Land and Environment Court of New South Wales CITATION : C G Australasia v Waverley Council [2007] NSWLEC 868 APPLICANT C G Australasia Pty Limited PARTIES : RESPONDENT Waverley Council FILE NUMBER(S) : 10986 of 2007 CORAM: Brown C KEY ISSUES: Development Application :- demolition of an existing residential flat building and the erection of a new residential flat building - floor space ratio - bonus floor space - view loss LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Waverley Local Environmental Plan 1996 CASES CITED: Tenacity Consulting v Warringah [2004] NSWLEC 140 DATES OF HEARING: 20, 21/12/07 EX TEMPORE JUDGMENT DATE : 21 December 2007 APPLICANT Mr A Galasso SC SOLICITORS Colin Biggers & Paisley LEGAL REPRESENTATIVES: RESPONDENT Mr M Staunton, barrister SOLICITORS Wilshire Webb Staunton Beattie Lawyers JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Brown C 21 December 2007 10986 of 2007 C G Australasia Pty Limited v Waverley Council JUDGMENT 1 COMMISSIONER: This is an appeal against the refusal of DA 772/2006 by Waverley Council (the council) for the demolition of an existing residential flat building and the erection of a new residential flat building at 15 Kenneth Street, Tamarama (the site). The site and surrounding area 2 The site has a northern frontage to Kenneth Street of 12.19 m, an eastern boundary of 46.29 m, a southern rear boundary of 12.19 m and a western boundary of 46.245 m, giving a total site area of 564 sq m. It has a slope from the street frontage to the rear of approximately 11 m. 3 The site currently contains a four storey residential flat building with hip roof set back from the rear boundary by approximately 18 m. Landscaping and private open space is provided at the rear. There is currently no off-street parking on the site. Access to the site is via Kenneth Street. 4 Development in the surrounding area comprises a mix of 1, 2 and 3 storey dwelling houses with garages generally at the street frontage and 3 to 5 storey residential flat buildings. Immediately to the rear of the site is the coastal walk and foreshore that links Bondi and Tamarama beaches. To the south the site enjoys expansive views of the Pacific Ocean, Tamarama, Bronte and Mackenzies Bay. The proposal 5 The proposal provides for the demolition of the existing residential flat building and the erection of a part 2 and part 5 storey residential flat building including 2 basement levels of car parking located partly below ground level. The building will comprise a lower and upper pavilion with the lower portion containing 2 storeys and the upper portion of 3 storeys above 2 storeys of car park levels. 6 The building will comprise 5 x 3 bedroom units, one on each level of the building. Each unit will contain a balcony at the rear overlooking the Pacific Ocean. The building will provide lift access to all levels however the front pedestrian entrance will be accessed via stairs from Kenneth Street. The basement car park will provide 8 spaces accessed by a car lift and turntable with ancillary garbage, bicycle and general storage areas. Relevant planning controls 7 The site is within zone 2(b) - Residential - Medium Density under Waverley Local Environmental Plan 1996. The proposed use is permissible with consent within this zone. 8 Waverley Development Control Plan 2006 (Amendment 2) (DCP 2006) applies. Part D2 provides requirements for multi-unit housing. Specific controls are provided for height, floor space ratio (FSR), setbacks, building length and depth, building separation, landscaping, solar access and other matters. 9 The council accepted that the development of the site could proceed on the basis of the FSR of the existing residential flat building rather than seek strict compliance with the FSR requirements in DCP 2006. Clause 3.4 of Pt D of DCP 2006 provides for a maximum FSR of 0.6:1 whereas the existing residential flat building has a FSR of 1.18:1. This also impacts on other areas of DCP 2006. A similar approach was adopted by the council in the redevelopment of the adjoining site at 11 Kenneth Street. In essence, the proposal requires a more merit based assessment rather than an assessment under the DCP 2006 requirements. 10 Clause 4.12 of DCP 2006 provides the opportunity for a bonus FSR through the provision of affordable housing. Clause 4.12 provides Objectives (cl 4.12.1), Strategy (cl 4.12.2) and Controls (4.12.3). The applicant relies on the use of this clause to achieve a bonus FSR of 0.2:1 and to achieve an overall FSR of 1.22:1 if measured above ground or 1.46:1 if below ground areas are included in gross floor area. 11 State Environmental Planning Policy No 65 - Design Quality of Residential Flat Development and State Environmental Planning Policy No 71 - Coastal Protection (SEPP 71), also apply. The issues 12 The Statement of Facts and Contentions identifies the following issues: 1) the unacceptable impact on views from adjoining properties; 2) the unacceptable impact on the coastal walk and adjoining open space through the location and design of a proposed building; 3) the unacceptable levels of overshadowing. The evidence 13 Mr Lewis Adey provided evidence for the applicant by Mr Brett Newbold and provided evidence for the council. Mr Newbold and Mr Adey provided a joint report. 14 The following residents provided evidence on site: o Professor Peter Swan of 17 Kenneth Street; o Mr Alexander Pearce of 19 Kenneth Street; o Mr Michael Furlong on behalf of the owners of 21 Kenneth; and o Mr Andrew Darroch on behalf of the owners of 11 Kenneth Street. 15 The properties of Professor Swan, Mr Pearce and also the property at unit 6, 7 Kenneth Street were inspected on the site view. Floor space ratio 16 There are two specific areas of disagreement over FSR. Firstly, the calculation. Mr Adey relies on calculations that exclude the area below ground level as this area does not contribute to the bulk and scale of the proposed development. Whilst this may be correct, the approach is inconsistent with the definition of FSR in Sch 2 of LEP 1995 where the gross floor area of the building is to be used in the calculation of FSR. There is no exclusion for areas below ground. In the absence of any compelling reason why the definition should not be adopted and relate to areas only above ground, I propose to accept the FSR calculations based on the LEP 1995 definition of FSR. 17 Secondly, the use of the bonus FSR provisions in cl 4.12 of DCP 2006. This clause states in part 4.12 Affordable Housing Design. The loss of affordable rental accommodation in Waverley is a matter of particular concern for council. In the face of increasing land values, construction costs and attractiveness of the local government area for investment, the cost of housing in both rental and owner/occupied sectors will continue to increase markedly. As a result council has put in place a variety of mechanisms directed at maintaining the affordability of rental housing within the LGA. The mechanisms applied by council involve a system of development incentives by relaxing various controls within this part in exchange for the provision of affordable rental housing. Development incentives to encourage the provision of affordable housing. The granting of a development incentive such as a floor space bonus is contingent on the development proposal being able to accommodate the bonus in a manner which maintains acceptable environmental amenity. Council is conscious of the need to maintain an adequate environmental amenity of the development and the surrounding neighbourhood where a floor space bonus and other incentives have been granted. 4.12.1 Objectives To encourage the development of new affordable housing whilst upholding the environmental objectives of this part. 4.12.2 Strategy Identify sites with inherent opportunities to incorporate bonus floor space ratio within the allowed building envelope. 4.12.3 Controls (a) An additional floor space bonus may only be permitted where affordable housing is provided. (b) Developments must demonstrate that all environmental criteria within this part are satisfied for the bonus FSR to apply. (c) Bonus FSR is to be incorporated within the building envelope except where outlined below (mixed use sites, sloping sites, dual street frontage). (d) Site specific opportunities to incorporate bonus FSR within the building envelope include: * Attic levels * Deep sites * Sloping sites * Mixed use sites * Dual street frontage sites. 18 There was disagreement between the parties on whether cl 4.12 could be used for the development application. Its operation is contingent upon satisfaction of a number of matters. These are: 1) an agreement between the applicant and the council on an appropriate mechanism to address the provision of affordable housing, in this case a monetary contribution; 2) the bonus floor area being within the allowed building envelope; 3) the bonus floor area maintaining an acceptable environmental amenity; and 4) the satisfaction of all environmental criteria within Pt D. 19 Accepting that cl 4.12 can be used as no issue was raised with its validity in these proceedings, there are a number of issues that have to be considered in the operation of this clause. 20 Firstly, there has been no agreement between the parties on an appropriate contribution. By letter dated 14 December 2007 from the applicant's solicitors, an offer of $250,000 was made to the council. In the council report from the Development and Building Unit on 15 October 2007 the following comments were made: When the Affordable Housing Program is strictly applied, that is, the contribution is calculated in accordance with the total bonus sought, (i.e. 0.87:1), the amount of the contribution would be in order of $6.3 million. When the benefit above, that already existing on the site is calculated (i.e. the existing building has an FSR of 1.8:1 and the benefit would then be 0.25:1) that would be a contribution of approximately $1.9 million. 21 Without considering the basis for the calculation of the contribution, as again this was not raised in the proceedings, the gap between the applicant's offer and even the lower of the two council requirements is considerable. Notwithstanding there being no agreement, the parties agreed that if the agreement was the only outstanding matter then the proceedings could be adjourned for further discussion prior to final orders being made. While this is a less than satisfactory approach I accept that it would address the issue of an agreement between the applicant and the council on the provision of affordable housing. 22 Secondly, I am not satisfied that all environmental criteria within Pt 4 are satisfactorily addressed. While I accept that the council's approach of a more merit based assessment is appropriate in the circumstances and that the design responds appropriately to the requirements in DCP 2006 in a number of areas, the issue of view loss is unsatisfactory. 23 The Court was taken on a view of the site from the coastal walk and a number of properties in Kenneth Street. With the use of a height pole and the surveyed location of the proposed building, a relatively accurate estimate of the location and form of the proposed building could be made from various locations on the coastal walk. 24 As I understand, the upper pavilion component of the proposal adjoining Kenneth Street is acceptable. The proposal, in fact reduces the overall height of the existing residential flat building in this location so view loss from this part of the development is not an issue. 25 The concerns relate to the two storey component or lower pavilion area at the rear of the site and adjoining the coastal walk and specifically the impact on the coastal walk and view loss from adjoining and nearby residential properties. 26 With the benefit of this view from the coastal walk, I am satisfied that the impact on the coastal walk is acceptable although I acknowledge a greater setback would be more desirable but in this case is not necessary. The proposal does not unacceptably visually impose on this important feature taking into account the form and location of existing development in this area and also the DCP 2006 requirement for a 6 m rear setback. I have come to this conclusion after considering cll 30, 32, 49 of LEP 1995 and cl 8(d), (e) and (f) of SEPP 71. 27 I note that the previous planning instrument, DCP 1, required only a 3 m setback. In acknowledging that the 6 m requirement is a generic control, I note that DCP 2006 is a relatively recent planning document and makes no specific setback requirement for this area, notwithstanding the emphasis placed by the council on a greater setback. 28 The significant issue raised by local residents was view loss. Views are addressed in cl 4.10 of DCP 2006 where the objectives are: o Ensure that views are shared providing equitable access to views from dwellings. o Protect and enhance views from streets and other public spaces. o Ensure that the desire for view does not conflict with privacy. 29 The principles established in Tenacity Consulting v Warringah [2004] NSWLEC 140 for consideration of view loss are also relevant. They require: 1) An assessment of views to be affected; 2) Consideration of what part of the property the views were obtained; 3) An assessment of the extent of the impact; and 4) The reasonableness of the proposal that was causing the impact. 30 In terms of view loss, Professor Swan's property is the most severely affected. The dwelling has two decks at the rear that face south with largely interrupted views of Mackenzie Bay, Tamarama and Bronte. The upper deck is located off the living area of the house and the lower deck off the main bedroom, although the deck at the lower level is larger and is used for social events because of its larger size. The impact of the proposed development at the lower level deck is to block a significant portion of the land/water interface of Mackenzies Bay, Tamarama and Bronte and land to the west. The views of the Pacific Ocean and to the east will be retained. From the upper deck the proposal will block the view of Mackenzies Bay to the rock outcrop on the southern side of Mackenzies Bay. Tamarama and Bronte will be visible over the top of the proposed development as will views of the Pacific Ocean and to the west. 31 In terms of Tenacity, the views to the south would be categorised as highly valuable. The land/water interface of the coast being more valuable than the views of the Pacific Ocean. The loss of the water/land interface from the lower level is a significant loss even considering the use of the adjoining room as a bedroom. In my view, the use of the deck on this level for social activities is a relevant consideration in assessing view impact. At the upper level the loss of views is not as significant although the location of the views from a living area would have a higher impact because of the more frequent use of this area by the occupants of the dwelling. 32 On the question of reasonableness, the proposal is significantly in excess of the DCP 2006 FSR requirements even accepting that this was not the test advocated by the council. The appropriate FSR was that of the existing building, being 1.18:1. The FSR of the proposal is calculated at 1.42:1. While it was argued by Mr Galasso that the additional floor area is not necessarily located in the lower pavilion structure that impacts on Professor Swan's view, I am satisfied that this is not the case as the northern part of the development largely occupies the building envelope of the existing residential flat building. A development that complied with an FSR of 1.18:1 would most likely have a reduced footprint in the area containing the lower pavilion. 33 On the issue of view loss, and even though it is not a conclusion reached by either Mr Newbold or Mr Adey, I find that following an assessment of the view impact using the principles in Tenacity that the proposal is inconsistent with the objective in cl 4.10.1, in that the views are not shared between Professor Swan's property and the subject proposal. It follows that the provisions in cl 4.12.3(a) are not satisfied and as such the bonus floor space provisions are not available to the applicant. 34 View loss was also raised in relation to 11 Kenneth Avenue, 19 Kenneth Avenue, 21 Kenneth Avenue and 6/7 Kenneth Avenue. With the benefit of the site view and an inspection of 19 Kenneth Avenue and 6/7 Kenneth Avenue, I am satisfied on the basis of the documentation provided and the views taken on site that the impact on view loss to these properties is not that significant that it would warrant the refusal of the development application. 35 Similarly, I am not satisfied that overshadowing, in isolation, would be a sufficient reason to refuse the development application. 36 By way of additional comment I find it necessary to state that following three separate hearings on two separate development applications in Kenneth Street, the proper assessment of development applications is severely hampered by a lack of strategic direction in the council's planning instruments that apply to the area. It is clearly unsatisfactory to deal with each application on its merits and in the absence of properly formulated planning controls. There seems little doubt that there will be further redevelopment of the Kenneth Street area and if the relevant concerns of council over matters such as the impact on the coastal walk, appropriate rear setbacks and reliance on the existing building form as a basis for redevelopment are not properly addressed and set out in planning documents, all parties in the development process, including the Court, will continue to consider applications in an ad hoc and inconsistent manner. This is clearly unsatisfactory. 37 The orders of the Court are: 1. The appeal is dismissed. 2. DA 772/2006 for the demolition of an existing residential flat building and the construction of a new residential flat building at 15 Kenneth Street Tamarama is refused. 3. The exhibits are returned. ___________________ G T Brown Commissioner of the Court 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.