Land and Environment Court New South Wales Medium Neutral Citation: Lenland Property Developments Pty Limited v Council of the City of Sydney [2013] NSWLEC 1060 Hearing dates: 11 December 2012 & Written submissions filed 8 March 2013 Decision date: 12 April 2013 Jurisdiction: Class 1 Before: Dixon C Decision: See Paragraph 22 of Judgment Catchwords: Appeal - development and modification appeals - change of use from commercial to residential unit: - imposition of a condition requiring the registration of a restrictive covenant on title under the Conveyancing Act 1919; rare and exceptional circumstances Legislation Cited: Conveyancing Act 1919 Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 Cases Cited: Fortunate Investments Pty Limited v North Sydney Council (2001) 114 LGERA1 MacDonald v Mosman Municipal Council (1919) 105 LGERA 49 North Shore Gas Company v North Sydney Municipal Council [1991] NSWLEC 66 NTL Australia Limited v Willoughby Council [2000] NSWLEC 244 PDP (Darlinghurst Apartments) Pty Limited v Sydney City Council [2005] NSW LEC 41 Category: Principal judgment Parties: Lenland Property Developments Pty Limited (Applicant) Council of the City of Sydney (Respondent) Representation: Solicitors Mr G Green, Pikes & Verekers Lawyers (Applicant) Mr A Singh, Council of the City of Sydney (Respondent) File Number(s): 10817 of 2012 and 10066 of 2013 Judgment 1The applicant, Lenland Development Pty Limited has development consent from Sydney City Council to construct a sixteen storey mixed-use development at 141 Bathurst Street Sydney (DA 2011/1779) (the original consent). The consent was issued on 2 April 2012 and approved retail uses on the ground level, commercial uses on levels 1, 2, 3 and 4 and residential apartments on levels 5 to 15. 2On 25 June 2012 the applicant lodged a second development application (DA955/2012) with the Council for consent to make alterations to the building and change of use of levels 2,3 and 4 from commercial to residential apartments. Relying on s82 (1) of the Environmental Planning and Assessment Act 1979 (the Act) it lodged an appeal under s97 (1) of the Act against the Council's deemed refusal of that application on 10 August 2012 (proceedings number 10817/2012). 3I heard the appeal in respect of proceedings 10817/2012 on 11 December 2012. After a consideration of the evidence and an assessment under s79C of the Act including the relevant planning controls: State Environmental Planning Policy 65, Sydney Local Environmental Plan 2005 cl 5, Sydney LEP 2005 cl 36, Central Sydney Development Control Plan and the town planners joint report and Mr McDonald's further statement I made the following findings: Wintergarden - size 4Mr Quinn raised a concern about the size of the wintergardens proposed for the corner unit (No 303) and the other two bedroom units in the development being less than the 11 m2 area prescribed in the RFDC Code. To resolve this issue Mr Quinn suggested the two bedroom units be re-designed to become one-bedroom units with a larger wintergarden to achieve the guideline of 11 m2. Mr McDonald, the applicant's town planner and the architect disagreed and gave evidence that the wintergardens as proposed were of a sufficient size to provide a pleasant useable space within a CBD environment. 5Mr McDonald told me that the air conditioning unit in the wintergarden space in unit 303 (1m x 400mm wide) could be used as a shelf. Therefore in his assessment the space was acceptable on a merit assessment despite it being less than the guideline recommendation 6Despite Mr Quinn's concerns I am satisfied on the basis of Mr McDonald and the applicants architect's evidence that in this case the proposed 8 m2 wintergardens are satisfactory after a consideration of the RFDC Code and the Council's controls. Ventilation- some of the units 7Another issue raised by Mr Quinn concerned the ventilation to unit 201 he was not concerned about solar access as that complies. In his assessment there should be a re-design of the unit and a reduction in the bedrooms to improve the ventilation. Mr McDonald, however, was of the opinion that the unit complies with the Building Code of Australia requirements for ventilation because of the wintergarden space. After an inspection of the plans and having regard to the location of the unit I accept Mr McDonald's evidence that the ventilation in the proposed amended design is satisfactory on a merit assessment. Privacy 8The next issue raised by Mr Quinn related to privacy. Having seen the site from both Castlereagh and Bathurst Streets I agree with his evidence that people standing on the street can look up and see the building. It is also likely that people standing in building will be visible if they stand at the windows or on the balconies of the residential floors on levels 2 and 3. It is also the case that people standing on the street may see part of the upper wall of one of the bedrooms. However, Mr Quinn agreed that appropriate window finishes such as blinds will address any privacy issue. In his assessment the issue of privacy is not a basis for refusal of this application. Commercial waste 9Whilst raised as an issue Mr Quinn told me that the commercial waste issue could be dealt with by an appropriate condition of consent. 10After delivery of my findings I directed the Council to forward its draft conditions of consent and indicated that after review I would make final orders. The draft conditions, however, were not agreed. The applicant took issue with the imposition of a restrictive covenant required by draft condition 3 so the proceedings were re-listed for a determination of that issue. 11Draft Condition 3(b) provides: 3(b) A restrictive covenant is to be registered on the title of the development site in the above terms and restricting any change of use of those levels from residential development as defined in Sydney Local Environment Plan 2005. The covenant is to be registered on title prior to an Occupation Certificate being issued or the use commencing, whichever is earlier, to the satisfaction of the Council. All costs of the preparation and registration of all associated documentation are to be borne by the applicant. 12The Council requires the imposition of the draft condition 3 for two reasons. The first is for consistency. I was told that the condition is consistent with the terms of the restrictive covenant condition imposed by the Council on the original development consent in respect of the residential levels. Therefore, if the draft condition 3 were not to be imposed then the building would have a restrictive covenant registered on title for the residential units on levels 5 and above and no such requirement in respect of the lower level residential units. The impracticality of such a situation is obvious. The second reason for its imposition is to serve as a useful notification to prospective purchases of the approved residential use not extending to the use of the units as serviced apartments. 13In order to address the inconsistency argument the applicant requested an adjournment of the appeal so it could lodge an application for the deletion of the restrictive covenant condition on the original consent. It submitted if the inconsistency problem was removed then the Court could proceed to finally determine the appeal. The Council was supportive of this course of action so I allowed the adjournment with a tight timetable bringing it back to the Court for final determination as soon as possible. 14The modification application under s 96 of the Act was lodged with the Council of 21 December 2012. It sought to delete condition 16(b) of the original consent, which was in the same terms as condition 3(b). Condition 16(b) of the original consent provides: 16(b) A restrictive covenant is to be registered on the title of the development site in the above terms and restricting any change of use of those levels from residential accommodation as defined in the Sydney Local Environmental Plan 2005. The covenant is to be registered on title prior to an Occupation Certificate being issued or the use commencing, whichever is earlier, to the satisfaction of the Council. All costs of the preparation and registration of all associated documentation are to be borne by the applicant. 15As it happened the Council refused the s96 application on 22 January 2013. The applicant lodged an appeal against the Council's decision on 30 January 2013 (the s 96 proceedings) and it was listed with the earlier appeal for determination by me on the basis of written submissions from each party. 16This judgment deals with both appeals. In addition to the matters dealt with earlier it answers the following question: should the Court impose a condition of consent on each development consent which requires the applicant to register a restrictive covenant on title under The Conveyancing Act 1919 for the purpose of notifying purchasers of the residential units that the development consent does not authorize the use of such units as a serviced apartment. 17The parties' written submissions set out the relevant law. They record that generally it is inappropriate for a condition of development consent to require the imposition of a restrictive covenant on the title to the land: MacDonald v Mosman Municipal Council (1919) 105 LGERA 49;and, that it is only to be imposed in a rare and exceptional case. 18The applicant submits that the facts in this case are not rare and exceptional: see Fortunate Investments Pty Limited v North Sydney Council (2001) 114 LGERA 1, North Shore Gas Company v North Sydney Municipal Council [1991] NSWLEC 66 and NTL Australia Limited v Willoughby Council [2000] NSWLEC 244. It asks the Court to apply the reasoning in PDP (Darlinghurst Apartments) Pty Limited v Sydney City Council [2005] NSWLEC 41 because that case is on point the facts are similar under review and the Court declined to impose a restrictive covenant condition on the development consent. It said: The Court will not as a matter of policy impose such a condition where the law already adequately provides the enforcement of the provisions over the Environmental Planning and Assessment Act 1979. Section 81(a) authorises the use of the building when erect for the purpose for which it was erected if that purpose is specified in the development application. The proposed uses are clearly defined in the subject development application. There is therefore no need or justification for the imposition of a restrictive covenant. Moreover, the proposed condition provides no definitive guidance for the actual terms of the s 88(e) restrictive covenant. Any unauthorised change of use would be a development as defined in s 4 of the EP and A Act and would be contrary to s 70A of the Act. Alternatively, an application might be made to modify the consent pursuant to s 96 for a fresh development application may be necessary. 19The applicant submits that conditions 3(b) and 16(b) reinforce existing planning law obligations. They prevent a change of use without further approval; however, that is already provided for under the provisions of the Act. To change the use of the development without prior approval is contrary to the Act. 20I agree with the applicant that the imposition of conditions 3(b) and 16(b) is unnecessary. I am of the opinion that the development consents clearly states the approved development and this is reinforced by conditions 3(a) and 16(a) and 3(e), 3(f) which clearly prohibit short-term residential accommodation whether in the nature of serviced apartments or otherwise. There can be no confusion as to what the permitted use is from a reading of the document. A prospective purchaser will be aware of the approved use for residential apartments and not serviced apartments after reading the consents and carrying out the requisite searches in the conveyancing process. 21I am also of the opinion there is sufficient protection in the other conditions of consent and in the provisions of the Act to ensure the outcomes sought to be achieved by the Council, without the need to impose conditions 3(b) and 16(b) or the suggested alternative conditions. I am satisfied on the evidence that it is not appropriate in this case to impose condition 3(b) on the consent under review in appeal number 10817 of 2012. I am also satisfied on the evidence that it is appropriate to delete condition 16(b) from the original consent under s 96 of the Act in appeal number 10066 of 2012. 22Accordingly, I make the following orders: In respect of appeal number 10817 of 2012 (1)The appeal is upheld. (2)Development consent is granted to DA/2012/955 for alterations to an approved mixed development at 141 Bathurst Street Sydney including the change of use of levels 1 to 4 from commercial to residential apartments in accordance with the amended plans exhibit A and subject to the conditions in accordance with my reasons for judgment. (3)The Council is directed to file draft conditions in accordance with my reasons for judgment within 7 days. In respect of appeal number 10066 of 2012 (1)The appeal is upheld. (2)The development consent D2011/1779 is modified in accordance with D/2011/1779/A to delete condition 16(b) of the consent. (3)The exhibits are returned Susan Dixon 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. Decision last updated: 12 April 2013