Land and Environment Court New South Wales Medium Neutral Citation: SOFS Pty Ltd v City of Sydney [2017] NSWLEC 1115 Hearing dates: 10-11 November & 2 December 2016 Date of orders: 08 March 2017 Decision date: 08 March 2017 Jurisdiction: Class 1 Before: Smithson C Decision: 1. The appeal is upheld. 2. Development Application D/2015/747 for the construction of a mixed use development at 117-119 Flinders Street, Surry Hills is approved subject to the conditions in Annexure A. 3. The applicant is to pay the respondent's reasonable costs under s.97B of the Environmental Planning and Assessment Act 1979 for assessment of the amended plans as agreed or assessed. 4. The exhibits, except Exhibits A, B, C, J and 10, are returned. Catchwords: DEVELOPMENT APPLICATION – mixed use; residential amenity; heritage; ventilation; acoustic privacy; solar access; views; Eastern Distributor tunnel and ventilation stack; development on major road Legislation Cited: Environmental Planning and Assessment Act 1979 Environmental Planning and Assessment Regulation 2000 Land and Environment Court Act 1979 Roads Act 1993 Sydney Local Environmental Plan 2012 Category: Principal judgment Parties: SOFS Pty Ltd (Applicant) Council of the City of Sydney (Respondent) Representation: Counsel: Mr N Eastman (Applicant) Dr S Berveling (Respondent) Solicitors Ms S Orbell, Mills Oakley (Applicant) Mr A Singh, City of Sydney (Respondent) File Number(s): 2016/150568 Publication restriction: No Judgment 1. COMMISSIONER: This is an appeal under s. 97(1) of the Environmental Planning and Assessment Act 1979 (the Act) against the deemed refusal of a development application by the City of Sydney Council (the Council), for the construction of a mixed use development at 117-119 Flinders Street, Surry Hills (the site). 2. The key issues associated with the application relate to the constraints of the site including its location on a busy road, proximity to the Eastern Distributor ventilation stack and adjoining residential development, and its location adjoining contributory buildings in a conservation area. Background to application 1. In July 2007, a deferred commencement consent was granted by the Council for construction of a 5 storey mixed use development on the site. It included retail space and 13 apartments with basement car parking accessed off Hutchinson Place. The deferred commencement condition required a number of design modifications and additional information to deal with acoustic issues and to address the Eastern Distributor ventilation stack. The consent was not acted on and lapsed in July 2010. 2. The current Development Application D/2015/747 (the DA) was submitted to the Council in June 2015 and was not determined by the Council. The DA proposed a mixed use development in a multilevel building comprising 25 apartments, ground floor retailing and basement parking for 19 vehicles. 3. In August 2015, the Applicant lodged a Class 1 appeal to the Land and Environment Court (the Court) against the deemed refusal of the DA. 4. In contentions filed with the Court, the Council raised concerns with the suitability of the site for the development noting that the site was significantly constrained particularly for residential uses. The constraints included: the size, nature and location of the adjacent Eastern Distributor ventilation stack; the Eastern Distributor Tunnel below; and the heavily trafficked classified roads to the east of the site (South Dowling and Flinders Streets). 5. These constraints were considered to limit the ability to construct a built form with acceptable residential amenity for future occupants in terms of cross ventilation, acoustic privacy, vibration, and air quality given the associated noise, vibration and emissions from the stack and adjacent major roads. 6. The Council was also concerned in terms of the impacts on adjacent terraces situated in the Bourke Street North conservation area as well as amenity impacts for adjoining residences in terms of solar access, privacy, outlook, view impacts, and visual bulk and scale. 7. Conciliation was conducted between December 2015 and July 2016 in an endeavor to address the issues raised by the Council. Various amendments to the plans were proposed as part of that conciliation process but did not result in a conciliated outcome. The conciliation process was therefore terminated. 8. The applicant was granted leave to rely on amended plans by the Court in August 2016 (the Revision 9 plans – Exhibit B). Key changes to the application as a result of the Revision 10 plans included reconfiguration of apartment layouts to improve amenity, provision of required private open space, additional retail space to provide activation to Flinders Street, treatments to minimise acoustic noise from passing traffic, and an increased setback of the south eastern corner of the building from its residential neighbour. The DA as amended contained 4 ground floor retail tenancies, 25 residential apartments over 5 storeys with a mixture of 1, 2 and 3 bedroom apartments, basement parking for 18 cars, and landscaping works 9. The Council did not object to the amended plans but reserved the question of costs pursuant to s 97B of the Act. Dr Berveling, counsel, argued the amendments were not minor and noted that the amended plans were re-notified and draw additional objections. 10. Notwithstanding the amendments to the plan, the Council contended that the application should still be refused on the basis of the following: 1. the unsuitability of the site for residential development resulting in reduced amenity for apartments within the proposed building in terms of ventilation, acoustic privacy and solar access; 2. the residential amenity, in terms of views and outlooks, of adjoining dwellings in Flinders Street and also for properties in South Dowling Street and Hutchinson Place; and 3. heritage impacts on adjacent terraces. The site and locality 1. The appeal site comprises four allotments with an area of 978.3m² which are vacant (other than fencing, remnant building material, and retaining walls), and with a street address of 117-119 Flinders Street. It is 'u' shaped with three street frontages: approximately 35m to Flinders Street to the north east, 27m to South Dowling Street to the east and 14m in two locations to Hutchinson Place to the west, being the rear. Flinders Street and South Dowling Street are 6-7 lane classified roads. 2. To the west, the site at the rear adjoins and effectively wraps around the Eastern Distributor ventilation stack which comprises a building up to 3 storeys fronting Hutchinson Place and housing operational equipment, and a large stack. The Eastern Distributor Tunnel runs under part of the site. 3. The remaining adjoining development is a mixture of medium to high density dwellings and mixed use developments ranging from 3 to 6 storeys. 4. Immediately adjacent to the northern boundary is 99-115 Flinders Street, a 4-5 storey building with commercial development on the lower 3 levels and residential dwellings above. Further north at 209 Albion Street (corner Flinders Street) is another mixed use building of 5 storeys. 5. Adjoining the front of the site to the south, at 457 and 459 South Dowling Street, is a pair of 3 storey Victorian era terrace houses. Further to the south at 431 South Dowling Street is the former Salvation Army Women's Hostel, a 7 storey residential flat building listed as a heritage item in the Council's LEP. 6. Opposite the site at the rear fronting Hutchison Place are 3 former warehouses converted for mixed uses with dwellings at upper levels. At 36-38 Hutchinson Place is an RFB, referred to as the Electrical Trades Union Hall, which is also listed as a heritage item in the LEP. Relevant Statutory Controls 1. The following statutory controls of specific relevance apply: 1. State Environmental Planning Policy No.65 (Design Quality of Residential Flat Development) (SEPP 65). 2. State Environmental Planning Policy Infrastructure 2007 (the Infrastructure SEPP) and associated Department of Planning's Development near rail corridors and busy roads – interim Guideline (the Interim Guideline). 3. Sydney Local Environmental Plan 2012 (the LEP). 4. Sydney Development Control Plan 2012 (the DCP). 1. In terms of SEPP65, given that the DA was lodged before the notification of the making of State Environmental Planning Policy No 65—Design Quality of Residential Flat Development (Amendment No 3) and the application had not been finally determined before the commencement of that amendment, the parties agreed that the application must be determined as if the amendment had not commenced, in accordance with Clause 31(2) of SEPP 65. This meant that the Residential Flat Design Code (RFDC), applicable prior to Amendment 3, applied to the assessment of the proposal. Therefore the Apartment Design Guide (ADG) was not applicable. 2. However, as the ADG is the current assessment resource used in NSW for the assessment of residential apartment development, the parties agreed that its provisions should at least be given consideration in the assessment of the proposal. 3. The site is zoned B4 Mixed Use under the LEP and the proposed development is permissible with consent. The objectives of the B4 zone are as follows: * To provide a mixture of compatible land uses. * To integrate suitable business, office, residential, retail and other development in accessible locations so as to maximise public transport patronage and encourage walking and cycling. * To ensure uses support the viability of centres. 1. Under the LEP, there is a maximum height of 18m which is also the maximum height of immediately adjoining buildings. 2. The relevant objectives of the height zone are as follows: 1. to ensure the height of development is appropriate to the condition of the site and its context, 2. to ensure appropriate height transitions between new development and heritage items and buildings in heritage conservation areas or special character areas, 3. to promote the sharing of views, 4. … 1. Under the DCP, a maximum of 5 storeys is permissible with a maximum 4 storey street frontage height to Flinders Street and South Dowling Street. The maximum permissible FSR of the site and surrounds is 3:1. 2. As the proposal sought to exceed the LEP height limit a request under clause 4.6 of the LEP was submitted with the DA. The applicable provisions of Cl 4.6 are as follows: 4.6 Exceptions to development standards (1) The objectives of this clause are as follows: (a) to provide an appropriate degree of flexibility in applying certain development standards to particular development, (b) to achieve better outcomes for and from development by allowing flexibility in particular circumstances. (2) Development consent may, subject to this clause, be granted for development even though the development would contravene a development standard imposed by this or any other environmental planning instrument. However, this clause does not apply to a development standard that is expressly excluded from the operation of this clause. (3) Development consent must not be granted for development that contravenes a development standard unless the consent authority has considered a written request from the applicant that seeks to justify the contravention of the development standard by demonstrating: (a) that compliance with the development standard is unreasonable or unnecessary in the circumstances of the case, and (b) that there are sufficient environmental planning grounds to justify contravening the development standard. (4) Development consent must not be granted for development that contravenes a development standard unless: (a) the consent authority is satisfied that: (i) the applicant's written request has adequately addressed the matters required to be demonstrated by subclause (3), and (ii) the proposed development will be in the public interest because it is consistent with the objectives of the particular standard and the objectives for development within the zone in which the development is proposed to be carried out, and (b) the concurrence of the Director-General has been obtained. (5) In deciding whether to grant concurrence, the Director-General must consider: (a) whether contravention of the development standard raises any matter of significance for State or regional environmental planning, and (b) the public benefit of maintaining the development standard, and (c) any other matters required to be taken into consideration by the Director-General before granting concurrence. (6) … 1. The site is located in the Bourke Street North Conservation Area. It is also adjacent to the Paddington Urban Conservation Area. A number of heritage items are located to the south and west. Objections 1. The original DA was notified and 11 submissions were received from 9 objectors. Six of these submissions were from occupants of dwellings at 36-38 Hutchinson Place. 2. In summary, the objections raised issues with the excess height above the 18m height limit, the incompatibility with the height and appearance of the adjacent heritage buildings, solar access and overshadowing, visual and acoustic impacts, loss of privacy, loss of prevailing breezes and natural ventilation, loss of outlook, and impacts from the proposed private open space. Construction issues were also raised as was a concern with increased traffic impacts to Hutchinson Place. 3. The amended application (Revision 9 plans) was also notified and 9 submissions were received. Of these, 7 objected to the amended proposal in terms of height, loss of views and sunlight, overlooking, lack of an appropriate transition to the two heritage terrace houses to the south, and/or acoustic and traffic impacts. These submissions were from residents of Hutchinson Place and 99-115 Flinders Street. 4. The remaining 2 submissions were from RMS and AML, a subsidiary of Transurban, the operators of the Eastern Distributor. These submissions raised concerns with the potential impact of the development on the operation of the Eastern Distributor including of the tunnel and ventilation stack and building. Specific concerns included possible excavation impacts, proximity and access to the ventilation building, setbacks or structures connected to the building, impacts on fire safety, and the need to maintain access to the stack and building. 5. During conciliation, the Court heard from residents in Hutchinson Place and visited 2 of these properties as well as viewing the site and surrounds. At the hearing, there was an adjournment so that Transurban could take the Court and the parties on a tour of the ventilation building to understand its operation and issues of concern to Transurban. 6. Evidence was also given by Mr Campbell-Smith, resident of 99-115 Flinders Street and chair of the management committee of that building, and by Mr Green on behalf of Transurban. 7. Mr Campbell-Smith, whilst indicating general support to the development, raised a concern with the breach of the height limit. He advised that 2 apartments in his complex looked south across the site and there was a concern with potential view loss associated with the height breach. He also advised that there was a water membrane which needed to be protected servicing their building with a pipe outlet across the site. He was also keen to ensure there would be pre-and post-development damage surveys undertaken and access to their car park in Hutchinson Place maintained. 8. Mr Green was the General Manager of Transurban Motorways. His concern was that the Eastern Distributor operates 24/7 and must continue to do so given its significant role in the Sydney road network. The ventilation building contains large fans for exhaust extraction which must also be operational 24/7. In addition, there was system testing every 12 weeks at night. His main concerns were as follows: 1. To ensure the integrity of the tunnel and associated infrastructure was not compromised during construction and that the Eastern Distributor could continue to operate uninterrupted. 2. Transurban hadn't been provided any detailed designs of what was proposed to check if there was a significant risk to the integrity or operation of the Eastern Distributor. 3. The design of the development would prevent inspection, servicing and repairs of their building, stack and infrastructure. 4. There would be noise and vibration associated with the testing and operation of the exhaust fans which may result in objections from future residents. 5. Residents of the development could potentially climb from balconies onto the roof of their building and access the facility. The key issues 1. Prior to the appeal commencing, conferral was undertaken between experts in the fields of acoustics, air quality, urban design, heritage and planning. Modifications were suggested or proposed to the application to respond to a number of the Council's amended contentions. As a consequence, amended plans were filed with the Court on commencement of the proceedings and were not opposed by the Council (the Revision 10 plans – Exhibit C). 2. During the proceedings, further modifications were proposed by the applicant which were supported by the Council as improvements to the application (the Revision 11 plans – Exhibit E). 3. The Revision 10 and 11 plans collectively addressed the Council's contentions on appropriate waste management and adequate private open space with increased balcony sizes, winter gardens and light wells. Some apartments were reconfigured to improve solar access and/or cross ventilation, and design changes were undertaken to provide additional privacy louvres and to reduce the view impact for the neighbours to the north. This included deletion of the top most apartment on the northern boundary (Apartment 25) which reduced the number of apartments to 24 and also reduced the height exceedence providing for additional roof top communal open space in this location instead. 4. The Council still remained concerned as to the suitability of the site for residential development given the difficulty in providing natural ventilation without adverse acoustic impacts, and with the heritage impacts. Subject to review of updated modelling, the concern with adequate solar access into the proposed apartments was no longer pressed nor was there an overshadowing concern for neighbours. Concerns remained however, in terms of the acceptability of the height proposed, of the view impacts, and on the operation of the Eastern Distributor. 5. Following the expert evidence, further and final minor amendments to the plans were undertaken and provided to the Court (the Revision 12 plans – Exhibit J). These plans comprised the application as finally amended. The modifications included to the façade and building immediately adjacent to the terraces to the south to reduce the height of the window to the retail tenancy and of the street awning. Additional skylights were added to a number of apartments along with privacy louvres to the western elevation. 6. The amended application resulted in a slight reduction in floor space with a final FSR of 2.72:1 relative to an LEP maximum permissible FSR of 3:1. Site suitability – amenity for future residents 1. The Council's main concerns for future occupants of the development were with noise, vibration and air pollution from the Eastern Distributor ventilation stack and from traffic in Flinders and South Dowling Streets. These issues were addressed by acoustic and air quality experts as their findings were necessary to determine the appropriateness of the design response and whether or not the site was suitable for residential use. 2. Acoustic experts for both parties conferred to determine whether or not the proposal satisfied the requirements of the Infrastructure SEPP, the Interim Guideline, SEPP65, the RFDC, and the DCP. There were three key issues considered by these experts: the external noise intrusion from road traffic into apartments, and the noise and vibration impacts from the Eastern Distributor ventilation infrastructure. 3. Section 4.2 of the Sydney DCP provides objectives and provisions for residential flat buildings. Part 4.2.3.11 contains acoustic controls for new development affected by traffic noise and maximum acceptable noise levels for dwellings. The Infrastructure SEPP defines busy roads that are subject to a noise assessment as including roads with an Average Annual Traffic (ADT) volume of more than 20,000 vehicles. As Flinders Street carries over 20,000 ADT, the Infrastructure SEPP was applied. Clause 102 of the SEPP requires that, if the development includes a residential use, the consent authority must be satisfied that the appropriate measures will be taken to ensure specified maximum noise levels are not exceeded. 4. An acoustic assessment prepared by Acoustic Logic Consultancy (ALC) was lodged with the DA and was updated to refer to the revised plans in October 2016. 5. The experts agreed that the revised ALC report on the whole adequately addressed the Council's acoustic concerns in terms of the Infrastructure SEPP, the Interim Guideline, the RFDC and the DCP on the basis that the proposed development could be made to comply with the appropriate noise criteria contained within the report. 6. The ALC report recommended glazing of varying thickness to all bedrooms and living areas but concluded that, even with these treatments, based on the noise levels measured at the site, the internal noise level criteria for 'windows open' under the DCP would not be satisfied for all facades of the development. With the windows closed, the development would comply. Therefore an alternative source of ventilation or air conditioning would be needed if both ventilation and acoustic amenity was to be achieved simultaneously. 7. The acoustic experts noted that the inability to comply with the DCP requirements for 'windows open' was not an unusual situation within the City of Sydney Council area. It was common practice for urban projects to provide an alternative source of ventilation or air conditioning to units in order to achieve compliance with the 'windows closed' DCP criteria for new residential developments located on busy roads such as Riley Street, Bourke Street and Crown Street. 8. Noise monitoring of the Eastern Distributor ventilation fans was also undertaken by ALC. It showed that the fans would not contribute to an increase in existing background noise level given the exhaust fans were designed so as not to increase ambient noise levels. Furthermore, the glazing proposed in the design of the development to minimise traffic noise intrusion would also adequately attenuate exhaust fan noise from the ventilation stack. 9. The acoustic consultants also considered vibration impacts from the Eastern Distributor exhaust fans which they classified as a continuous source of vibration. Vibration measurements were conducted in November 2015 during a peak traffic flow period. The vibration measures showed that the maximum vibration levels met the specified vibration criteria for residential receivers at the site. The levels inside the proposed apartments were therefore likely to be acceptable and meet the established tactile vibration criteria. The assessment therefore concluded that there would be no negative impact on the development from the vibration generated from the Eastern Distributor and associated ventilation stack. 10. As the Council was concerned with the risk to building occupants posed by the level of pollutants predicted to occur at the site, evidence was also given by air quality experts who addressed emissions as a result of traffic on the adjacent roads and from continuous operation of the Eastern Distributor stack. 11. In 2010, an emissions assessment of development on the site was undertaken for the previous owner of the site being the then NSW Roads and Traffic Authority (RTA).The RTA assessment concluded that all predicted pollutant levels were well within air quality goals and the health risks associated with the levels assessed were low to very low including the risk to future occupants who may be affected by respiratory afflictions. Similarly, the carcinogenic health risk fell below the screening level at all receptors. 12. Two reports by Pacific Environment in 2015 updated the 2010 RTA assessment and assessed the site's use for either residential or hotel development. The results and conclusions of the updated assessments were very similar to those of the 2010 assessment. 13. During joint conferencing, the experts agreed that a shortcoming of the assessment was that it was not based on the existing air quality at the site, specifically the contribution from traffic on nearby roads. Additional air quality monitoring was therefore undertaken to determine existing concentrations. 14. The air quality experts agreed that measurements and modelling indicated that the ambient outdoor levels of air pollution at the site were well below the criteria specified in air pollution guidelines provided by the Department of Environment and Conservation. In addition, the contribution of traffic emissions from Flinders Street was predicted to be well below the risk based criterion used in the assessment of major road projects in Sydney. Therefore the health risks associated with the levels of pollution were low. 15. Furthermore, the experts noted that practicable measures were being implemented in the development's design to reduce the exposure of future building occupants to traffic emissions. These measures complied with the Infrastructure SEPP guidelines for building design to reduce the potential impact of noise and air emissions from the adjacent classified roads. 16. Specifically, the following practicable measures were noted to have been incorporated within the application: 1. setting back part of the top storey to reduce a street canyon effect; 2. using building elements with different heights and open spaces to improve air dispersion; 3. using mechanical ventilation with air intake sited as far as practicable from traffic on Flinders and South Dowling Streets and away from the Eastern Distributor stack (noting that the roof of the development was approximately 9m below the top of the stack); and 4. retail space would be located closest to the emissions at ground floor level providing a buffer between the traffic and residential areas. 1. The air quality experts noted that the presence of the stack and associated building meant that the site had significant limitations in being able to provide natural ventilation but agreed that all practicable measures were being implemented to reduce the exposure of future occupants to traffic emissions. 2. In terms of an emergency situation occurring within the tunnel, such as a fire, it was agreed that there was potential for significant emissions of smoke and fumes from the stack. Given the unpredictable nature of such events, it was not possible to quantify the emissions that may occur or the impacts. However as part of the emergency response plans for the proposed building, a system to notify residents to shut off air conditioning systems and seal doors and windows was recommended. This requirement was incorporated into an agreed condition of consent. 3. Finally, Dr Boulter, the applicant's expert from Pacific Environment concluded that air pollutant concentrations were unlikely to exceed the relevant criteria at the site in the future, even with a large increase in traffic volume on nearby roads. Ms Lawrence, air quality expert for the Council, having reviewed the additional information provided by Pacific Environment, including regarding the incremental impacts of particulate matter and emissions from Flinders Street, agreed that the methodology and modelling results provided satisfactory evidence that adverse air quality impacts would not be anticipated at the site as a result of current or potential future traffic emissions. 4. The urban design and planning experts (the design experts) also considered the likely noise and emissions impacts in terms of site suitability and residential amenity. 5. In particular, the Council's design experts were concerned that the development included bedrooms to the street (front) elevation of the building which the acoustic experts agreed meant that apartments could not concurrently meet the applicable noise and natural ventilation criteria. 6. The design experts agreed that the DCP did not contain a numeric control for ventilation compliance and therefore the development should be assessed under SEPP65 specifically the RFDC. 7. The RFDC contains a 'rule of thumb' which states that 60% of residential units should be naturally cross ventilated and that developments which seek to vary from the minimum standards must demonstrate how natural ventilation can be satisfactorily achieved, particularly in relation to habitable rooms. 8. In the Council's view, all bedrooms should be provided on the western elevation of the development or with access to naturally ventilated window or door openings not affected by road noise, to satisfy the objectives, design practice and rules of thumb in Part 3 of the RFDC relating to natural ventilation and the guidance in the Interim Guideline and the ADG. This states that, where the proposal cannot achieve natural cross ventilation, any alternative solutions to be considered must clearly demonstrate that associated impacts on the residential amenity of the apartments have been minimised. 9. The applicant's design experts argued that the site constraints are not unusual for developments in this locality and that the air quality, noise and vibration associated with the stack were all appropriately accommodated by the proposed design. They argued that the underlying question was how one appropriately develops on a busy Sydney road. This was not an unusual or unique constraint but 'de rigueur' for most inner city development sites with many residential projects across Sydney on sites where traffic numbers far exceeded those surrounding this site. 10. The Court was advised that the approach to residential development on the site had been undertaken in line with addressing the objectives of the Apartment Design Guide, albeit it the ADG did not technically apply, along with the guidelines derived from the Infrastructure SEPP and Interim Guideline for development on busy roads. It was argued the development would achieve acceptable, and even high, levels of amenity. 11. In this regard, apartments facing Flinders Street, and in particular the bedrooms which are located on this edge, had been designed to allow natural ventilation via openable windows. To achieve suitable acoustic conditions, some windows were located to open away from the Flinders Street edge and were shielded by their physical orientation, while others had operable windows located behind solid balustrade 'upstands'. These upstands provided an acoustic barrier to the windows and are recommended in the Interim Guideline. 12. The Interim Guideline also suggests that providing enclosed balconies (or winter gardens) is another means of reducing the noise into a building. Winter gardens were therefore incorporated into the development. 13. The applicant's experts argued that 18 of the 24 apartments would have at least two operable windows, one of which does not front Flinders Street providing the opportunity to receive natural ventilation from a secondary (quiet) edge. The remaining 6 apartments, whilst having bedrooms which access natural ventilation from the Flinders Street edge, have their windows located behind the acoustic barrier recommended in the Interim Guideline, promoting the use of non-sealed winter garden edges and building elements to deliver acoustic benefits. 14. Mr Eastman, counsel for the applicant, also noted that the DCP provisions applying to development on busy roads only requires non-residential uses on the ground floor of developments fronting roads with volume greater than 20,000 ADT. This implies residential use higher than the ground floor on such roads is acceptable. Furthermore, the DCP ventilation provisions only require natural cross ventilation to be achieved by having windows facing different directions (to the main road) 'where possible'. 15. The applicant's position was that all proposed apartments have mechanical ventilation and air conditioning systems. Individual residents will therefore be able to manage their internal amenity, ie. make the trade off between the noise from the roads and wanting natural ventilation. 16. Mr Reynolds, planner for the Council, agreed that the Interim Guideline provided flexibility in design for residential development fronting major roads. He accepted that, where openable windows are provided, occupants can make a choice between noise and natural ventilation but he argued that it would be preferable not to have residential development on such a site in the first place. Height 1. As part of the proposed development exceeded the 18m height limit, a written request was provided with the DA under cl 4.6 of the LEP seeking discretion to exceed the height development standard in the LEP. This request was modified in response to the Revision 9 plans and was argued by the applicant to remain relevant to the subsequent revisions. 2. The Council maintained a concern that the height exceeded the 18m height limit of the LEP notwithstanding acknowledging the modifications which lowered the northern elevation. 3. The concerns relating to the height transition between the development and heritage items and buildings in the conservation areas are dealt with later. 4. The design experts however, gave evidence relating to other aspects of the height non-compliance and Clause 4.6 variation request submitted, including in terms of view sharing, outlook and setbacks. 5. The Council's DCP storey controls promote a 5 storey building with the fifth level set back from the street edge along Flinders Street. This setback is achieved at the northern and southern ends of the Flinders Street elevation rather than along its entire length. 6. The applicant's experts argued that bringing the fifth level to the street edge at the intersection of Flinders Street and Moore Park Road reflected a good urban outcome of allowing corner buildings to articulate street intersections through a built to street edge condition. Further that, notwithstanding the technical non-compliance, the application responded to the objectives of both the LEP height control and the DCP storey control, and no amenity impacts on neighbours arose as the application had been modified to address these impacts. 7. Their primary argument was that the non-compliance with the LEP numerical height control was only ostensibly for the lift over runs and/or was as a result of existing site excavation which is not a natural ground condition and occurred during the construction of the Eastern Distributor Tunnel. Such intervention of the ground condition would not have been contemplated in the establishment of the broad brush LEP controls applying to the site – rather the 18m height limit was established to enable the building to respond directly to its northern neighbour. Further, when the building was viewed from Flinders Street it sat under the numerical height control as the areas of non-compliance were in the centre of the site. 8. The applicant's design experts argued that the intent of the LEP height control is to deliver 5 storeys. Further, the building responded directly to the adjoining building to the north in terms of that building's height and massing. As such, it fitted in well with its existing context and was an example of appropriate urban infill in the spirit of the planning controls. 9. The applicant's experts also argued that the DCP controls don't reflect the streetscape in this location – for example, they propose a street wall height in excess of the adjoining terraces which are unlikely to be developed. 10. Furthermore, it was argued by the applicant that the site was at a major intersection where street presence was important yet it did not propose the maximum height for the entire frontage nor could it be said to be overdevelopment given the maximum FSR of 3:1 is not achieved. What was proposed also had the added benefit of shielding the Eastern Distributor stack and no benefit was seen to be derived for the streetscape, pedestrian experience or amenity outcomes by setting back the fifth storey. Where a setback or lower height was warranted, such as adjoining the terraces, this was provided. It was also noted that, one site removed to the north, at 83 Flinders Street, the residential flat building was 5 continuous storeys with no front setback. 11. Mr Darroch for the applicant referenced the objectives for building setbacks at 4.2.2 of Section 4 of the DCP which states as follows: Objectives (a) Ensure development: (i) is generally consistent with existing adjacent patterns of building setbacks on the street; and (ii) maintains the setting of heritage items and is consistent with building setbacks in heritage conservation areas. 1. The objectives for upper level setbacks at provision 4.2.2.2 are: 4.2.2.2 Setbacks above the street frontage height (1) Setbacks above the street frontage height are to be included where: (a) adjacent buildings include upper level setbacks; and (b) new development is adjacent to a heritage item to reduce visual impact and to respect the heritage item. 1. The applicant argued the development was not adjacent to a heritage item, albeit the design showed deference to adjacent terraces and the conservation area, and adjacent buildings did not have meaningful upper level setbacks. Furthermore, consistency with the pattern of development in the street not with individual buildings was required, and both Flinders and South Dowling Streets had great diversity in building form and height. Finally, what exists in the vicinity of the site is unlikely to change in the foreseeable future and does not reflect the controls that apply in the DCP. 2. The cl 4.6 written variation request submitted with the application sought to justify the height exceedance on the following grounds: 1. The levels of the site have been significantly modified which causes the non-compliance over a formerly excavated portion of the site for the building to retain it's design integrity. The only other non-compliances are for lift over-runs which will not be visible from surrounding streets; 2. The site is on a highly trafficked intersection where lower level amenity is reduced by noise and emissions from traffic as well as overshadowing. The design of the building seeks to maximise amenity for future occupants, including solar access at upper levels, including the provision of roof top communal open space; 3. The FSR is 2.72:1 which is less than the permissible maximum FSR for the site of 3:1 meaning the height breach is not as a result of excess floor space or overdevelopment; 4. The height of the building is significantly below the permissible height at the northern and southern boundaries, stepping down to these boundaries to provide appropriate interfaces with, and reduce impacts to, adjoining development; 5. There are no adverse amenity impacts on neighbours arising from the height non-compliance in terms of overshadowing, privacy, view loss or the bulk and scale; 6. There will be greater amenity for neighbours, including in Hutchinson Place, than would be achieved from a compliant building built to a maximum height of 18m; 7. The development will have a building form in terms of bulk and scale consistent with the character of buildings in the vicinity and will assist with shielding the Eastern Distributor stack; 8. The development includes additional retail tenancies in response to Council's request for greater street activation. This adds to the overall floor space but will provide services for the local community. 9. The development meets the objectives of the zone and of the height standard and raises no matters of State or regional significance. It is considered to be a better planning outcome for the site and to impose the standard across the site would be unreasonable and unnecessary given the circumstances. 10. Cl 4.6 provides the flexibility to provide a compatible and appropriate building form which exceeds the height in very limited locations but has less height in others and which is below the maximum floor space permitted for the site. 1. Although agreeing the site adjoined a large intersection, the Council didn't agree it was a prominent site and maintained that the height of the development was not appropriate to the condition of the site and its context. Furthermore, flexibility to the height development standard should not be applied as the proposal did not result in a better outcome overall than a height compliant scheme, which would also shield the stack, and represented an overdevelopment of the site contrary to the desired future character of the locality. 2. The Council's experts argued that the LEP standard and DCP street frontage and storey height controls, when considered together, are intended to deliver a development with a 4 storey street wall height, with a setback fifth storey where it can be accommodated without unreasonable impacts upon the streetscape and the residential amenity of the locality. 3. The proposal does not conform to the maximum height and street wall height requirements of the LEP and DCP, as it presents a 5 storey form to Flinders and South Dowling Streets. The height to Hutchinson Place was not of concern. 4. The Council argued the site is not perceived as a corner site due to the obtuse angle of the meeting of these streets. Instead, the building is perceived as an extension of the built form at 99-115 Flinders Street, which establishes the existing 4 storey street wall height. 5. The Council advised that, if the Court took the view that the non- compliance with the development height standard at level 4 is acceptable, the design should be modified to provide a uniform setback of 3 metres from the street front boundary to Flinders and South Dowling Street, to maintain the appearance of the street wall height and provide a predominant 4 storey appearance when viewed from the public domain.. Further any modification to the setback level would need to be designed to appear recessive to the 4 storey building, through the use of colours, materials, finishes and detailing. 6. The Council in particular was concerned with the impact of the height of the development on the adjacent terraces to the south of the site, and I will now turn to consideration of that issue. Heritage considerations 1. As previously indicated, the site is located in the Bourke Street North Conservation Area. It is also adjacent to the Paddington Urban Conservation Area which is on the opposite side of Flinders Street. A number of heritage items are located in proximity to the site including terraces at 368-378 South Dowling Street and at 126-156 Flinders Street and the heritage façade at 471 South Dowling Street. There are also remnants of the former terraces that occupied the site on the site and of the early building fabric in the adjacent public domain comprising 5 cast iron pavement lights in Flinders Street. 2. The Council's primary heritage concerns with the application were: the impact on the neighbouring contributory buildings to the south within the conservation area being 457-459 South Dowling Street; on the streetscape of Flinders and South Dowling Streets; and on the conservation areas in general. 3. Expert heritage advice was provided by Mr Wang, the City of Sydney's heritage specialist and by Mr Vale for the applicant. 4. The heritage experts agreed that, as a new infill building, the development needed to respond to both the southern neighbouring terraces on South Dowling Street and the northern neighbouring buildings on Flinders Street. They also agreed that the new building needed to consider the scale and character of buildings on both sides of Flinders and South Dowling Streets. 5. The major disagreement between the experts was whether the height transition of the proposed new building, the ground level height, and the extent of the front setback area were appropriate. 6. Mr Wang was of the view that the building had excessive height and inadequate front setback, including the proposed height of the ground floor, as the new building will form part of the streetscape of two major streets. In particular, he considered that the fifth level setback required by the DCP should be provided and the building's southern most portion should have a wider frontage and lower overall height and not exceed the height of the chimney of the adjoining terrace. In evidence, Mr Wang accepted the building to Flinders Street could be higher but maintained that the South Dowling Street façade should be a maximum of 4 storeys. 7. Mr Wang was also of the view that the front setback and landscaping area of the proposed retail tenancy immediately adjacent to the terraces (Tenancy 1) should be increased to mitigate the impact on the consistent front gardens along South Dowling Street. 8. In particular, Mr Wang was concerned that Tenancy 1 had a 5.25m high floor to floor height which, in his view, would have a poor relationship with the southern neighbouring terrace whose ground level height was around 3.1m. He argued that this ground storey height resulted in two over scaled tall windows adjoining the terrace houses. He also considered the proposed street awning to be too dominant in scale. 9. Mr Vale was of the opinion that, in the context of the dominant buildings of the precinct at 111-115 Flinders Street and 461 South Dowling Street, the scale of the proposed development was appropriate. He considered it desirable to conceal the Eastern Distributor stack with a height and scale similar to other buildings in the precinct, as was proposed. Whilst he agreed with Mr Wang that the manner in which the development stepped down towards the southern neighbouring terraces was an important streetscape issue, he considered that the design made a reasonable transition in stepping down in levels toward these terraces. 10. Mr Vale argued that there was considerable diversity along the western side of Flinders Street in proximity to the site as far south as the façade of the Salvation Army building at 461 South Dowling Street. Beyond that there was far greater consistency of form with most properties being terraces of similar scale. He considered the Salvation Army building to be the dominant building which had visual links with the building at 111-115 Flinders Street. He therefore considered that a development between 111-115 Flinders Street and 461 South Dowling Street generally reaching similar heights as these buildings, as the application proposed, would be a reasonable urban outcome reinforcing the alignment of the street. 11. Mr Vale considered that the proposed southern portion of the building at 3 storeys with a change of materials provided an appropriate stepping down and transition to the adjacent terraces and gave due deference to these terraces whilst infilling a gap in the urban form of similar scale to the dominant nearby buildings. 12. However, Mr Wang considered that the 3 storey portion proposed was still too high and too narrow to provide an appropriate transition even with the change in materials proposed for the façade. In his view the transition area should be no less than the width of one typical terrace house. 13. Mr Eastman submitted that the Salvation Army building had a maximum height of 24m so it wasn't a transition down to continual terraces at 3 storeys. Mr Wang agreed that there was a DCP inconsistency with the LEP in terms of that site with the DCP having a 3 storey street height limit but the LEP permitting a height up to 24m. 14. Mr Eastman also contended that the two adjoining terraces would still be able to be read as contributory buildings in the conservation area and noted they were not listed heritage items in the LEP. 15. Mr Vale did however, agree with Mr Wang that consideration should be given to reducing the height of the southernmost retail tenancy. 16. In response, Mr Haddow, architect for the applicant, argued that this was a busy corner of Sydney with many large buildings and focussing on 1 or 2 retail tenancies on the ground floor was out of context. He also noted it was the Council who required retail tenancies at the ground level for street activation and they had to be sufficiently visible and useable to be viable as well as provide for disabled access. He noted it was possible the terraces could themselves be converted for commercial uses as was typical in Surry Hills. However, Mr Haddow did agree to reduce the height of the windows to Tenancy 1, the height of the street canopy, and the height of the parapet at the third level. 17. In viewing these modifications, Mr Wang did not consider that they addressed his concerns and in fact potentially increased them. In his view the excessive ground level height of the southernmost tenancy, the excessive overall height of the southern transition area, and the inadequate front setback area were not addressed by the amendments proposed 18. The heritage experts did agree that the main potential impact of the proposal on the two conservation areas was in terms of the front of the building, or its façade, to South Dowling Street. If this issue could be resolved, including the transition to the adjoining terraces to the south, they agreed that the development's impact on the conservation areas would likely be acceptable 19. They also agreed that remnants of the former terrace houses that existed on the site should be salvaged and reused in the project and the basement lights on the footpath of Flinders Street should be retained in situ and incorporated into the basement car park. This was proposed as a condition of consent. 20. Conditions of consent also address the treatment of the southern interface area including landscaping on the southern boundary in front of Tenancy 1. The conditions require the lowering of the finished floor levels of upper floor apartments in the southern portion of the building, thus lowering parapet heights, and reducing the overall 3 storey height to align with the height of the chimney of the adjacent terrace. Changes in colours, materials and finishes are also required to reduce the visual impact of this part of the building. Residential amenity and concerns of neighbours 1. The experts had regard the amenity impacts on the adjoining residential dwellings and agreed that the modifications undertaken, including privacy screens, addressed the following concerns to the extent reasonable in facilitating development of the site in accordance with the controls: 1. privacy to 22 – 24 Hutchinson Place, albeit this is a commercial building 2. privacy to 20 Hutchinson Place 3. privacy and solar access to 457 South Dowling Street and to dwellings to west and south. 1. The parties agreed that the proposal had a 'minor' view impact on the 2 upper levels of 99-115 Flinders Street, which had been minimised with the deletion of Apartment 25 and other design changes, and was agreed to be acceptable. It was also agreed that a fully compliant development to a maximum 18m height across the site could have greater view impacts for the dwellings to the north. 2. It was also agreed by the parties that the conditions of consent would address the remaining valid concerns raised in submissions. These included proving flashing to neighbouring walls to prevent water entering between boundary walls and dilapidation reports being undertaken pre and post construction. Impact on Eastern Distributor 1. In response to the issues raised by Transurban, the applicant referenced a geotechnical assessment undertaken by Pells Sullivan Meynink in 2015 and a structural design statement prepared by M+G Consulting, dated 26 October 2016, both of which had been submitted to the Council. 2. The adequacy of the geotechnical assessment was beyond the expertise of the experts before the Court. However, the Council agreed that the structural design statement addressed the impacts upon the Eastern Distributor Tunnel although not the stack or building. Nor did it address the Interim Guideline. They noted the submission by Transurban relating to potential geotechnical and structural concerns. 3. Mr Haddow gave evidence that the geotechnical conditions on site were able to support the proposed development in line with the Infrastructure SEPP and Interim Guideline and that he was confident the issues raised by Transurban were adequately addressed in the design of the development. He indicated that developing over the Eastern Distributor Tunnel and adjoining such infrastructure was not unique. Mr Haddow had reviewed the proposed conditions of consent and was satisfied that they addressed the required construction issues raised by Transurban. He confirmed that there would be no structures fixed to Transurban's building and that modifications had been undertaken to the design so that access from the development to the roof of the building would be highly unlikely. 4. Mr Eastman pointed out that Mr Green did not have access to the design drawings or to the documents before the Court including expert advice on vibration which would eliminate a number of his concerns. 5. In terms of Transurban's concern relating to the ability to inspect and repair the building, Mr Eastman noted that the stack is built to the boundary. He submitted that it was unreasonable for Transurban to access their infrastructure over the site without arrangements in place with the owners. However, if there were any concerns with access for maintenance, the RMS had powers of compulsory acquisition under the Roads Act 1993. Mr Green accepted that this was the case and it was not reasonable to continue to access the infrastructure through the site. 6. Finally in terms of the concern about potential resident complaints and unlawful access to the property, Mr Eastman noted that, as the Court has previously determined, assumed lawful conduct cannot result in or contribute to the refusal of a DA. Furthermore, any such complaints would be unlikely to shut down the Eastern Distributor and the site should not be sterilised from its development potential given its zoning because of the existence of the stack on an adjoining property. In any event, as Mr Haddow had indicated, the design had been modified to reduce any likelihood that future residents would try and access the roof of the facility. 7. Furthermore, the relevant experts had confirmed that no health issues would likely arise from the emissions, and that vibration and noise impacts would not be perceptible. 8. Notwithstanding, the conditions of consent include conditions requiring a full geotechnical study certifying that the development will not adversely impact the structural integrity of the ventilation equipment, and for detailed design drawings and geotechnical reports to be submitted to RMS for assessment. Conditions also preclude encroachment on the ventilation stack or building and require the applicant to enter into an agreement with RMS to deal with interface arrangements in relation to the construction and operation of the development and its impact on the stack as well as requiring submission of excavation documentation to RMS. Findings 1. The application as it was amended following refusal by the Council was a substantial improvement on the DA refused. The improvements were to the benefit of future occupants of the development as well as to its neighbours and resulted from the applicant's significant endeavours to address the Council's concerns and, within reason, those of Transurban. 2. Whilst ultimately the Council was not totally satisfied in terms of the impact of the development on the adjoining terraces to the south, or of the height in storeys to Flinders and South Dowling Streets, the vast majority of the original contentions raised by the Council were resolved in the amended design. 3. For this, and the reasons that follow, I have determined that the application as amended should be approved and that the overall height of the development is acceptable with the height exceedance minor. Accordingly, I have formed the view that the clause 4.6 justification provided for the height exceedance is supportable, and there are sufficient environmental planning grounds to allow the flexibility provided by cl 4.6. 4. In this regard, I note that the total floorspace is less than the FSR permits and is appropriately distributed over the site having regard to its context and neighbours. This includes recognition that the highest levels, including the communal open space on the roof top, will have greater solar access and amenity from traffic impacts than lower levels. The height is not out of context with surrounding development and is less than the maximum permissible adjoining both side boundaries in deference to the neighbours including the contributory terraces to the south. 5. The objectives of the zone are met in the provision of a development with a mix of uses on a site well located to public transport and with retail tenancies to support the viability of the Mixed Use zone. The objectives of the standard are also met in that the height is appropriate given the context and condition of the site, design changes undertaken to ensure the height promotes the sharing of views, and appropriate height transitions are provided to heritage items and buildings within the conservation area, having regard to later comments in terms of the relationship with the terraces to the south. 6. I also accept that the height exceedance is to accommodate lift overruns and is in part a result of previous excavation over a portion of the site which has created an anomaly in compliance with the height for that portion of the site. These non-compliances do not result in any adverse visual impact or amenity impacts for neighbours. I therefore consider height compliance across all of the site to be unreasonable and unnecessary in the circumstances. 7. The development adjoins terraces at 457 and 459 South Dowling Street, and has been reduced to 3 storeys in this location accordingly. The terraces are not heritage listed buildings albeit they are contributory buildings in a conservation area. The terraces are adjoined to the south by a taller building than is proposed on the site and the Council's heritage expert was not so concerned with maintaining a 4 storey height limit to Flinders Street only to South Dowling Street. 8. There are conditions which require further modifications to the southern end of the development to provide a reduction in the height of Tenancies 1 and 2, to lower the height of the building overall in this location, and to improve landscaping in the front setback area. I believe these design responses to be all that can reasonably be required as an interface to the terraces, noting also the height of the development on their southern boundary. 9. Finally, I consider the height of the development to Flinders and South Dowling Streets to be appropriate given the height of the adjacent development to the north at 99-115 Flinders Street, as the height was reduced to minimise the impact of outlook from apartments in that development. Specifically, the major issue of concern for height exceedence from neighbours to the north was resolved with the deletion of Apartment 25 achieving height compliance to this boundary. 10. The application was therefore modified to address the interfaces to both immediately adjoining developments in a manner which I consider reasonable given the other site constraints with provision of communal open space at the upper levels at both these interfaces. 11. In summary, in my view, the distribution of height proposed is an acceptable alternative to a fully compliant 18m high building across the site given the corner configuration of the building, the fact that the building is lower at both side boundaries and it will assist with screening the stack. Furthermore there is sufficient articulation and an agreed quality design with no amenity impacts arising for neighbours. Given the height meets the objectives of the zone and of the standard, it is in the public interest to allow the setting aside of the height standard as there is no public benefit to maintaining the standard in this instance. 12. In terms of the nature of development proposed, I do not accept that it is inappropriate to have upper level residential accommodation on this site given most of the surrounding development is residential and notwithstanding the proximity of the stack and two major roads. In this regard, I accept the applicant's expert evidence that to preclude such development because of the volume and noise of traffic would be to preclude it on other Sydney roads just as busy or busier. The same is true in terms of the ability to provide natural cross ventilation. 13. Expert advice was that emissions and vibrations from the Eastern Distributor stack would not cause health issues or preclude residential development on the site. Furthermore, the applicant's designers had incorporated design features recommended in the Interim Guideline for development on busy roads, which recognises such development will occur. 14. The Interim Guideline only requires that development be designed to minimise and mitigate impacts but it doesn't preclude residential development along major roads. The Guideline provides design suggestions in this regard which the applicant has adopted such as winter gardens and sound 'barriers' 15. Section s79C(3A)(b) of the Act states that, where DCP provisions can not be reasonably applied, then flexible and reasonable alternatives can be adopted. This is a circumstance warranting flexibility and the reasonable design alternative proposed. 16. Mr Eastman queried where in Surry Hills could a new residential development provide the open windows for ventilation sought by the DCP and achieve acoustic compliance? That is a reasonable question. In this regard, some weight should be given to the zoning which supports residential and mixed uses and I note there are roads in Sydney at least as busy if not busier than Flinders Street and South Dowling Street. 17. In terms of the impact of the development on the Eastern Distributor Tunnel and ventilation stack, there was no evidence that the development would adversely impact any aspects of the Eastern Distributor infrastructure nor be adversely affected by it. 18. As previously indicated, conditions of consent were agreed between the parties which preclude encroachment on the ventilation stack or building and require the applicant to enter into an agreement with RMS to deal with interface arrangements in relation to the construction and operation of the development and its impact on the stack as well as requiring submission of excavation documentation to RMS. 19. In terms of the issues raised by the residents, the application was modified to address, to the extent reasonable, any impacts on views, overshadowing and outlook and to take on board specific areas of concerns in terms of the design. A number of conditions are also proposed which deal with more general issues of minimsing impact during construction. 20. Finally, Dr Berveling, counsel for the Council argued that the modifications between the original application and the Revision 9 and 10 plans, whilst improvements, were not minor and a cost order under s97B of the Act should apply. I agree, and a cost order is imposed accordingly. It was agreed that the subsequent modifications to these plans (which resulted in the Revision 12 plans which ultimately comprised the application) were minor. Orders 1. The orders of the Court are: 1. The appeal is upheld. 2. Development Application D/2015/747 for the construction of a mixed use development at 117-119 Flinders Street, Surry Hills is approved subject to the conditions in Annexure A. 3. The applicant is to pay the respondent's reasonable costs under s.97B of the Environmental Planning and Assessment Act 1979 for assessment of the amended plans as agreed or assessed. 4. The exhibits, except Exhibits A, B, C, J and 10, are returned __________________ Jenny Smithson Commissioner of the Court 150568.16 Annexure A (C as amended - slip rule) (229 KB, pdf) Amendments 05 May 2017 - On 5 May 2017 - Pursuant to UCPR 36.17, amendment made to Annexure A, Conditions to modify 3 conditions to align with the findings. 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: 05 May 2017