Land and Environment Court New South Wales Medium Neutral Citation: MPG Investments Pty Ltd v Willoughby City Council [2017] NSWLEC 1442 Hearing dates: 7-8 August 2017 Date of orders: 17 August 2017 Decision date: 17 August 2017 Jurisdiction: Class 1 Before: O'Neill C Decision: (1) The appeal is dismissed. (2) Development Application No. 2016/280 for the demolition of existing structures and construction of a six storey residential flat building, with rooftop terraces and two levels of basement parking, is refused. (3) The exhibits, other than exhibits 1 and A, are returned. Catchwords: DEVELOPMENT APPLICATION: residential flat building; existing use rights to be abandoned; non-compliance with height of buildings and floor space ratio development standards. Legislation Cited: Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 Cases Cited: Cracknell & Lonergan Architects Pty Ltd v Leichhardt Municipal Council 193 LGERA 151 Texts Cited: Nil Category: Principal judgment Parties: MPG Investments Pty Ltd (Applicant) Willoughby City Council (Respondent) Representation: Counsel: Mr A Galasso SC with Mr S. Nash barrister (Applicant) Ms K. Gerathy solicitor (Respondent) Solicitors: Project Lawyers (Applicant) HWL Ebsworth Lawyers (Respondent) File Number(s): 2016/383215 Publication restriction: No Judgment 1. COMMISSIONER: This is an appeal pursuant to the provisions of s 97 of the Environmental Planning and Assessment Act 1979 (EPA Act) against the refusal of Development Application No. 2016/280 for the demolition of existing structures and construction of a six storey residential flat building with two levels of basement parking and rooftop terraces (the proposal) at 155-161 Willoughby Road, Naremburn (the site) by Willoughby Council (the Council). 2. The appeal was subject to mandatory conciliation on 7 April 2017, in accordance with the provisions of s 34 of the Land and Environment Court Act 1979 (LEC Act). As agreement was not reached the conciliation conference was terminated, pursuant to s 34(4) of the LEC Act. Leave was granted by the Court on 24 May 2017 for the applicant to rely on an amended proposal. Issues 1. The Council's contentions can be summarised as: * The proposal is an overdevelopment of the site; * Justifying the exceedance of the development standards on the basis of an incentive to cease an existing impermissible use is not acceptable; * The proposal is inconsistent with the objectives of the development standards for floor space ratio and height of buildings; * The proposal results in amenity impacts on surrounding development. 1. The Council's contentions regarding stormwater were addressed to Council's satisfaction by the agreement of the stormwater engineering experts and reflected in the stormwater plans (exhibit E). The applicant contends that the conditions sought to be imposed by the Council on the consent regarding stormwater are unnecessary following the tender of exhibit E. 2. The proposal includes 27 car parking spaces in the basement (exhibit A). The tender of a Traffic and Parking Report (exhibit D) which demonstrates that there would be a reduction in car movements in the laneway when compared to the existing use addressed Council's contention, to Council's satisfaction, regarding traffic and parking. The site and its context 1. The site is on the eastern side of Willoughby Road, Naremburn, on the block bounded by Donnelly Road to the north and Chandos Street to the south. The site has an area of 1319.2sqm with a frontage to Willoughby Road and rear access from Kershaw Lane. 2. The site contains an existing two storey commercial building fronting Willoughby Road. 3. 163 Willoughby Road, to the north of the site, contains a nine storey residential flat building. 161A Willoughby Road is at the rear of 163 Willoughby Road and contains a three storey residential flat building. 161A is accessed from the northern end of Kershaw Lane. 4. 143-145 Willoughby Road, to the south of the site, contains a three storey residential flat building. 5. 202 Willoughby Road is to the west of the site on the opposite side of Willoughby Road and contains a three and four storey mixed use development. The proposal 1. The proposal is to demolish all existing structures on the site and construct a residential flat building consisting of the following: * Two basement levels accessed from Kershaw Lane containing 27 car parking spaces, storage, garbage room and vertical circulation. * Ground floor – units 1 to 5 with private courtyards, consisting of 4 one bed units and 1 two bed unit; landscaped areas and communal open space areas; * First floor - units 6 to 9 with balconies, consisting of 4 one bed units and 1 two bed unit; 1. The form of the development is divided into a northern 'wing' and southern 'wing' by the east to west circulation between the two wings and this division is reflected externally in the articulation of the building. The northern wing extends further to the east on the lower levels and is six storeys with rooftop terraces with lift and stair access; and the southern wing is four storeys with rooftop terraces. Planning framework 1. The proposal is subject to the relevant provisions of State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development (SEPP 65) at cl 4(1)(a)(i) and consideration is to be given to the Apartment Design Guide (ADG) at cl 28(2)(c). 2. I accept the applicant's submission that the solar and daylight provisions in the ADG at 4A-1 requiring that living rooms and private open spaces of at least 70% of apartments in a building receive a minimum of 2 hours direct sunlight between 9am and 3pm at mid-winter in the Sydney Metropolitan Area apply to the proposal and that the inconsistent controls in relation to solar access in the Willoughby Development Control Plan (WDCP) are of no effect, under cl 6A of SEPP 65, to the extent of the inconsistency. 3. The site is zoned R3 Medium density residential pursuant to Willoughby Local Environmental Plan 2012 (LEP 2012). The relevant objectives of the zone are to provide for the housing needs of the community within a medium density environment and to accommodate development that is compatible with the scale and character of the surrounding residential development. 4. The relevant aims of LEP 2012 include promoting development that is designed to contribute to the desired future of the locality concerned and to reduce adverse impacts from development on adjoining or nearby residential properties. 5. The site has a maximum building height of 12m (Height of Buildings Map - Sheet HOB_005 LEP 2012). The relevant objectives of the height of buildings development standard, at cl 4.3(1) of LEP 2012, are as follows: (a) to ensure that new development is in harmony with the bulk and scale of surrounding buildings and the streetscape, (b) to minimise the impacts of new development on adjoining or nearby properties from disruption of views, loss of privacy, overshadowing or visual intrusion, (c) to ensure a high visual quality of the development when viewed from adjoining properties, the street, waterways, public reserves or foreshores, (d) to minimise disruption to existing views or to achieve reasonable view sharing from adjacent developments or from public open spaces with the height and bulk of the development, (e) to set upper limits for the height of buildings that are consistent with the redevelopment potential of the relevant land given other development restrictions, such as floor space and landscaping, (f) to use maximum height limits to assist in responding to the current and desired future character of the locality, (h) to achieve transitions in building scale from higher intensity business and retail centres to surrounding residential areas. 1. The site has a floor space ratio (FSR) of 0.9:1 (Floor Space Ratio Map - Sheet FSR_005 LEP 2012). The relevant objectives of the FSR development standard, at cl 4.4(1) of LEP 2012, are as follows: (a) to limit the intensity of development to which the controls apply so that it will be carried out in accordance with the environmental capacity of the land and the zone objectives for the land, (c) to minimise the impacts of new development on adjoining or nearby properties from disruption of views, loss of privacy, overshadowing or visual intrusion, (d) to manage the bulk and scale of that development to suit the land use purpose and objectives of the zone, 1. The relevant provisions of WDCP apply to the proposal. WDCP includes a list of proposed lane widenings, including Kershaw Lane 1.2m from west side between 141 and 155 Willoughby Road. 2. WDCP includes, at D2.5 Density and Height, that the fourth level of a building in the R3 zone with a 12m height limit is to be setback from the floor below with a floor area no greater than 60% of the floor below. 3. The controls at D2.6.3 of WDCP for development in relation to the streetscape require residential flat buildings to be sensitive to the specific characteristics of the site and its locality and to respect the elements which contribute to streetscape character which includes the form of surrounding buildings. 4. The controls at D2.7.3 for maximum site coverage are 28% for a four storey building and 24% for a 6 storey building. The proposal has a site coverage of 29%. 5. The controls at D2.9.5 require developments of over 10 dwellings to provide a children's play area in addition to the communal open space area. The proposal does not include a children's play area. The applicant submits that if this deficiency is determinative, children's play equipment could be provided in a secondary area of communal landscaping on the south-eastern portion of the site over the entry ramp to the basement. Public submissions 1. Five resident objectors provided evidence at the commencement of the hearing on-site and the court, in the company of the parties, viewed the site from the balcony on the upper level of the northern elevation at 143-145 Willoughby Road. Their concerns can be summarised as: * The proposal represents an overdevelopment of the site; * The proposal will increase the overshadowing of units at 143-145 Willoughby Road, to the south of the site; * The proposal will compromise the privacy of bedrooms and courtyards at 161A Willoughby Road; * The proposal will compromise the privacy of apartments at 161 Willoughby Road to the north of the site; * The proposal will exacerbate traffic conflicts in Kershaw Lane as a car has to mount the kerb to pass a garbage truck. Expert evidence 1. The applicant relied on the expert planning evidence of Mr Stuart Harding. The Council relied on the expert planning evidence of Ms Ana Vissarion and the expert urban design evidence of Mr Peter Smith. Consideration 1. In order for there to be power to grant development consent for a development that contravenes development standards in LEP 2012, I must be satisfied that the proposal is consistent with the objectives of the development standards and the objectives for development within the zone (cl 4.6(4)(a)(ii) of LEP 2012); that the applicant's written request has adequately addressed that compliance with the development standards is unreasonable or unnecessary in the circumstances (cl 4.6(3)(a) of LEP 2012) and that there are sufficient environmental planning grounds to justify contravening the development standards (cl 4.6(3)(b) of LEP 2012). 2. The proposal has a maximum height above ground level of 21.36m, which is the lift overrun required for access to the roof terraces. The maximum building height development standard for the site is 12m. The proposal has a FSR of 1.14:1. The FSR development standard for the site is 0.9:1. 3. The applicant's written request (exhibit C) for the contravention of the height of buildings development standard and the FSR development standard in LEP 2012 justifies the numerical non-compliances with the development standards as follows: * The current use of the site for commercial purposes, which is an impermissible use in the R3 zone, is to be abandoned by the applicant. The opportunity to cease this use and pursue a permissible use is a trigger for exploring incentives to promote redevelopment of the site for a land use consistent with the zone objectives. The additional floor space in excess of the FSR development standard is 315sqm. Development consent for this additional floor space would provide a suitable incentive for the developer to abandon the impermissible use. The proposed variations of the applicable development standards take account of the unique circumstances of existing use rights that apply to the site. * The proposed building envelope takes into account the heights of nearby buildings, in concert with a footprint that minimises impacts resulting from the development. The building height variation in excess of the height of buildings development standard is an addition 8.82m at its maximum in response to the context. * The proposal complies with the objectives of the standard and the zone. * The additional height has no amenity impacts on surrounding existing and future development, such as overshadowing, view or privacy impacts. 1. I have considered the applicant's written request under cl 4.6 of LEP 2012 and I am not satisfied that the written request justifies that compliance with the height of buildings and FSR development standards in cll 4.3 and 4.4 of LEP 2012 is unnecessary or unreasonable in the circumstances of the appeal, for the reasons set out in the following paragraphs. Existing use rights 1. It was not controversial that the operative consent for a commercial use on the site is preserved pursuant to s 109B of the EPA Act and that the site benefits from "existing use" rights within the meaning of s 106 of the EPA Act (Cracknell & Lonergan v Leichhardt Municipal Council 193 LGERA 151 [50] "Cracknell & Lonergan"). 2. The applicant submits that as a consequence of the circumstance of existing use rights on the site there are two pathways to determine the development application. The first, consistent with Justice Craig's findings in Cracknell & Lonergan, is to deal with the proposal's non-compliance with the development standards in the terms set out by cl 4.6 of LEP 2012, effectively without regard to the existing use currently on the site. The second is to determine that the development standards in LEP 2012 and controls in WDCP have no force or effect pursuant to cl 41(1)(d) of the Environmental Planning and Assessment Regulation 2000 (the Regulation), which is in the following terms: 41 Certain development allowed (cf clause 39 of EP&A Regulation 1994) (1) An existing use may, subject to this Division: (d) be changed to another use, but only if that other use is a use that may be carried out with or without development consent under the Act, or 1. The applicant submits, as I understand the submission, that the second pathway does not mean that the development standards and controls are ignored; the development application is instead assessed in terms of its appropriateness within the physical context of the site merely with reference to the development standards and controls. 2. In Cracknell v Lonergan [83]-[87], Justice Craig found that development standards imposed by the applicable planning instrument did not derogate from the provisions of cl 41(1)(d) of the Regulation in its current form, pursuant to s 108(3) of the EPA Act. His Honour addressed the imposition of development standards to the determination of the development application; notwithstanding his finding that s 108 was not engaged as the use approved under the operative consent had been abandoned [58]. On this basis, the development standards in LEP 2012 are applicable to the determination of the development application, subject to the terms of cl 4.6 of LEP 2012. 3. I do not accept the applicant's position, as articulated in the written request (exhibit C), that an incentive should be provided in terms of an exceedance of development standards, or the setting aside of development standards, in order to encourage an applicant to abandon an existing use. The provision of an incentive or a reward for an applicant to abandon an existing use is a policy decision that would be appropriately reflected in the planning regime. This argument is unsubstantiated by the provisions of Division 10 of the EPA Act regarding existing uses. Context 1. I accept and agree with the evidence of Council's experts that the height of the proposal is not justified by the presence of the nine storey building to the north. The building to the north is set within generous landscaped grounds, with substantial setbacks to boundaries and it is viewed from the public domain as a tower in the round. It is an anomaly in the context, in that it deviates from all surrounding development in its vicinity. The proposal is on a relatively narrower site without an opportunity for generous setbacks to surrounding development and it is distinctly different in form to the residential tower to the north. A six storey high building with a roof terrace would not be read in the context as a building form transitioning from the residential tower to the north. 2. The context of the site otherwise consists of two to four storey buildings. The desired future character of this block, on the eastern side of Willoughby Road, can be broadly ascertained from the LEP 2012 zoning and development standard maps and relevant controls. It is for medium density residential development of three and four storeys fronting Willoughby Road, opposite the mixed use development on the western side of Willoughby Road, as a transition to the low density residential development to the east. Having considered all of the evidence of the experts, I am not satisfied that the form and massing of the proposal is consistent with this desired future character. Amenity impacts 1. I accept the agreement of the experts that there would be an improvement in solar access to units fronting Willoughby Road in the residential flat building to the south of the site, as a result of the demolition of the existing building fronting Willoughby Road. I accept the submission of the applicant that the eastern elevation of upper two floors of the proposal could be amended to improve the extent of overshadowing of the central balconies on the northern façade of the residential building to the south. 2. I accept the agreement of Council's experts that the proposal is not a case of relocating a portion of the building envelope to a different part of the site in order to minimise amenity impacts on neighbouring development. 3. I am concerned about any additional overshadowing of the northern façade of the residential building to the south of the site that affects the residents' amenity, on the winter solstice, when that additional overshadowing would be caused by an element of the proposal's building envelope that exceeds the development standards in LEP 2012. 4. The design criteria in the Apartment Design Guide at 4A includes the following in relation to solar and daylight access: 1. Living rooms and private open spaces of at least 70% of apartments in a building receive a minimum of 2 hours direct sunlight between 9am and 3pm at mid winter in the Sydney Metropolitan Area… 1. It is the applicant's position that this criterion should be used to measure the performance of the existing residential flat building on the adjoining property in relation to the impact of the building envelope of the proposal, in order to justify the acceptability of the proposal, as the 70% threshold is achieved. I disagree. It may be appropriately applied to an existing adjoining residential building as a measure of performance of a proposed building envelope that substantially complies with the relevant building envelope development standards and controls, depending on all of the relevant circumstances. However, applying this criterion to an adjoining existing residential building to measure the performance of a non-complying element of a proposal's building envelope is inappropriate. Instead, the actual increase in overshadowing on the winter solstice of an adjoining residential building and its detrimental impact should be assessed in relation to a non-complying building envelope. For this reason, I do not accept that the proposal has no amenity impacts on surrounding existing and future development. 2. I accept the agreed evidence of the experts that a 12m high proposal would interrupt the district views, up to the horizon, from the upper level balcony on the opposite side of Willoughby Road, when looking towards the east. The proposal's impact on views from this balcony would not be, therefore, determinative. Conclusion 1. I am not satisfied that the proposal is consistent with the objectives of the development standards in LEP 2012; nor am I satisfied that the applicant's written request has adequately addressed that compliance with the development standards is unreasonable or unnecessary in the circumstances. Consequently, development consent cannot be granted to the development application. Orders 1. The orders of the Court are: 1. The appeal is dismissed. 2. Development Application No. 2016/280 for the demolition of existing structures and construction of a six storey residential flat building, with rooftop terraces and two levels of basement parking, is refused. 3. The exhibits, other than exhibits 1 and A, are returned. ____________ Susan O'Neill 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: 17 August 2017