SEPP 1 justifies the upholding of the SEPP 1 objection: Fastbuck$ v Byron Shire Council (1999) 103 LGERA 94 at 100 and City West Housing Pty Ltd v Sydney City Council (1999) 110 LGERA 262 at 291. The matters in clause 8(a) and (b) are: "(a) whether non-compliance with the development standard raises any matter of significance for State or regional environmental planning, and (b) the public benefit of maintaining the planning controls adopted by the environmental planning instrument". 35 At [42] to [43], His Honour then proceeds to discuss ways of establishing that compliance with the standard is unreasonable or unnecessary, relevantly he states: 42 An objection under SEPP 1 may be well founded and be consistent with the aims set out in clause 3 of the Policy in a variety of ways. The most commonly invoked way is to establish that compliance with the development standard is unreasonable or unnecessary because the objectives of the development standard are achieved notwithstanding non-compliance with the standard… 43 The rationale is that development standards are not ends in themselves but means of achieving ends. The ends are environmental or planning objectives. Compliance with a development standard is fixed as the usual means by which the relevant environmental or planning objective is able to be achieved. However, if the proposed development proffers an alternative means of achieving the objective, strict compliance with the standard would be unnecessary (it is achieved anyway) and unreasonable (no purpose would be served). 36 Mr Byrnes considered cl 15A of LEP 1994 to be a development standard and prepared a SEPP 1 objection. He stated that cl 15A does not include any aims or objectives for the standard. In his opinion the generic objectives associated with general height standards are: 1. Consistency of development height and when read in conjunction with FSR controls a consistency of bulk in of building in the 3(c) zone. 2. Compatability with development in any adjoining zones. 3. Safeguarding the interests of the public domain (such as view corridors; consistency with retained local heritage items; overshadowing of public places) 37 Mr Byrnes stated that the proposal met the underlying objectives of the standard because: The application proposes to exceed the currently two storey commercial building by only 1.5 metres due to the inclusion of a third storey but at different floor to floor heights for a Mixed Use building. A 1.5m variation in height limit does not constitute unreasonable variation between building heights. Variations of even one storey generally occur within the current zone and the surrounding residential zone without any undue concern for contextual relationship between buildings. It can also be observed that there are no adverse consequences that arise from the only specific concerns raised in regard to overshadowing, privacy or impact of a heritage item. The height standard therefore relates purely to an objective to maintain reasonable compatibility of development within the surrounding built form context. This measure is not just an abstract aesthetic measure that can be detached from the reality of expectations under the zoning. Where there are different zones adjoining with a common boundary permitting different forms of development in terms of bulk and scale, they must be some relatively adverse relationships between buildings relative to expected levels of compatibility where there are two similar zones abutting, for example residential. In this case the objective to achieve a height of two storeys is intended to achieve compatibility of heights and the application does this. The measure of storeys is largely peripheral to the concern for context due to the simple fact that storey height between differing uses are different and only a broad guide to height as the ultimate measure. Therefore insofar as the objective relates to consistency of height and ultimately built form, either within the prevailing zone or in the surrounding development context, the variation sought by this part two, part three storey proposal is both compatible in its context (and as the context is developing according to recent approval) but also consistent with the assumed objectives of the standard. 38 I acknowledge that a purpose of the height standard is to maintain reasonable compatibility of development within the surrounding built form context however, I do not accept that this is sufficiently achieved by the proposal to warrant a variation to cl 15A of LEP 1994. Mr Byrnes places considerable weight on the height of the two storey existing building on the site. This is a commercial building and has higher floor to floor height than the proposed residential component. In Mr Byrnes opinion the proposal, although 3 storeys, is only a marginal increase over the existing height. 39 Mr Byrnes considers that some relatively adverse relationships between different zones are not unreasonable. The relationship of the existing building to the residential development is not ideal and is not something to be emulated or exacerbated by an increase in height. Part of the proposal is setback and is two storeys where it adjoins the residential zone however, I do not consider this setback to be sufficient to provide an acceptable transition between the two zones nor do I accept that this in an inevitable consequence of different zones. 40 I accept Mr Dickson's evidence that any 3 storey component should be located on the Forest Road corner with a transition in scale between the two zones. This approach has been adopted in the approved development at 37-43 Forest Road, which is a part 2, part 3 storey development. The 3 storey component appears to be concentrated on the corner of Forest Road and Lily Street with the majority of the building being two storeys, adjoining the residential zone. I also accept Mr Dickson's concerns about the location and design of the communal open space, which is less than optimum. The location of the communal open space in the north east corner would clearly achieve better amenity although this may result in the loss of some units. 41 Mr Rigg referred to Seaside Property Developments Pty Ltd v Wyong Shire Council [2004] NSWLEC 117 where at [25] Bly C provides a planning principle on development in adjoining different zones: As a matter of principle, at a zone interface as exists here, any development proposal in one zone needs to recognise and take into account the form of existing development and/or development likely to occur in an adjoining different zone. In this case residents living in the 2(b) zone must accept that a higher density and larger scale residential development can happen in the adjoining 2(c) or 2(d) zones and whilst impacts must be within reason they can nevertheless occur. Such impacts may well be greater than might be the case if adjacent development were in and complied with the requirements of the same zone. Conversely any development of this site must take into account its relationship to the 2(b) zoned lands to the east, south-east, south and south-west and the likely future character of those lands must be taken into account. Also in considering the likely future character of development on the other side of the interface it may be that the development of sites such as this may not be able to achieve the full potential otherwise indicated by applicable development standards and the like. 42 This principle recognises that each zone must consider development likely to occur in adjoining zones and that developments may not be able to achieve their full potential. In applying this principle to this appeal the question is not whether the maximum height limit can be achieved but whether the proposal should be able to exceed its potential in terms of height. I find that the answer to this question is no. There are no particular characteristics of this site or of this proposal, which justify a variation of the height standard in the vicinity of the residential zone. 43 I accept that there is an urban design argument for permitting three storeys to reinforce the corner of Forest Road and Lily Street based on the scale of the school and the approval on the opposite corner. However, the proposal does not achieve this in a satisfactory manner. The corner element is largely a screen around a terrace on the second and third storey. Only a small part of the building above ground level fronts the Forest Road alignment. Nearly half of the Forest Road frontage is only single storey with the second storey element being a screen with aluminium louvres around the communal open space. Conversely the majority of the Lily Street frontage is three storeys. While there are balconies at both the second and third storey, the building will appear as three storeys along this frontage. I do not consider that the design resolution of the proposal achieves a satisfactory relationship with either its commercial context along Forest Road nor with its residential context along Lily Street. 44 I find that the proposal does not meet the underlying purpose of the standard in cl 15A of LEP 1994, compliance with the standard is not unreasonable or unnecessary and the SEPP 1 objection is not well founded. On this basis the application must fail. Other issues 45 In relation to the other issues raised by Mr Dickson about the internal design of the proposal. Individually these would not warrant refusal of the application but cumulatively they indicate that the design is unresolved. I do not accept Mr Byrnes opinion that they are matters that can be resolved at a latter stage through conditions of consent. In particular, the shared access for commercial and residential users of the lift and lobbies is of concern. The Code outlines Better Design Practices which relevantly include: - Providing separate access for residents in mixed use buildings (p57) Design legible circulation systems, which ensure the safety of users by: - isolating commercial service requirements, such as loading docks, from residential access, servicing needs and primary outlook - locating clearly demarcated residential entries directly from the public street - clearly distinguishing commercial and residential entries and vertical access points. The coming and going of strangers can lead to security issues, especially for the residential component (p80) 46 The proposal provides only one lift, which is located in the residential lobby off the unnamed lane at the rear of the site. Anybody wishing to access the commercial/retail or residential uses from the basement would therefore share the same lift and, as currently proposed, exit into the ground floor residential lobby. Mr Byrnes suggested that a separate security residential lobby could be provided off the lift in the basement car park, however, this would result in there being no lift access for commercia/retail users, including disabled access. Access to the commercia/retail tenancies is via fire stairs off the Forest Road and unnamed lane lobbies. While the fire stairs are separate from the residential lobby it means that these users must exit onto the street and then walk around to re-enter the commercial/retail tenancies. Service access is available from the rear of these tenancies but it is not envisaged that this would be for the public. This arrangement is less than optimal, particularly off the unnamed lane. 47 The unnamed lane provides poor amenity, which will not be improved by the development. Access along the lane to the lobby and fire stair is past at grade car spaces. The lobby adjoins the driveway entrance to the basement car park and more at grade parking. Limited landscaping is provided and elements of the first floor of the building project in part over the lower level but no weather protection or awning is provided. The lobby itself is recessed and accessed by a narrow path that adjoins a disabled parking space. This is the only entry to the building, which provides lift access and is therefore the principle residential entry to the building as such it is unsatisfactory. Consistent with the recommendations of the Code, the primary residential access (including a lift) should be off either Forest Road or Lily Street and should be separate from the commercial/retail access. 48 The basement provides a number of commercial retail car spaces, which will be used by the public. Accessible and separate access from the basement to the commercial/retail uses should be provided, preferably not by only a fire stair. 49 Mr Dickson also raised concerns about the length of corridors and the number of units accessed off a single corridor and its length which, in his opinion, does not comply with the "rule of thumb" in the Code that the number of units off a corridor be limited to eight (p79). I note Mr Byrnes's comments that there are two residential lobbies from which access to units is available. However, as there is only one lift it is likely that the units will be serviced from this point along the single corridor, particularly from the basement car park. Relocating the residential lobby to Lily Street may also assist in reducing the length and the number of units serviced off a single corridor by providing a more central access. 50 Mr Dickson also raised the travel distance to the garbage room from a number of units as being unsatisfactory, particularly as it is via the loading dock. I accept this criticism of the proposal as a further indication that the design is unresolved. 51 I have not given weight to Mr Dickson's concerns about the viability of the commercial units along the eastern part of Lily Street, although the provision of residential uses adjoining 75 Lily Street and the residential zone would appear the have some merit. Orders 52 The orders of the Court are: 1. The appeal is dismissed. 2. Development Application (08/DA-404) to demolish an existing building and construct a 3-storey mixed retail, commercial and residential development with basement parking at 45 Forest Road, Hurstville, is refused. 3. The exhibits are returned. _______________________ Annelise Tuor Commissioner of the Court ljr 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.