Land and Environment Court New South Wales Medium Neutral Citation: Tricon Management Group Pty Ltd v Inner West Council [2020] NSWLEC 1159 Hearing dates: Conciliation conference on 19 March 2020 Date of orders: 08 April 2020 Decision date: 08 April 2020 Jurisdiction: Class 1 Before: Gray C Decision: Refer to orders at [17] Catchwords: APPEAL – development application – mixed use development with community housing – inconsistency between instruments concerning percentage of residential use in a business zone – conciliation conference – agreement reached Legislation Cited: Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979 Marrickville Local Environmental Plan 2011 State Environmental Planning Policy (Affordable Rental Housing) 2009 State Environmental Planning Policy No 55—Remediation of Land Category: Principal judgment Parties: Tricon Management Group Pty Ltd (Applicant) Inner West Council (Respondent) Representation: Counsel: J Johnson (Applicant) C McEwen SC (Respondent) Solicitors: Hunter Lawyers (Applicant) Inner West Council (Respondent) File Number(s): 2019/270779 Publication restriction: No Judgment 1. COMMISSIONER: This appeal concerns a development application for the demolition of existing structures and the construction of a mixed use development including community housing and basement car parking, at 2-2A Gladstone Street, Newtown, which has frontages to Gladstone Street, Wilford Street and Gladstone Lane in Newtown. The appeal is lodged pursuant to s 8.7 of the Environmental Planning and Assessment Act 1979 ("EPA Act"). In exercising the functions of the consent authority on the appeal, the Court has the power to determine the development application pursuant to ss 4.15 and 4.16 of the EPA Act. The Council now agrees to the grant of development consent. The final orders in this appeal, outlined in [17] below, are made as a result of an agreement between the parties that was reached at a conciliation conference. 2. From the time that the appeal was initially lodged with the Court, the development application has undergone a number of amendments. By way of summary, the amendments removed a fifth storey, setback the fourth storey (level 3) on the southern elevation, reduced the residential units from 40 to 21, and amended the floor plates to allocate percentages of residential and commercial uses. The amendments reduce the bulk and scale of the development so that it now complies with the applicable height development standard and the floor space ratio standard. Its proposed height and visual appearance is now agreed to be compatible with the nearby low-density residential dwellings and has a scale and massing comparable to the existing mixed use buildings in the immediate context. As a result of the amendments, the development application seeks the demolition of existing buildings on the site and construction of a mixed use development comprising ground and first floor level creative use commercial tenancies, as well as 21 community housing dwellings and external communal open space, with associated basement parking. All of the residential accommodation in the development is to be used as community housing. 3. The Court arranged a conciliation conference under s 34(1) of the Land and Environment Court Act 1979 ("LEC Act") between the parties, which was held on 19 March 2020. I presided over the conciliation conference. 4. Following the conciliation conference, an agreement under s 34(3) of the LEC Act was reached between the parties as to the terms of a decision in the proceedings that was acceptable to the parties. The decision agreed upon is for leave to be granted to amend the development application, and for the grant of development consent subject to conditions of consent pursuant to s 4.16(1) of the EPA Act. The amendments that result in the plans the subject of the agreement changed the floor layout of the community housing units to achieve a better apartment mix, and also remove some screening structures. 5. As the presiding Commissioner, I am satisfied that the decision to grant development consent to the amended application subject to conditions of consent is a decision that the Court can make in the proper exercise of its functions (this being the test applied by s 34(3) of the LEC Act). I formed this state of satisfaction as each of the jurisdictional preconditions identified by the parties is met, for the reasons set out below. 6. The site is zoned B7 Business Park pursuant to the Marrickville Local Environmental Plan 2011 ("MLEP 2011"), and residential flat buildings are a permissible use in the B7 zone. 7. The community housing dwellings are "in-fill affordable housing" to which Division 1 of the State Environmental Planning Policy (Affordable Rental Housing) 2009 ("SEPP ARH") applies. Clause 13 of the SEPP ARH provides as follows: 13 Floor space ratios (1) This clause applies to development to which this Division applies if the percentage of the gross floor area of the development that is to be used for the purposes of affordable housing is at least 20 per cent. (2) The maximum floor space ratio for the development to which this clause applies is the existing maximum floor space ratio for any form of residential accommodation permitted on the land on which the development is to occur, plus: (a) if the existing maximum floor space ratio is 2.5:1 or less: (i) 0.5:1—if the percentage of the gross floor area of the development that is used for affordable housing is 50 per cent or higher, or … 1. Pursuant to cl 4.4 of the MLEP 2011, the applicable FSR development standard is 1.5:1. 2. Clause 13(1) is satisfied, and as such the proposal benefits from additional floor space, allowing a total FSR of 2:1, as long as "the percentage of the gross floor area of the development that is used for affordable housing is 50 per cent or higher". The proposal complies, with a FSR of 2:1 and 55% of the gross floor area of the development used for affordable housing. 3. However, cl 6.13 of the MLEP 2011 concerns residential development in the B7 zone, and provides as follows: 6.13 Dwellings and residential flat buildings in Zone B7 Business Park (1) The objective of this clause is to provide for limited residential development in association with non-residential uses permitted in Zone B7 Business Park, including small scale live-work enterprises, to assist in the revitalisation of employment areas and to provide a transition between adjoining land use zones. (2) This clause applies to land in Zone B7 Business Park. (3) Development consent must not be granted to development for the purpose of a dwelling or a residential flat building on land to which this clause applies unless the consent authority is satisfied that— (a) the development is part of a mixed use development that includes a non-residential use permitted in Zone B7 Business Park, and (b) no part of the ground floor of the building that fronts a street will be used for residential purposes (excluding access, car parking and waste storage), and (c) not less than 60% of the total gross floor area of the building will be used for non-residential purposes, and … 1. The proposed development complies with cl 6.13(3)(a) and (b), with ground floor commercial uses. It does not comply with (c) (notwithstanding that it provides more than 60% of the gross floor area in a FSR of 1.5:1 as non-residential purposes). 2. However, cl 6.13(3)(c) of the MLEP 2011, by requiring "not less than 60% of the total gross floor area" to be used for non-residential purposes, is inconsistent with cl 13(2)(a) of the SEPP ARH, which allows a bonus 0.5:1 FSR with a requirement for the percentage of the gross floor area of the development that is used for affordable housing to be 50% or higher. Pursuant to cl 8 of the SEPP ARH, the SEPP ARH prevails to the extent of the inconsistency. As a result, I accept the joint position of the parties that cl 13(2)(a) of the SEPP ARH prevails to the extent of the inconsistency, and that cl 6.13(3)(c) of the MLEP 2011 does not apply to the total floor space permitted by cl 13(2)(a). As such, if cl 6.13(3)(c) of the MLEP 2011 is a development standard, in the circumstances of the present application it does not apply to compel "not less than 60% of the total gross floor area of the building" to be used for non-residential purposes. Consequentially, a request pursuant to cl 4.6 of the MLEP 2011 is not required concerning that non-compliance. 3. The proposed development otherwise complies with all development standards in the MLEP 2011 and the SEPP ARH, and I have taken into consideration whether the design of the development is compatible with the character of the local area, as required by cl 16A of the SEPP ARH. Further, the conditions of consent that are agreed between the parties achieve compliance with cl 17 of the SEPP ARH. 4. Clause 7 of the State Environmental Planning Policy No 55—Remediation of Land requires consideration as to whether the land is contaminated and requires remediation. Documentation provided with the application indicates that the site can be made suitable for the development. 5. Having reached the state of satisfaction that the decision is one that the Court could make in the exercise of its functions, s 34(3)(a) of the LEC Act requires me to "dispose of the proceedings in accordance with the decision". The LEC Act also requires me to "set out in writing the terms of the decision" (s 34(3)(b)). 6. In making the orders to give effect to the agreement between the parties, I was not required to make, and have not made, any assessment of the merits of the development application against the discretionary matters that arise pursuant to an assessment under s 4.15 of the EPA Act. 7. The Court orders that: 1. Leave is granted to the applicant to amend the development application and rely on the amended plans listed in condition 4 of Annexure A. 2. Pursuant to Section 8.15(3) of the Environmental Planning and Assessment Act 1979, the applicant is to pay the Respondent's costs thrown away as a result of the amendment of the application (this includes the renotification costs of the amended plans, the vacation of the hearing dates of 24 and 25 February 2020 but does not include the cost of the Notice of Motion). 3. The appeal is upheld. 4. Development consent is granted to development application DA201900242 for demolition of existing buildings on the site and construct a mixed use development comprising ground and first floor level creative use commercial tenancies and 21 x community housing dwellings and external communal open space, with associated basement parking at 2A-2 Gladstone Street, Newtown is approved subject to the conditions in Annexure A. The Court notes: 1. The agreement between the parties that the applicant is to pay the Respondent's costs of the Notice of Motion (this includes the three separate appearances) in the total amount of $15,000. The amount of $10,000 is payable prior to 31 March 2020 and the amount of $5,000 is payable prior to 31 March 2021. …………………….. J Gray Commissioner of the Court Annexure A (217 KB) Architectural Plans (16.4 MB) ********** 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: 09 April 2020