66 Ernest St Developments Pty Limited ATF 66 Ernest St Development Unit Trust v North Sydney Council

[2024] NSWLEC 1115

Land and Environment Court

New South Wales

Medium Neutral Citation:

66 Ernest St Developments Pty Limited ATF 66 Ernest St Development Unit Trust v North Sydney Council [2024] NSWLEC 1115

Hearing dates:

8-9 February 2024

Date of orders:

15 March 2024

Decision date:

15 March 2024

Jurisdiction:

Class 1

Before:

Horton C

Decision:

The Court orders that:

(1) The appeal is dismissed.

(2) Development consent for development application DA407/2022 seeking consent for demolition of an existing residential flat building and construction of a part three, part four residential flat building, containing nine apartments over a single level of basement parking with associated works and landscaping is refused.

(3) All exhibits are returned except for Exhibits A, B, C, K, M and N.

Catchwords:

DEVELOPMENT APPLICATION – residential apartment development – residential flat building in R2 Low Density Residential zone – existing use – whether sufficient environmental planning grounds to justify contravention of height standard

Legislation Cited:

Environmental Planning and Assessment Act 1979, ss 1.3, 4.15, 4.65, 4.66, 4.67, 8.7

Land and Environment Court Act 1979, s 39

Environmental Planning and Assessment Regulation 2021, Pt 7, ss 38, 163, 164

North Sydney Local Environmental Plan 2013, cll 4.3, 4.6

State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004

State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development

Cases Cited:

Fodor Investments v Hornsby Shire Council (2005) 141 LGERA 14; [2005] NSWLEC 71

P D Mayoh Pty Ltd v North Sydney Council No 10219 of 1997 [1997] NSWLEC 149

Project Venture Developments v Pittwater Council (2005) 141 LGERA 80; (2005) NSWLEC 191

Saffioti v Kiama Municipal Council [2019] NSWLEC 57

Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827

Texts Cited:

North Sydney Development Control Plan 2013

Category:

Principal judgment

Parties:

66 Ernest St Developments Pty Limited ATF 66 Ernest St Development Unit Trust (Applicant)
North Sydney Council (Respondent)

Representation:

Counsel:
M Staunton (Applicant)
A Seton (Solicitor) (Respondent)

Solicitors:
McKees Legal (Applicant)
Marsdens Law Group (Respondent)

File Number(s):

2023/42493

Publication restriction:

Nil

Judgment

1. COMMISSIONER: A red brick residential flat building stands on a site at the intersection of Ernest Street and Sophia Street, Crows Nest, known as 66 Ernest Street.

2. Redevelopment of the site is proposed, comprising the demolition of the existing building to permit construction of a part 3- part 4-storey residential flat building containing nine apartments over basement car parking, landscaping and associated works.

3. To this end, the Applicant in these proceedings, 66 Ernest St Developments Pty Limited ATF 66 Ernest St Development Unit Trust, lodged Development Application DA407/2022 (the DA) with North Sydney Council (the Respondent) on 29 December 2022.

4. The DA was notified by the Respondent to residents in the surrounding area between 20 January 2023 – 3 February 2023 in accordance with the relevant Community Engagement Protocol, in response to which five submissions were received.

5. On 8 February 2023, the Applicant appealed the deemed refusal of the DA in accordance with s 8.7 of the Environmental Planning and Assessment Act 1979 (EPA Act) in Class 1 of the Court’s jurisdiction.

6. On 23 November 2023 the Court granted leave for the Applicant to rely upon amended plans and other documents by exercising the functions and discretions of North Sydney Council, as the relevant consent authority, to approve the amendment of the DA by the Applicant in accordance with s 38 of the Environmental Planning and Assessment Regulation 2021 (EPA Regulation).

7. At the commencement of the hearing, the Applicant sought, unopposed, to further amend the amended DA, and sought leave to rely upon the following amended plans and other documents:

1. Amended architectural plans, later marked Exhibit C

2. Amended landscape architectural plans, later marked Exhibit D

3. Amended Sun Access Report, later marked Exhibit E

4. Amended Design Verification Statement, later marked Exhibit F

5. Amended BASIX Certificate, later marked Exhibit H

8. While the Respondent did not object to the further amendment of the amended DA, it was necessary for the Court, under s 39 of the Land and Environment Court Act 1979, to approve the amendment of the amended DA by those amended plans and other documents listed at [7] which the parties agree are minor in nature.

The site view

9. The matter commenced with an onsite view at which the Court, in the company of the legal representatives and experts, heard oral submissions from a representative of the owners of No 64 Ernest Street, and from the owner of No 62 Ernest Street who invited the Court to view the subject site from the rear private open space of that site.

10. The concerns of the owners of both properties can be summarised as follows:

1. Overlooking

2. Overshadowing

3. Visual bulk and scale

4. Contrains future development opportunities

11. The Court was also taken to vantage points in Ernest Lane, Sophia Street and Ernest Street where certain built features and elements were identified as reference points to assist the Court in understanding the bulk and scale of the proposed development in comparison to the existing built form.

12. A number of properties were also identified by the parties for the contribution they are said to make to the Holtermann Heritage Conservation Area (HCA), ranging from ‘contributory’, to ‘neutral’, and ‘uncharacteristic’.

13. Given the angle at which Sophia Street intersects with Ernest Street, the site is essentially triangular. The site is also bounded by Ernest Lane to the north, such that the site is surrounded on three sides by streets, and only one neighbouring property to the west, known as No 64 Ernest Street.

14. The width of the frontages to each of the streets bounding the site are identified on the site survey (Exhibit A, Tab 6) as follows:

1. Ernest Street: 35.085m

2. Sophia Street: 45.865m

3. Ernest Lane: 9.9m

15. The resulting area of the site, legally described as Lot 10A in Section 14 in DP 1265, is identified to be 860.4m².

16. The Amended Statement of Facts and Contentions prepared by the Respondent (Exhibit 2) describes existing development in the vicinity of the site to be predominantly dwelling houses, semi-detached dwellings and some attached dwellings. One other residential flat building occupies the site at 61 Holtermann Street, which is directly opposite the site to the north-east.

17. The existing building on the site, and that opposite at 61 Holtermann Street, are identified in Appendix 1 of the North Sydney Development Control Plan 2013 (NSDCP) as uncharacteristic elements within the Holtermann Estate B Conservation Area.

18. The Holtermann Estate B Conservation Area is described, at Section C3.5.2 of the NSDCP (Exhibit 5) in the following terms (at p C3-43):

“The Holtermann Estate B Conservation Area includes the central portion of the larger Holtermann Estate.

The landform is generally level, with slight falls to the south. Subdivision is determined by a grid pattern of wide streets and narrow, rear lanes. Lot sizes vary and many lots have been developed for attached houses.

The area is characterised by is low scale of single storey, hipped roof, detached and attached dwelling houses that include a mix of late 19th and early 20th century building styles, and restrained examples of Victorian Georgian and Filigree, Victorian Italianate, Federation Queen Anne and Federation Bungalow. There are also some Inter-War Californian Bungalow and Art Deco styles with some post war residential flat buildings and modern infill housing. There are examples of high quality attached dwellings.

Street verges are typically 3.5m wide and include grass with concrete or bitumen footpaths. Deep set sandstone kerbs remain in some locations. Rear lanes are lined with fences, garages and carports with some remnant dunnies. The lane intersections are sometimes terminated by the side profile of a corner building oriented to the cross street.

Sophia Street provides diagonal views.

Front gardens contribute to the landscaping of the streets. Gardens follow the natural fall of the land with steps to the street on the high side. There are high and low scale street trees and shrubs.”

19. The site is also located within the R2 Low Density Residential zone according to the North Sydney Local Environmental Plan 2013 (NSLEP), in which residential flat buildings are not identified as development permitted with consent. As such, development for such a purpose is prohibited.

The site benefits from an existing use

20. It is commonly agreed between the parties that the site benefits from existing use pursuant to s 4.65 of the EPA Act because while a residential flat building is not a permitted use in the R2 zone, the continuance of that use is permitted by operation of s 4.66(1) of the EPA Act.

21. Existing use is defined at s 4.65 of the EPA Act in the following terms:

In this Division, existing use means—

(a)  the use of a building, work or land for a lawful purpose immediately before the coming into force of an environmental planning instrument which would, but for this Division, have the effect of prohibiting that use, and

(b)  the use of a building, work or land—

(i)  for which development consent was granted before the commencement of a provision of an environmental planning instrument having the effect of prohibiting the use, and

(ii)  that has been carried out, within one year after the date on which that provision commenced, in accordance with the terms of the consent and to such an extent as to ensure (apart from that provision) that the development consent would not lapse.

22. However, as shown by Preston CJ in Saffioti v Kiama Municipal Council [2019] NSWLEC 57 (Saffioti), at [67]-[68], the rights at [20] above, do not, of themselves, authorise any change in the existing use or other lawful use.

23. Instead, any entitlement to change an existing use is found at Pt 7 of the EPA Regulation, made under s 4.67 of the EPA Act, which permits certain regulations to be made for the enlargement or expansion or intensification of an existing use, as is the case here.

24. Subsection 4.67(3) of the EPA Act provides that an environmental planning instrument such as the NSLEP may contain provisions that extend, expand or supplement such regulations, but not where those provisions derogate from such regulations.

25. To that end, s 163 of the EPA Regulation provides relevantly, at subcl (a), that an existing use may be enlarged, expanded or intensified and, at subcl (c), may be rebuilt.

26. Section 164 of the EPA Regulation states development consent is required, so long as the enlargement, expansion or intensification is, at subcl (a), for the existing use and for no other use, and, at subcl (b), carried out only on the land on which the existing use was carried out immediately before the relevant day, being the day the NSLEP commenced.

27. A detailed chronology, supported by documentary evidence, is set out in Exhibit L, which satisfies me that the existing residential flat building on the subject site was subject to a consent lawfully issued on 18 October 1967 (Tab 6) that was, according to a Certificate issued 13 September 1968 (Tab 10), substantially commenced and, on the basis of an affidavit read, unopposed, in the name Rose Bowman, has been in use ever since, and so has not been abandoned.

28. As a consequence, there is an entitlement to make, and have the consent authority consider and determine, a development application seeking consent to enlarge, expand or intensify the existing use (Saffioti at [69]).

29. That said, the Respondent contends the proposed development is contrary to the objectives of the R2 zone, that are:

•  To provide for the housing needs of the community within a low density residential environment.

•  To enable other land uses that provide facilities or services to meet the day to day needs of residents.

•  To encourage development of sites for low density housing, including dual occupancies, if such development does not compromise the amenity of the surrounding area or the natural or cultural heritage of the area.

•  To ensure that a high level of residential amenity is achieved and maintained.

30. The Respondent also submits the proposal fails when assessed against those questions set out in the planning principle established in Fodor Investments v Hornsby Shire Council (2005) 141 LGERA 14; [2005] NSWLEC 71.

31. The Respondent’s planning expert, Mr Stuart McDonald, summarises his concerns at replacing “an existing non-conforming and out of scale residential flat building with a larger flat building while at the same time increasing the building footprint and reducing existing building setbacks…” (Exhibit 7, para 11).

32. Integral to the breach of these controls is what Mr McDonald regards as an unsatisfactory setback to Ernest Lane, and a height that he regards as unacceptable.

The height standard is exceeded

33. The height of building standard applicable to the site at cl 4.3 of the NSLEP is 8.5m.

34. The planning experts agree that the proposed development is a maximum of RL104.92, or 12.14m in height. As such, the proposal exceeds the height standard.

35. I note the experts also agree that the ridgeline of the existing building is at RL105.7, or 12.92m above the surface of the ground floor car park, and that a significant portion of the existing roof is at a height of RL105.0, or 12.33m above the car park.

36. A written request in respect of the height exceedance, prepared by Boston Blyth Fleming Town Planners in accordance with cl 4.6 of the NSLEP, accompanies the amended DA (written request) (Exhibit N).

37. The planning experts also provide written and oral evidence on the written request.

38. A primary difference between the existing and proposed exceedance, according to the planning expert for the Applicant, Mr Greg Boston, is that the existing exceedance is contained within vertical walls whereas the proposal integrates the residential floor space forming the exceedance within either a mansard or gable roof.

39. Mr McDonald, planning expert for the Respondent, believes the height to be excessive when inadequate setbacks to the side and rear are taken into account, resulting in an unacceptable visual bulk and scale when viewed from the neighbouring property at No 64 Ernest Street.

Whether compliance with the height standard is unreasonable or unnecessary

40. The written request cites the common approaches to demonstrating compliance with a development standard is unreasonable or unnecessary as set out in Wehbe v Pittwater Council (2007) 156 LGERA 446; [2007] NSWLEC 827. In the circumstances of this case, the written request relies on the first approach by asserting compliance is unreasonable and unnecessary because the objectives of the standard are achieved notwithstanding non-compliance with the standard.

41. The objectives of the height standard, at cl 4.3(1) of the NSLEP are as follows:

(a)  to promote development that conforms to and reflects natural landforms, by stepping development on sloping land to follow the natural gradient,

(b)  to promote the retention and, if appropriate, sharing of existing views,

(c)  to maintain solar access to existing dwellings, public reserves and streets, and to promote solar access for future development,

(d)  to maintain privacy for residents of existing dwellings and to promote privacy for residents of new buildings,

(e)  to ensure compatibility between development, particularly at zone boundaries,

(f)  to encourage an appropriate scale and density of development that is in accordance with, and promotes the character of, an area,

(g)  to maintain a built form of mainly 1 or 2 storeys in Zone R2 Low Density Residential, Zone R3 Medium Density Residential and Zone C4 Environmental Living.

42. In respect of objective (a), the written request states that as the land on which the development is propos is generally flat, so the ground floor reflects the natural levels of the land.

43. In respect of objective (b), the written request refers to an assessment of potential view loss from both the private and public domain resulting from the exceedance. The assessment was undertaken by walking up to 300m from the site in surrounding streets to identify existing sightlines over and across the subject site, with a particular focus on Sophia Street. This is because reference is made to views along Sophia Street in the description of the Holtermann HCA at [18]. The conclusion drawn by the assessment is that existing views will not be affected.

44. In respect of objective (c), the written request relies upon shadow diagrams and view from the sun diagrams prepared by the architect, Playoust Churcher that are the basis of the assessment undertaken by ESD Scientific in the ADG Solar Access Report (Exhibit E).

45. The diagrams are said to demonstrate that existing solar access to the east facing living room windows and north facing private open space to No 64 Ernest Street is maintained between 9am and 3pm in mid winter. Furthermore, to the extent the proposal represents future development that should promote solar access, 100% of apartments achieve compliance with the solar access required by the ADG.

46. In respect of objective (d), the written request asserts that an assessment of visual or aural privacy impacts likely to be imposed on adjoining residential development concludes no adverse impacts arise as a result of the height exceedance.

47. In respect of objective (e), the written request states that the site does not adjoin a zone boundary, but in any event, the test is one of compatibility which may be understood by reference to the planning principle set out in Project Venture Developments v Pittwater Council (2005) 141 LGERA 80; (2005) NSWLEC 191 (Project Venture). When the physical impacts of the proposal on surrounding development, such as noise, overlooking, overshadowing and any constraint on future development are considered, the written request asserts that, as at [45]-[46], no adverse impacts arise from those elements which exceed the height standard, and when the proposal’s appearance is assessed in context, the development would not appear offensive, jarring, unsympathetic or incompatible with the streetscape. To this end, the written request relies on two images re-produced below:

48. In respect of objective (f), the written request observes the focus of the objective is not to ensure, but merely to encourage an appropriate scale and density that accords with, and promotes, the character of an area. In setting out the character of the area with which the scale and density of the development should accord and serve to promote, the written request relies upon an excerpt taken from the Statement of Heritage Impact prepared by GBA Heritage (Exhibit 7, Annexure B), re-produced as follows:

“The new development design incorporates contributory built elements from the Holtermann Estate B Conservation Area, including the siting form, roof form, materiality, fence and access to carparking from the rear lane. The proposal does not incorporate any uncharacteristic elements of the HCA identified within the NSDCP 2013 and will improve the presentation of the site to the existing streetscape.

The proposed new building at 66 Ernest Street has been designed to reduce visual dominance, while being in keeping with the residential character of the streetscape and the Holtermann Estate B HCA. This has included the use of bays and pitched roof form to minimise the massing of the Ernest Street façade and to reflect the terrace dwellings at Ernest Street.

Although the proposed development will comprise a higher scale than the adjacent dwellings, it is consistent with the existing building located within the site and has been designed to be more sympathetic to the existing setting, through the siting, design and materiality of the new building. The higher forms of the development will also be further set back, which will further minimise the potential visual impact and the use of a pitched room form is in keeping with the existing streetscape.

The proposal will include the removal of carparking at the ground floor level, and will provide access to the basement carparking level via Ernest Lane, which will improve the visual setting of the ground floor level, particularly from the two primary frontages.

The proposed development is consistent with the heritage requirements and guidelines of the NSLEP 20123 and NSDCP 2013.”

49. On the basis of the excerpt above, the written request asserts particular attention has been given to considering the different streetscapes and visual catchments from which the proposal is viewed given the site has three frontages.

50. Additionally, the written request sets out six grounds in support of the scale and density of the proposal:

1. Firstly, the existing four-storey building is absent elements considered complementary or compatible with the established built form or landscape character of the conservation area, whereas the proposal presents a predominantly two-storey parapet form with upper level floor space contained in a mansard roof form.

2. Secondly, the proposal represents an outcome that enhances the streetscape, heritage conservation, residential amenity, landscape and design outcomes desired by the State Environmental Planning Policy No 65 – Design Quality of Residential Apartment Development/Australian Design Guide (ADG).

3. Thirdly, the front and side setbacks of 3m are consistent with controls that apply to development on surrounding land and, but for the projecting dormer windows facing west, the proposal is also within the 45 degree building height plane control at Section 1.4.6, Provision P3 of the NSDCP.

4. Fourthly, while neither the landscaped area or site coverage shown in the proposal comply with the numerical controls of the NSDCP, the landscape outcome is far superior to the existing landscape condition and will be consistent with the established landscape character of the Holtermann HCA.

5. Fifthly, and relatedly, when the building height is considered alongside the setbacks, landscaped area, site coverage and building footprint, the resulting floor space is acceptable in circumstances where no FSR standard applies that would otherwise regulate scale and density.

6. Lastly, in terms similar to those at [47], the proposed development will not be perceived as incompatible when images included in the written request are referred to.

51. Finally, in respect of objective (g), the written request states the proposed development, while a four-storey building, presents as a predominantly two-storey building with a characteristic pitched roof. As such, the proposal achieves the objective for development to maintain a built form that is mainly 1 or 2 storeys in height notwithstanding properties in the immediate vicinity of the site which exceed this number of storeys. In any event, the proposal itself, on this site, will not change the built form in the zone because this development is premised on an existing use that does not apply commonly in the zone.

Expert evidence on the character of the area

52. As the written request invokes, at [48], the expert opinion of Mr Graham Brooks, it is necessary to summarise the dispute between the heritage experts in Exhibit 6 as to whether the proposal displays an appropriate scale and density that accords with, and promotes, the character of the area.

53. The Applicant’s heritage expert, Mr Graham Brooks, cites the report prepared by GBA Heritage dated June 2023, at Appendix B of the joint heritage report which describes the diagonal alignment of Sophia Street as a remnant of the historic junction between two land grants. The result of this alignment is a concentration of oddly-shaped sites, some of which were used for light industrial activities. The three largest triangular sites in the Holtermann HCA are identified as either ‘uncharacteristic’ or ‘neutral’ in their contribution made to the Holtermann HCA. All of these are located on Sophia Street, between Holtermann Street and Ernest Street.

54. Mr Brooks is of the view that otherwise the site so varies from the dominant small scale form of the Holtermann HCA that the controls found in the NSDCP cannot be applied in the usual way.

55. In essence, Mr Brooks considers it is the oddity of these sites that sets them apart from the predominant subdivision pattern and argues that any assessment of the proposal should consider that the proposal responds to the existing character of its two main frontages, or what he describes as the ‘dual’ architectural expression in Ernest Street and Sophia Street.

56. Mr Brooks is also of the view that the uncharacteristic scale of the proposal is a function of the uncharacteristic scale of the site, and while the scale varies from that of the local area, the proposal is not, in Mr Brooks’ opinion, over-bearing.

57. While Mr Brooks agrees the site is visually prominent, it is only so when viewed from close quarters.

58. The existing built form to properties seen from Ernest Lane represents, to Mr Brooks, a varied and highly altered setback from what would have been evident as the Holtermann HCA was formed.

59. Ms Holtham cites the Elevation at DA A200, observing the topography of Ernest Street and Ernest Lane, falls to the east. As such, one would expect the height of buildings to follow that fall. Such a fall is evident in the ridgelines of No 60, No 62 and No 64 Ernest Street, and again, in the terraces to the east of the subject site on Sophia Street.

60. Ms Holtham expects an appropriate scale of development on the subject site would be ‘somewhere in between’ the height of No 64 (RL 100.4) and the height of the ‘long terraces’ to the east of Sophia Street (RL 101.2).

61. In summary terms, Mr Brooks believes the proposal removes the uncharacteristic four-storey building and proposes, in its place, a more respectful addition to the Holtermann HCA that will result in development that makes a ‘neutral’ contribution because of its adoption of elements that are characteristic of the area.

62. A table prepared by Mr Brooks at par 28 of the joint heritage report compares uncharacteristic elements evident in the existing building, with built elements and materials in the proposal that are said to be characteristic of the Holtermann HCA. However, I note in cross examination, Mr Brooks accepts not all of the elements identified by him are found in Section 3.5.6 of the NSDCP.

63. Nevertheless, the primary purpose of the table, according to Mr Brooks is to demonstrate the basis on which the proposal is likely to improve on the uncharacteristic contribution of the existing building so as to make a neutral contribution, which is the object of Provision P7 of Section 13.8 of the NSDCP.

64. One such element is the brick parapet that caps the two-storey brick façade, consistent with the focus of objective (g) to achieve development of mainly 1 to 2 stories.

65. Ms Holtham considers the proposed development to be visually dominant because it exceeds the height of all development within the streetscape, and is incompatible with the HCA, principally because of its overall volume.

66. Likewise, the choice of materials and finishes such as black concrete roof tiles, zinc and aluminium framed windows are also incompatible.

67. Additionally, when landscape and stormwater plans are understood, building setbacks and hardstand required for the driveway preclude extensive planting to ameliorate the visual impacts of the development.

68. Ms Holtham provides, at par 71 of the joint heritage report, recommendations designed to bring the proposal to within acceptable terms. These include:

1. The overall height should be reduced to no more than two storeys with a third storey presenting as ‘rooms in a roof’.

2. Changes to materials and finishes.

3. More consistency in documentation when viewed in context with surrounding development, and in the fencing and vegetation proposed.

69. The Applicant relies on a comparison between the proposed development and the existing building on the site. Ms Holtham provides recommendations that, if adopted, might make the proposal more acceptable.

70. I state here that the Court is not assessing the existing building, nor the hypothetical building that results from Ms Holtham’s recommendations.

71. Instead, the Court brings its consideration to the development the subject of the development application. That is, the development as proposed, and the outcome that is sought by the Applicant.

72. While Section 13.8, Provision P7 of the NSDCP invites a comparison of sorts, it is in respect of the outcome that should make a contribution of either neutral or better status to the Holtermann HCA.

Compliance with the height standard is unreasonable or unnecessary

73. I am satisfied that the written request establishes that compliance with the height standard is unreasonable or unnecessary, because the proposed development achieves the objectives of the height standard. In forming this opinion of satisfaction, I accept the following:

1. Firstly, to the extent there is a fall in the topography of the site, it is minor, and the built form reduces from a high point to the west, to a lower height to the east in the direction of the fall, albeit a small reduction.

2. Secondly, to the extent that there are views along Sophia Street, these are retained. Put another way, there are no views obscured as a result of the height exceedance.

3. Thirdly, I am assisted by the agreement of the planning experts that the overshadowing to No 64 Ernest Street is no longer regarded as adverse, and agreement that the degree of overlooking from the west of the proposal to No 64 Ernest Street is also acceptable. Furthermore, on the basis of the Acoustic Report (Exhibit A, Tab 15), I also accept that acoustic amenity is not compromised.

4. Fourthly, while the site is not located at a zone boundary, the objective nevertheless seeks compatibility between development. I note Mr McDonald’s oral evidence is that development on this site should ‘turn the corner’ to address Sophia Street, as it does, and that while photomontages contained in the architectural plans at Exhibit C do not explicitly demonstrate conformity with the Court’s photomontage policy, there is no reason to question their accuracy in representing the form of the proposal. I also note the survey plans of nearby properties at Nos 54-64 (Exhibit G) confirm the height of existing two storey terraces at No 58-60 exceed the height standard. Taking this into account, I see no reason to question the assessment of the proposal against the planning principle in Project Venture that is set out in the written request, that is supported by those images at [47].

74. The written request purports to make a comparison between the characteristics of the existing building and proposed development, summarised at [50(1)], in respect of objective (f) of the height standard.

75. The Court has long held that it is those matters at s 4.15 of the EPA Act that are to be taken into consideration as are of relevance to the development the subject of the development application, and not some other development such as the existing development evident on the site, and whose demolition is proposed.

76. The Applicant submits that a comparison is invited. I accept, to some degree, it is. The exercise of comparison is invited by the NSDCP, but only as it relates to demolition, which may be permitted in circumstances where the Applicant can demonstrate that the replacement building will allow the site to be reclassified from ‘uncharacteristic’ to ‘neutral’.

77. For such a re-classification to occur, some assessment of the characteristics of the existing, and that of the proposed, is required and may be described as an exercise in comparison.

78. Specifically, Provision P7, at Section 13.8 is in the following terms:

“Demolition of uncharacteristic items

P7 Council will only consider the demolition of uncharacteristic items if the applicant can satisfactorily demonstrate:

(a) that the replacement building will allow the site to be reclassified from at least “uncharacteristic” to “neutral”.

(b) that sustainability outcomes of the proposed replacement development reasonably justify the change.”

79. The definition of ‘uncharacteristic item’ at Section 13.6 of the NSDCP likewise invokes the status of a replacement building.

“Uncharacteristic items are buildings and structures that are intrusive and detract from the character and significance of the heritage conservation area. They are not suitable benchmarks for new developments. Replacement buildings are to achieve a neutral or contributory status.”

80. I accept Mr Brooks’ description of the site as being characteristic of the area so that, to some extent, the proposal sited on the site is also likely to demonstrate some degree of uncharacteristic form.

81. I also accept Mr Brooks’ observation that the site, having three frontages, requires development that addresses Ernest Street and Sophia Street at a minimum.

82. As I understand it, this suggests built form aligning to the street pattern and grain of Ernest Street, and built form that is parallel to the alignment of Sophia Street.

83. The planning experts agree this is an appropriate response to the site.

84. What follows from this, as I understand it, is the need for the triangular space between those two built forms to be ‘filled in’, enclosed, or ‘capped’ by a roof form that also broadly adopts a triangular shape in plan. I accept that an aspect of the uncharacteristic form that results is therefore a response to the characteristics of the site. The form so described substantially complies with the objectives and provisions of Section 1.4.6 of the NSDCP to reinforce the characteristic pattern of setbacks in Ernest Street and Sophia Street (if the setback for residential flat buildings is adopted from the R3 Medium Density Residential zone).

85. The Applicant has formed the triangular roof form that results from the frontages to Ernest Street and Sophia Street with a mansard roof with two different roof pitches. The first is a steep pitch mansard that is unquestionably visible from locations in the public domain on Ernest Street and Sophia Street. The second pitch is more shallow and which is less visible, or not visible, depending on the position of the viewer.

86. I also accept Mr Brooks’ opinion that the absence of a mansard roof in the Holtermann HCA does not, of itself, render a mansard roof form uncharacteristic or inappropriate in the area. I do not accept that the term ‘modified roof form’ that appears in Section 3.5.7 of the NSDCP, describing uncharacteristic elements, necessarily infers a mansard roof. Rather, it would appear to refer to a roof form, presumably existing, that is modified.

87. Equally, I accept Mr Brooks’ observation that for a building to be considered characteristic, or neutral for that matter, it does not need to comprise the totality of elements contained in Section 3.5.6 of the NSDCP that lists characteristic elements.

88. However, I consider there to be sufficient characteristic elements proposed for the proposal to achieve a neutral contribution, when the development in understood as a whole, and not as an inventory of individual elements. The proposal locates development to the front of the block (P1), with a setback consistent with No 64 (P2). The primary gable roof to the west of the site presents a strong skyline of simple pitched roof (P8), with gabled ends, in part, to the street (P10). The predominant materials presenting to the street include face brick (P13), terracotta tiles (P15), behind fencing that is, in part, face brick with metal palisade or timber pickets (P20). Car accommodation is located off Ernest Lane (P21).

Whether zone objectives are achieved

89. The written request also asserts that the objectives of development in the R2 zone, at [29] are achieved by the proposal, notwithstanding the fact that residential flat buildings are not a permitted use within the R2 zone.

90. The proposal is consistent with the first objective of the R2 zone in that the proposal provides for the housing needs of the community and reduces the residential density on this site by replacing 15 x one-bedroom apartments with 9 apartments consisting of 2 x two-bedroom, and 7 x three-bedroom apartments.

91. The proposal is consistent with the second objective of the R2 zone because it does not inhibit the development of other permissible land uses within the zone that are envisaged by the objective.

92. The proposal is consistent with the third objective for development in the zone because, while not proposing low density housing, that which is proposed does not compromise the amenity of the surrounding area, nor its natural or cultural heritage. Rather, the removal of an existing building that is foreign in the streetscape, and which makes no contribution to the character of the Holtermann HCA is to be replaced by development that enhances the amenity of housing on the site, and that will make a contribution that is, at worst, neutral to the area, according to the expert assessment contained in the Statement of Heritage Impact.

93. The proposal is consistent with the fourth objective for development in the zone because the level of residential amenity achieved by the proposal is, according to the written request, exceptionally high, when the relevant objectives of the ADG are considered. 100% of apartments receive at least 2 hours of direct sunlight to living rooms and private open space between 9am and 3pm, on 21 June, and 100% of apartments are naturally cross ventilated.

94. The amenity of surrounding residential development is also maintained, notwithstanding the height breach. View, privacy and solar access are maintained so that the high level of amenity currently enjoyed by surrounding development is unaffected by the exceedance.

Expert evidence on zone objectives

95. While Mr McDonald believes an RFB can, theoretically, be consistent with a low density residential environment as desired by the first objective of the R2 zone, the proposed development is not complementary to such an environment.

96. In respect of the fourth objective of development in the R2 zone, Mr McDonald does not believe the proposal achieves a high level of residential amenity when viewed from the public domain or from No 64 Ernest Street.

97. The level of amenity is limited by the visual bulk of the proposal, and breach of controls that essentially regulate built form density that remain a concern.

98. The visual bulk will be visible from two windows facing the subject site from the living spaces of No 64 Ernest Street, and from the public domain in Ernest Street and Sophia Street because of the highly visible roofline.

99. The controls regulating the built form density on the site, in lieu of a floor space ratio (FSR) standard are threefold. All are found in Section B1.5 of the NSDCP:

1. Landscaped Area, which is defined at Section B1.5.6, Provision P2 (a) of the NSDCP in the following terms:

“Landscaped area is considered to comprise all parts of a site used for growing plants, grasses and trees, but does not include any building, structure or hard paved area;…”

2. Unbuilt Upon Area, which is defined at Section B1.5.6 of the NSDCP, at Provision P2(c) in the following terms:

“the following items are considered to constitute un-built upon area:

(i) any part of a basement which does not comprise site coverage;

(ii) unenclosed balconies7, decks, pergolas and the like;

(iii) paving and patios (porous and non-porous);

(iv) driveways and car stand areas (porous and non-porous); or

(v) water features. However, un-built upon area excludes:

(vi) anything else defined as site coverage; or

(vii) anything else comprising landscaped area.”

3. Site Coverage, which is defined at Section B1.5.5 of the NSDCP in the following terms:

“P2 For the purposes of P1, the following items are considered to constitute site coverage:

(a) buildings as defined by the EP&A Act 1979;

(b) garages and carports;

(c) sheds;

(d) enclosed / covered balconies, decks, pergolas and the like;

(e) swimming pools, spa pools and the like:

(f) other structures including:

(i) permanent BBQ structures;

(ii) cabanas;

(iii) external staircases;

(iv) gazebos;

(v) greenhouse/glasshouse;

(vi) plant rooms;

(vii) rainwater tanks;

(viii) ramps;

(ix) garbage storage facilities.

However, site coverage excludes:

(g) any basement;

(h) any part of an awning that is outside the subject site;

(i) any eaves;

(j) unenclosed balconies, decks, pergolas and the like;

(k) paving and patios (porous and non-porous);

(l) driveways and car stand areas (porous and non-porous);

(m) water features; or

(n) anything else defined as landscaped area.”

100. Calculations of those controls above are found on architectural plan A402, in respect of the existing development, and A403, in respect of the proposed development. It is helpful to tabulate those calculations as below:

Existing development		Proposed development	Control
Landscaped Area	32.84%	31.18%	40% minimum
Unbuilt Upon Area	40.93%	21.05%	15% maximum
Site Coverage	29.5%	51.66%	45% maximum

101. The Applicant has also calculated the area of landscape it proposes, inclusive of landscape planting over basement areas. These areas fall outside the definition of Landscaped Area, but it is Mr Boston’s view that the landscape planting is proposed regardless, and would be viewed by any passerby as landscape.

102. When this broader interpretation of landscaped area is considered, the Applicant calculates 39.80% of the site as landscaped area. In Mr Boston’s view this is sufficiently close to the requirement for 40% to be considered complying.

103. Additionally, no Communal Open Space is provided.

104. However, I note here Mr McDonald acknowledges, in oral evidence, that privacy and overlooking impacts from the proposal are now resolved.

Whether the environmental planning grounds are sufficient to justify the contravention

105. The written request advances two primary grounds on which it asserts there are sufficient environmental planning grounds to justify the contravention of the height standard. These are:

1. Firstly, for the reasons that follow there is an improvement in terms of heritage conservation, design quality, amenity, landscaping and sustainability.

1. An assessment by the Applicant’s heritage expert concludes the result will be a development that achieves a neutral, and not an ‘uncharacteristic’ contribution to the area, when those elements at Section 13.6 of the NSDCP are considered.

2. An assessment of the amenity of apartments in the existing building concludes that amenity is substandard when the provisions of the ADG are applied to ceiling heights, layout, private open space and ‘general amenity’, whereas the proposed development exceeds the minimum requirements for solar access and natural cross ventilation. Likewise, the landscape quality of the site is enhanced by the proposal as is compliance with State Environmental Planning Policy (Building Sustainability Index: BASIX) 2004.

3. A redevelopment of the site to achieve this improvement is said to rely upon the replacement building being economically viable. Such viability is only achieved with the addition of floor space located above the building height because it is that floor space that offsets the reduction in apartments, the construction of a basement carpark and construction costs said to be associated with a high quality built form outcome complying with contemporary design, construction and sustainability standards.

4. The non-compliant portion of the development is generally limited to the pitched roof forms and the floor space contained within the roof form which sits atop development that otherwise presents predominantly as a two-storey façade fronting streets, behind which added height is recessive.

5. Approval of the building height variation promotes both the orderly and economic use and development of land, and facilitates an improvement in heritage conservation, design quality, amenity, landscaping and sustainability performance.

2. Secondly, the written request reiterates the argument in the preceding paragraphs that approval of the height variation will promote the orderly and economic use and development of the land and it will improve the heritage conservation, design quality and amenity, landscaping and sustainability performance of development on the site. This ground is supported by logic summarised as follows:

1. Demolition of an existing four-storey residential flat building will never result in a complying two-storey built form, as it would be neither orderly or economic, which is an object of the EPA Act. Insisting on strict compliance in this regard would inhibit redevelopment of the site, and so development that makes a neutral contribution to the Holtermann HCA would simply not occur on the site. Accordingly, some economic incentive must operate to catalyse development of a scale that includes excavation for basement car parking so as not to detract from the character of a conservation area, and which conforms to the design objectives of the relevant parts of the ADG. In short, that portion of the development that exceeds the height standard represents such an incentive.

2. Upholding the written request promotes the sustainable management of built heritage through the replacement of a building which makes no contribution to the significance of the heritage conservation area, with development that is complementary and compatible with the desired heritage conservation outcome.

106. I reject both of the grounds advanced by the written request for the reasons that follow.

107. Firstly, to suggest the demolition of the uncharacteristic existing building on the site to be replaced by a building that makes a neutral or better contribution does not focus on the aspect or element of the development that contravenes the development standard, but promotes the benefits of carrying out the development as a whole. Redevelopment of the site in a manner that does not exceed the height standard, but with an alternate distribution of floor space could also be said to result in the same outcome. The height exceedance is not an aspect or feature of the outcome, nor the argument for it, in my view.

108. Secondly, an argument is advanced that the height exceedance is essential to ensure the economic viability of the proposal. However, the Applicant does not provide support for this argument, either in the written request, or elsewhere in the application before the Court. I accept the Respondent’s submission that to understand the viability of a proposal requires an understanding of total development costs and financial return that goes beyond the estimate provided by the quantity surveyor at Exhibit K, the scope of which is re-produced below, comprising five sums:

Description	Quantity	Unit	Rate	Subtotal	Factor	Total
66 ERNEST ST CROWS NEST
MULTI-UNIT DEVELOPMENT	5,535,000	5,535,000
BUILDERS MARGIN	553,500	553,500
SUBTOTAL	6,088,500	6,088,500
GST	608,850	608,850
TOTAL	6,697,350	6,697,350

109. While the written request asserts that demolition of an existing building to be replaced by one of lower scale is unlikely, and so an economic incentive for redevelopment is necessary, the written request does not develop this assertion beyond a conceptual argument. The quantity surveyors summary at Exhibit K provides an estimate of something described as ‘Multi-unit development’, without explanation of what this comprises. A builder’s margin of 10%, and GST is then added to provide a total cost. A statement in Exhibit K also advises “[t]he estimated costs of the works include all external services and hard/soft landscaping work…” and that “…we have assumed the development has a basic level of finishes’.

110. The statement concludes as follows: “Please note that this report is to be used as an estimated cost of development for DA submission to North Sydney Council and for no other purpose.”

111. The written request does not set out the cost of land purchase, consultant fees, marketing or the like. Neither does it include assumptions on the financial return expected from sales (or other property ownership model). Neither does any other document in evidence beyond that re-produced at [108]. In particular, the contribution made by that portion of floor space comprising the exceedance to the economic viability, presumably with, and without that floor space factored, is not dealt with at all.

112. Regardless, the Respondent submits, for the reasons shown by Lloyd J in P D Mayoh Pty Ltd v North Sydney Council No 10219 of 1997 [1997] NSWLEC 149, importing questions of economic viability would put the consent authority in the place of the entrepreneur or developer, requiring it to make commercial decisions which may have no relationship to the kind of commercial decisions motivating the particular entrepreneur or developer”. To the extent economic viability is said to be consistent with object at s 1.3(c) of the EPA Act to promote the orderly and economic use and development of land, this is merely an aim of the controls.

113. However, as I understand the Applicant’s submission, it is reasonable to place determinative weight on the objective at s 1.3(c) of the EPA Act where financial viability is in question.

114. I accept the Applicant’s submission, however for the reasons at [108]-[111], the Court is not presented with adequate information on which it could so determine.

115. Finally, and relatedly, I also consider the argument summarised at [105(2)(b)] promotes the benefit of the development as a whole when it argues that replacement of an uncharacteristic building with one of neutral status in the Holtermann HCA is an example of sustainable management of built heritage because, absent supporting information of the sought summarised at [111], the argument is not tethered to the height exceedance

116. As I find the environmental planning grounds set out in the written request are not sufficient to justify the contravening of the height standard, I cannot be satisfied that the written request has adequately addressed the matters required to be demonstrated at cl 4.6(4)(a)(i) of the NSLEP, and so development consent must not be granted.

Orders

117. The Court orders that:

1. The appeal is dismissed.

2. Development consent for development application DA407/2022 seeking consent for demolition of an existing residential flat building and construction of a part three, part four residential flat building, containing nine apartments over a single level of basement parking with associated works and landscaping is refused.

3. All exhibits are returned except for Exhibits A, B, C, K, M and N.

T Horton

Commissioner of the Court

**********

Decision last updated: 15 March 2024